Himangni Enterprises vs Kamaljeet Singh Ahluwalia on 12 October, 2017

REPORTABLE

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)

JUDGMENT

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
Signature Not Verified

Digitally signed by
ASHA SUNDRIYAL
Date: 2017.10.12
17:09:05 IST
Reason:

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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

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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 2 nd 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

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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 PH 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

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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

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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

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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

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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

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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.

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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

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