The cost of rental prices is an occupancy requirement regardless of non-fulfillment of the enterprise

Payment of rental costs is a constraint on occupancy even though Diksha Sharma, a student at Government Law College in Mumbai, is not in a business

M / s Arun Kumar Kamal Kumar versus M / s Selected Marble Home


The complainants had a brand name called Nathu’s Sweets and had entered into two separate license agreements in which it was determined that the complainants would run and operate the business on the respondents’ premises and the other to pay the commission for sales to the respondents. The dispute arose when the respondents’ business came to a standstill due to an incomplete installation of a required 2.5 kV power connection. As a result, operations ceased from March 1991 to October 1995.
A lawsuit has been filed with the Delhi High Court under Section 20 of the Arbitration Act of 1940 for failure to pay commission as well as failure to transfer the vacant space to the owner. The court appointed an arbitrator to rule on the case that the calculations relating to the commission were wrong and deliberate. However, the question arose as to whether the respondents were entitled to compensation. The award was challenged by the applicants in the Supreme Court.


Whether the respondents were entitled to rent and what damage resulted from the course of business?


• Section 20 of the 1940 Arbitration Act
• Section 108 of the Property Transfer Act of 1882

Allegation of the complainants:

The learned attorney argued that the agreement did not contain a clause mentioning payment of damages due to occupancy of the premises even when the business was not in operation. The agreement was limited to the payment of the commission on gross sales. The erroneously made erroneous calculations, if resolved, would have resulted in less compensation payable.

Claim of the respondents:

The Respondent’s learned attorney alleged that no error had been made in the settlement, and the High Court’s learned single judge did not conclude that the plaintiffs were required to pay the damage, including the period during which the deal failed ran.

Comments from the Court:

After examining the submissions of both sides, the court found that the vacant premises had only been given to the interviewees at the beginning of the arbitration proceedings. In view of the verdict of the learned single judge, if the interviewees had allegedly been tenants, they would have been obliged to pay the rent under Section 108 of the Property Transfer Act of 1882 despite failure to perform the business. Therefore the single judge and the referee made no mistake.


The court upheld the decision of the Bench Division of the High Court to reduce the interest rate from 16% per annum to 9% per annum payable from the date of the award to the date of the judgment given by the appellant, including any thereof accruing interest.

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