Srddha Health & Fitness Private ... vs M/S J.N. Hotels Private Limited
2021 Latest Caselaw 3930 Jhar

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   IN THE HIGH COURT OF JHARKHAND AT RANCHI
           Arbitration Application No.17 of 2019
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Srddha Health & Fitness Private Ltd. A Company duly incorporated under companies Act 1956 through its Director Mr. Diwakar Prasad Sinha, having its registered office at Road no. 6, Rajendra Nagar, Patna, Bihar 800016.

                                      ... ...    Petitioner
                             Versus

M/S J.N. Hotels Private Limited, a Company duly incorporated under Companies Act, 1956 through Director Shri Sudhir Kr. Chopra, having its registered office at Doranda, P.O. & P.S. Doranda, District Ranchi - 834002, Jharkhand.

... ... Respondent With Arbitration Application No.18 of 2019

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Srddha Health & Fitness Private Ltd. A Company duly incorporated under companies Act 1956 through its Director Mr. Diwakar Prasad Sinha, having its registered office at Road no. 6, Rajendra Nagar, Patna, Bihar 800016.

                                      ... ...    Petitioner
                             Versus

M/S J.N. Hotels Private Limited, a Company duly incorporated under Companies Act, 1956 through its Director Shri Sudhir Kr. Chopra, having its registered office at Doranda, P.O. & P.S. Doranda, District Ranchi - 834002, Jharkhand.

... ... Respondent

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CORAM :HON'BLE MR. JUSTICE SUJIT NARAYAN PRASAD

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For the Petitioner : Mr. Shubham Gautam, Advocate For the Respondent : Mr. Rahul Kumar Gupta, Advocate

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st Order No. 09 : Dated 21 October, 2021

The instant application has been filed under Section

11(6) of the Arbitration and Conciliation Act, 1996 by

invoking the arbitration Clause as stipulated under Clause

40 of the Lease deed.

The dispute in relation to which the petitioner is

constrained to approach this Court pertains to lease deed

dated 08.03.2013 which contemplates the use of the premise

of the respondent on rent for running the business of the

petitioner and, therefore, the petitioner has approached this

Court for appointment of Arbitrator after fulfilling the

conditions stipulated under Section 11(6) of the Arbitration

and Conciliation Act, 1996 as because an application has

been filed for eviction of the petitioner from the said premises

under the provision of Section 19 of the Jharkhand Building

(Lease, Rent and Eviction) Control Act, 2011.

Mr. Rahul Kumar Gupta, learned counsel appearing for

the respondent, submits that the eviction application is still

pending.

He raised serious objection about the maintainability of

the application filed under Section 11(6) of the Arbitration

and Conciliation Act, 1996 by relying upon the judgment

rendered by Hon'ble Apex Court in Vidya Drolia and Others

v. Durga Trading Corporation reported in (2021) 2 SCC 1

wherein ratio has been laid down that in the matter

pertaining to rent control, the arbitration will not lie.

It is not in dispute that the matter pertains to eviction of

the premises in question since application has been filed by

invoking the jurisdiction conferred under Section 19 of the

Jharkhand Building (Lease, Rent and Eviction) Control Act,

2011 in which the petitioner has put in his appearance and

thereafter the instant application has been filed invoking the

Arbitration Clause which contains a provision for resolution

of dispute by referring the matter before the sole Arbitrator.

It is not in dispute that the Jharkhand Building (Lease,

Rent and Eviction) Control Act, 2011 is a self contained Code

which contains provision conferring power upon the

competent forum for passing order of eviction as also the

forum of appeal and revision.

The Arbitration can be invoked if the lease deed contains

the arbitration clause, which is the case of the petitioner

since reliance has been placed upon Clause 40 of the Lease

Agreement but that ground is not available to the petitioner

for invoking the Arbitration Clause for the reason that the Act

in question i.e., Jharkhand Building (Lease, Rent and

Eviction) Control Act, 2011 being a self contained Code,

contain the provision for adjudication of the issue pertaining

to establishment of relationship of landlord or tenant, fixation

of rent or eviction from the premises as also the provision of

appeal or revision before the quasi judicial authority and if

the arbitration clause will be held to be applicable as per the

lease deed, the aforesaid tenancy will become redundant and

the matter will start going before the Arbitrator for resolution

of dispute.

The aforesaid issue has been dealt with by the Hon'ble

Apex Court in Vidya Drolia and Others v. Durga Trading

Corporation (Supra) wherein it has been laid down that the

matter pertaining to landlord-tenant disputes covered and

governed by rent control legislation would not be arbitrable

when specific court or forum has been given exclusive

jurisdiction to apply and decide special rights and

obligations. Such rights and obligations can only be

adjudicated and enforced by the specified court/forum, and

not through arbitration. Paragraphs 79 and 80 of the said

judgment is quoted hereunder :-

"79. Landlord-tenant disputes governed by the Transfer of Property Act are arbitrable as they are not actions in rem but pertain to subordinate rights in personam that arise from rights in rem. Such actions normally would not affect third-party rights or have erga omnes effect or require centralised adjudication. An award passed deciding landlord- tenant disputes can be executed and enforced like a decree of the civil court. Landlord-tenant disputes do not relate to inalienable and sovereign functions of the State. The provisions of the Transfer of Property Act do not expressly or by necessary implication bar arbitration. The Transfer of Property Act, like all other Acts, has a public purpose, that is, to regulate landlord-tenant relationships and the arbitrator would be bound by the provisions, including provisions which enure and protect the tenants.

80. In view of the aforesaid, we overrule the ratio laid down in Himangni Enterprises v. Kamaljeet Singh Ahluwalia, (2017) 10 SCC 706 and hold that landlord- tenant disputes are arbitrable as the Transfer of Property Act does not forbid or foreclose arbitration. However, landlord-tenant disputes covered and

governed by rent control legislation would not be arbitrable when specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations. Such rights and obligations can only be adjudicated and enforced by the specified court/forum, and not through arbitration."

This Court, after taking into consideration the ratio laid

down by the Hon'ble Apex Court as also the position of law as

stipulated in the Jharkhand Building (Lease, Rent and

Eviction) Control Act, 2011, is of the view that the objection

which has been raised by the learned counsel for the

respondent is worth to be considered.

Accordingly, both the Arbitration Applications are held

to be not maintainable and are dismissed.

Howerver, it is made clear that dismissal of these

applications will not come in the way of consideration of the

case of the petitioner before the Rent Controller and it will be

decided on its own merit.

(Sujit Narayan Prasad, J.) Birendra/Saurabh