Arbitration clause can not oust tenancy protection law

Arbitration clause in Rent Agreement

Facts of the Tenancy eviction case:

The appellants have inducted the respondents as tenants in respect of a shop room measuring 600 sq. feet at HA-3, Sector-3, Salt Lake City, Kolkata, and paying a monthly rent to the appellants. In respect of the tenancy, the appellants and the respondents have executed an unregistered tenancy agreement which has been notarized on 10.11.2003. On 06.03.2008, the appellants, through their Advocates, served a notice on the respondents terminating the tenancy and asking them to vacate the shop premises and the notice stated that after April, 2008 the relationship of landlord and tenant between the appellants and the respondents shall cease to exist and the respondents will be deemed to be trespassers liable to pay damages at the rate of Rs.500/- per day for wrongful occupation of the shop. The respondents, however, did not vacate the shop premises and the appellants filed Title Suit No.89 of 2008 against the respondents for eviction, arrears of rent, arrears of municipal tax, mesne profit and for permanent injunction in the Court of the Civil Judge (Senior Division), 2nd Court at Barasat, District North 24-Parganas in the State of West Bengal. In the suit, the respondents filed a petition under Section 8 of the Arbitration and Conciliation Act, 1996 (for short ‘the 1996 Act’) stating therein that the tenancy agreement contains an arbitration agreement in clause 15 and praying that all the disputes in the suit be referred to the arbitrator. By order dated 10.06.2009, the learned Civil Judge dismissed the petition under Section 8 of the 1996 Act and posted the matter to 10.07.2009 for filing of written statement by the defendants (respondents herein).

Aggrieved, the respondents filed an application (C.O. No.2440 of 2009) under Article 227 of the Constitution of India before the Calcutta High Court and contended that the tenancy agreement contains an arbitration agreement in Clause 15, which provides that any dispute regarding the contents or construction of the agreement or dispute arising out of the agreement shall be settled by Joint Arbitration of two arbitrators, one to be appointed by the landlords and the other to be appointed by the tenants and the decision of the arbitrators or umpires appointed by them shall be final and that the arbitration will be in accordance with the 1996 Act and, therefore, the learned Civil Judge rejected the petition of the respondents to refer the disputes to arbitration contrary to the mandate in Section 8 of the 1996 Act. The appellants opposed the application under Article 227 of the Constitution of India contending inter alia that the dispute between the appellants and the respondents, who are landlords and tenants respectively, can only be decided by a Civil Judge in accordance with the provisions of the West Bengal Premises Tenancy Act, 1997 (for short ‘the Tenancy Act’). By the impugned judgment dated 16.04.2010, the High Court has held that in view of the decisions of this Court in Hindustan Petroleum Corporation Ltd. v. Pinkcity Midway Petroleums [(2003) 6 SCC 503], Agri Gold Exims Ltd. v. Sri Lakshmi Knits & Wovens & Ors. [(2007) 3 SCC 686] and Branch Manager, Magma Leasing & Finance Limited & Anr. v. Potluri Madhavilata & Anr. [(2009) 10 SCC 103], the Court has no other alternative but to refer the disputes to the arbitrators to be appointed by the parties as per the arbitration agreement. The High Court, however, has observed in the impugned judgment that if any dispute is raised regarding arbitrability of such dispute before the arbitral tribunal, such dispute will be decided by the arbitral tribunal.

Relevant Rent/Tenancy Law:

The relevant portion of Section 6 of the Tenancy Act 1997 is quoted hereinbelow:

“6. Protection of tenant against eviction.—(1) Notwithstanding anything to the contrary contained in any other law for the time being in force or in any contract, no order or decree for the recovery of the possession of any premises shall be made by the Civil Judge having jurisdiction in favour of the landlord against the tenant, except on a suit being instituted by such landlord on one or more of the following grounds………..”
[Note the words in red.]

 

Supreme Court decided that arbitration clause is overridden by Tenancy Act:

It will be clear from the language of Section 6 of the Tenancy Act 1997 quoted above that ‘notwithstanding anything to the contrary contained in any contract’, no order or decree for recovery of possession of any premises shall be made by the Civil Judge having jurisdiction in favour of the landlord against the tenant, ‘except on a suit being instituted by such landlord’ on one or more grounds mentioned therein. It is, thus, clear that Section 6 of the Tenancy Act overrides a contract between the landlord and the tenant and provides that only the Civil Judge having jurisdiction can order or decree for recovery of possession only in a suit to be filed by the landlord.

In this case, there is an arbitration agreement in clause 15 of the tenancy agreement, which provides that any dispute regarding the contents or construction of the tenancy agreement or dispute arising out of the tenancy agreement shall be settled by arbitration in accordance with the provisions of the 1996 Act. But the words ‘notwithstanding anything in any contract’ in Section 6 of the Tenancy Act, will override the arbitration agreement in clause 15 of the tenancy agreement where a suit for recovery of possession of any premises has been filed by a landlord against the tenant. Such a suit filed by the landlord against the tenant for recovery of possession, therefore, cannot be referred under Section 8 of the 1996 Act to arbitration. In fact, sub-section (3) of Section 2 of the 1996 Act expressly provides that Part-I which relates to ‘arbitration’ where the place of arbitration is in India shall not affect any other law for the time being in force by virtue of which certain disputes may not be submitted to arbitration. Section 6 of the Tenancy Act is one such law which clearly bars arbitration in a dispute relating to recovery of possession of premises by the landlord from the tenant. Since the suit filed by the appellants was for eviction, it was a suit for recovery of possession and could not be referred to arbitration because of a statutory provision in Section 6 of the Tenancy Act.

The High Court, therefore, was not correct in coming to the conclusion that as per the decisions of this Court in the aforesaid three cases, the Court has no alternative but to refer the parties to arbitration in view of the clear mandate in Section 8 of the 1996 Act. On the contrary, the relief claimed by the appellants being mainly for eviction, it could only be granted by the “Civil Judge having jurisdiction” in a suit filed by the landlord as provided in Section 6 of the Tenancy Act. The expression “Civil Judge having jurisdiction” will obviously mean the Civil Judge who has jurisdiction to grant the other reliefs: decree for arrears of rent, decree for recovery of arrears of proportionate and enhanced municipal taxes, a decree for mesne profits and a decree for permanent injunction claimed in the suit.

[Source: Ranjit Kumar Bose v. Anannya Chowdhury]

Fraud avoids all acts.

Fraud avoids all judicial acts, ecclesiastical or temporal

Fraud is a deception deliberately practiced to achieve unfair or unlawful gain. Fraud apart from being a criminal offence is also a civil wrong in India, as at most places. It is defined by section 17 of Contract Act of India. Misrepresentation is defined by section 18 of said Act. The definition of fraud and misrepresentation is as under:

Definition of fraud:

“Fraud” means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agents, with intent to deceive another party thereto his agent, or to induce him to enter into the contract;
(1) the suggestion as a fact, of that which is not true, by one who does not believe it to be true;
(2) the active concealment of a fact by one having knowledge or belief of the fact; Continue reading “Fraud avoids all acts.”

Ban on Solar Fims by Supreme Court of India

The supreme court of india. Taken about 170 m ...

Short analysis of Supreme Court’s unreasonable decision
to ban the use of solar films on cars in India.

It is very rare for judges to reach out of their Ivory Tower and express about the ground realities of life. In one such rare occasion, a Supreme Court of India’s judge G S Singhvi speaking at a seminar observed:

“It is sad to say that my generation has failed the nation. In a country where 700 million people live below the poverty line, we tend to talk about justice. We talk about our fundamental rights being trampled upon but what about those people who do not get two square meals a day, have no right to education, shelter, clothing and other basic amenities. The country is divided into rural and urban and the idea about equality and fraternity needs to be pondered about and the entire process of development had taken place at the cost of rural people ……….. I feel guilty when I read about equality and fraternity and think about the labourers and farmers who have made our lives comfortable and easy. The ‘jan sevaks’ (Public Servants) are fast becoming our masters, the first citizens followed by the rich and the poor only as third class citizens.”

[Source: http://m.timesofindia.com/Young-lawyers-facing-multiple-challenges-Supreme-Court-judge/articleshow/13112646.cms]

Constitutionalism in India means that people’s sovereignty is supreme and unlimited and the constituents of the state have limited powers.”

[Source: http://articles.timesofindia.indiatimes.com/2012-02-26/nagpur/31100894_1_culture-guest-lecture-justa-causa]

The VIP class problems:

The problem is that we all know about the failures. But what will take it to put into practice? What about the class called VIP’s? Who are they and why they are VIP’s? Problem is that only thing we see in focus is MONEY and DOMINATION. All we have to do is to do our own work diligently, even if some time, the reciprocation is not fair. It is not easy but practice can make anyone perfect. I will misquote Gandhi: ‘When you do something, remember the face of the poorest of poor’.

Constitutionalism and judicial fiats:

As regards the second part, it is another story. While Constitutionalism means Rule of law and not Fiats issued at Will; another decision of Supreme Court nearly rubs it on wrong way. Following direction has been given by Supreme Court:

We have no hesitation in holding that use of black films or any other material upon safety glass, windscreen and side windows is impermissible. In terms of Rule 100(2), 70 per cent and 50 per cent VLT standard are relatable to the manufacture of the safety glasses for the windshields (front and rear) and the side windows respectively. Use of films or any other material upon the windscreen or the side windows is impermissible in law. It is the VLT of the safety glass without any additional material being pasted upon the safety glasses which must conform with manufacture specifications. ….. The competent officer of the traffic police or any other authorized person shall challan such vehicles for violating Rules 92 and 100 of the Rules with effect from the specified date and thereupon shall also remove the black films from the offending vehicles. (Full judgment is here.)

Natural justice not followed:

By one stroke of pen, an entire industry has been struck off. I wonder if they were a party to it. If not then it is violative of principles of natural justice. It beyond logical comprehension that if Manufacturer does not apply tinted glasses, I can not apply solar film to it? Off course it must meet statutory standard. Merely because law enforcement agency do not have technical equipment, all films are to be removed. By same logic why not every person be kept in lock and key at night as most crimes are committed at night. Curfew will be even better. Passes can be issued to VIP’s to wander at night, under Rules. Yes ban the liquor/Alcohol. A large number crime are committed under its influence. Licenses can be issued to VIP’s for that as well.

Consideration of irrelevant facts:

Judgment relies upon the practice of not using films in countries where the maximum temperature never exceeds 25 degrees. Here it touches 48 degrees centigrade every summer. In fact the word ‘weather’ does not even occurs in the judgment. The very basis of applying solar films is missing. Thus the judgment shall be hit by Wednesbury’s arbitrariness as it excludes an important and relevant fact from consideration while deciding an issue and therefore is not a reasonable judgment. Those interested in full judgment of Wednesbury’s case, can find it here. Some other arguments have been raised by another Gentleman here and therefore are not repeated.

Hypocrisy of Supreme Court in entertaining direct petition:

Another legal issue is that this order has been passed under article 32 of Constitution and is purported to enforce article 21 of Constitution in a Public Interest Litigation (PIL). Article 21 guarantees right to life to every citizen. If today a Habeas Corpus petition is filed in Supreme Court saying that life of a girl is in danger, Supreme Court will not entertain that petition and ask the party to go to respective High Court. Was solar film matter so important that Supreme Court could not have waited for the opinion of High Courts?

Photo credit: Wikipedia