A single judge bench of the Madras High Court comprising of Justice C.V. Karthikeyan allowed a petition on account of a specific clause in the lease deed to settle disputes through arbitration.
The court rejected the respondents’ contention that there is a special act to govern the tenancy rights and hence, the disputes will not go to arbitration. It was held so because the special act mandated registration of the lease deed, however, in the present case, the deed was unregistered.
Facts:
The petitioners contend that they are the absolute owners of the premises Old No.64/1 and New Door No.103 Ramanayakkan Street, Nungambakkam, Chennai - 600 034. The said premises had been leased out to the respondent company. The first respondent through the second and third respondents had entered into the lease agreement on 10.01.2020 for three years. The lease amount had not been registered. The respondents had taken the premises on lease for residential purpose. The monthly rent was agreed to a sum of Rs.2,40,000/-. They had paid an advance of Rs.14,40,000/- which was paid in two instalments. The 1st instalment was paid on 14.01.2020 and the 2nd instalment was paid on 10.02.2020. The possession was handed over on 20.01.2020. It had been stated that there had been defaults in the payment of rent. It had also been stated that though there was an outstanding of Rs.64,80,000/-, the respondent had paid only a sum of Rs.19,42,500/-.
Contentions of the Petitioners:
The petitioners contend that since there is a specific clause in the lease deed to settle disputes through arbitration, the disputes which have arisen have to be referred to an arbitrator for adjudication. It had been further stated that a legal notice had been issued on 20.12.2021 and a reply dated 10.01.2021 had been received, wherein the respondent had stated about the rents which had been paid by them and about the adjustments towards the dues and had also stated that it was their prerogative as lessee to appoint an arbitrator but however the respondents had not appointed an arbitrator. It is complained that since the respondents had not appointed an arbitrator, the present petition has been filed seeking for appointment of an arbitrator. Notice had been issued and learned counsel had entered appearance on behalf of the respondents.
Contentions of the Respondents:
It is the contention of the respondents that since the terms of the lease signified a relationship as landlord-tenant the matter cannot be referred to arbitration, as a specific Act prevails to adjudicate the disputes between landlord-tenant. It is the very specific contention of the respondents that since a special law, The Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act, 2017 governs the tenancy between the petitioners and the respondents, the matter cannot be referred to arbitration.
Legal Question:
Whether the dispute can be referred to be adjudicated through arbitration or whether the parties are governed under the provisions of the Tamil Nadu Regulation of Rights and Responsibilities of Landlord and Tenants, Act, 2017?
Observations of the Courts:
Tamil Nadu Regulation of Rights and Responsibilities of Landlords and Tenants Act of 2017 mandates that the lease agreement must be registered however, in the present case, it was not registered. In the case of S. Muruganandam and others vs J. Joseph and others, the court held that if a written tenancy agreement had been entered into and the same is not registered, and which apart is subsisting then, the relief would only be to institute a suit before the Competent Civil Court. In M/S Primex Healthcare and Reserarch Private Limited vs Mr. A.A.L. Ramaswamy, the court held that if an agreement is un-registered then the same can be presented for registration before the Competent Authority with an application to condone the delay in registration. In the present case, neither the petitioner nor the respondents had presented the agreement for registration. They had also not filed any application to condone the delay in presenting it for registration. Moreover, the respondents have not disputed the jurisdiction of arbitration proceedings but have only claimed the privilege to appoint an arbitrator.
When the parties have not registered their agreement, the only option is to go before the competent civil court. The court has power to appoint an arbitrator.
Decision:
The original petition was allowed.
Case: T.G. Boobalakrishnan and B.K. Jayachitra vs M/S Truliv Properties and Services Private Limited vs 2 others
Citation: ARB. O.P. No. 14 of 2022
Coram: Justice C.V. Karthikeyan
Pronounced on: 11.11.2022
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