An expired lease may be deemed operative solely to assess interim rent pending arbitration.

The appellant-lessor challenged a Commercial Court order under Section 9 of the Arbitration and Conciliation Act, 1996, which required restoration of electricity to the respondent-lessee’s commercial premises without a corresponding direction to pay rent.

The appellant contended that the lease had expired on 5 May 2026 and that the respondent had not paid rent.

In an interim order, the High Court required the respondent to make specified deposits, including amounts calculated at Rs. 10,000 per day under clause 5.5 of the lease, as a condition for continuing to avail of electricity.

The respondent asserted that the lease had been renewed and stated that she had filed a Section 11 application to appoint an arbitrator; notice had issued in that application.

The parties disputed the lease’s expiry and renewal.

Whether, pending arbitration, the appellant could disconnect electricity to the premises or was required to continue supply, given the parties’ dispute over the lease and the respondent’s non-payment of amounts directed by the High Court.

Whether the respondent should be directed to pay lease rent or interim mesne profits during the arbitration proceedings, notwithstanding the dispute about expiry or renewal of the lease.

The Court considered Sections 9, 11 and 17 of the Arbitration and Conciliation Act, 1996.

Section 9 provides for interim measures by a court; Section 11 concerns appointment of an arbitral tribunal; and Section 17 empowers the tribunal to grant interim measures.

The Court reasoned that, once the dispute was to be adjudicated in arbitration, a party seeking possession or other relief—including disconnection of electricity—could seek appropriate relief from the arbitrator under Section 17, by counterclaim, or through a civil suit in accordance with law.

The lease terms, including clause 5.5, were relevant to the interim payment directions, but the Court did not finally determine the lease’s expiry, renewal, or the parties’ ultimate rights.

The Court noted that the arbitration clause had been invoked and that the Section 11 application was pending, so the parties’ substantive disputes—including whether the lease had expired or been renewed—were matters for the arbitral process.

It therefore declined to permit the appellant to unilaterally disconnect electricity and directed continued supply, subject to any order under Section 17 or the final award.

At the same time, it considered that the lessor could not be left without payment while the respondent remained in occupation.

Without deciding the lease-status dispute, it treated the lease as continuing solely for calculating interim lease rent or mesne profits during arbitration.

The respondent was directed to clear the arrears for 5 May 2026 to 30 September 2026 by 30 November 2026 and thereafter to pay the applicable amount under the lease by the seventh day of each month during the arbitration proceedings, as interim rent or mesne profits subject to the final award.

All rights and contentions were reserved for determination at the appropriate stage.