Tapan Das vs M/S Mayasheel Retail India ...
2021 Latest Caselaw 2574 Gua

                                                                     Page No.# 1/6

GAHC010077762021




                              THE GAUHATI HIGH COURT
   (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)

                                 Case No. : CRP/38/2021

            TAPAN DAS
            S/O LATE ARINDRA CH. DAS, R/O HOUSE NO. 13, KALIA THAKUR PATH,
            GARCHUK, P.O. GARCHUK, P.S. GARCHUK, GUWAHATI 781035, DIST.
            KAMRUP (M), ASSAM.



            VERSUS

            M/S MAYASHEEL RETAIL INDIA LIMITED (FPRMERLY KNOWN AS
            MAYASHEEL RETAIL LLP),
            A CO. DULY INCORPORATED UNDER THE COMPANIES ACT 2013 HAVING
            ITS REGISTERED OFFICE AT 5709 SUBHASH MOHALLA, GANDHINAGAR,
            NEW DELHI 110031 REPRESENTED BY ITS AUTHORIZED SIGNATORY SRI
            DEEPAK MONPA, S/O KESANG TSHERING MONPA, R/O SANTI PARA,
            WARD NO. 42, SALUGARA, SILIGURI MUNICIPAL CORPORATION,
            JALPAIGURI, WEST BENGAL 734008



Advocate for the Petitioner   : MR P SHARMAH

Advocate for the Respondent : MR. R BAISHYA
                                                                                 Page No.# 2/6


                                  BEFORE
                 HONOURABLE MR. JUSTICE PARTHIVJYOTI SAIKIA

                                       JUDGMENT

28.10.2021

Heard Mr. P. Sharmah, learned counsel for the petitioner as well as Mr. P.M. Talukdar, learned counsel for the respondents.

2. This is an application under Section 115 of the Code of Civil Procedure read with Section 151 of the said Code whereby the order dated 03.04.2021 passed by the Civil Judge No. 3, Kamrup (M) at Guwahati in connection with Section 8 of the Arbitration and Conciliation Act, 1996 filed by the respondent (arising out of Title Suit No. 399/2020) is put to challenge.

3. Shorn of unnecessary details, the facts necessary for disposal of this application are like this - the respondent is a tenant in respect of a house owned by the petitioner. The tenancy started with execution of an agreement wherein there is a clause which stated that in the event of any controversy, dispute and difference between the parties then the said dispute shall be referred to arbitration under the provisions of the Arbitration and Conciliation Act, 1996. It was also agreed that the Arbitrator shall be appointed by the lessee. It was agreed between the parties that if there is any dispute regarding the choice of arbitrator by the lessee then the president of Emerging Businesses Chamber of Commerce shall appoint the arbitrator. It was further agreed that the venue of arbitration shall be at New Delhi.

4. Thereafter, a dispute arose and accordingly the present petitioner filed a suit being TS No.399/2020 in the Court of the Civil Judge, Kamrup (M), Guwahati seeking a decree for eviction of the respondent along with ancillary reliefs. Since there was an arbitration clause in the agreement between the parties, the present respondent filed a petition under Section 8 of the Act of 1996 praying for referring the case for arbitration. The trial Court after hearing both sides agreed with the respondent.

5. I have given my anxious consideration to the submissions made by the learned counsels of both sides.

Page No.# 3/6

6. In the State of Assam the land lord tenant relationship is governed by The Assam Urban Areas Rent Control Act, 1972. Long back in the year 1987, this Court in Sri Beni Madhab Sarkar v Tulsi Ram Prasad, reported in (1987)2 GLR (NOC)10 has held as under-

"The Assam Urban Areas Rent Control Act, 1972 which is a special legislation for protection of the tenant, takes away the contractual as well as the statutory rights of the landlord under The Transfer of Property Act, 1882 and the provisions of the Act create a new right in favour of the tenant. The tenant to claim rights and privileges under the said Act the tenant must strictly comply with the provisions of the Act and in case of failure he will lose such protection".

7. Prior to Sri Beni Madhab Sarkar's judgment (supra), the Supreme Court in Natraj Studios (P) Ltd. v. Navrang Studios, (1981) 1 SCC 523, has held that the disputes between land lord and tenant cannot be referred to the arbitrator.

8. Thereafter in Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 , the Supreme Court has categorized the disputes which are arbitrable and held as under -

"36. The well-recognized 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".

9. Affirming the decision in Booz Allen & Hamilton Inc (supra), in a recent judgment in Vidya Drolia v. Durga Trading Corpn., (2021) 2 SCC 1,the Supreme Court has dealt with the subject of arbitration in land lord tenant relationship. Paragraphs 38,54 and 55 of the judgment are relevant and they are quoted as under---- "38. Landlord-tenant disputes governed by rent control legislation are not actions in rem, yet they are non-arbitrable. In Booz Allen & Hamilton Inc. [Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd., (2011) 5 SCC 532 : (2011) 2 SCC (Civ) 781] reference was made (at SCC p. 547, Page No.# 4/6

para 40) to Russell on Arbitration (22nd Edn.) in Para 2.007 at p. 28 wherein the author has observed that certain matters in English Law are reserved for the court alone and if an Arbitral Tribunal purports to deal with them the resulting award would be unenforceable. These matters would include where the type of remedy required is not one which the Arbitral Tribunal is empowered to give. Reference was made (at SCC p. 548, para 41) to Law and Practice of Commercial Arbitration in England (2nd Edn. 1989) by Mustill and Boyd which states that certain types of remedies which the arbitrator can award are limited by consideration of public policy and as arbitrator is appointed by the parties and not by the State. Arbitrator cannot impose fine, give imprisonment, commit a person for contempt or issue a writ of subpoena nor can he make an award binding on third parties and affect public at large, such as a judgment in rem. Mustill and Boyd in their 2001 Companion Volume have observed that axiomatically rights that are valid as against the whole world, cannot be a subject of private arbitration, although subordinate rights in personam derived from such rights may be ruled upon by the arbitrators. Therefore, rights under a patent license may be arbitrated but the validity of the underlying patent may not be arbitrable. Similarly, an arbitrator who derives its power from a private agreement between A and B, plainly has no jurisdiction to bind a third person by a decision on whether the patent is valid or not, for no one else has mandated him to make the decision and the decision which attempts to do so would be useless.

54. Implicit non-arbitrability is established when by mandatory law the parties are quintessentially barred from contracting out and waiving the adjudication by the designated court or the specified public forum. There is no choice. The person who insists on the remedy must seek his remedy before the forum stated in the statute and before no other forum. In Transcore v. Union of India [Transcore v. Union of India, (2008) 1 SCC 125 : (2008) 1 SCC (Civ) 116] , this Court had examined the doctrine of election in the context whether an order under proviso to Section 19(1) of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 ("the DRT Act") is a condition precedent to taking recourse to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 ("the NPA Act"). For analysing the scope and remedies under the two Acts, it was held that the NPA Act is an additional remedy which is not inconsistent with the DRT Act, and reference was made to the doctrine of election in the following terms: (Transcore case [Transcore v. Union of India, (2008) 1 SCC 125 : (2008) 1 SCC (Civ) 116] , SCC p. 162, para

64).

64. In the light of the above discussion, we now examine the doctrine of election. There are three elements of election, namely, existence of two or more remedies; inconsistencies between such remedies and a choice of one of them. If any one of the three elements is not there, the doctrine will not apply. According to American Jurisprudence, 2d, Vol. 25, p. 652, if in truth there is only one remedy, then the doctrine of election does not apply. In the present case, as stated above, the NPA Act is an additional remedy to the DRT Act. Together they constitute one remedy and, therefore, the doctrine of election does not apply. Even according to Snell's Principles of Equity (31st Edn., p. 119), the doctrine of election of remedies is applicable only when there are two or more co-existent remedies available to the litigants at the time of election which are repugnant and inconsistent. In any event, there is no repugnancy nor inconsistency between the two remedies, therefore, the doctrine of election has no application."

55. Doctrine of election to select arbitration as a dispute resolution mechanism by mutual agreement is available only if the law accepts existence of arbitration as an alternative remedy and freedom to choose is available. There should not be any inconsistency or repugnancy between the provisions of the mandatory law and arbitration as an alternative.

Page No.# 5/6

Conversely, and in a given case when there is repugnancy and inconsistency, the right of choice and election to arbitrate is denied. This requires examining the "text of the statute, the legislative history, and "inherent conflict" between arbitration and the statute's underlying purpose" [Jennifer L. Peresie, "Reducing the Presumption of Arbitrability" 22 Yale Law & Policy Review, Vol. 22, Issue 2 (Spring 2004), pp. 453-462.] with reference to the nature and type of special rights conferred and power and authority given to the courts or public forum to effectuate and enforce these rights and the orders passed. When arbitration cannot enforce and apply such rights or the award cannot be implemented and enforced in the manner as provided and mandated by law, the right of election to choose arbitration in preference to the courts or public forum is either completely denied or could be curtailed. In essence, it is necessary to examine if the statute creates a special right or liability and provides for the determination of each right or liability by the specified court or the public forum so constituted, and whether the remedies beyond the ordinary domain of the civil courts are prescribed. When the answer is affirmative, arbitration in the absence of special reason is contraindicated. The dispute is non-arbitrable."

10. Therefore, the law is very clear. In the State of Assam, the relationship between landlord and tenant is governed by The Assam Urban Areas Rent Control Act, 1972. Moreover, it is a settled law that the dispute between the landlord and tenant is non- arbitrable.

11. There is another aspect of the matter that requires to be mentioned here. Therefore, a brief visit to Section 10 of the Indian Contract Act would be fruitful. It reads as-

"Section 10. What agreements are contracts.--All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void. Nothing herein contained shall affect any law in force in 1 [India] and not hereby expressly repealed by which any contract is required to be made in writing or in the presence of witnesses, or any law relating to the registration of documents."

12. There is no doubt that the dispute between the landlord and tenant is non- arbritable. Therefore, the Clause 17 of the agreement between the parties is bad in law as it is against the law of the land.

13. The learned trial Court has referred to Booz Allen & Hamilton Inc (supra) and Vidya Drolia v. Durga Trading Corpn (supra) and held that since The Assam Urban Areas Rent Control Act, 1972 has not created any specific Court to exercise exclusive jurisdiction under the said Act and for that reaon allowed the prayer of the respondent. This is absolutely an erroneous finding. This Court is constraint to hold that Page No.# 6/6

the trial Court has not read the aforesaid two judgments and therefore arrived at a perverse finding.

14. The landlord tenant dispute is not arbitrable. Therefore, the impugned order dated 03.04.2021 passed by the Civil Judge (Sr. Division), Court No. 3, Kamrup (M), Guwahati is set aside. Accordingly, the present application is allowed. The trial Court is directed to expeditiously dispose of the suit preferably within next three months.

With the aforesaid observation the present application is disposed of.

JUDGE

Comparing Assistant