SURESH SHAH versus HIPAD TECHNOLOGY INDIA PRIVATE LIMITED

Citation: [2020] 13 S.C.R. 821 · Decided: 18-12-2020 · Supreme Court of India · Bench: S.A. BOBDE · Disposal: Appeal(s) allowed

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Judgment (excerpt)

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SURESH SHAH
V.
HIPAD TECHNOLOGY INDIA PRIVATE LIMITED
(Arbitration Petition (Civil) No. 08/2020)
DECEMBER 18, 2020
[S. A. BOBDE, CJI, A. S. BOPANNA AND
V. RAMASUBRAMANIAN, JJ.]
Arbitration: Arbitrability of the dispute relating to lease/
tenancy agreements/deeds when such lease is governed by the
Transfer of Property Act, 1882 – Held: When the disputes arise
between the landlord and tenant with regard to determination of
lease under the TP Act, the landlord for seeking 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 have agreed upon the alternate mode of dispute
resolution through arbitration, the landlord would be entitled to
invoke the arbitration clause and make a claim before the arbitrator
– The instant case is governed by the Transfer of Property Act,
petitioner-landlord while invoking the arbitration clause nominated
sole arbitrator and issued notice to the respondent-tenant –
Respondent neither replied to the notice nor objected to the arbitrator
proposed by the petitioner – Since dispute between the parties is to
be resolved through arbitration, the prayer made in this petition is
accepted – Petition for appointment of nominated sole arbitrator
allowed – Transfer of Property Act, 1882 – ss.111, 114, 114A.
Arbitration: Arbitrability of the dispute arising under the Rent
Act – Held: If the eviction or tenancy is governed by a special statute,
namely, the Rent Act, the premises being amenable to the provisions
of the Act would also provide statutory protection against eviction
and the courts specified in the Act alone will be conferred
jurisdiction to order eviction or to resolve such other disputes – In
such proceedings under special statutes, the issue to be considered
by the jurisdictional court is not merely the terms and conditions
entered into between the landlord and tenant but also other aspects
such as the bonafide requirement, comparative hardship etc. even
if the case for eviction is made out – In such circumstance, the
Court having jurisdiction alone can advert into all these aspects as
[2020] 13 S.C.R. 821
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SUPREME COURT REPORTS
[2020] 13 S.C.R.
a statutory requirement and such cases are not arbitrable – Rent
Control Legislation.
Allowing the Arbitration Petition, the Court
HELD: 1. A perusal of s.111 & 114, 114 A of TP Act indicate
the manner in which the determination of lease would occur, which
also includes determination by forfeiture due to the acts of the
lessee/tenant in breaking the express condition agreed between
the parties or provided in law. The breach and the consequent
forfeiture could also be with respect to non-payment of rent. In
such circumstance where the lease is determined by forfeiture
and the lessor sues to eject the lessee and, if, at the hearing of
the suit, the lessee pays or tenders to the lessor the rent in arrear,
Section 114 of TP Act provides that the Court instead of passing
a decree for ejectment may pass an order relieving the lessee
against the forfeiture due to which the lessee will be entitled to
hold the property leased as if the forfeiture had not occurred.
Under Section 114A of the TP Act, a condition for issue of notice
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. [Para
15][831-F-H; 832-A-B]
2. 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
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be enti

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