The principal issue which falls for the determination of the Court is whether the provisions of section 41 of the Presidency Small Cause Courts Act, 1882 would bar the jurisdiction of an arbitral tribunal to entertain a claim for specific performance of an agreement of renewal contained in an agreement of licence executed between a licensor and licensee. The relief which has been sought in these proceedings under section 9 of the Arbitration and Conciliation Act, 1996 is an order of injunction restraining the licensor from terminating the agreement of licence and acting upon a communication calling upon the licensee to hand over vacant possession and in particular, restraining the licensor from initiating proceedings for the recovery of possession of the licensed premises. An injunction has also been sought restraining the licensor from disturbing the use and occupation of the premises by the licensee; from entering into any third party rights in respect of the licensed premises. Other consequential reliefs restraining the licensor from interfering with the use of common facilities have been sought.

2. The respondents are licensors and the petitioner is a licensee in respect of commercial premises consisting of Unit No.7 in the A Wing on the first floor of a building known as Modern Centre situated at Mahalakshml, Mumbai. The petitioner has been ill occupation of the premises from 1st January, 2002. A leave and licence agreement is stated to have been initially entered into on 19th October, 2001 for a term of three years commencing from 1st January, 2002 which was to expire on 31st December, 2004. According to the petitioner a right, was conferred upon it of a refusal to renew the agreement for a further two terms of three years each commencing from 31st December, 2004. On 11th January, 2005 an agreement of licence was entered into between the parties under which a licence was granted by the respondents to the petitioner to utilize the facilities of a business center at the premises for a period of three years commencing from 1st January, 2005 and ending on 31st December, 2007. The licence fee under the agreement was fixed at Rs.5,75,0001- per month and a deposit of Rs.60 lacs was furnished free of interest for the due performance of the obligations under the agreement. Towards the provision of certain services and facilities, the petitioner was to pay in addition an amount of Rs.14,510/- each month. Clause 5 of the agreement deals with renewal and made the following provisions:

"5(a) Client shall have the right of refusal to renew this Agreement for fUl1her periods of three years from 1st January, 2008 to 31st December, 2010.

(b) In the event of the Client opting for renewal, the charges under subclause (a) of Clause No.8 shall be increased by 15% i.e. to Rs.6,61,2501(Rupees six lacs sixtyone thousand two hundred fifty only) per month.

(c) In the event of the Client desiring to renew the agreement after completion of three years (36 English calender months) beyond 31st December, 2007 the Client shall give to the Conductor advance notice of 6 months in writing before the expiry of the agreement.

(d) All other terms and conditions herein shall remain the same during the extended period of agreement for renewal period."

3. Clause 6 of the agreement provided that the agreement was terminable for a breach on the part of the other party. During the period of renewal the petitioner was entitled to terminate the agreement with a notice of six months while on the other hand the respondents did not have any right to terminate the agreement other than for a breach of the conditions of the agreement. Under clause 7(a)(i) the agreement was to be terminable by efflux of time. Sub-clause (c) of clause 7 provides that upon the termination of the agreement the petitioner would hand over vacant and peaceful possession to the respondents failing which the respondents were entitled to remove the belongings of the petitioner upon the expir