TMI Blog2020 (12) TMI 688X X X X Extracts X X X X X X X X Extracts X X X X ..... tice prior to filing suit of ejectment is provided so as to enable the lessee to remedy the breach. No doubt the said provisions provide certain protection to the lessee/tenant before being ejected from the leased property - the same cannot be construed as a statutory protection nor as a hard and fast rule in all cases to waive the forfeiture. It is a provision enabling exercise of equitable jurisdiction in appropriate cases as a matter of discretion. Such equitable protection does not mean that the disputes relating to those aspects between the landlord and the tenant is not arbitrable and that only a Court is empowered to waive the forfeiture or not in the circumstance stated in the provision. When the disputes arise between the landlord and tenant with regard to determination of lease under the TP Act, the landlord to secure possession of the leased property in a normal circumstance is required to institute a suit in the Court which has jurisdiction. However, if the parties in the contract of lease or in such other manner have agreed upon the alternate mode of dispute resolution through arbitration the landlord would be entitled to invoke the arbitration clause and make a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having acquired absolute longterm leasehold right of the land and building referred supra has Sub-Leased the same to the respondent under the Sub-Lease Deed dated 14.11.2018. In respect of the Sub-Lease entered into between the parties, certain disputes are stated to have arisen which is to be resolved. Since the Sub-Lease Deed provides for resolution of the disputes through arbitration vide Clause 12 thereof the petitioner invoked the same by issuing a notice dated 11.12.2019, nominated the Sole Arbitrator and sought concurrence from the respondent. The respondent did not respond to the same. The petitioner is, therefore, before this Court seeking appointment of the Arbitrator. 4. Notice of this petition was ordered to the respondent on 02.03.2020. Despite service, the respondent has not chosen to appear and oppose this petition. In that light we have heard Mr. Vikas Dhawan, learned counsel for the petitioner and perused the petition papers. 5. The parties to the petition have entered into a Sub-Lease Deed dated 14.11.2018 whereunder the terms of lease have been agreed to between the parties. In respect of the terms and conditions agreed under the Sub-Lease Deed certain dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tizen of Kenya and habitually is a resident of Nairobi, Kenya. Thus, the petitioner being an individual who is a national of Kenya and is habitually a resident of that country; having entered into a contract and since disputes have arisen under the said document, the same qualifies as an International Commercial Arbitration as defined in Section 2(f) of Act, 1996. In such circumstance, Supreme Court is to appoint an Arbitrator as provided under Section 11(6) of the Act, 1996 and not by the High Court as stated in the contract entered into between the parties. 8. However, before considering the appointment of Arbitrator the first part of Clause 12 providing for arbitration needs elaboration to consider the arbitrability of the dispute relating to lease/tenancy agreements/deeds when such lease is governed by Transfer of Property Act, 1882 ( TP Act for short) and iron out the creases on the legal aspect. The learned counsel for the petitioner asserts that the tenancy in the instant case is not created under; nor is the leased/tenanted property governed by a special statute where the tenant enjoys statutory protection and as such there is no impediment for resolving the dispute t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a civil suit against the tenant for eviction. In the said suit the tenant filed an application under Section 8 of Act, 1996 seeking reference to arbitration since the parties were governed by an arbitration agreement. The Civil Court had dismissed the application and that order was upheld by the High Court. The Supreme Court while deciding the same, though relied on the decision in the case of Natraj Studios (P) Ltd. vs. Navrang Studios (1981) 1 SCC 523 wherein the issue arose in respect of premises governed under the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947 (Special Statute) and the case of Booz Allen (supra) wherein it was clearly indicated that non arbitrability is in respect of tenancy governed by special statutes, still upheld the order rejecting the application under Section 8 of Act, 1996 seeking reference to arbitration. 10. The observations contained in para 23 and 24 of Himangni Enterprises (supra) has brought within its sweep the non-arbitrability of disputes relating to the lease/tenancy governed under TP Act. The said observations read as hereunder: 23. The learned counsel for the appellant, however, argued that the provisions of the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing of the suit, the lessee pays or tenders to the lessor the rent in arrears, together with interest thereon and his full costs within 15 days, the Court in its discretion may relieve the lessee against the forfeiture. This shows two things one that the landlord's interest is secured not only by the deposit of rent in arrears but also interest thereon and full costs of the suit. The option given, of course, is that security may also be given but what is important is that the Court is given a discretion in making a decree for ejectment if this is done. The discretion may be exercised in favour of the tenant or it may not. This itself shows that Section 114 cannot be said to be a provision conceived for relief of tenants as a class as a matter of public policy. The same goes for Section 114A. Here again, a lessee is given one opportunity to remedy breach of an express condition, provided such condition is capable of remedy. However, the exception contained in this section shows that it is a very limited right that is given to a tenant, as this would not apply to assigning, subletting, parting with the possession, or disposing of the property leased, or even to an express co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r; or (2) in case the lessee renounces his character as such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may reenter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee of his intention to determine the lease; (h) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the property leased, duly given by one party to the other. 114. Relief against forfeiture for nonpayment of rent.- Where a lease of immovable property has been determined by forfeiture for nonpayment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Others (AIR 1953 SC 228) as under: .. The argument of Mr. Daphtary that there was no real discretion in the court and relief could not be refused except in cases where third party interests intervene is completely negatived by the decision of the House of Lords in Hyman v. Rose. ..With great respect we think that the observations cited above contain sound principles of law. We are, therefore, unable to accede to the contention of Mr. Daphtary that though section 114 of the Transfer of Property Act confers a discretion on the court, that discretion except in cases where third party interests intervene must always be exercised in favour of the tenant irrespective of the conduct of the tenant. 16. Such equitable protection does not mean that the disputes relating to those aspects between the landlord and the tenant is not arbitrable and that only a Court is empowered to waive the forfeiture or not in the circumstance stated in the provision. In our view, when the disputes arise between the landlord and tenant with regard to determination of lease under the TP Act, the landlord to secure possession of the leased property in a normal circumstance is required to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. In the backdrop of the above discussion, we are of the considered view that insofar as eviction or tenancy relating to matters governed by special statutes where the tenant enjoys statutory protection against eviction whereunder the Court/Forum is specified and conferred jurisdiction under the statute alone can adjudicate such matters. Hence in such cases the dispute is non-arbitrable. If the special statutes do not apply to the premises/property and the lease/tenancy created thereunder as on the date when the cause of action arises to seek for eviction or such other relief and in such transaction if the parties are governed by an Arbitration Clause; the dispute between the parties is arbitrable and there shall be no impediment whatsoever to invoke the Arbitration Clause. This view is fortified by the opinion expressed by the Coordinate Bench while answering the reference made in the case of Vidya Drolia wherein the view taken in Himangni Enterprises is overruled. 19. As noted above, the petitioner in the instant case while invoking the Arbitration Clause has proposed the name of Justice (Retired) Mukul Mudgal as the Sole Arbitrator. The respondent neither replied to the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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