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2015 Supreme(Cal) 502
IN THE HIGH COURT OF JUDICATURE AT CALCUTTA
SOUMEN SEN, J.
Diamond Apartments Pvt. Ltd. - Petitioner
Vs.
Abanar Marketing Ltd. - Respondent
GA No. 1343 of 2015 & CS No. 389 of 2014
Decided On : 03-06-2015
Advocate Appeared:
For the Petitioner: Mr. Abhrajit Mitra, Mr. Jishnu Chowdhury, Mr. Soumabha Ghose, Ms. Rajshree Kajaria
For the Respondent: Mr. Jishnu Saha, Mr. Sarathi Dasgupta
A party who has taken a stand before an authority that the said authority lacks competence to decide the dispute by reason of some special law, cannot thereafter take a different stand when the other party on the basis of such objection files an appropriate proceeding before a civil court which is otherwise valid in law.
Headnote:
ARBITRATION - JURISDICTION - ESTOPPEL - WAIVER - ARBITRABILITY OF DISPUTE - TRANSFER OF PROPERTY ACT - PREMISES TENANCY ACT - EVICTION PROCEEDINGS - [Section 5, 8, 14(3), 16, 32 and 34(2)(b)(i) of the Arbitration and Conciliation Act, 1996; Section 106 of the Transfer of Property Act, 1882; West Bengal Premises Tenancy Act]
Fact of the Case:
Plaintiff initiated an arbitration proceeding based on an arbitration clause in a leave and license agreement. Defendant objected to the arbitrator's jurisdiction to decide the dispute. Plaintiff filed a suit for recovery of possession, claiming that the defendant was not a tenant but a licensee. Defendant filed an application to dismiss the suit on grounds of arbitration agreement and sought reference to arbitration.
Finding of the Court:
The court held that the defendant was estopped from objecting to the jurisdiction of the civil court to decide the dispute. The defendant had raised the issue of the arbitrator's jurisdiction before the arbitrator and had taken a clear stand that the arbitrator lacked competence to decide the dispute. The court noted that the defendant could not thereafter take a different stand when the plaintiff filed a suit on the basis of such objection.
Issues: 1. Whether the defendant was estopped from objecting to the jurisdiction of the civil court to decide the dispute. 2. Whether the dispute was arbitrable.
Ratio Decidendi: 1. A party who has consciously taken a stand before an authority that the said authority lacks competence to decide the dispute by reason of some special law, could not thereafter take a different stand when the other party on the basis of such objection filed an appropriate proceeding before a civil court which is otherwise valid in law. 2. The dispute governed by the State Tenancy Act being held to be a special statute would debar an arbitrator to arbitrate such dispute. However, an eviction proceeding upon service of notice to Section 106 of the Transfer of Property Act may not be treated alike as Transfer of Property Act is a general law and the State Tenancy Act is special law.
Final Decision: The court dismissed the defendant's application to dismiss the suit and held that the suit was maintainable. The court also held that the defendant was estopped from objecting to the jurisdiction of the civil court to decide the dispute.
Soumen Sen, J.
The defendant has filed this application for dismissal of the suit on the ground that an arbitration proceeding is pending and by reason of the existence of the arbitration agreement, the parties are required to be referred to arbitration for resolution of the disputes.
2. The petitioner before the initiation of the suit initiated an arbitration proceeding on the basis of the arbitration clause mentioned in the leave and licence agreement executed by and between the parties on 1st August, 2012. There is a named arbitrator before whom the proceeding commenced. The plaintiff filed a statement of claim praying, inter alia, for recovery of possession on termination of the leave and licence agreement. The plaintiff also claims certain monetary reliefs. The plaintiff states that the leave and licence agreement expired in the month of June, 2013 whereupon the defendant became oblige to deliver vacant and peaceful possession of the claimant, however, the defendant had failed and neglected to do. The plaintiff, in fact, had served a notice to quit dated 25thSeptember, 2013 under Section 106 of the Transfer of Property Act, 1882 calling upon the defendant to deliver vacant and peaceful possession of the suit premises expired on 15 days from the date of respondent's receipt of the same. It is stated that even assuming that the respondent was a lessee of the suit premises, the lease stood terminated on 11th October, 2013.
3. In the said proceeding, the plaintiff has also filed an application for interim relief under Section 17 of the Arbitration and Conciliation Act, 1996.
4. Mr. Chandranath Mukherjee, Advocate, since deceased, was the named Arbitrator.
5. Before the learned Arbitrator pleadings were filed. In the counter objection as well as the opposition filed in connection with the application filed under Section 17 of the Arbitration and Conciliation Act, 1996, the applicant questioned the jurisdiction of the Arbitrator to arbitrate the disputes canvassed in the said proceeding. In paragraphs 9 and 12 of the counter statement, it is stated that the purported agreement on the basis of which the instant proceeding was initiated is invalid, illegal and not binding. The said agreement is not properly stamped and cannot be looked into. The purported arbitration clause as contained in the said agreement perishes with the said agreement which is void ab initio, uncertain, vague and the learned Arbitrator has no jurisdiction to entertain the instant arbitration proceeding. In paragraph 4 of the affidavit in opposition filed in connection with the Section 17 application, it is stated that in any event the arbitral tribunal does not have jurisdiction to entertain an application for eviction of tenants either under the Premises Tenancy Act or under the Transfer of Property Act and hence the arbitration is squarely barred by law and is not maintainable either in facts or in law.
6. The Arbitrator died during the pendency of the said proceeding. None of the parties had taken any step for substitution of the Arbitrator although it was open for the parties to take appropriate steps for appointment of a substituted arbitrator. Although the plaint proceeds on the basis that on the death of Mr. Chandranath Mukherjee the arbitration proceeding has come to an end, it has been fairly conceded from the bar that the agreement survives and the plaintiff could have taken steps for appointment of a new arbitrator consequent upon the death of Mr. Chandranath Mukherjee, since the law is well settled on this point as one could find from the decision of the Hon'ble Supreme Court in ACC Limited (Formerly known as The Associated Cement Company Limited) v. Global Cements Limited reported at (2012) 7 SCC 71.
7. The other reason for filing the suit appears to be the objection raised by the defendant before the learned Arbitrator that the arbitrator had no jurisdiction to decide the dispute, that is to say, the said dispute is not arbitrable. It is st
