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2024 Supreme(P&H) 1151

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
SUVIR SEHGAL, J.
CSJ Infrastructure Private Limited – Petitioner
Versus
M/s. Talwar Jewellery House – Respondent
ARB NO. 416 of 2022
Decided On : 01-05-2024

Advocates Appeared:
Mr. Anil Mehta, Advocate and Ms. Sukriti Kaur, Advocate; For the Petitioner
Mr. Anish Setia, Advocate; For the Respondent

Disputes regarding recovery of lease amounts under an Arbitration Clause are arbitrable and do not fall under the jurisdiction of the Rent Controller.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11 - Lease agreement - Dispute regarding non-payment of lease money - Petitioner sought appointment of an Arbitrator after lease termination and eviction proceedings - Court held that the dispute is arbitrable as it pertains to recovery of lease amount, not eviction. (Paras 1, 5, 7)

(B) Rent Act - Applicability - Court noted that the claim for recovery of lease amount does not fall under the exclusive jurisdiction of the Rent Controller, as it does not involve eviction. (Paras 5, 6)

Facts of the case:
The petitioner leased commercial premises to the respondent, who defaulted on lease payments. After issuing notices and terminating the lease, the petitioner sought arbitration for recovery of dues. The respondent contested the arbitration citing the Rent Act.

Findings of Court:
The court found that the dispute regarding recovery of lease payments is arbitrable and not subject to the Rent Act's exclusive jurisdiction.

Issues: The main issue was whether the dispute regarding lease payments could be arbitrated given the provisions of the Rent Act.

Ratio Decidendi: The court ruled that since the petitioner was not seeking eviction but recovery of lease payments, the dispute was arbitrable under the Arbitration Act.

Result: Petition allowed; Arbitrator appointed.

JUDGMENT

Mr. Suvir Sehgal, J. (ORAL).

By way of instant petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short "the Arbitration Act"), petitioner has approached this Court for appointment of an Arbitrator to adjudicate the disputes and differences between the parties.

2. Counsel for the petitioner submits that the petitioner leased out a commercial premises to the respondent and a lease deed dated 12.11.2014, Annexure P-2, was executed. Counsel submits that the respondent defaulted in the payment of the lease money and the petitioner issued a notice dated 24.09.2020, Annexure P-5, and part payment was made. Counsel submits that by notice dated 02.11.2020, Annexure P-7, lease was terminated and the petitioner approached the Rent Controller under the East Punjab Urban Rent Restriction Act, 1949 (for short "the Rent Act") seeking his eviction. Counsel submits that respondent filed an application under Section 10 of the Rent Act for restoration of electricity and the petitioner simultaneously filed applications under Section 5 and 8, respectively, of the Arbitration Act for referring the dispute to an Arbitrator. Counsel submits that by order dated 05.02.2021, Annexure P-9, both the applications were decided by the Rent Controller and the parties were referred to Arbitration. Counsel submits that an appeal filed by the respondent was dismissed and a revision petition (CR- 2682-2021) was dismissed as having been rendered infructuous by this Court vide order dated 03.07.2023. Counsel submits that in the meanwhile, the Rent Controller passed eviction order dated 20.01.2022, Annexure P-8, and the possession of the premises was handed back to the petitioner on 19.02.2022. As the lease amount and maintenance charges w.e.f. 01.03.2020 were due, a notice dated 09.08.2022, Annexure P-12, was served invoking the Arbitration Clause, which has remained unresponded.

3. Upon notice, petition has been contested by the respondent by filing a reply, wherein it has been inter-alia submitted that the respondent filed an application under section 8 of the Arbitration Act for the stay of the eviction proceedings in view of the arbitration clause, which was rejected by order dated 14.09.2021, Annexure P-11. Counsel for the respondent places reliance upon paras 48 and 49 of the judgment of the Supreme Court in Vidya Drolia and others v. Durga Trading Corporation, (2021) 2 SCC 1 as well as judgment of this Court in Mala Kshetrapal through Attorney Kanwal Preet Singh Bindra v. Gunveen Singh 2023 (4) PLR 339 to submit that as the dispute falls within the jurisdiction of the Rent Controller, provisions of the Rent Act are applicable and it is not arbitrable.

4. I have heard counsel for the parties and considered their respective submissions.

5. In Harpreet Singh v. M/s International Cars and Motors Ltd. and another, 2009 (2) RCR (Civil) 887, this Court held that a detailed procedure has been envisaged under the Rent Act giving the grounds on which eviction of a tenant can be claimed at the hands of the landlord. Noticing the claim raised by the petitioner, this Court held that as he is neither claiming enhancement of rent, nor ejectment of the respondent, the claim does not even remotely fall with the provisions of the Rent Act. This Court held that as the claim was for recovery of the lease amount, in furtherance of the lease deed, which contains an Arbitration Clause, the dispute was clearly arbitrable. In Sunil Kumar Sharma v. M/s Perfexa Solutions Pvt. Ltd., (2009) SCC Online P&H 889, this Court reiterated this position and held that as the petitioner is not claiming eviction of the tenant on any of the grounds available to the landlord under the provisions of the Rent Act and has sought recovery of arrears of lease money, such dispute does not fall in the exclusive jurisdiction of the Rent Controller.

6. Still further in Rohit Sawhney v. DLF Power and Services Ltd., (2022) SCC Online P&H 4271, another Co-ordinate Bench o

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