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Himangni Enterprises Vs. Kamaljeet Singh Ahluwalia - (Supreme Court) (12 Oct 2017)

Civil suit would be triable by the Civil Court; Arbitrator has no jurisdiction to decide the eviction/rent disputes



Present appeal is filed by the Defendant against the final judgment passed by the High Court of Delhi at New Delhi whereby the High Court dismissed the appeal filed by the Appellant herein and upheld the order of the Additional District Judge. The contention of the Appellant, was that since the disputes for which the civil suit is filed arise out of the lease deed dated 31st August, 2010 which contained an arbitration Clause (9.8) for their adjudication through the arbitrator, the civil suit to get such disputes decided by the Civil Court was barred. The question, which arises for consideration in this appeal, is whether the two Courts below were justified in rejecting the application filed by the Appellant under Section 8 of the Arbitration and Conciliation Act, 1996 in a pending civil suit filed by the Respondent seeking Appellant's eviction from the premises in question and for claiming some ancillary reliefs therein.

The question involved in the appeal remains no longer res integra and stands answered by two decisions of this Court in Natraj Studios (P) Ltd. v. Navrang Studios and Anr., and Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. and Ors., against the Appellant and in favour of the Respondent.

In Natraj Studio's case, the landlord had filed a civil suit against the tenant in the Small Causes Court, Bombay claiming therein the tenant's eviction from the leased premises. There also, the tenant was inducted pursuant to "leave and license" agreement executed between the landlord and the tenant. This Court rejected the application filed by the tenant under Section 8 of the Act and held, that the civil suit filed by the landlord was maintainable. It was held that the disputes of such nature cannot be referred to the arbitrator. The relationship between the parties being that of licensor-landlord and licensee tenant and the dispute between them relating to the possession of the licensed demised premises, there is no help from the conclusion that the Court of Small Causes alone has the jurisdiction and the arbitrator has none to adjudicate upon the dispute between the parties.

Yet in another case of Booz Allen & Hamilton Inc., this Court (two Judge Bench) laid down the following proposition of law after examining the question as to which cases are arbitrable and which are non-arbitrable: The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes.

In view the law laid down by this Court in aforementioned two decisions and on application of the same to the facts of this case, Supreme Court opined that, both the Courts below were right in dismissing the Appellant's application filed under Section 8 of the Act and thereby were justified in holding that, the civil suit filed by the Respondent was maintainable for grant of reliefs claimed in the plaint despite parties agreeing to get the disputes arising therefrom to be decided by the arbitrator.

The Delhi Rent Act, 1955 which deals with the cases relating to rent and eviction of the premises, is a special Act. Though it contains a provision (Section 3) by virtue of it, the provisions of the Act do not apply to certain premises but that does not mean that the Arbitration Act, ipso facto, would be applicable to such premises conferring jurisdiction on the arbitrator to decide the eviction/rent disputes. In such a situation, the rights of the parties and the demised premises would be governed by the Transfer of Property Act and the civil suit would be triable by the Civil Court and not by the arbitrator. In other words, though by virtue of Section 3 of the Act, the provisions of the Act are not applicable to certain premises but no sooner the exemption is withdrawn or ceased to have its application to a particular premises, the Act becomes applicable to such premises. In this view of the matter, it cannot be contended that the provisions of the Arbitration Act would, therefore, apply to such premises. Present appeal is dismissed as bereft of merit.

Relevant : Natraj Studios (P) Ltd. v. Navrang Studios and Anr., MANU/SC/0477/1981 : 1981(1) SCC 523 and Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. and Ors., MANU/SC/0533/2011: (2011) 5 SCC 532


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