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High Court Of Delhi
ORIENTAL BUILDING AND FURNISHING COMPANY LIMITED,NEW DELHI - Appellant
Versus
UNION OF INDIA - Respondent
Suit 363A of 1977
Decided On : 04/24/1981
ARBITRATION - LIMITATION - PUBLIC PREMISES (EVICTION OF UNAUTHORISED OCCUPANTS) ACT, 1971 - JURISDICTION - SCOPE OF ARBITRATION AGREEMENT - RAILWAY LAND LEASE DISPUTE - ARBITRATION CLAUSE - EVICTION PROCEEDINGS - INTERPRETATION OF AGREEMENT - APPOINTMENT OF ARBITRATOR.
Fact of the Case:
A dispute arose between the petitioner, a lessee of railway land, and the respondents, the railway authorities, regarding the terms of the lease, including the duration of the lease, the rent payable, and the petitioner's right to occupy the land during the lease period. The petitioner filed a petition under Section 20 of the Arbitration Act, 1940, seeking to refer the disputes to arbitration as per the arbitration clause contained in the lease agreement.
Finding of the Court:
1. Limitation: The petition was held to be within the limitation period of three years under Article 137 of the Limitation Act, 1963, as the limitation period commenced from the date when the differences between the parties arose, which was when the parties could not resolve the disputes and an application was made to refer the matter to arbitration. 2. Jurisdiction: The Court held that it had jurisdiction to entertain the petition and refer the disputes to arbitration, as Section 15 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, which bars certain proceedings related to eviction and rent recovery, did not apply to arbitration proceedings under the Arbitration Act, 1940. 3. Ouster of Arbitration: The Court held that the reference of the matter to the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, did not bar the arbitration proceedings, as there was nothing in the Act or the Arbitration Act that prohibited the simultaneous conduct of both proceedings. 4. Scope of Arbitration Agreement: The Court held that the disputes between the parties fell within the scope of the arbitration agreement contained in the lease agreement, as they related to the intent and meaning of the agreement and the subject matter referred to therein.
Issues: 1. Whether the petition was barred by limitation. 2. Whether the Court had jurisdiction to entertain the petition in light of Section 15 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. 3. Whether the reference of the matter to the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, barred the arbitration proceedings. 4. Whether the disputes between the parties fell within the scope of the arbitration agreement contained in the lease agreement.
Ratio Decidendi: 1. The limitation period for filing an application under Section 20 of the Arbitration Act, 1940, is three years from the date when the right to apply accrues, which is when the differences between the parties arise and not when the cause of action for filing a suit arises. 2. Section 15 of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, which bars certain proceedings related to eviction and rent recovery, does not apply to arbitration proceedings under the Arbitration Act, 1940, as the two Acts deal with different matters and have different limitation periods. 3. The reference of a matter to the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971, does not bar arbitration proceedings, as there is no provision in either Act that prohibits the simultaneous conduct of both proceedings. 4. The scope of an arbitration agreement is determined by the wording of the agreement, and disputes that arise from the interpretation of the agreement or the subject matter referred to therein fall within the scope of the arbitration agreement.
Final Decision: The petition was allowed, the arbitration agreement was directed to be filed, and the disputes were directed to be referred to an arbitrator to be appointed by the General Manager of the Northern Railway within three months. The respondents were restrained from evicting the petitioner during the pendency of the arbitration proceedings and until the award was given.
( 1 ) THE petition under S. 20 of the Arbitration Act, 1940, before the Court has given rise to some important question of law. There is a clash in the instant case between the provisions of the Arbitration Act, 1940, and the provisions of the Public Premises (Eviction of Unauthorised Occupants) Act, 1971. I have considered the question whether the case should not be referred to a large Bench, but in view of the fact that a right of appeal would be lost to the parties by this procedure, I have preferred to give my own decision on the points which have arisen.
( 2 ) THE facts of the case are that an area of 2,743 sq. yards belonging to the Northern Railway, i. e. the land being Railway land was leased out to the petitioner on 9th May, 1969. An amount of Rs. 30,611. 88 has been paid as rent yearly for this plot. The land used is for stacking or storing materials and for parking vehicles. The period of the lease was for ten years and according to the petitioner, the period commenced on 1st January, 1963, which means that the lease was made long after the term actually commenced. According to the petitioner, the period of ten years was automatically to be extended for another ten years period. However, according to the respondents, the term was ten years which would be automatically extended for another ten years if the lease is not terminated by giving a notice terminating the lease, which notice was to be for a period of three calendar months before the first period of ten years expired. In the lease-deed, there is an arbitration clause contained in paragraph No. 19. That clause reads as follows:
"19. That in case of any dispute arising between the parties with regard to the intent and meaning of this agreement and subject-matter referred to therein the same shall be referred to the sole arbitration of the General Manager, Northern Railway, or any other officer of the Railway appointed by him, who shall conduct the proceedings in accordance with the provisions of the Indian Arbitration Act 1940. "one of the disputes which has arisen regarding the lease is the question whether the period of ten years has not been extended to 20 years. It may have been extended because it was automatically extended or, it may have been extended because no notice was given, even according to the interpretation of the respondent. Then there are other disputes concerned with the rent to be paid for the period after ten years had expired, because, the petition was filed in 1977 and if the lease expired after ten years had expired, it expired at the end of December, 1972. There are several other disputes regarding constructions made on the land which according to the respondents the petitioner could not make. Furthermore, there is the question as to how the petitioner is to be evicted. There is, therefore, no doubt that disputes exist and there is an arbitration clause. However, the matter is not quite simple and several fine questions of law have arisen. On the pleadings, the following issues were framed by myself:
"1. Is the petition under Section 20 belated in the sense that the suit based on cause of action was or is barred by time or the application is otherwise filed beyond the period of limitation ? 2. Has this court no jurisdiction to deal with the matter because the matter is pending before the Estate Officer under the Public Premises (Eviction of Unauthorised Occupants) Act, 1971 ? 3. Is the matter not referable to arbitration because it is before the Estate Officer or within his competency? 4. Is the dispute specified in the petition, particularly in paragraph 10 of the. same, covered by arbitration agreement dated 9-5-1969 ? 5. Is the matter to be not referred to arbitration for any reason ? 6. Relief. "at that time, a direction was given that the questions seem to be purely legal and could be decided merely by filing of documents and affidavits. Eventually, the case has been heard on the basis of the affidavits and documents filed
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