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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL No.  3334  OF 2014  (Arising out of SLP (C) No. 15165 of 2010)

  Ranjit Kumar Bose & Anr.                                … Appellants

Versus

Anannya Chowdhury & Anr.                         … Respondents

J U D G M E N T

A. K. PATNAIK, J.

Leave granted.

Facts of the Case

2. The  appellants  have  inducted  the  respondents  as  

tenants in respect of a shop room measuring 600 sq.  

feet at HA-3, Sector-3,  Salt  Lake City,  Kolkata,  and  

paying a monthly rent to the appellants.  In respect  

of the tenancy, the appellants and the respondents  

have executed an unregistered tenancy agreement  

which  has  been  notarized  on  10.11.2003.   On  

06.03.2008, the appellants, through their Advocates,

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served a notice on the respondents terminating the  

tenancy  and  asking  them  to  vacate  the  shop  

premises and the notice stated that after April, 2008  

the relationship of landlord and tenant between the  

appellants and the respondents shall cease to exist  

and  the  respondents  will  be  deemed  to  be  

trespassers  liable  to  pay  damages  at  the  rate  of  

Rs.500/- per day for wrongful occupation of the shop.  

The respondents, however, did not vacate the shop  

premises and the appellants filed Title Suit No.89 of  

2008 against the respondents for eviction, arrears of  

rent, arrears of municipal tax, mesne profit and for  

permanent injunction in the Court of the Civil Judge  

(Senior Division), 2nd Court at Barasat, District North  

24-Parganas in the State of West Bengal.  In the suit,  

the respondents filed a petition under Section 8 of  

the Arbitration and Conciliation Act, 1996 (for short  

‘the  1996  Act’)  stating  therein  that  the  tenancy  

agreement  contains  an  arbitration  agreement  in  

clause 15 and praying that all the disputes in the suit  

be  referred  to  the  arbitrator.   By  order  dated  

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10.06.2009,  the  learned  Civil  Judge  dismissed  the  

petition under Section 8 of the 1996 Act and posted  

the  matter  to  10.07.2009  for  filing  of  written  

statement by the defendants (respondents herein).

3. Aggrieved, the respondents filed an application (C.O.  

No.2440  of  2009)  under  Article  227  of  the  

Constitution of India before the Calcutta High Court  

and contended that the tenancy agreement contains  

an  arbitration  agreement  in  Clause  15,  which  

provides that any dispute regarding the contents or  

construction of the agreement or dispute arising out  

of the agreement shall be settled by Joint Arbitration  

of  two  arbitrators,  one  to  be  appointed  by  the  

landlords  and  the  other  to  be  appointed  by  the  

tenants and the decision of the arbitrators or umpires  

appointed  by  them  shall  be  final  and  that  the  

arbitration will  be in accordance with the 1996 Act  

and,  therefore,  the learned Civil  Judge rejected the  

petition of the respondents to refer the disputes to  

arbitration contrary to the mandate in Section 8 of  

the  1996  Act.   The  appellants  opposed  the  

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application under Article 227 of  the Constitution of  

India contending  inter alia that the dispute between  

the  appellants  and  the  respondents,  who  are  

landlords  and  tenants  respectively,  can  only  be  

decided  by  a  Civil  Judge  in  accordance  with  the  

provisions of the West Bengal Premises Tenancy Act,  

1997  (for  short      ‘the  Tenancy  Act’).   By  the  

impugned  judgment  dated  16.04.2010,  the  High  

Court has held that in view of the decisions of this  

Court  in  Hindustan  Petroleum  Corporation  Ltd.  v.   

Pinkcity Midway Petroleums [(2003) 6 SCC 503], Agri  

Gold Exims Ltd. v. Sri Lakshmi Knits & Wovens & Ors.  

[(2007)  3  SCC  686]  and  Branch  Manager,  Magma  

Leasing  &  Finance  Limited  &  Anr.  v.  Potluri   

Madhavilata & Anr. [(2009) 10 SCC 103], the Court  

has no other alternative but to refer the disputes to  

the arbitrators to be appointed by the parties as per  

the arbitration agreement.  The High Court, however,  

has observed in the impugned judgment that if any  

dispute  is  raised  regarding  arbitrability  of  such  

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dispute before the arbitral tribunal, such dispute will  

be decided by the arbitral tribunal.  

Contentions of the learned counsel for the parties

4. Learned counsel for the appellants submitted that in  

Hindustan  Petroleum  Corporation  Ltd.  v.  Pinkcity   

Midway  Petroleums, Agri  Gold  Exims  Ltd.  v.  Sri   

Lakshmi Knits & Wovens & Ors. and Branch Manager,  

Magma Leasing & Finance Limited & Anr. v. Potluri   

Madhavilata  &  Anr.  (supra),  this  Court  has  not  

decided  as  to  whether  the  dispute  between  the  

landlord  and  the  tenant  could  be  decided  by  the  

arbitrator  in  accordance  with  the  arbitration  

agreement between the landlord and the tenant and  

the provisions of the 1996 Act or by the appropriate  

forum in accordance with the law relating to tenancy.  

He cited the decision of this Court in  Natraj Studios  

(P)  Ltd.  v.  Navrang  Studios  &  Anr.  [(1981)  1  SCC  

523],  wherein it  has been held that Court of Small  

Causes alone and not the arbitrator as a matter of  

public policy has been empowered to decide disputes  

between  the  landlord  and  the  tenant  under  the  

Bombay Rent Act.  He also relied on the observations  

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of this Court in  Booz Allen and Hamilton Inc. v. SBI   

Home Finance Limited & Ors. [(2011) 5 SCC 532] in  

para 36 at page 547 that eviction or tenancy matters  

governed  by  a  special  statute  where  the  tenant  

enjoys  statutory  protection against  eviction can be  

decided  by  specified  courts  conferred  with  the  

jurisdiction to grant eviction and such disputes are  

non-arbitrable.

5. Learned counsel  for  the respondents,  on the other  

hand,  relied  on  the  decisions  of  this  Court  in  

Hindustan  Petroleum  Corporation  Ltd.  v.  Pinkcity   

Midway  Petroleums, Agri  Gold  Exims  Ltd.  v.  Sri   

Lakshmi Knits & Wovens & Ors. and Branch Manager,  

Magma Leasing & Finance Limited & Anr. v. Potluri   

Madhavilata & Anr.  (supra) to support the impugned  

judgment.  He submitted that there can be no doubt  

that the Tenancy Act will determine the rights of the  

landlord and the tenant in this case, but when there  

is an arbitration agreement between a landlord and a  

tenant, instead of the Civil Judge, the arbitrator will  

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decide  the  disputes  between  the  landlord  and  the  

tenant by applying the provisions of the Tenancy Act.

Findings of the Court

6. The relevant portion of Section 6 of the Tenancy Act  

1997 is quoted hereinbelow:

“6.  Protection  of  tenant  against  eviction.—(1)  Notwithstanding anything to  the contrary contained in any other law for  the time being in force or  in any contract,  no order or decree for the recovery of the  possession of any premises shall be made  by  the  Civil  Judge  having  jurisdiction  in  favour  of  the landlord against  the  tenant,  except  on a suit  being instituted by such  landlord on  one  or  more  of  the  following  grounds:—  ………………………………………………………..”

It  will  be  clear  from  the  language  of  Section  6  of  the  

Tenancy  Act  1997  quoted  above  that  ‘notwithstanding  

anything to  the contrary  contained in  any contract’,  no  

order or decree for recovery of possession of any premises  

shall  be  made  by  the  Civil  Judge  having  jurisdiction  in  

favour of the landlord against the tenant, ‘except on a suit  

being instituted by such landlord’ on one or more grounds  

mentioned therein. It is, thus, clear that Section 6 of the  

Tenancy  Act  overrides  a  contract  between  the  landlord  

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and  the  tenant  and  provides  that  only  the  Civil  Judge  

having  jurisdiction  can  order  or  decree  for  recovery  of  

possession only in a suit to be filed by the landlord.

7. Part-I of the 1996 Act is titled ‘arbitration’.  Section 8  

of the 1996 Act is extracted hereinbelow:

“8.  Power  to  refer  parties  to  arbitration  where there is an arbitration agreement.--  (1) A  judicial  authority  before  which  an  action is brought in a matter which is the  subject of an arbitration agreement shall, if  a  party  so  applies  not  later  than  when  submitting  his  first  statement  on  the  substance of the dispute, refer the parties  to arbitration.

(2) The application referred to in subsection  (1)  shall  not  be  entertained  unless  it  is  accompanied  by  the  original  arbitration  agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has  been made under sub- section (1) and that  the  issue  is  pending  before  the  judicial  authority,  an  arbitration  may  be  commenced  or  continued  and  an  arbitral  award made.”

A reading of sub-section (1) of Section 8 of the 1996 Act  

will make it clear that a judicial authority before which an  

action is brought in a matter which is the subject of an  

arbitration agreement shall refer the parties to arbitration.  

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Without  ‘an  arbitration  agreement’,  therefore,  a  judicial  

authority cannot refer the parties to arbitration.   

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 any contract’ in 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  to  ‘arbitration’  

where  the  place  of  arbitration  is  in  India  shall  not  

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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.

9. In  Natraj Studios (P) Ltd. v. Navrang Studios & Anr.  

(supra),  there  was  a  leave  and  licence  agreement  

between Natraj Studios (P) Ltd. and Navrang Studios.  

On  28.04.1979,  Navrang  Studios  purported  to  

terminate  the  leave  and  licence  agreement  and  

called upon Natraj Studios (P) Ltd. to hand over the  

possession of the studios to them.  Natraj Studios (P)  

Ltd. filed a suit on 08.05.1979 in the Court of Small  

Causes, Bombay, for a declaration that Natraj Studios  

(P) Ltd. was a monthly tenant of the studios and for  

fixation of standard rent and other reliefs.  Navrang  

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Studios filed a written statement contesting the suit.  

Natraj  Studios  (P)  Ltd.  filed  an  application  under  

Section 33 of the Arbitration Act, 1940 in the Bombay  

High  Court  for  a  declaration  that  the  arbitration  

clause  in  the  leave  and  licence  agreement  was  

invalid  and inoperative.   The High Court  dismissed  

the application.  Thereafter, Navrang Studios filed an  

application  under  Section  8  of  the  Arbitration  Act,  

1940 for appointment of a sole arbitrator to decide  

the  disputes  and  differences  between  the  parties  

under the leave and licence agreement.   The High  

Court allowed the application and appointed a sole  

arbitrator.  On appeal being carried to this Court by  

Natraj Studios (P) Ltd.,  this Court held that Section  

28(1)  of  the  Bombay  Rent  Act  vests  an  exclusive  

jurisdiction in the Court of Small Causes to entertain  

and try any suit  or  proceeding between a landlord  

and  tenant  relating  to  the  recovery  of  rent  or  

possession of any premises.  This Court further held  

that the Bombay Rent Act was a welfare legislation  

aimed at the definite social objective of protection of  

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tenants against harassment by landlords in various  

ways and public policy requires that contracts to the  

contrary which nullify the rights conferred on tenants  

by the Act cannot be permitted and 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  

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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  

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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  

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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  

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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  

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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.

15.  For the aforesaid reasons, we allow this appeal and  

set aside the impugned judgments of the High Court  

and the Civil Judge, Senior Division, and remand the  

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matter  to  the  learned  Civil  Judge,  Senior  Division,  

who will now give an opportunity to the respondents  

to  put  in  their  written  statements  and  thereafter  

proceed  with  the  suit  in  accordance  with  law.  

Considering the peculiar facts of this case, there shall  

be no order as to costs.      

                                                      .....……………..…….J.                                                        (A. K. Patnaik)

                             ....…………..……….J.

                                              (V. Gopala Gowda)

New Delhi, March 07, 2014.  

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