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CALCUTTA HIGH COURT
RAJESH BINDAL, ACJ
SWAROOP SEN – Appellant
Versus
AJAY KUMAR BORAL AND ANOTHER – Respondent
A.P. No. 512 of 2019
For the Appellants/Petitioners: Mr. Sanjib Dawn
For the Respondents: Mr. Swatarup Banerjee (VC), Mr. Manik Lal De, Mr. Ratul Biswas
The court determined that disputes under agreements predating current legislation are generally non-arbitrable, affirming the integrity of arbitration mechanisms.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11(6) - Applicability of arbitration agreement - Dispute arose from Leave and Licence agreement dated August 10, 1987 - The applicant sought appointment of an arbitrator, citing the Supreme Court ruling in Vidya Drolia which established that landlord/tenant disputes can be arbitrated unless covered by rent control legislation. The court held the 1997 Act inapplicable as the agreement predates its enactment. (Paras 2, 8, 10)
(B) Non-arbitrability - Argument regarding arbitrability becomes irrelevant if the dispute is found fundamentally non-arbitrable. The court clarified that complex arguments regarding non-arbitrability should be efficiently addressed to protect the integrity of arbitration. (Paras 11, 12)
Facts of the case:
The applicant argued for arbitration citing an arbitration clause in a Lease and Licence agreement. The respondent contended the agreement nature and act non-applicability.
Findings of Court:
The court dismissed the application, affirming that the agreement does not qualify for arbitration due to its age and the nature of the dispute.
Issues: Whether the dispute governed by pre-1997 agreement is eligible for arbitration under current laws.
Ratio Decidendi: The court determined that disputes regarding pre-1997 agreements were not arbitrable as per the differences in the tenancy laws.
Result: Application dismissed.
| Table of Content |
|---|
| 1. application for arbitration based on an existing agreement. (Para 2 , 4 , 8) |
| 2. examination of tenancy laws and their applicability. (Para 6 , 9 , 10) |
| 3. reinforcement of non-arbitrability based on dispute nature. (Para 11 , 12) |
O R D E R
1. The present application has been filed under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (for short, ‘the Act’) for appointment of an arbitrator.
2. The learned Counsel for the applicant submitted that there is an arbitration Clause in the lease and license agreement dated August 10, 1987 signed between the parties. In terms thereof both the parties had appointed one arbitrator each. However, they failed to appointed an umpire. As a result the arbitral proceeding could not commence. The applicant has filed the present petition seeking direction for appointment of arbitrator.
3. The judgment of Hon’ble the Supreme Court in Vidya Drolia and Others vs. Durga Trading Corporation, (2021) 2 SCC 1 was referred to in support of the argument that landlord/tenants disputes are arbitrable. The case in hand does not fall in the exception clause. Section 105 of the Transfer of Property Act defines ‘lease’. Whereas in terms of Section 3 (c) of the West Bengal Premises Tenancy Act, 1997 (for short, ‘the 1997 Act’) the dispute in the present case is not governed by the aforesaid Act. Hence, the present application may be accepted and an arbitrator be appointed for resolution of the dispute.
4. On the other hand, learned Counsel for the respondent submitted that the argument raised by the learned Counsel for the applicant that the 1997 Act is not applicable in the case in hand is misconceived as the agreement in the case in hand was signed before coming into force of the aforesaid Act. He further submitted that it is not a lease agreement rather it is merely a Leave and Licence agreement.
5. In response, the learned Counsel for the applicant submitted that in terms of findings recorded in para 154.4 in Vidya Drolia and Others’s case (supra) the issue regarding arbitrability of a dispute is also to be decided by an arbitrator.
6. Heard the learned Counsel for the parties and perused the paperbook.
7. The clause of the agreement on which reliance was placed by the learned Counsel for the applicant is extracted below:
“14. In the event of any dispute between the parties to these presents in connection with the observant of the terms and conditions of this Agreement the matter shall be referred to the Arbitration of two Arbitrators one to be appointed by each of the parties to these presents with the power to such Arbitrators to appoint an Umpire and the decision of the majority of the Arbitrators shall be binding on both the parties to these presents and all the provisions of Indian Arbitration Act shall apply.”
8. The aforesaid agreement which is termed to be a Leave and Licence agreement was signed on August 10, 1987. The aforesaid facts are not in dispute. Hon’ble the Supreme Court in Vidya Drolia and Others’s case (supra), while dealing with the issue regarding arbitrability of a landlord/tenant dispute, while overruling the earlier judgment in Himangni Enterprises v. Kamaljeet Singh Ahluwalia, (2017) 10 SCC 706 held that landlord/tenant’s dispute which are covered and governed by the rent control legislation would not be arbitrable. Para 80 thereof is extracted below:
“80. In view of the aforesaid, we overrule the ratio laid down in Himangni Enterprises and hold that landlord-tenant disputes are arbitrable as the Transfer of Property Act does not forbid or foreclose arbitration. However, landlord-tenant disputes covered and governed by rent control legislation would not be arbitrable when specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations. Such rights and obligations can only be adjudicated and enforced by the specified court/forum, and not through arbitration.”
9. Argument raised by the learned Counsel for the applica
