Delhi High Court
Jitenderpal Singh Huf vs M/S Oyo Apartments Investments (Llp) on 20 August, 2025
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Judgment reserved on: 28.07.2025
Judgment delivered on: 20.08.2025
+ FAO (COMM) 175/2024, CM APPL. 52685/2024 (Stay) & CM
APPL. 44943/2025 (Delay of 113 days in filing the reply to
appeal)
JITENDER PAL SINGH HUF .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENTS (LLP)
.....Respondent
Through: Mr. Ashish Mohan, Sr. Adv. along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 193/2024, CM APPL. 56310/2024 (Stay) & CM
APPL. 44180/2025 (Delay of 113 days in filing the reply to the
appeal)
JUVELLO HOMES PVT. LTD. .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENT (LLP) ...Respondent
Through: Mr. Ashish Mohan, Sr. Adv. along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 194/2024, CM APPL. 56909/2024 (Stay) & CM
APPL. 44940/2025 (Delay of 113 days in filing the reply to the
appeal)
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 1 of 34
Signing Date:22.08.2025
20:03:18
VIBRUS HOMES PVT. LTD. .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENTS (LLP) ...Respondent
Through: Mr. Ashish Mohan, Sr. Adv. along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 199/2024, CM APPL. 57915/2024 (Stay) & CM
APPL. 44945/2025 (Delay of 113 days in filing the reply to
appeal)
RAUNAK INTERNATIONAL .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENTS (LLP)
.....Respondent
Through: Mr. Ashish Mohan, Sr Adv along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 203/2024, CM APPL. 59614/2024 (Stay) & CM
APPL. 44944/2025 (Delay of 113 days in filing the reply to
appeal)
CONVEST BUILDCON PVT. LTD .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 2 of 34
Signing Date:22.08.2025
20:03:18
M/S OYO APARTMENTS INVESTMENTS(LLP) ...Respondent
Through: Mr. Ashish Mohan, Sr. Adv. along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 252/2024 & CM APPL. 8440/2025 (restoration of
main case)
CONVEST OVERSEAS PVT. LTD. .....Appellant
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENT (LLP) ....Respondent
Through: Mr. Ashish Mohan, Sr. Adv. along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
+ FAO (COMM) 67/2025 & CM APPL. 13370/2025 (Interim relief)
JEET CORPORATION AND ANOTHER .....Appellants
Through: Mr. Pawanjit Singh Bindra, Senior
Advocate with Mr. Udit Gupta and
Mr. T.S. Sawhney, Advocates.
versus
M/S OYO APARTMENTS INVESTMENT (LLP) ...Respondent
Through: Mr. Ashish Mohan, Sr Adv along
with Mr. Diptiman Acharya &
Mr.Sagar Pradhan, Advs.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 3 of 34
Signing Date:22.08.2025
20:03:18
% JUDGEMENT
HARISH VAIDYANATHAN SHANKAR J.
1. These appeals under Section 37 of the Arbitration and
Conciliation Act, 19961, have been filed against separate orders, all
dated 07.06.2024, passed by the learned District Judge (Commercial
Court-10), Central, Tis Hazari Courts, Delhi2, in petitions filed by the
appellants under Section 34 of the A&C Act, whereby the learned Judge
dismissed the said petitions and consequently upheld the separate arbitral
awards, all dated 25.01.2023, passed by the learned Arbitrator.
2. Before delving into the legal submissions, it is important to note
certain excerpts from the Arbitral Award dated 25.01.2023, which set out
the relevant and analogous background to the present appeals. The
following paragraphs from the Arbitral Award, rendered in one of the
connected matters [FAO (COMM) 175/2024], are particularly
illustrative:-
"2. The Claimant entered into a Management Services Agreement
dated 22.7.2019 with the Respondent, in respect of a property owned
by the Respondent in Malka Ganj, Delhi, whereunder the Claimant
was to pay 70% of the revenue share to the Respondent for the first
three months, followed by the same share of the revenue, with a
minimum guarantee stipulated in the Agreement, in the remaining
term of the Agreement. The net revenue was to be derived by
excluding, from the payments collected from the occupants, the sale
proceeds of the food and beverages sold at the property. The term of
the Agreement was agreed at two years with a Lock-in-Period of 11
months. Some payments in terms of the said Agreement were made by
the Claimant to the Respondent. The claimant made an Interest Free
Refundable Security Deposit of Rs. 6,20,000/ (Six Lacs Twenty
Thousand Only) with the respondent.
1
A&C Act
2
District Court
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 4 of 34
Signing Date:22.08.2025
20:03:18
3. As many as seven identical Agreements were executed by the
Claimant, with seven different entities. All the seven entities were
represented by the same person as their Authorised Representative and
by the same counsel. The properties subject matter of these seven
Agreements were being managed by a common person, who appeared
in the witness box as their Authorised Representative.
4. On 1.9.2022, it was agreed that for the purpose of recording the
cross-examination of the witnesses, all the seven matters may be
consolidated so that the cross-examination pertaining to all the seven
cases was recorded in one case and read and considered for the
purpose of all the seven cases. One witness namely Ms. Ankita Munjal
was examined by the Claimant. A common Authorised Representative
was examined on behalf of all the seven Respondents.
5. The Agreement between the parties is titled as "Management
Services Agreement". The Claimant is described as the Service
Provider / Party of the First Party, whereas the Respondent is
described as the Owner/Party of the Second Part, in the Agreement. It
is recorded in the preamble that "The Owner is desirous of engaging a
Service Provider for providing the services in the premises on an
exclusive basis and on the terms and conditions as more specifically
agreed hereunder."
****
7. Vide an email dated 28.11.2019, the Claimant asked the Respondent
to provide the documents specified therein and informed that the said
documents are mandatorily required to run its operations. It was also
stated in the email that further payment to the Respondent would be
put on hold till the said documents were provided. The documents so
sought by the Claimant were not provided to it.
8. On 11 March, 2020, an advisory on Social Distancing Measures was
issued by Government of India, Ministry of Health and Family
Welfare, in the wake of breakout of the pandemic COVID-19. The
case of the Claimant is that to address the situation created by the
pandemic throughout countries, lockdowns were imposed and non-
essential travel was curbed. As a result, bookings in the Hotels were
cancelled and travel plans were shelved. The Claimant, vide its email
dated March 30, 2020, referring to the situation created by the spread
of COVID-19, sought to re-visit the Agreement it had executed with
the Respondent and as an interim measure, proposed a revised revenue
sharing model with effect from 12.3.2020. It was also stated in the said
email that because of the situation created by the pandemic COVID-
19, the Claimant was left with no option but to invoke Force Majeure
and suspend payment of the monthly rent and/or any other amount
payable to the Respondent under the Agreement. It was further stated
that though the Claimant was well within its right to terminate the
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 5 of 34
Signing Date:22.08.2025
20:03:18
Agreement, it was refraining from taking such a drastic step while
reserving its right to do so should the circumstances continue to
deteriorate. However, the Respondent did not respond to the proposed
revenue sharing model.
9. Vide its notice dated 2.5.2020, purporting to be sent under Clause
10.3(a) of the Agreement, the Claimant, referring to its email dated
28.11.2019 requested the Respondent to provide all the necessary
documents within 30 days of the notice and informed that not
providing the said documents would vitiate the Agreement which shall
stand terminated forthwith, if the documents were not provided within
30 days. It was also stated in the said notice that the Claimant had
received complaints from the occupants informing that the Respondent
was collecting the room tariff directly from them. The Respondent was
called upon to render accounts of all such collections with effect from
December, 2019. The Arbitration Clause contained in the Agreement
was also invoked and an Arbitrator named in the Notice was proposed
with a request to the Respondent to confirm his appointment as a Sole
Arbitrator.
10. The Respondent sent a Reply through its Advocate on 27.2.2021
stating therein that all the necessary documents had already been
provided to the Claimant, the subject premises was already in its
possession and the business was going on smoothly. It was stated in
para 6 of the Reply that "due to non-availability of inhouse stay
supervisor from your Client's side, residents deposited fee to my
Client's Warden whose salary was agreed to be borne by your Client."
The Respondent suggested another Arbitrator to adjudicate the
disputes between the parties.
11. Disputes having arisen between the Claimant and all those seven
entities, the Hon'ble High Court of Delhi was pleased to appoint me as
the Arbitrator to adjudicate all those disputes. The nature of the
disputes between the parties is identical though the reliefs claimed by
the parties are not common.
(Emphasis supplied)
3. In the present appeals, the Appellants have raised a limited and
common issue, and with the consent of both parties, all appeals were
heard together. For consistency and clarity, arguments and references
during the hearing were made from the record of FAO (COMM)
175/2024 only. Accordingly, this judgment shall also refer to the contents
of FAO (COMM) 175/2024, and for ease of reference, the Appellants will
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 6 of 34
Signing Date:22.08.2025
20:03:18
hereinafter collectively be referred to as "Appellant(s)" and the
Respondent as "OYO".
4. The core submission advanced by the learned Senior Counsel for
the Appellant, which was even duly recorded by this Court at the stage of
issuing notice, is that the arbitral award dated 25.01.2023 suffers from
patent perversity, as the learned Arbitrator failed to duly consider a
critical aspect of the case. It is contended that the alleged breach
attributed to the Appellant, namely, the failure to furnish ownership
documents, stood impliedly waived or condoned on 30.03.2020, when
OYO itself issued a communication inviting the Appellant to re-negotiate
the financial terms under the Management Services Agreement dated
20.08.20193.
5. At this stage, it is apposite to set out the relevant background facts
that form the basis of the present controversy, which are:
(a) On 20.08.2019, the Appellant and OYO entered into a
Management Services Agreementfor the operation and
management of a property located at various locations in Delhi,
which were primarily intended to serve as accommodation
facilities. Prior to this, a draft version of the agreement was
exchanged between the parties on 22.07.2019. The arrangement
under the said Agreement was structured on a revenue-sharing
model, wherein OYO, acting as the service provider, was entitled
to receive a Management Fee based on the net revenue generated
from the said properties.
3
Agreement
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 7 of 34
Signing Date:22.08.2025
20:03:18
(b) On 28.11.2019, OYO, by way of a formal email, raised a specific
request calling upon the Appellant to provide essential regulatory
and legal documents. These included, inter alia, a No-Objection
Certificate from the local Society or Resident Welfare
Association as well as clearances from the local Police
authorities. OYO explicitly stated in the said communication that
the absence of these documents would amount to a material
compliance lapse and further made it clear that all future
payments would be put on hold until such documents were
submitted by the Appellant.
(c) However, notwithstanding the aforesaid request, the Appellant
did not provide the relevant documents, and by December 2019,
the Appellant allegedly began collecting room charges directly
from the residents of the subject premises, which constituted a
clear violation of the terms of the said Agreement. This act of
direct collection of revenue significantly undermined OYO's
operational and financial visibility with respect to the said
property. Consequently, OYO was unable to accurately monitor
or track the revenue generated from the premises from that point
onward.
(d) On 11.03.2020, the World Health Organization officially declared
COVID-19 as a global pandemic. In response, the Government of
India invoked the provisions of the Epidemic Diseases Act, 1897,
on 12.03.2020 and implemented a series of nationwide lockdown
measures, including severe restrictions on movement and
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 8 of 34
Signing Date:22.08.2025
20:03:18
business operations. Domestic air travel was suspended starting
from 25.03.2020. These unprecedented restrictions gravely
impacted the hospitality and accommodation sectors across the
country, including OYO's operations under the said Agreement.
(e) In light of the extraordinary and unforeseen circumstances arising
from the COVID-19 pandemic, OYO, vide communication dated
30.03.2020, issued a Force Majeure Notice to the Appellant. In
this notice, OYO stated that due to the closure of educational
institutions and the mass departure of students, occupancy levels
at the subject premises had drastically declined. Consequently,
OYO proposed a revised revenue-sharing arrangement, reducing
its share to 30% of the net revenue.
(f) Thereafter, on 02.05.2020, OYO issued a formal Notice to the
Appellant under Clauses 10.3(a) and 11.2 of the Agreement. In
this Notice, OYO referred to its earlier email dated 28.11.2019
and once again requested the Appellant to furnish all the required
documents within a period of 30 days. It was categorically stated
that failure to provide the said documents within the stipulated
period would result in automatic termination of the Agreement.
OYO also alleged that it had received several complaints from
occupants stating that the Appellant had been collecting room
tariffs directly from them. Accordingly, the Appellant was called
upon to disclose and render accounts of all such collections made
from the residents with effect from December 2019 onwards. In
the same notice, for the purpose of resolving the issues regarding
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 9 of 34
Signing Date:22.08.2025
20:03:18
the collection of rents, OYO also invoked the arbitration clause
stipulated in the Agreement and proposed the name of an
Arbitrator to be appointed as the Sole Arbitrator, seeking consent
from the Appellant for the same.
(g) Despite the lapse of the stipulated time period, the Appellant took
no steps to comply with the said notice.
(h) It is pertinent to note that even after termination, the Appellant
remained silent for nearly nine months and responded only on
27.02.2021 through a Reply issued by its legal counsel. In this
Reply, the Appellant contended that all necessary documents had
already been provided to OYO, that the subject premises
continued to remain in its possession, and that the business was
running smoothly. In paragraph 6 of the said Reply, the Appellant
also stated that due to the non-availability of an in-house stay
supervisor from OYO's side, the residents were constrained to
deposit the rent with the Appellant's warden, whose salary was,
as per the agreement, to be borne by OYO. Thus, the Appellant
admitted that the collections were indeed being made directly, to
the Appellant, from the residents.
(i) Subsequently, upon an application made by OYO, this Court
appointed an Arbitrator to adjudicate the disputes arising out of
the Agreement.
(j) In the arbitration proceedings, OYO filed its Statement of Claim
setting out its allegations and claims against the Appellant. In
response, the Appellant filed its Statement of Defence.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 10 of 34
Signing Date:22.08.2025
20:03:18
Thereafter, OYO filed a Rejoinder. The Appellant also filed a
Counter-Claim before the learned Arbitrator, seeking certain
reliefs against OYO in addition to its defence.
(k) After considering the pleadings, evidence, and submissions made
by both sides, the learned Arbitrator passed an Arbitral Award
dated 25.01.2023. In the said Award, the learned Arbitrator
dismissed the counter-claims raised by the Appellant and partially
allowed certain claims made by OYO.
(l) Aggrieved by the said Arbitral Award dated 25.01.2023, the
Appellant filed a Petition under Section 34 of the A&C Act
before the learned District Judge.
(m) After due consideration of the pleadings, material on record and
contentions of the parties, the learned District Judge, vide
impugned Order dated 07.06.2024, dismissed the said Petition
filed by the Appellant, thereby affirming the Arbitral Award. On
the same line, in other cases also, the learned District Judge
dismissed the Petitions.
(n) It is against these dismissals that the present set of appeals has
been preferred by the Appellant(s) under Section 37 of the A&C
Act.
ANALYSIS:
6. This Court has heard both parties at length and has undertaken a
detailed consideration of the pleadings, Impugned Orders and Arbitral
Awards.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 11 of 34
Signing Date:22.08.2025
20:03:18
7. At the outset, it is necessary to reiterate that this Court is fully
conscious of the limited scope of appellate jurisdiction under Section 37
of the A&C Act. Judicial interference with arbitral awards is strictly
circumscribed and may only be exercised on well-settled and narrow
grounds. As observed by the Hon'ble Supreme Court in Punjab State
Civil Supplies Corpn. Ltd. v. Sanman Rice Mills4, appellate courts must
remain cautious not to sit as appellate forums over the reasoning or
conclusions of the Arbitrator unless a finding is so perverse or
unreasonable as to shock judicial conscience. The relevant paragraphs of
the Punjab State Civil Supplies Corpn. Ltd(supra) that summarizes the
laware as follows:
"11. Section 37 of the Act provides for a forum of appeal inter-alia
against the order setting aside or refusing to set aside an arbitral award
under Section 34 of the Act. The scope of appeal is naturally akin to
and limited to the grounds enumerated under Section 34 of the Act.
12. It is pertinent to note that an arbitral award is not liable to be
interfered with only on the ground that the award is illegal or is
erroneous in law that too upon reappraisal of the evidence adduced
before the arbitral trial. Even an award which may not be reasonable
or is non-speaking to some extent cannot ordinarily be interfered with
by the courts. It is also well settled that even if two views are possible
there is no scope for the court to reappraise the evidence and to take
the different view other than that has been taken by the arbitrator. The
view taken by the arbitrator is normally acceptable and ought to be
allowed to prevail.
13. In paragraph 11 of Bharat Coking Coal Ltd. v. L.K. Ahuja, it has
been observed as under:
"11. There are limitations upon the scope of interference in
awards passed by an arbitrator. When the arbitrator has
applied his mind to the pleadings, the evidence adduced
before him and the terms of the contract, there is no scope for
the court to reappraise the matter as if this were an appeal and
even if two views are possible, the view taken by the
arbitrator would prevail. So long as an award made by an
4
2024 SCC OnLine SC 2632
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 12 of 34
Signing Date:22.08.2025
20:03:18
arbitrator can be said to be one by a reasonable person no
interference is called for. However, in cases where an
arbitrator exceeds the terms of the agreement or passes an
award in the absence of any evidence, which is apparent on
the face of the award, the same could be set aside."
14. It is equally well settled that the appellate power under Section 37
of the Act is not akin to the normal appellate jurisdiction vested in the
civil courts for the reason that the scope of interference of the courts
with arbitral proceedings or award is very limited, confined to the
ambit of Section 34 of the Act only and even that power cannot be
exercised in a casual and a cavalier manner.
15. In Dyna Technology Private Limited v. Crompton Greaves
Limited, the court observed as under:
"24. There is no dispute that Section 34 of the Arbitration Act
limits a challenge to an award only on the grounds provided
therein or as interpreted by various courts. We need to be
cognizant of the fact that arbitral awards should not be
interfered with in a casual and cavalier manner, unless the
court comes to a conclusion that the perversity of the award
goes to the root of the matter without there being a possibility
of alternative interpretation which may sustain the arbitral
award. Section 34 is different in its approach and cannot be
equated with a normal appellate jurisdiction. The mandate
under Section 34 is to respect the finality of the arbitral award
and the party autonomy to get their dispute adjudicated by an
alternative forum as provided under the law. If the courts
were to interfere with the arbitral award in the usual course on
factual aspects, then the commercial wisdom behind opting
for alternate dispute resolution would stand frustrated.
25. Moreover, umpteen number of judgments of this Court
have categorically held that the courts should not interfere
with an award merely because an alternative view on facts
and interpretation of contract exists. The courts need to be
cautious and should defer to the view taken by the Arbitral
Tribunal even if the reasoning provided in the award is
implied unless such award portrays perversity unpardonable
under Section 34 of the Arbitration Act."
16. It is seen that the scope of interference in an appeal under Section
37 of the Act is restricted and subject to the same grounds on which an
award can be challenged under Section 34 of the Act. In other words,
the powers under Section 37 vested in the court of appeal are not
beyond the scope of interference provided under Section 34 of the Act.
17. In paragraph 14 of MMTC Limited v. Vedanta Limited, it has been
held as under:
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 13 of 34
Signing Date:22.08.2025
20:03:18
"14. As far as interference with an order made under Section
34, as per Section 37, is concerned, it cannot be disputed that
such interference under Section 37 cannot travel beyond the
restrictions laid down under Section 34. In other words, the
court cannot undertake an independent assessment of the
merits of the award, and must only ascertain that the exercise
of power by the court under Section 34 has not exceeded the
scope of the provision. Thus, it is evident that in case an
arbitral award has been confirmed by the court under Section
34 and by the court in an appeal under Section 37, this Court
must be extremely cautious and slow to disturb such
concurrent findings."
18. Recently a three-Judge Bench in Konkan Railway Corporation
Limited v. Chenab Bridge Project Undertaking referring to MMTC
Limited (supra) held that the scope of jurisdiction under Section 34
and Section 37 of the Act is not like a normal appellate jurisdiction
and the courts should not interfere with the arbitral award lightly in a
casual and a cavalier manner. The mere possibility of an alternative
view on facts or interpretation of the contract does not entitle the
courts to reverse the findings of the arbitral tribunal.
***
CONCLUSION:
20. In view of the above position in law on the subject, the scope of
the intervention of the court in arbitral matters is virtually prohibited,
if not absolutely barred and that the interference is confined only to the
extent envisaged under Section 34 of the Act. The appellate power of
Section 37 of the Act is limited within the domain of Section 34 of the
Act. It is exercisable only to find out if the court, exercising power
under Section 34 of the Act, has acted within its limits as prescribed
thereunder or has exceeded or failed to exercise the power so
conferred. The Appellate Court has no authority of law to consider the
matter in dispute before the arbitral tribunal on merits so as to find out
as to whether the decision of the arbitral tribunal is right or wrong
upon reappraisal of evidence as if it is sitting in an ordinary court of
appeal. It is only where the court exercising power under Section 34
has failed to exercise its jurisdiction vested in it by Section 34 or has
travelled beyond its jurisdiction that the appellate court can step in and
set aside the order passed under Section 34 of the Act. Its power is
more akin to that superintendence as is vested in civil courts while
exercising revisionary powers. The arbitral award is not liable to be
interfered unless a case for interference as set out in the earlier part of
the decision, is made out. It cannot be disturbed only for the reason
that instead of the view taken by the arbitral tribunal, the other view
which is also a possible view is a better view according to the
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 14 of 34
Signing Date:22.08.2025
20:03:18
appellate court.
21. It must also be remembered that proceedings under Section 34 of
the Act are summary in nature and are not like a full-fledged regular
civil suit. Therefore, the scope of Section 37 of the Act is much more
summary in nature and not like an ordinary civil appeal. The award as
such cannot be touched unless it is contrary to the substantive
provision of law; any provision of the Act or the terms of the
agreement."
(emphasis supplied)
8. The principal argument of the Appellant is that the Arbitral Award
and Impugned Order are perverse, as the learned Arbitrator as well as the
learned District Judge failed to appreciate that the alleged breach by the
Appellant in not furnishing documents stood condoned by OYOvide its
communication dated 30.03.2020.
9. This contention, however, fails at the very outset. It was never part
ofthe Appellant's reply dated 27.02.2021 to OYO's legal notice dated
02.05.2020, nor was it raised before the learned Arbitrator, either in the
Statement of Defence or in the Counter-Claim.
10. The argument that the communication dated 30.03.2020 amounted
to condonation of any prior breach was made for the first time before the
learned District Judge during proceedings under Section 34, and that too
only in the course of oral arguments. Such a belated plea appears to be
nothing more than an afterthought or improvisation by the arguing
counsel. Up to that point, the Appellant's consistent stand had been either
that no such documents were required under the Agreement or that all
necessary documents had already been furnished during the course of the
execution of the Agreement.
11. A perusal of the record reveals that the Appellant's submissions,
before the learned Arbitrator, were entirely silent on any claim that OYO
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 15 of 34
Signing Date:22.08.2025
20:03:18
had expressly or impliedly waived its earlier demand dated 28.11.2019
for documents. The relevant paragraphs pertaining to the contentions
raised by the Appellant in its Statement of Defence would demonstrate
the same and are as follows:
"18. Para no. 18 of the Statement of Claim is categorically denied. It is
submitted that the notice dated 30.03.2020 was premature as the clause
10.4 of the Agreement clearly states that "if the premises are rendered
unfit....., for a period exciding 3 months then this unfit Agreement may
be terminated......". It is pertinent to mention that the lockdown
declared by the Central Government was w.e.f. 25th March, 2020 to
31st May, 2020 and thereafter the State Government continued the
lockdown till June, 2020. After the said period the various lockdowns
were lifted and things became normal. Therefore, it cannot be
ascertained that the subject property was lying vacant. The notice
dated 30.03.2020 seems to be vague and based presumption and
assumptions. The remaining contents of the answering paragraph are
matter of record.
****
27. That para no.27 of the Statement of Claim is wrong and denied. As
per clause 10.4 of the Management Services Agreement, if the
premises rendered unfit, in whole or part or use and occupation or the
access thereof is hindered by any event such as tempest, flood,
earthquake or any irresistible force or act of God not occasioned by
negligence on the part of the service provider or his servant and
agents, for a period exceeding 3 months, then in such event, the
service provider may terminate this agreement by giving to the owner
a written notice of One month, whereas the claimant served the notice
on 30.03.2020 and didn't adhered to the terms of agreement. It is
pertinent to mention here that without waiting for period for 3 months,
the claimant sent the notice within 7 days of imposing day of
lockdown announced by central government."
12. The same omission is evident even in the Appellant's Counter-
Claim filed before the learned Arbitrator, where the narrative remained
consistent with the initial pleadings and did not introduce any assertion
that the communication dated 30.03.2020 altered or affected OYO's prior
position regarding the requirements of the documents.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 16 of 34
Signing Date:22.08.2025
20:03:18
13. The learned Arbitrator framed specific issues for determination
and, after conducting a reasoned and detailed analysis, rendered findings
on each; among the principal issues examined were whether the
Appellant's failure to provide the statutory and regulatory documents
requested by OYO in its email dated 28.11.2019 constituted a material
breach, and whether the Appellant's act of directly collecting rent from
the residents violated the terms of the Agreement. Both of which were
answered against the Appellant and in favour of OYO.
14. While delivering the Arbitral Award, the learned Arbitrator
concluded that the Appellant had violated Clauses 6.1(h), 6.2(b), and
6.2(j) of the Agreement, holding that the breaches were not confined to
the failure to furnish documents but also extended to the unauthorized
collection of rent, which significantly impaired OYO's contractual and
operational entitlements, thereby justifying the termination of the
Agreement under Clause 10.3. The relevant portion of the Arbitral
Award is produced hereinbelow:
"ISSUES/POINTS NO. 1 & 2
18. The Claimant had two main grievances against the Respondent, the
first grievance being that the Respondent, despite receiving the email
dated 28.11.2019 from the Claimant, did not provide the documents
specified therein, the second grievance being that the Respondent had
collected room tariff directly from the residents, though it had no
authority to collect the said tariff and such an act on the part of the
Respondent amounted to a material breach of the terms of the
Agreement. Clause 6.2 (b) mandated the Respondent to ensure
availability and validity of the documents such as Sale Deed, Power of
Attorney, electricity and water bills. The documents required by the
Claimant, vide its email dated 28.11.2019 inter alja included the
registered title deed in favour of the Owner, registered and irrevocable
Power of Attorney for entering into Lease Deed on behalf of the
Owner, if any and latest electricity bill and water bill in the name of
the Owner. Other documents included the completion certificate,
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 17 of 34
Signing Date:22.08.2025
20:03:18
occupancy certificate and police NOC for renting the premises to the
Claimant for co-living purposes. The case of the Respondent is that the
Claimant having made its due diligence before executing Agreement
with the Respondent, and having satisfied itself in all respects, it was
not entitled to seek the documents specified in the said email dated
28.11.2019. In view of the specific obligation agreed by the
Respondent in Clause 6.2 (b) of the Agreement, it would be difficult to
say that it was not contractually bound to provide the copy of the Sale
Deed of the subject Property, the electricity and water bills and the
Power of Attorney / authorization for executing the Agreement with
the Claimant. Clause 6.2(b) does not contain an exhaustive list of the
documents required to be kept available and valid by the respondent.
The use of the word 'such as' in the said Clause indicates that there
could be other documents related to the property which would be
necessary for the purpose of permitting the Claimant to rent the
property for co-living purposes. The occupancy certificate would be
one such document since a building cannot be legally occupied
without issuance of an occupancy certificate by the concerned Local
Authority. It has come in para 4 of the legal notice dated 2 May, 2020
sent by the Claimant to the Respondent that the aforesaid documents
were demanded by the Auditors of the Claimant during internal audit
and known provisioning of the said documents amounted to material
breach of the terms of the Agreement.Despite receiving the legal
notice, the Respondent did not provide the documents demanded vide
email dated 28.11.2019. It was also stated in the legal notice dated 2
May, 2020 that the Claimant as a policy did not provide services in the
premises which do not fulfill the legal compliance and necessary
requirements under the applicable laws. Vide para 7 of the legal
notice, the Respondent was informed that in case the said documents
were not provided within 30 days from the date of the notice, the
Agreement shall stand terminated. Clause 10.3 of the Agreement
entitled the Claimant to terminate the Agreement at any time including
within the Lock-in-Period, in case there was a material breach of the
said Agreement by the Respondent.
19. As regards the second grievance of the Claimant, though the
submission of the Respondent during the course of argument was that
no rent was collected by it from the occupants during the currency of
the Agreement, the said submission is contrary to the pleadings and
documents of the Respondent.
Para 6 of the legal notice dated 2.5.2020 reads as under:
"Our Clients have received complaints from the residents who
are staying at the subject premises (residents) that you are
collecting the room tariff directly from the residents. It is
pertinent to mention that you have no authority to collect
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 18 of 34
Signing Date:22.08.2025
20:03:18
room tariff from the residents directly and such an act
amounts to material breach of the terms of the Agreement.
You are therefore also being called upon to render accounts
of all the collections done directly by you from December,
2019 till date...."
Para 6 of the Reply sent by the Respondent through counsel on
27.2.2021 reads as under:
"... Due to non-availability of in-house stay Supervisor from
your client's side, residents deposited fee to my clients warden
whose salary was agreed to be borne by your client."
It would thus be seen that the collection of rent by the
Respondent from the residents / occupants of the subject
Property through the Supervisor appointed by it was admitted
in the Reply sent to the legal notice of the Claimant. This was
not the plea taken in the Reply that the Respondent was
entitled to collect the room rent directly from the
residents/occupants or that the said room rent was collected
by the Respondent with the consent of the Claimant. This is
also not the case of the respondent that though some rent was
collected by it, the amount so collected was paid to the
claimant.
20. In para 21 of the Statement of Claim, the Claimant has inter alia
stated that "The act of the Respondent in collecting the tariff/
charges/fee / rent directly from residents, which apart from being in
direct breach of the Agreement had also compounded the viability of
the arrangement."
In para 21 of the Statement of Defence, the Respondent has inter alia
stated that "It is submitted that no official of the Claimant was present
at the subject Property and, therefore, the residents paid the due
amount to the employee/caretaker of the Respondent."
In para 15 of the Statement of Defence, it is stated that "Without any
rhyme and reason, the Claimant had abandoned the premises and the
Respondent was forced to look after/manage the day to day business."
21. It is thus evident that collection of rent/tariff from the occupants
residents of the subject Property has been admitted not only in reply to
the legal notice but also in the Statement of Defence filed by the
Respondent.
22. In its email dated 28.1.2020 sent to the Claimant, the Respondent
inter alia stated that "According to.. rent collected by the Owner is Rs.
2,92,809/-whereas actual amount collected by me is only Rs.
1,57,097."
It was submitted by the learned counsel for the Respondent that the
above referred extract of the email pertained to the amount which the
Claimant had taken from the occupants as security deposit and which
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 19 of 34
Signing Date:22.08.2025
20:03:18
the Respondent was compelled to adjust at the time the occupants left
the accommodation. However, the said submission is contrary to the
stand taken in the reply to the legal notice and the Statement of
Defence filed by the Respondent. Therefore, the submission made by
the learned counsel for the Respondent is nothing but an afterthought.
23. The case of the Claimant is that the Respondent had circulated a
pamphlet amongst the occupants/residents of seven properties
including the subject Property, asking them to deposit the rent directly
in its bank account. The said pamphlet purports to request the residents
to make rent payment only to the Owner and his Authorised
Representatives whose names and mobile numbers were given in the
pamphlet. The Bank name, IFS Code and beneficiary name as well as
the account number were also given in the pamphlet, in case payment
was sought to be made through bank transfer. It was suggested to CW-
1, in her cross-examination, that the pamphlet had been issued only to
the occupants of the property subject matter of the Agreement with
JHPL. It would be pertinent to note here that the property subject
matter of this Agreement was being managed by the same person who
was managing the property subject matter of the Agreement with
JHPL. This very person has appeared as a common witness in all the
seven matters.
24. In the matter of JHPL, the Respondent in that matter has placed on
record a bank statement issued by HDFC Bank in respect of the
account maintained by it with the said Bank. The statement of account
pertains to the period from 1.8.2019 to 31.7.2020. There are several
credit entries in the said statement which show transfer of rent/tariff
directly to the Account Holder. On 7.9.2019, there is a transfer of Rs.
16,000/- by one Rattan Kumar described as "Bipasha PG Fees". There
is a credit entry on 6.9.2019 describing the transfer of Rs. 2,000/- as
'September rent'. There is a credit of Rs. 13,000/- on 29.8.2019
described as 'rent'. There is a credit entry of Rs. 9,000/- on 14.12.2019
described as 'Charu Mittal rent'. On 10.12.20219 there is a credit entry
of Rs. 15,000/- described as 'Sankalp rent'. On 27.1.2020 there is a
credit entry of Rs. 9,000/-described as 'Sudhanshu rent' and another
entry of Rs. 4,500/- described as 'rent'. On 13.1.2020 there is a credit
entry of Rs. 9000/- as 'rent'. On 11.1.2020 there is a credit entry of Rs.
16,000/- described as 'rent'.
It is evident from the admission contained in the reply to the legal
notice as well as the Statement of Defence, that the Respondent had
been collecting rent/tariff from the residents / occupants of the subject
Property.
Though it was submitted by the learned counsel for the respondent that
the aforesaid entries in the bank account of JHPL pertained to other
properties or that portion of the property which was retained by the
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 20 of 34
Signing Date:22.08.2025
20:03:18
respondent, the said submission is not backed either by the pleadings
or by any documentary evidence and therefore cannot be accepted.
25. Clause 10.3 of the Agreement entitled the Respondent to terminate
the Agreement even within Lock-in-Period in case the Claimant failed
to pay the share of the Claimant for one month despite being in
operation and the said breach on the part of the Claimant was not
remedied within 30 days of Notification of the said breach to the
Claimant. Therefore, even if the Claimant had failed to pay the share
of the Respondent in the net revenue subject to the stipulated
minimum guarantee to it, the Respondent could not have started
collecting rent directly from the occupants/residents though it could
have terminated the Agreement executed between the parties.
26. The next question which arises for consideration is as to whether
the collection of rent/tariff by the Respondent directly from the
occupants/residents amounts to a material breach of the terms of the
Agreement or not. The Agreement between the parties was essentially
a Revenue Sharing Agreement under which the net revenue collected
by the Respondent by renting/licensing accommodations in the subject
Property was to be shared between the Claimant and the Respondent.
The Respondent was to receive 70% of the net revenue whereas the
remaining 30% was to be retained by the Claimant. If 70% of the net
revenue came to less than the amount of minimum Guarantee given by
the Claimant to the Respondent and incorporated in Schedule I of the
Agreement, the respondent was entitled to the said amount irrespective
of the net revenue collected by the claimant. After a period specified
in the Agreement, if 70% of the net revenue was higher than the
amount of the minimum Guarantee, the Respondent was entitled to the
said higher amount. Such an arrangement necessarily required
collection of the rent solely and exclusively by the Claimant. If both
the parties were to collect rent/tariff from the residents/occupants, it
would not have been possible to determine the total rent collected
from the occupants. The Agreement between the parties did not
envisage collection of rent/tariff by both the parties. This is more than
evident from the terms of the Agreement including Clause 2.3, which
required the Respondent to execute an Irrevocable Power of Attorney
in favour of the Claimant authorizing it to collect rent / licence fee
from guests and take action in the event they did not pay the rent,
Clause 6.2 (j) required the Respondent not to interfere in the day to
day operations of the Claimant including with the occupation of any
sub-licencee/sub-lessee except for partial inventory (the portion of the
building which had not been given to the Claimant for management).
In any case, the collection of rent/tariff solely by the Service Provider
is inherent in such an Agreement. It is not possible for the Service
Provider to determine the exact net revenue recovered from the
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 21 of 34
Signing Date:22.08.2025
20:03:18
occupants/residents if rent/tariff is collected by the Owner as well as
by the Service Provider. In such a situation, the amount payable to the
Owner in terms of the Agreement cannot be correctly determined. In
any case, the Agreement between the parties did not permit both the
sides to recover the rent/tariff from the occupants/residents. It would
be pertinent to note here that neither in reply to the legal notice nor in
its Statement of Defence, the Respondent has claimed that under the
terms of the Agreement, both the parties were entitled to collect rent
from the occupants/residents of the subject Property.
27. Though the term 'material breach' has not been defined in the
Agreement executed between the parties, it would be difficult to
dispute that breach of a fundamental term of the Agreement would
certainly constitute its material breach. The collection of rent/tariff by
the Claimant alone, in my opinion was a fundamental term of an
Agreement of this nature since the Agreement could not have been
successfully implemented if the rent/tariff is collected by both the
parties. As rightly contended by learned counsel for the Claimant, a
breach which makes the commercial performance of an Agreement
impossible and unviable would amount to a material breach. The
whole concept of revenue sharing becomes meaningless, if the revenue
is collected by both the parties.
28. The Agreement between the parties is based on and comprises
reciprocal rights and obligations. The right of the respondent to
receive the agreed share in the net revenue carried with it, an
obligation not to interfere in the management of the subject property
by the respondent, including inducting occupants/residents therein and
recovering rent/tariff from them. If a party to the Agreement commits
breach of one or more of its material terms and thereby deprives the
other party of its rights under the said Agreement, the party in breach
can not compel the other party to perform the obligations of that party
under the said Agreement, Logically also, such an Agreement cannot
be performed, if both the parties collect rent/tariff from the
tenants/occupants. The share of the respondent cannot be quantified in
money terms, without first ascertaining the total revenue generated
from the property. If the rent from the occupants is collected not only
by the claimant but also by the respondent, the claimant cannot be sure
of the total revenue generated from the property, even if the
respondent were to offer to disclose the total rent collected by it. In
any case, here no such offer has been made by the respondent. The
stand taken during the arguments was that no rent/tariff from the
residents/occupants of the subject property was collected by the
respondent. By collecting rent /tariff from the residents/occupants, the
respondent forfeited its right to receive any share in the net revenue
generated from the property, irrespective of the extent of such
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 22 of 34
Signing Date:22.08.2025
20:03:18
collection. A party who himself is in breach of an Agreement can not
compel the other party to perform his obligations, ignoring the breach
committed by him. I therefore hold that the respondent is not entitled
to the any share in the revenue collected by the Claimant.
29. As noted earlier, in terms of clause 6.2(b) of the Agreement, the
respondent was required to keep available and valid, the documents
relating to the property subject matter of the Agreement and the
documents specifically mentioned therein cannot be said to be the only
documents required to be kept available and valid by the respondent.
The use of the words 'all the documents related to the property such as
'clearly indicates that all the documents which could be genuinely
required by the claimant were required to be kept available and valid.
Of course, the claimant could not have sought irrelevant documents
from the respondent. But, it can be hardly disputed that the documents
such as title deed, Sanctioned Building Plans and the Occupancy
Certificate would be genuinely required by the person entrusted with
the management of the property. This is more so, when the policy of
the service provider is to manage only those properties which are
legally compliant. The respondent did not offer the copies of even
these core property documents to the claimant. The case of the
claimant is that the documents were necessary for carrying out an
audit of the subject property, which was also envisaged in the
Agreement. By failing to provide these core property documents to the
claimant committed breach of yet another material term of the
Agreement, thereby giving a right to the claimant to terminate the
Agreement.
30. It is contended by the learned counsel for the Respondent that the
Agreement between the parties was a Lease Agreement and, therefore,
the Claimant was bound to pay the share of the Respondent in the net
revenue subject to the minimum guarantee agreed between the parties,
as the lease money. I however, find myself unable to accept the
contention. Though the words "lease" and "lessee" have been
occasionally used in the Agreement as well as in the Statement of
Claim, in pith and substance the Agreement between the parties is a
management Service Agreement. As noted earlier, the Agreement is
described as Management Service Agreement, the Claimant is
described as Service Provider and the Respondent as Owner, in the
preamble to the Agreement. It is also recorded that the Owner was
desirous of engaging the Service Provider for providing the services
on an exclusive basis. As per Clause 2.1 of the Agreement, the
Respondent had appointed the Claimant for providing services in the
premises on the terms and conditions contained therein and had
undertaken to execute an Irrevocable Power of Attorney in its favour,
authorizing it interalia to collect rent / licence fee from the guests. The
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 23 of 34
Signing Date:22.08.2025
20:03:18
most important feature of the Agreement is that as per Clause 2.4, the
possession of the premises was to remain with the Owner. In a lease,
the possession is transferred to the Lessee and does not remain with
the Lessor. Therefore, it would not be correct to say that the
Agreement between the parties was a Lease Agreement. In any case, it
would be immaterial whether the Agreement between the parties was a
Lease or a Management Agreement, the relevant fact being breach of
the material terms of the said Agreement. I therefore hold that the
respondent had committed breach of clause 6.1(h), 6.2(b) and (j) of the
Agreement. The claimant therefore, was entitled to terminate the
Agreement in terms of clause 10.3 thereof."
15. Significantly, from the above analyses by the learned Arbitrator, it
is clear that the findings of breach are not predicated solely on the
Appellant's failure to furnish documents, but also on the unauthorised
rent collection, which was found to be a distinct and substantive
violation. Therefore, even assuming, arguendo, that there was a
subsequent waiver of the document requirement, which, as discussed
later, is not borne out from the record, it would still not absolve the
Appellant of the second and independent ground of breach.
16. It further appears from the Impugned Order of the learned District
Judge that the Appellant, for the first time, sought to characterize the
communication dated 30.03.2020 as amounting to condonation/waiver of
the breach for non-compliance with the email dated 28.11.2019. The
learned District Judge, however, after a thorough examination of the
scope of review under Section 34 and the arbitral record, declined to
interfere with the arbitral award.
17. A plain reading of the communication dated 30.03.2020 leaves no
room for any inference, either express or implied, that OYO had waived
or condoned the requirement of the documents. The tenor and content of
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 24 of 34
Signing Date:22.08.2025
20:03:18
the email clearly shows that it was written in the context of the emerging
COVID-19 crisis, and merely proposed a revision of the revenue-sharing
arrangement due to the significant disruption in operations. There is no
indication in the said communication that OYO had abandoned its earlier
demands or that it was willing to forego the contractual compliance on
essential legal and regulatory obligations. For the sake of absolute clarity,
the entire communication dated 30.03.2020 is produced hereinbelow:
"Dear Business Partner,
At the outset, we would like to express our sincere gratitude for
the faith that you have reposed in OYO Apartment Investments LLP
("OYO") by partnering with us. The overwhelming support you have
provided to us as a valued asset partner in our goal of providing safe,
affordable, secure and reliable quality living spaces to millions of our
valued customers is appreciated wholeheartedly.
As you are aware, the widespread and severity of the Novel
Coronavirus (COVID-19) pandemic has exponentially increased in the
last weeks, both in India and over hundred fifty countries around the
world. On March 11, 2020, the World Health Organization declared
that COVID-19 is a ""pandemic". To combat this pandemic, many
governments around the world have declared lockdown in their
respective countries until the virus is contained.
In India, State Governments and Union Territories have invoked
the provisions of the Epidemic Diseases Act, 1897 from March 12,
2020 as a measure to arrest growth in the number of cases of COVID-
19. The State Governments have issued notifications declaring
COVID-19 as an epidemic and ordered a complete lockdown of their
respective states with severe restrictions on movement of the people,
including sealing of borders. On March 11, 2020, the Ministry of
Health and Family Welfare Has issued an advisory on Social
Distancing Measures where they have advised everyone to avoid non-
essential travel and use video conferencing facilities to avoid face to
face meetings. Due to these situations, the Ministry of Railways
cancelled all train services to help contain the spread of the pandemic.
Domestic air travel too has been suspended w.e.f. March 25, 2020.
On top of that, the Hon'ble Prime Minister Narendra Modi
addressed the nation on March 19, 2020 advising the general public to
stay indoors, followed by a "Janta Curfew on March 22, 2020 and
given that the pandemic is spreading so fast and uncontrolled, on
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 25 of 34
Signing Date:22.08.2025
20:03:18
March 24, 2020 he gave directions that the entire country will be on
lockdown, with exception of certain essential services, starting March
25, 2020 12:00 AM until April 15, 2020.
Even globally, the hospitality and accommodation industry is
facing one of the most challenging times in its history, as people
across the globe are forced to change their normal routine way of work
including but not limited to working from home, cancellation of any
travel plans in deference to or in compliance with advisories or
regulations from their respective governments against travelling,
public gatherings, visiting workplaces, and similar activities. Ministry
of Health and Family Welfare has issued a consolidated travel
advisory for COVID-19 on March 11, 2020 putting the prohibition of
travel from China, Italy, Iran and some countries of EU to India and an
additional travel advisory on March 19, 2020 prohibiting scheduled
international commercial passenger aircrafts to enter into India from
March 22, 2020.
These and many such circulars and notifications issued by the
Central and State Governments mandating, cancellations of travels,
lockdowns, curfews etc. as a consequence of the COVID-19 pandemic
are available on the website of several ministries of Government of
India and as responsible citizen, we must abide by these and help
contain this COVID-19 pandemic and save precious lives.
While we hope that circumstances will improve and force
majeure situation would improve, given the experience in other
jurisdictions as is available in the public domain, it is likely that the
situation will continue for a little while longer.
In this backdrop, the biggest challenge that we are facing today
is that as the companies and educational institutes are closed down,
most of our residents have either left for their hometown or are in
process of leaving On our part, we are taking every measure possible
to ensure that the safety and security-of our residents remain our
highest priority and that we should do everything possible to ensure
their well-being as well as that of our employees and partners amidst
the COVID-19 outbreak. To deal with this -COVID-19 situation at
property level, we have taken several steps such as:
Governmental Guidelines: Actively monitoring the situation
and following guidance from the Centers for Disease Control and
Prevention (CDC), World Health Organization (WHO) and
"local/national health officials and regularly updating our business
partners with accurate information and advisories;
Enhanced Sanitization Initiatives: taking enhanced
sanitization initiatives in all public areas of all the buildings, such as
lobbies, elevators, door handles, bathrooms and advising our business
partners to do the same;
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 26 of 34
Signing Date:22.08.2025
20:03:18
Technological Support: Our technological solutions continue
to deliver easy and hassle-free check-in, check out and online payment
experience, ensuring minimum people-to-people contact;
Support through Customer Service: Our customer. residents
and ground support teams are fully equipped and sensitized to
effectively manage resident concerns and our 24x7 emergency
response team is ready to help business partners and OYO teams to
apply necessary safety protocols and report any incident or suspected
case.
Provide support services to ensure we do our part to help the
community and enable our asset partners to provide accommodation to
the healthcare professionals, stranded persons whether they are from
neighbourhood cities or foreign countries, people who need support
for isolation or quarantine which initiatives are being explored in
discussion with the Government and Hospital Authorities.
In light of this COVID-19 pandemic and various restrictions
issued by the governmental authorities, the occupancy rate of your
property has been significantly and adversely impacted and it is
unlikely to improve in the next few months. At the time of entering
into the agreement between (Agreement) between JP Singh ("you")
and OYO ("OYO" or "we"), this global pandemic, the Government's
response to it (which is rightly so in light of this serious pandemic
situation where we have no control whatsoever) and the resulting
decline in the revenue of the property simply wasn't and could not
have been foreseen by either of us. The basic assumption under which
the Agreement and particularly the Rent/Benchmark Revenue was
agreed, amongst others, "was that the demand for bed occupancy
would continue in the ordinary course of business subject to usual
fluctuations that are typical in the hospitality, accommodation and/or
co-living business. This abrupt, extra-ordinary and unprecedented drop
in your property's revenue as a result of the COVID-19 pandemic can
hardly be considered to be in the ordinary course of business. OYO's
performance and obligation in relation to the Rent/Benchmark
Revenue under the Agreement has become extremely onerous and
commercially impracticable.
This letter provides notice of the occurrence of a 'Force Majeure
event effective from March 12, 2020 on account of the outbreak of
COVID-19 around which various State Governments invoked
provisions of the Epidemic Diseases Act, 1897, being an extraordinary
circumstance, which is beyond our control and which could not be
avoided by any amount of foresight and care and its severe impact on
our performance under the Agreement.
As you are aware, the COVID-19 pandemic and the consequent
actions of both the Government and other Regulators/private
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 27 of 34
Signing Date:22.08.2025
20:03:18
organizations has had an unforeseen and extremely adverse impact on
the entire hospitality and accommodation industry which has,
effectively, disrupted the entire industry. In these exceptional and
trying circumstances, kindly note that it is impossible for OYO to
discharge its obligations under the Agreement including, inter alia, the
provisions of Rent/Benchmark Revenue. Given that the impact of this
unforeseen situation is likely to be felt long after the withdrawal of the
lockdown and COVID-19 pandemic, it appears that the very basis
upon which the Agreement was entered into has been altered beyond
anyone's imagination. Consequently, OYO will find it virtually
impossible to continue to operate the Agreement from the point of
view of the object and purpose in relation to which the Agreement was
first executed. As such, OYO is left with no option but to invoke Force
Majeure in as much as the pandemic and related consequences have
adversely impacted the operation of the property and the business of
the property and to put you to notice that it is constrained to exercise
its rights thereunder to suspend payment of the monthly rent and/or
any other amounts payable to you under the Agreement. Kindly note
that while OYO is well within its rights to terminate the Agreement, in
view of the above, we are currently refraining from taking such a
drastic step while reserving our rights to do so should the
circumstances continue to deteriorate or the adverse conditions, be
prolonged.
Notwithstanding the above, in our endeavour to effectively
provide facilities and benefits at the property, we will continue to incur
expenses during the time when we are running the property in relation
to the quality maintenance and upkeep, safety and security,
renovations and manpower for managing the property to the extent
feasible and without any obligation on our part. Further, during this
period of lockdown, please note that the existing residents and/or the
belongings of the residents who have left for their hometown before or
at the start of the lockdown will continue to stay/remain at your
property in accordance with the instructions from the Government
authorities. We will endeavor to collect the rental payment from such
residents in subject to the instructions from the Government
authorities, if any.
Under the circumstances, please note that we deeply value our
partnership and wish to continue it while also safeguarding our
common financial interests from the property and in larger public and
government interest. As mentioned above, since the entire hospitality
and accommodation industry as well as the way people live appears to
have been disrupted and its impact is likely to continue well after the
lockdowns restrictions are withdrawn/modified, it may be in our
mutual interest to revisit our Agreement to try and arrive at a more
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 28 of 34
Signing Date:22.08.2025
20:03:18
rational and mutually, beneficial commercial arrangement that is more
in tune with the present day reality and the likely future.
In this regard, and in the interim, we propose a revenue share
model, effective March 12, 2020, whereby our commercial
engagement, in supersession of the existing commercial terms, under
the Agreement will be 30% (thirty percent) of the net revenue Le., the
revenue on account of accommodation deducting therefrom
levies/cess/duties whether imposed by local/state/central authorities
(wherever applicable), sales and marketing costs, channel charges
including but not limited to commissions, customer acquisition
expenses etc. and subject to all applicable taxes both present and
which may be levied in the future ("Revenue Share").
Also, note that, as our joint efforts for the community services,
OYO might not be able to make payment of Revenue Share as per the
above-mentioned terms in case part or in full in the event that property
is being utilized for supporting essential services by or under the
orders of Government/ Health care centres/authorities.
We would like to emphasize continuity of the business at the property
shall be subject to business feasibility, safety and security of the
residents, manpower peaceful surrounding environment and
compliance of the property with various applicable laws and
regulations and OYO may use discretion in the event of any change in
the aforementioned situations (including but not limited to shutting
down the property), which we shall endeavour to inform to you as
soon as practicable.
Apart from, the day-to-day operations, to achieve higher
standard of governance for our respective responsibilities, you are
expected to and committed to observe compliance with various
government policies and regulatory requirements applicable to the
property (including in relation to all guidelines and directives issued
by the government and administrative authorities in relation to
COVID-19 pandemic) and we will make all commercially reasonable
efforts that we perform our obligations in accordance with the
Agreement signed between us read in conjunction with this
communication.
Needless to mention, our priority continues to be the safety of
our residents, manpower, partners and the communities in which we
operate. We are regularly reviewing the position and shall
communicate once the force majeure event/COVID-19 situation has
ceased and when OYO will be able to resume performance of its
currently affected obligations under the Agreement.
In any event, you can reach us through the same mail, if you should
have any immediate questions.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 29 of 34
Signing Date:22.08.2025
20:03:18
We appreciate your understanding and we look forward to the
continued success of our partnership.
Yours faithfully,
OYO"
18. As is manifest from a bare perusal of the contents of the
aforementioned communication, no novation, as has been contended by
the Appellant, has been sought of the entire Agreement. The
communication, in recognition of the prevailing conditions, seeks to
amend the working of the Agreement to a limited extent, i.e., in respect
of the commercial engagement inter-se the parties, limited to the revenue
share. A reading of the said communication also makes it evident that the
rest of the terms as between the parties subsisted.
19. This is further corroborated by the subsequent legal notice dated
02.05.2020 issued by OYO, in which the requirement of the same
documents was reiterated. In fact, the notice expressly warned that non-
furnishing of the documents within 30 days would amount to a material
breach of the terms of the Agreement. The notice also invoked the
arbitration clause and proposed the name of a Sole Arbitrator. Thus, far
from supporting the Appellant's case, this sequence of communications
reinforces the view that OYO consistently insisted on documentary
compliance and never intended to waive the same.
20. The notice dated 02.05.2020 did not constitute a blanket
termination of the Agreement but clearly stated that termination would
ensue only upon failure to supply the documents. The invocation of the
arbitration clause in the same notice further clarifies that OYO treated the
breach, the direct rent collection, as live and unresolved disputes,
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 30 of 34
Signing Date:22.08.2025
20:03:18
warranting formal adjudication. The relevant extracts of the notice dated
02.05.2020 are produced hereinbelow:
"3. Noteworthy to mention here that under the Agreement you have
specifically represented that all the documents related to Subject
Premises as required from regulatory & legal perspective are available
and the validity of the same shall be maintained throughout the term of
the Agreement.
4. That despite repeated requests you have failed to provide necessary
documents/permissions/approval with respect to Subject Premises
which are essential for purposes of the Agreement. Even when such
documents were demanded by the auditors during internal audit our
client had requisitioned these relevant documents from you vide our
client's email dated 28/11/2019, including but not limited to non-
objection certificate ("NOC") from the Society/ Housing/Resident
Welfare Association & Police NOC for renting the Subject Premises to
OYO for the purposes defined under the Agreement. However, the
aforesaid documents have not been provided to our client till date and
thus, non-provisioning of the aforesaid documents amounts to material
breach of the terms of Agreement.
5. That vide this notice we once again request you to provide the all
necessary documents as requested vide our client's email dated
28/11/2019 for the Subject Premises within 30 (thirty) days of the date
of this notice. Kindly note that non-provisioning of aforesaid
documents would vitiate the Agreement from the very inception and
shall render the same void. Kindly note that our client, as a policy, do
not provide services in the premises which do not fulfil the legal
compliance and necessary requirements under the applicable laws.
*****
7. Also please note that in case the documents referred to in para 4 and
5 above are not provided within aforesaid stipulated period of 30
(thirty) days from the date of this notice, then the Agreement shall
stand terminated forthwith.
8. That in the meanwhile the COVID19 pandemic hit across the globe
which has been declared as pandemic. As you are aware, due to
COVID19, companies and educational institutes are closed down and
thus, most of our client's residents have either left for their hometown
or are in process of leaving. In view of the same our client invoked the
force majeure clause in the Agreement vide its communication dated
30/03/2020.
9. That dehors the right of our client to terminate the Agreement, and
without prejudice to exercise of its right to terminate the Agreement, it
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 31 of 34
Signing Date:22.08.2025
20:03:18
is abundantly clear from your aforesaid acts and events that you are
not willing to comply with your obligations under the Agreement
dated 22/07/2019. From the aforementioned facts and circumstances, it
is crystal clear that a dispute has arisen between our client and you
regarding the payment of sums of money in terms of the Agreement
and viability of doing business from the Subject Premises in absence
of the relevantdocuments/approvals/permission, if the same are not
provided as the formed the vary basis of Agreement. Further, that
aforesaid dispute being purely civil and commercial in nature, is
mandatorily required to be resolved through the dispute resolution
mechanism as agreed between you and our client in the Agreement by
invoking arbitration in accordance with Clause 11.2. of the Agreement
dated 22/07/2019. In this regard, Clause 11 of the terms and conditions
of the Agreement is relevant, and the same is as under:
*****
9. In view of the aforementioned clause which lays down the agreed
mechanism for resolution of disputes between the parties, our client
hereby invokes arbitration. That further our client recommends the
name of Mr. K. K. Nangia, Retired Registrar of the Delhi High Court
as a Sole Arbitrator for adjudicating the disputes which have arisen
between our client and you. You are hereby requested to confirm the
appointment of Mr. K. K. Nangia as a Sole Arbitrator within a period
of 30 (thirty) days from receipt of the present notice, failing which our
client shall be constrained to initiate appropriate proceedings for
constitution of the Arbitral Tribunal before the Hon'ble High Court of
Delhi.
****
....."
(emphasis supplied)
21. In response, the Appellant never furnished the requested
documents. Instead, it waited nearly ten months and replied only on
27.02.2021, contending vaguely that the documents had already been
provided in July 2019. Even in this reply, the Appellant made no
assertion that the communication dated 30.03.2020 operated as a waiver
or condonation of the earlier breach. This argument was plainly an
afterthought and an attempt to raise a new defence not pleaded before the
learned Arbitral Tribunal.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 32 of 34
Signing Date:22.08.2025
20:03:18
22. The consistent position taken by OYO, from the 28.11.2019
request and culminating in the legal notice dated 02.05.2020,
demonstrates an unambiguous assertion of its rights under the
Agreement. The allegation that the communication dated 30.03.2020
altered this legal position is misconceived and finds no support either in
language or conduct.
23. Accordingly, the submission that the said communication
constituted a waiver or condonation of breach is legally unsustainable,
factually incorrect, and liable to be rejected as a belated and
manufactured defence raised for the first time before the learned District
Judge.
CONCLUSION:
24. As noted at the commencement of this judgment, the core
contention advanced by the learned Senior Counsel for the Appellant
formed the common thread across all the connected appeals. Having been
found devoid of merit in FAO (COMM) 175/2024, this ground cannot
sustain any of the appeals.
25. In view of the above discussion, no case is made out for
interference with the Impugned Orders dated 07.06.2024 passed by the
learned District Judge or with the Arbitral Awards dated 25.01.2023
passed by the learned Arbitrator. The findings recorded therein are
neither perverse nor contrary to the settled legal position and therefore
warrant affirmation; accordingly, all appeals are dismissed.
26. The present appeals and all pending applications, if any, are
disposed of in the above terms.
Signature Not Verified
Digitally Signed
By:HARVINDER KAUR
BHATIA
FAO (COMM) 175/2024 & connected appeals Page 33 of 34
Signing Date:22.08.2025
20:03:18
27. No order as to costs.
ANIL KSHETARPAL, J.
HARISH VAIDYANATHAN SHANKAR, J. AUGUST 20, 2025/sm Signature Not Verified Digitally Signed By:HARVINDER KAUR BHATIA FAO (COMM) 175/2024 & connected appeals Page 34 of 34 Signing Date:22.08.2025 20:03:18