Arbitration award
Ashraf
(Querist) 26 October 2009
This query is : Resolved
Dear Sir / Madam,
On 19-04-2008, I had entered in to an agreement with Malappuram Municipality to run their amusement park for three years by fixing 1 crore rupees as annual rent. Due to the lack of visitors I failed to pay the agreed rent on time. In the signed agreement, we both parties were admited it as an experimental project and the terms may changed upon the mutual understanding. I requested municipality to reduce the rent with my balance sheet. But they denied my request and I approched hon'ble high court of Kerala for arbitration and the court already ordered for the arbitration. My question is that, what is the real meaning of experimental project as per the terms of law? What is chance for componsation from the municipality for my loss? I had deposited 1 crore rupees as security deposit when sign the contract, wether they forfit this money to the rent defaulted by me? I only paid 50 lakhs out of 1 crore 20 lakhs for the rent. I had invested about 58 Lakhs for improvement in the park and municipality is using the same now, shall I get the money for it?
I hope any experts will answer me properly
Kiran Kumar
(Expert) 26 October 2009
Mr. Ashraf,
i can understand your agony as you faced big financial loss.
but the trouble here is nothing concrete can be adviced without reading the terms and conditions of the contract.
compensation, forfiet of security etc. all issues have to be seen from the terms of the contract.
you can not go beyond equity.
'Experimental Project' to my knowledge will be invited its literal meaning, as the MC must be intending to launch few more such projects if the one with you becomes a success....but in my opinion a contract is a contract which has to be honoured as per its terms.
you can not demand compensation merely on the basis of equity.
so my advice is visit some local counsel and show him the terms of the contract so that he must be in position to provide you a firm advice.
Raj Kumar Makkad
(Expert) 26 October 2009
This is repeated quarry. I have already replied in detail in your similar quarry raised on today.
A. A. JOSE
(Expert) 27 October 2009
Mr.Kiran Kumar is absolutely right. A contract has legal sanctity and parties concerned are bound to honour the same. Mere use of the word "experimental" may not qualify one to commit breach of the express terms and conditions of the contract please. While one sympathises with the author for his predicament, one cannot help much in the background of the case unless some saving clause can be found out in the contractual conditions.
