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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)

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

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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 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

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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  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

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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