2008 (1) TMI 997 - HC - Indian Laws

Summary

Issues Involved:
1. Whether Section 41 of the Presidency Small Cause Courts Act, 1882 bars the jurisdiction of an arbitral tribunal to entertain a claim for specific performance of an agreement of renewal.
2. Whether the relief sought under Section 9 of the Arbitration and Conciliation Act, 1996, including injunctions against the licensor, falls within the jurisdiction of the Small Causes Court.
3. Whether the relationship between the parties and the nature of the relief sought constitutes a dispute relating to the recovery of possession under Section 41(1).
4. Whether the Arbitration and Conciliation Act, 1996, is encompassed within the exception provided in Section 41(2) of the Presidency Small Cause Courts Act, 1882.

Issue-wise Detailed Analysis:

1. Whether Section 41 of the Presidency Small Cause Courts Act, 1882 bars the jurisdiction of an arbitral tribunal to entertain a claim for specific performance of an agreement of renewal:
The court determined that Section 41(1) of the Presidency Small Cause Courts Act, 1882, confers exclusive jurisdiction on the Small Causes Court to entertain and try all suits and proceedings between a licensor and licensee relating to the recovery of possession of immovable property or licence fees. The court emphasized that the non-obstante clause in Section 41(1) gives it overriding effect over other provisions of the Act, including Section 18 and Section 19, which define the pecuniary limits and exceptions to the Small Causes Court's jurisdiction. The court concluded that the primary determination is whether the suit in essence relates to the recovery of possession, and if so, it falls within the exclusive jurisdiction of the Small Causes Court.

2. Whether the relief sought under Section 9 of the Arbitration and Conciliation Act, 1996, including injunctions against the licensor, falls within the jurisdiction of the Small Causes Court:
The court noted that the relief sought by the petitioner under Section 9 of the Arbitration and Conciliation Act, 1996, included injunctions restraining the licensor from terminating the agreement, acting upon a letter demanding possession, and adopting proceedings for eviction. The court held that these reliefs relate to the recovery of possession and thus fall within the exclusive jurisdiction of the Small Causes Court under Section 41(1). The court emphasized that the nature and character of the dispute, as reflected in the relief sought, indicate that it is essentially a dispute relating to the recovery of possession.

3. Whether the relationship between the parties and the nature of the relief sought constitutes a dispute relating to the recovery of possession under Section 41(1):
The court observed that the parties had a pre-existing relationship of licensor and licensee, and the petitioner sought an extension of this relationship by exercising the option of renewal under the existing agreement. The court held that the expression "relating to the recovery of possession" in Section 41(1) is broader than "for the recovery of possession" and includes suits where the primary relief sought is the continuation of the licensor-licensee relationship. The court concluded that the petitioner's claim for specific performance of the renewal agreement and the consequential reliefs sought fall within the ambit of Section 41(1).

4. Whether the Arbitration and Conciliation Act, 1996, is encompassed within the exception provided in Section 41(2) of the Presidency Small Cause Courts Act, 1882:
The court rejected the petitioner's argument that the words "or any other law for the time being in force" in Section 41(2) encompass the Arbitration and Conciliation Act, 1996. The court held that Section 41(2) carves out exceptions for specific legislations that provide exclusive or special provisions for regulating the relationship of landlord and tenant or licensor and licensee, such as the Rent Act. The court concluded that the Arbitration and Conciliation Act, 1996, does not fall within the exception provided in Section 41(2) and thus does not override the exclusive jurisdiction conferred on the Small Causes Court by Section 41(1).

Conclusion:
The court held that the objection to the jurisdiction of the arbitral tribunal to entertain the dispute was well-founded. The court concluded that the recourse to arbitration under the terms of the arbitration clause contained in the agreement of leave and licence is barred by the exclusive jurisdiction conferred upon the Court of Small Causes by Section 41(1) of the Presidency Small Cause Courts Act, 1882. Consequently, the petition was dismissed.