Arbitration: Arbitrability of the dispute relating to lease/tenancy agreements/deeds when such lease is governed by the Transfer of Property Act, 1882 – Held: When the disputes arise between the landlord and tenant with regard to determination of lease under the TP Act, the landlord for seeking possession of the leased property in a normal circumstance is required to institute a suit in the court which has jurisdiction – However, if the parties in the contract of lease have agreed upon the alternate mode of dispute resolution through arbitration, the landlord would be entitled to invoke the arbitration clause and make a claim before the arbitrator – The instant case is governed by the Transfer of Property Act, petitioner-landlord while invoking the arbitration clause nominated sole arbitrator and issued notice to the respondent-tenant – Respondent neither replied to the notice nor objected to the arbitrator proposed by the petitioner – Since dispute between the parties is to be resolved through arbitration, the prayer made in this petition is accepted – Petition for appointment of nominated sole arbitrator allowed – Transfer of Property Act, 1882 – ss.111, 114, 114A. Arbitration: Arbitrability of the dispute arising under the Rent Act – Held: If the eviction or tenancy is governed by a special statute, namely, the Rent Act, the premises being amenable to the provisions of the Act would also provide statutory protection against eviction and the courts specified in the Act alone will be conferred jurisdiction to order eviction or to resolve such other disputes – In such proceedings under special statutes, the issue to be considered by the jurisdictional court is not merely the terms and conditions entered into between the landlord and tenant but also other aspects such as the bonafide requirement, comparative hardship etc. even if the case for eviction is made out – In such circumstance, the Court having jurisdiction alone can advert into all these aspects as a statutory requirement and such cases are not arbitrable – Rent Control Legislation.
Allowing the Arbitration Petition, the Court
HELD: 1. A perusal of s.111 & 114, 114 A of TP Act indicate the manner in which the determination of lease would occur, which also includes determination by forfeiture due to the acts of the lessee/tenant in breaking the express condition agreed between the parties or provided in law. The breach and the consequent forfeiture could also be with respect to non-payment of rent. In such circumstance where the lease is determined by forfeiture and the lessor sues to eject the lessee and, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, Section 114 of TP Act provides that the Court instead of passing a decree for ejectment may pass an order relieving the lessee against the forfeiture due to which the lessee will be entitled to hold the property leased as if the forfeiture had not occurred. Under Section 114A of the TP Act, a condition for issue of notice prior to filing suit of ejectment is provided so as to enable the lessee to remedy the breach. No doubt the said provisions provide certain protection to the lessee/tenant before being ejected from the leased property. The same cannot be construed as a statutory protection nor as a hard and fast rule in all cases to waive the forfeiture. It is a provision enabling exercise of equitable jurisdiction in appropriate cases as a matter of discretion. [Para 15][831-F-H; 832-A-B]
2. Such equitable protection does not mean that the disputes relating to those aspects between the landlord and the tenant is not arbitrable and that only a Court is empowered to waive the forfeiture or not in the circumstance stated in the provision. When the disputes arise between the landlord and tenant with regard to determination of lease under the TP Act, the landlord to secure possession of the leased property in a normal circumstance is required to institute a suit in the Court which has jurisdiction. However, if the parties in the contract of lease or in such other manner have agreed upon the alternate mode of dispute resolution through arbitration the landlord would be entitled to invoke the arbitration clause and make a claim before the Arbitrator. Even in such proceedings, if the circumstances as contained in Section 114 and 114A of TP Act arise, it could be brought up before the Arbitrator who would take note of the same and act in accordance with the law qua passing the award. [Para 16][832-E-H]
3. Insofar as eviction or tenancy relating to matters governed by special statutes where the tenant enjoys statutory protection against eviction whereunder the Court/Forum is specified and conferred jurisdiction under the statute alone can adjudicate such matters. Hence in such cases the dispute is nonarbitrable. If the special statutes do not apply to the premises/property and the lease/tenancy created thereunder as on the date when the cause of action arises to seek for eviction or such other relief and in such transaction if the parties are governed by an Arbitration Clause; the dispute between the parties is arbitrable and there shall be no impediment whatsoever to invoke the Arbitration Clause. [Para 18][833-F-G]
4. The petitioner in the instant case while invoking the Arbitration Clause has proposed the name of Justice (Retired) Mukul Mudgal as the Sole Arbitrator. The respondent neither replied to the said notice nor objected to the Arbitrator proposed by the petitioner. In that backdrop since a dispute between the parties is to be resolved through Arbitration, the prayer made in this petition is liable to be accepted. [Para 19][834-A-B]
Vidya Drolia & Ors. v. Durga Trading Corporation (2019) SCC online SC 358 : 2019 (3) SCR 465 – relied on.
Booz Allen and Hamilton Inc v. SBI Home Finance Limited and Others (2011) 5 SCC 532: [2011] 7 SCR 310; Himangni Enterprises v. Kamaljeet Singh Ahluwalia (2017) 10 SCC 706:[2017] 10 SCR 139; Natraj Studios Ltd. v. Navrang Studios (1981) 1 SCC 523: [1981] 2 SCR 466; Namdeo Lokman Lodhi v. Narmadabai &
Others AIR 1953 SC 228:[1953] SCR 1009 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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