CIVIL

Himangni Enterprises VS Kamaljeet Singh Ahluwalia

12-10-2017

Supreme Court-min

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No. 16850 OF 2017
(@ S.L.P.(c) No.27722/2017)
(D.No.21033/2017)

Himangni Enterprises ….Appellant(s)
VERSUS
Kamaljeet Singh Ahluwalia …Respondent(s)

J U D G M E N T
Abhay Manohar Sapre, J.
1) Delay condoned. Leave granted.
2) This appeal is filed by the defendant against
the final judgment and order dated 27.07.2016
passed by the High Court of Delhi at New Delhi in
F.A.O. No.344 of 2016 whereby the High Court
dismissed the appeal filed by the appellant herein
and upheld the order dated 11.04.2016 of the
Additional District Judge-05, South East Dist.,
Saket Courts, New Delhi in C.S. No. 132 of 2016.

3. The question involved in the appeal is short. It
arises on the facts, which lie in a narrow compass.

4. 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 herein under Section 8 of the Arbitration
and Conciliation Act, 1996 (hereinafter referred to
as “the Act”) 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.

5. The appellant is the defendant whereas the
respondent is the plaintiff in a civil suit out of which
this appeal arises.

6. The respondent has filed a suit being C.S. No.
132/2016 against the appellant on 17.08.2015 in
the Court of ADJ-05, South East Dist., Saket Courts, New Delhi.

7. The suit is filed essentially to seek appellant’s
eviction from Shop No. SF-2 measuring around
317.29 Sq. ft. situated at 2nd floor in a Commercial
Complex known as “Omaxe Square” in Block No.14,
Non-Hierarchy Commercial Center, District Center
Jasola, New Delhi (hereinafter referred to as “the
suit premises”) and for recovery of unpaid arrears of
rent and grant of permanent injunction.

8. According to the respondent, the suit premises
was leased out to the appellant vide lease deed
dated 31.08.2010 executed between the appellant
and the respondent’s predecessor-in-title for a
period of three years from 07.10.2010. The lease
period stipulated in the lease deed, however, expired
by efflux of time and no fresh lease deed was
executed thereafter between the parties for
extension of the time period. The appellant’s
tenancy was monthly and started from 1st of every
month and ended on the last day of each month.
9. The appellant, on being served with the notice
of the civil suit, filed an application under Section 8
of the Act. According to the appellant, since the suit
was founded on the lease deed dated 31.08.2010,
which contained an arbitration clause (9.8) for
resolving the dispute arising out of the lease deed
between the parties, and when admittedly the
disputes had arisen in relation to the suit premises,
the same were governed by the terms of the lease
deed. It was contended that the civil suit to claim
the reliefs in relation to the suit premises was,
therefore, not maintainable and, in fact, barred and
the remedy of the respondent to get such disputes
resolved is to submit themselves to the jurisdiction
of the arbitrator by taking recourse to the procedure
prescribed in clause 9.8 of the lease deed.
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10. In other words, the contention of the appellant,
in support of their application, was that since the
disputes for which the civil suit is filed arise out of
the lease deed dated 31.08.2010 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.
11. The respondent opposed the application
essentially on two grounds. First, the lease period
initially fixed in the lease deed having come to an
end by efflux of time, such lease deed was no longer
enforceable by the appellant and second, the
disputes, which are subject matter of the civil suit,
are incapable of being referred to an arbitrator. It
was contended that the respondent has, therefore,
rightly filed the civil suit in Civil Court seeking
appellant’s eviction from the suit premises and
other ancillary reliefs arising therefrom and the
same has to be tried by the Civil Court.
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12. The Trial Court, vide order dated 11.04.2016,
upheld the objections of the respondent and
dismissed the appellant’s application. The
defendant, felt aggrieved, filed appeal before the
High Court.
13. By impugned judgment, the High Court
dismissed the appeal and upheld the order of the
Trial Court giving rise to filing of the special leave to
appeal by the defendant (appellant herein) before
this Court.
14. Heard Ms. Geeta Luthra, learned senior
counsel for the appellant and Mr. Dhruv Mehta,
learned senior counsel for the respondent.
15. Though learned senior counsel for the
appellant (defendant) argued the point involved in
the appeal at great length and also cited several
decisions such as, Anjuman Taraqqi Urdu (Hind)
vs. Vardhaman Yarns & Threads Ltd., ILR(2012) II
Delhi 770, M/s Lovely Obsessions Pvt. Ltd.,
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Gurgaon vs. M/s Sahara India Commercial Corp.
Ltd. Gurgaon, (2012) SCC Online P&H 11449,
Reva Electric Car Company Pvt. Ltd. vs. Green
Mobil, (2012) 2 SCC 93, Harishchandra Hegde vs.
State of Karnataka & Ors., (2004) 9 SCC 780 and
Khadi & Village Industries Commission vs.
Saraswati Ramkrishna Dalmia & Ors., (2013) 3
Mh.L.J. 250 contending that the application filed by
the appellant under Section 8 of the Act should
have been allowed by the Courts below and the
respondent should have been relegated to submit
themselves to the jurisdiction of an arbitrator in
terms of clause 9.8 of the lease deed for
determination of the disputes by the arbitrator
instead of filing the civil suit for their determination
by the Civil Court.
16. In reply, learned senior counsel for the
respondent(plaintiff) supported the impugned
judgment and contended that it does not call for
8
any interference and hence the appeal deserves
dismissal.
17. Having heard learned senior counsel for the
parties at length and on perusal of the record of the
case, we find no merit in the appeal.
18. In our considered opinion, 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. vs. Navrang Studios &
Another, 1981(1) SCC 523 and Booz Allen &
Hamilton Inc. vs. SBI Home Finance Ltd. & Ors.,
(2011) 5 SCC 532 against the appellant and in
favour of the respondent.
19. So far as Natraj Studio’s case (supra) is
concerned there also, 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
9
inducted pursuant to “leave and license” agreement
executed between the landlord and the tenant.
20. The tenant filed an application under Section 8
of the Arbitration Act, 1940 contending therein that
since the “leave and license” agreement contained
an arbitration clause for resolving all kinds of
disputes arising between the parties in relation to
the “leave and license” agreement and the disputes
had arisen between the parties in relation to the
“leave and license” agreement, such disputes could
only be resolved by the arbitrator as agreed by the
parties in the agreement. It was contended that the
civil suit was, therefore, not maintainable and the
disputes for which the suit has been filed be
referred to the arbitrator for their adjudication.
21. This Court (Three Judge Bench) speaking
through Justice O. Chinnappa Reddy rejected the
application filed by the tenant under Section 8 of
the Act and held, inter alia, that the civil suit filed by
10
the landlord was maintainable. It was held that the
disputes of such nature cannot be referred to the
arbitrator.
22. This is what Their Lordships held as under:
“24. In the light of the foregoing discussion
and the authority of the precedents, we hold
that both by reason of Section 28 of the
Bombay Rents, Hotel and Lodging House
Rates Control Act, 1947 and by reason of the
broader considerations of public policy
mentioned by us earlier and also in Deccan
Merchants Cooperative Bank Ltd. v.
Dalichand Jugraj Jain, the Court of Small
Causes has and the arbitrator has not the
jurisdiction to decide the question whether
the respondent-licensor landlord is entitled
to seek possession of the two Studios and
other premises together with machinery and
equipment from the appellant-licensee
tenant. That this is the real dispute between
the parties is abundantly clear from the
petition filed by the respondents in the High
Court of Bombay, under Section 8 of the
Arbitration Act seeking a reference to
Arbitration. The petition refers to the notices
exchanged by the parties, the respondent
calling upon the appellant to hand over
possession of the Studios to him and the
appellant claiming to be a tenant or
protected licensee in respect of the Studios.
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
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adjudicate upon the dispute between the
parties.”
23. Yet in another case of Booz Allen & Hamilton
Inc. (supra), this Court (two Judge Bench) speaking
through R.V.Raveendran J. laid down the following
proposition of law after examining the question as to
which cases are arbitrable and which are
non-arbitrable:
“36. 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.”
(emphasis supplied)
24. Keeping in view the law laid down by this
Court in aforementioned two decisions and applying
the same to the facts of this case, we have no
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hesitation to hold 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.
25. Learned counsel for the appellant, however,
argued that the provisions of the Delhi Rent
Act,1955 are not applicable to the premises by
virtue of Section 3(c) of the Act and hence the law
laid down in the aforementioned two cases would
not apply. We do not agree.
26. The Delhi Rent Act, 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.
27. We have gone through the decisions cited by
the learned counsel for the appellant in support of
her contention. Having gone through the same, we
are of the considered opinion that firstly, some
decisions are rendered by the High Court; Secondly,
remaining decisions are distinguishable on facts
and lastly, in the light of two authoritative decisions
of this Court, which are directly on the point and
continue to hold the field, no reliance can be placed
by the learned counsel for the appellant on any
decision of the High Court. Indeed, any such
decision of the High Court, which has taken view
contrary to the view of this Court, the same stands
overruled. Such is the case here.

28. We, therefore, need not deal with any other
submissions of learned counsel for the appellant
which, in our opinion, really do not arise in the light
of what we have held supra.

29. In view of foregoing discussion, we find no
merit in the appeal, which fails and is accordingly
dismissed.

30. We accordingly direct the concerned Civil
Court which is seized of the civil suit to proceed
with the trial of the suit on the merits in accordance
with law uninfluenced by any of our observations
made herein, expeditiously.

……………………………………..J.
[R.K. AGRAWAL]

……
………………………………….J.
[ABHAY MANOHAR SAPRE]
New Delhi;
October 12, 2017