[Case Brief] Eviction or tenancy matters governed by special statutes cannot be arbitrated.

Himangni Enterprises v/s Kamaljeet Singh Ahluwalia, 2017

A civil suit was filed, under the Civil Procedure Code, essentially to seek appellant’s eviction from Shop situated in a Commercial Complex at New Delhi. The suit also sought recovery of dues and a permanent injunction against the appellants.

According to the facts of the case, a premise was leased out to the appellant through lease deed executed between the parties for a period of three years starting from 07.10.2010. With the passage of time, the suit period expired and no fresh lease was executed between them.

The appellant was served with the notice to vacate the premises. On being served with such notice of the civil suit, he filed an application under the Arbitration and Conciliation Act, 1996 for resolving the dispute through arbitration. According to him, the lease deed contained a clause which provided that the dispute between the parties will be resolved through arbitration.

The respondent refuted this contention on two major grounds. Firstly, it was contended that the lease deed had come to an end by efflux of time and thus the appellant cannot take recourse to such deed. Secondly, it was contended that the matters which fall under the jurisdiction of the civil law cannot be resolved by the arbitrator. Both the trial court and High Court upheld the objections raised by the respondent. Being aggrieved by this the appellant filed a writ petition before the Supreme Court of India through a special leave.

The Supreme Court heard the arguments of both the parties and referred to:

  1. Natraj Studios (P) Ltd. vs. Navrang Studios & Another, 1981(1) SCC 523
  2. Booz Allen & Hamilton Inc. vs. SBI Home Finance Ltd. & Ors., (2011) 5 SCC 532

Referring to these cases, the court held that the well-recognised examples of non-arbitrable disputes are:

  1. disputes relating to rights and liabilities which give rise to or arise out of criminal offences;
  2. matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody;
  3. guardianship matters;
  4. insolvency and winding-up matters;
  5. testamentary matters (grant of probate, letters of administration and succession certificate); and
  6. 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.

Thus the court held that the actions taken by lower courts were correct and there is no merit observed in the appeal. It was next contended by the appellants that the provision of the Delhi Rent Act will not be applicable in the present dispute by virtue of section 3 of the 1996 act. The bench rejected this argument and said that though section 3 of the 1996 Act has a restrictive clause enumerated in it, it does not mean that the act of 1996 will be applicable, ipso facto. If such circumstances arise then the Transfer of Property Act would be applicable. Thus dismissing the appeal, the civil court was instructed to proceed under the law.

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