JUDGMENT - S.M. JHUNJHUNUWALA, J.:---By this suit, the plaintiffs, who are described as petitioners in the suit, seek to file the arbitration agreement under section 20 of The Arbitration Act, 1940 (for short, 'the Act') in this Court as also an order of reference of plaintiffs' claim against the defendants to arbitration in accordance therewith.

2. Though short but an interesting question of law arises for consideration in the present proceedings. The circumstances giving rise to the present proceedings in which the question of law arises are these :

3. By a Deed of Lease dated 3rd September, 1984 entered into between the plaintiffs on the one hand and the President of India on behalf of Bombay Telephones on the other hand, the plaintiffs granted lease of the premises mentioned therein to Bombay Telephones for the purpose of housing telephone offices for the consideration therein mentioned. The lease was for a period of 3 years from 8th August, 1983 and it was agreed by and between the parties thereto that after expiry of the period of 3 years, the same would be renewed for a further period of 3 years if so desired by the Bombay Telephones, the lessees, on the same terms and conditions and that the lease would come to an end at the end of the sixth year. As provided in the said Deed of Lease, after expiration of six years lease period, further renewal if desired by the lessees would be on the terms to be mutually decided between the parties thereto. The said Deed of Lease contained an arbitration clause which reads as under:-

"That it is hereby expressly agreed that if at any time there shall arise any dispute, doubt, difference or question with regard to the interpretation of meaning or any of the terms and conditions of this demise or in respect of the rights, duties and liabilities of the parties hereto or in any way touching or arising out of these presents or otherwise in relation to the premises then every such dispute, difference, doubt or question (except the decision whereof is herein expressly provided for) shall be referred to the sole arbitration of the Director General Posts and Telegraphs or in case his designation is changed or his office is abolished, the officer who for the time being is entrusted whether or not in addition to other functions, with the functions of the Director General of Posts and Telegraphs, by whatsoever designation such official may be called or if he be unable or unwilling to act, then of an officer appointed by him in this behalf. It will be no objection to any such appointment that the person appointed is a Government Servant, that he had to deal with the matters to which the indenture of lease relates and that in the course of his duties as such Government servant has expressed views on all or any of the matters in dispute or difference. The decision of the Arbitration shall be final and binding on the parties to this deal. The provision of the Indian Arbitration Act, 1940, or any statutory modifications or re-enactments thereof and the rules made thereunder for the time being in force shall apply to such arbitration and this deed shall be deemed to be a submission to arbitration within the meaning of the said Act."

The defendants were incorporated on 1st April, 1986 and are successors-in-title to the Bombay Telephones. The lease period of three years from 8th August, 1983 was extended for three years from 8th August, 1986 and expired on 7th August, 1989. Both parties have admitted that the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, 'The Bombay Rent Act') apply to the premises leased to the defendants. Before the expiry of the lease, by their letter dated 20th February, 1989 addressed to the General Manager of the defendants, the plaintiffs informed the defendants that the lease of the said premises was to expire on 7th August, 1989 and requested the defendants to release the said premises to enable the plaintiffs to allot the same to the

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