REPORTABLE

2026 INSC 5 IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 36 of 2026 (@ Special Leave Petition (Civil) No. 5834 of 2025)

Motilal Oswal Financial Services Limited …Appellant(s)

VERSUS Santosh Cordeiro and Another …Respondent(s)

J U D G M E N T

K.V. Viswanathan, J.

1. Leave granted.

2. The present appeal calls in question the correctness of the order dated 02.05.2024 passed by the Single Judge of the High Court of Judicature at Bombay in Commercial Arbitration Application No.9 of 2024. By the said order, the learned Single Judge allowed the Section 11 Application filed by the Signature Not Verified Digitally srigneed byspondent under the Arbitration & Conciliation Act, 1996 (for CHANDRESH Date: 2026.01.05 Reason:

short “the A&C Act”) and appointed an arbitrator to adjudicate the dispute between the parties. The only objection taken by the appellant herein was that the dispute is non-arbitrable in view of Section 41 of the Presidency Small Cause Courts Act, 1882 (for short “the 1882 Act”). The learned Single Judge made a short shrift of the said objection by holding that the place where the property in question, which was the subject matter of the dispute, was situated, i.e. Malad, was outside the jurisdiction of the Small Causes Court. This finding has now turned out to be a damp squib, since parties before us are ad idem that Malad area is covered under the jurisdiction of the Small Causes Court. We could have rest content by remanding the matter to the High Court for fresh consideration. However, that will only prolong the dispute and, hence, we have decided to answer the issues arising in the case ourselves.

BRIEF FACTS OF THE CASE: -

3. With regard to the premises situated at Unit No.718, admeasuring 2925 sq. ft., 7^th Floor, Palm Spring Centre, Link Road, Malad (West), Mumbai, the appellant entered into a Leave and License Agreement on 06.10.2017 with the respondent. The period of the Leave and License was 60 months from 01.10.2017 to 30.10.2022. Though the appellant terminated the said agreement on 31.12.2019, after exchange of correspondence between the parties, the said termination was reversed and an Addendum dated 13.03.2020 was entered into extending the Leave and License period from 60 months to 96 months with a lock-in period of 72 months.

4. According to the appellant, due to COVID-19 pandemic, they were unable to continue the arrangement and citing the force majeure clause in the agreement, they handed over the keys and vacant peaceful possession of the premises to the respondent on 09.09.2020. According to the appellant, they intimated the respondents about the same on 10.10.2020 by writing an email. The appellant also sought refund of the security deposit.

5. On 28.06.2023, the respondent No.1 called upon the appellant to pay a sum of Rs.94,40,152/- along with interest @ 24% towards the alleged arrears of license fees for the balance lock-in period i.e. from 01.09.2020 to 14.06.2023. The appellants wrote back on 17.07.2023 denying any liability and seeking refund of security deposit of Rs. 10 lakhs.

6. The appellant on 17.07.2023 received a notice dated 15.07.2023 issued by the respondent under Section 21 of the A&C Act invoking Clause 33 of the arbitration agreement of the Leave and License Agreement dated 06.10.2017 and Addendum dated 13.03.2020. Clause 33 of the Leave and License Agreement dated 06.10.2017 reads as under: -

“In the event of the any dispute or difference arising between the Licensors and the Licensee hereto concerning or relating to the interpretation of these presents or the interpretation or effect of any provisions thereof or relating to the liability or obligation on the part of any of the parties hereto, the same shall be referred to arbitration and Sole Arbitrator shall be appointed by the mutual consent of the Parties. The award passed by the sole arbitrator shall be binding on both the parties. The arbitration shall be in Mumbai and in accordance with and