Case: Ranjit Kumar Bose  Vs. Anannya Chowdhury

it follows that arbitration agreements between parties whose rights are regulated by the Bombay Rent Act cannot be recognized by a court of law. This decision in Natraj Studios (P) Ltd. v. Navrang Studios & Anr. (supra) supports our conclusion that the arbitration agreement between the landlord and tenant has to give way to Section 6 of the Tenancy Act which confers exclusive jurisdiction on the Civil Judge, to decide a dispute between the landlord and the tenant with regard to recovery of possession of the tenanted premises in a suit filed by the landlord. 10. The High Court, however, has relied on three decisions of this Court to hold that it is for the arbitral tribunal to decide under Section 16 of the 1996 Act whether it has the jurisdiction to decide the dispute between the appellants and the respondents. We may distinguish those cases from the facts of the present case. 11. In Hindustan Petroleum Corporation Ltd. v. Pinkcity Midway Petroleums (supra), Hindustan Petroleum Corporation Ltd. stopped supply of petroleum products to the dealer and the dealer filed a civil suit in the Court of Civil Judge, Rewari, for a declaration that the order stopping supply of petroleum product was illegal and arbitrary. Hindustan Petroleum Corporation Ltd. filed a petition under Section 8 of the 1996 Act praying for referring the dispute pending before the Civil Court to the arbitrator as per Clause 40 of the Dealership Agreement. The Civil Judge dismissed the petition and Hindustan Petroleum Corporation Ltd. filed a revision before the High Court, but the High Court also dismissed the revision. Hindustan Petroleum Corporation Ltd. thereafter filed an appeal before this Court and this Court held that Section 8 of the 1996 Act in its clear terms mandates a judicial authority before whom an application is brought in a matter, which is the subject-matter of an arbitration agreement, to refer such parties to the arbitration. In this case, the arbitration agreement contained in Clause 40 of the Dealership Agreement was not hit by a statutory provision like the one in Section 6 of the Tenancy Act providing that the dispute shall be decided only by a Civil Judge in a suit notwithstanding a provision in the contract to the contrary. 12. In Agri Gold Exims Ltd. v. Sri Lakshmi Knits & Wovens & Ors. (supra), the parties had entered into a memorandum of understanding in relation to the business of export and the memorandum of understanding contained an arbitration clause that in case of any dispute between the two parties, the same shall be referred to arbitration, by two arbitrators, nominated by each of the parties and the award of the arbitrators shall be binding on both the parties. Agri Gold Exims Ltd. filed a suit in the District Court at Vijayawada for recovery of an amount of Rs.36,14,887/- and for future interest on a sum of Rs.53,79,149/-. Sri Lakshmi Knits & Wovens filed an application under Section 8 of the 1996 Act for referring the dispute to the arbitral tribunal in terms of the arbitration agreement contained in the memorandum of understanding. This application, however, was dismissed by the District Court, but on revision the High Court reversed the order of the District Court and referred the parties to arbitration. Agri Gold Exims Ltd. carried an appeal to this Court and this Court reiterated that Section 8 of the 1996 Act is peremptory in nature and in a case where there exists an arbitration agreement, the Court is under obligation to refer the parties to arbitration in terms of the arbitration agreement, relying on Hindustan Petroleum Corporation Ltd. (supra). In this case again, there was no statutory bar to arbitration like the one in Section 6 of the Tenancy Act providing that the dispute can only be decided by the Civil Judge in a suit. 13. In Branch Manager, Magma Leasing & Finance Limited & Anr. v. Potluri Madhavilata & Anr. (supra), Magma Leasing Limited Public United Company (for short ‘Magma’) and Smt. Potluri Madhavilata (for short ‘hirer’) entered into an agreement of hire-purchase for the purchase of a motor vehicle whereunder the hirer was required to pay hire-purchase price in 46 instalments. When the instalments were not paid, Magma seized the vehicle and sent a notice to the hirer saying that the hire-purchase agreement has been terminated. The hirer then filed a suit against Magma in the Court of the Senior Civil Judge for recovery of possession of the vehicle and for restraining Magma from transferring the vehicle. Magma filed a petition before the Civil Judge under Section 8 of the 1996 Act praying that the dispute raised in the suit be referred to an arbitrator in terms of Clause 22 of the Hire-Purchase Agreement, which contained the arbitration agreement. This Court reiterated that Section 8 is in the form of legislative command to the court and once the prerequisite conditions are satisfied, the Court must refer the parties to arbitration. In this case again, there was no statutory bar to arbitration like Section 6 of the Tenancy Act providing that the dispute can only be decided by a Civil Judge. 14. The High Court, therefore, was not correct in coming to the conclusion that as per the decisions of this Court in the aforesaid three cases, the Court has no alternative but to refer the parties to arbitration in view of the clear mandate in Section 8 of the 1996 Act. On the contrary, the relief claimed by the appellants being mainly for eviction, it could only be granted by the “Civil Judge having jurisdiction” in a suit filed by the landlord as provided in Section 6 of the Tenancy Act. The expression “Civil Judge having jurisdiction” will obviously mean the Civil Judge who has jurisdiction to grant the other reliefs: decree for arrears of rent, decree for recovery of arrears of proportionate and enhanced municipal taxes, a decree for mesne profits and a decree for permanent injunction claimed in the suit.

Court's decision (1 = petition accepted / positive for appellant, 0 = rejected / negative): 1

Reasoning from the judgment:
1[ds]8. In this case, there is an arbitration agreement in clause 15 of the tenancy agreement, which provides that any dispute regarding the contents or construction of the tenancy agreement or dispute arising out of the tenancy agreement shall be settled by arbitration in accordance with the provisions of the 1996 Act. But the words ‘notwithstanding anything in anyin Section 6 of the Tenancy Act, will override the arbitration agreement in clause 15 of the tenancy agreement where a suit for recovery of possession of any premises has been filed by a landlord against the tenant. Such a suit filed by the landlord against the tenant for recovery of possession, therefore, cannot be referred under Section 8 of the 1996 Act to arbitration. In fact, sub-section (3) of Section 2 of the 1996 Act expressly provides that Part-I which relates towhere the place of arbitration is in India shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration. Section 6 of the Tenancy Act is one such law which clearly bars arbitration in a dispute relating to recovery of possession of premises by the landlord from the tenant. Since the suit filed by the appellants was for eviction, it was a suit for recovery of possession and could not be referred to arbitration because of a statutory provision in Section 6 of the Tenancy Act.The High Court, therefore, was not correct in coming to the conclusion that as per the decisions of this Court in the aforesaid three cases, the Court has no alternative but to refer the parties to arbitration in view of the clear mandate in Section 8 of the 1996 Act. On the contrary, the relief claimed by the appellants being mainly for eviction, it could only be granted by thein a suit filed by the landlord as provided in Section 6 of the Tenancy Act. The expressionwill obviously mean the Civil Judge who has jurisdiction to grant the other reliefs: decree for arrears of rent, decree for recovery of arrears of proportionate and enhanced municipal taxes, a decree for mesne profits and a decree for permanent injunction claimed in the suit.