Hon'ble Judges/Coram:
Indira Banerjee and C.T. Ravikumar

JUDGMENT

Indira Banerjee, J.

1. Leave granted.

2. These appeals are against a common judgment and final order dated 18th November 2021 passed by the High Court of Sikkim at Gangtok allowing Arbitration Appeal No. 02 of 2021 filed by the Respondents, setting aside the impugned order dated 31st May 2021 passed by the Commercial Court on an application of the Appellant Under Section 9 of the Arbitration and Conciliation Act, 1996, hereinafter referred to as "the 1996 Act", and also dismissing Arbitration Petition No. 02 of 2021 filed by the Appellant Under Section 11 of the 1996 Act for appointment of an Arbitrator.

3. The State of Sikkim, impleaded as Respondent No. 2 in this appeal, is the absolute owner of the property bearing Plot No. 309, Paljor Stadium Road, Gangtok, East Sikkim, known as Norkhill Hotel, hereinafter referred to as the 'said property' along with its land, buildings, annexe, servants quarters and garages.

4. By a registered deed of lease dated 9th December 1997, the Respondent State leased out the said property to the Appellant on terms and conditions stipulated in the said deed of lease. Some of the terms and conditions of the Deed of Lease are set out hereinbelow for convenience:

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2. The consideration of the lease of the premises fully described in the Schedule I below, the lessee undertakes to pay to the lessor the sum of Rs. 30.00 lakhs (Rupees Thirty lakhs) only per annum with a 10% (ten percent) increase compounded every three years in quarterly installments of Rs. 7,50,000/- (Rupees Seven Lakhs Fifty Thousand only) payable by the 7th April, 7th July, 7th October and 7th December of each year and the first installment shall be payable on the date of the execution of this deed.

3. That the initial terms of the lease under this deed shall be a period of twenty four years from 01.06.1997 to 31.05.2021 (First day of June one thousand nine hundred and ninety seven to the thirty first day of May two thousand and twenty one) and shall be renewable for such acceptance of the lessee's offer in terms of Clause 4(xiii) hereinafter.

4. The lessee covenants with the Lessor as follows:

i) The lessee shall pay the lease amounts on the dates aforesaid in Clause 2 hereinabove.

ii) The lessee shall pay the increased lease amounts at the rate of 10% (ten percentage) to be compounded every three years as follows:

a) from 01.06.2000 to 31.05.2003 Rs. 33,30,000.00 per annum.

b) from 01.06.2003 to 31.05.2006 Rs. 36,30,000.00 per annum.

c) from 01.06.2006 to 31.05.2009 Rs. 39,93,000.00 per annum.

d) from 01.06.2009 to 31.05.2012 Rs. 43,92,300.00 per annum.

e) from 01.06.2012 to 31.05.2015 Rs. 48,31,530.00 per annum.

f) from 01.06.2015 to 31.05.2018 Rs. 53,14,683.00 per annum.

g) from 01.06.2018 to 31.05.2021 Rs. 58,46,151.30 per annum.

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v) The lessee shall keep the leased premises in good order and condition and in the same condition in which it was handed over the lessee with a reasonable wear and tear for which he shall not be entitled to make any claim subsequently.

vi) The lessee shall comply with all the provisions of the relevant enactments and Regulations thereunder and with any other obligations imposed by the local laws in regard to the lease premises.

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