Calcutta HC Appoints Arbitrator to Resolve Long-Pending Lease-Renewal Dispute between DGGI and Property Owner [Read Order]

In a recent ruling, the Calcutta High Court appointed a sole arbitrator to resolve the long-pending lease-renewal dispute between the property owner and the Directorate General of Goods and Services Tax (Intelligence), Kolkata Zonal Unit, after observing that the arbitration clause survived the expiry of the lease and that the arbitral tribunal must decide questions of limitation.

G.E.T. Properties Private Limited, the petitioner, explained that despite repeated communications, the respondent neither executed fresh lease deeds nor paid enhanced rent, which led to the invocation of arbitration on 5 August 2025 after the contractual mechanism failed.

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The respondent argued that the lease had expired in 2011, that the notice invoking arbitration after fourteen years was barred by limitation, and that the arbitration clause did not survive the end of the lease. It contended that it had become a monthly tenant and that a civil suit, rather than arbitration, was the appropriate forum.

The single-bench comprising Justice Shampa Sarkar observed that the respondent’s own affidavit showed it was pursuing mandatory governmental approvals, such as a Non-Availability Certificate and a Fair Rent Certificate, before executing or renewing any lease, and that it had not refused the petitioner’s demands.

The court observed that the respondent continued to occupy the premises and paid rent at the old rate, which indicated that the terms of the 2016 agreement were still being acted upon and that disputes concerning non-execution of lease deeds and non-payment of enhanced rent continued to subsist.

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On limitation, the bench observed that even if part of the monetary claim might later be held time-barred, the respondent’s continued occupation meant that the cause of action was ongoing. The question was a mixed issue of law and fact to be decided by the arbitral tribunal, and the claims were not ex facie dead at the referral stage.

The court explained that under the doctrine of separability, an arbitration clause survives expiry or termination of the main contract unless the clause itself is shown to be invalid. Since the appointment procedure had failed and the disputes were arbitrable, the High Court appointed Mr. Druva Ghosh, Senior Advocate, as the sole arbitrator. All issues were left open for decision before the tribunal, and the application was disposed of.

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