The Supreme Court in a recent judgment has clarified that the Tenancy Matters which fall under the Transfer of Property Act are arbitrable and paved the way for faster adjudication of cases.
The Supreme Court in the Himangni Enterprises case held that Tenancy disputes can only be taken up in Civil Courts. But now, this has been changed and it was held that tenancy disputes can be resolved through Arbitration.
The cases can include landlord-tenant disputes regarding rent recovery, matters concerning damage to property, delayed payments, a refund of security deposits, or anything arising from both the parties to lease deed.
The same was observed by the three-judge bench led by CJI SA Bobde while hearing a petition under section 11(5) of the Arbitration and Conciliation Act, seeking the appointment of a sole arbitrator to resolve the disputes regarding a lease deed.
The court noted that as per the clause in the lease deed, the disputes arising between the two parties has to be resolve through arbitration. The court observed that according to the provisions of the Transfer of Property Act, certain protection is provided to the tenant/lessee before being ejected from the leased property.
The bench also comprised of Justice AS Bopanna and Justice V. Ramasubramanian said,
“Our considered view is that 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 the exercise of equitable jurisdiction in appropriate cases as a matter of discretion.”
The Bench added,
“In our view, when the disputes arise between the landlord and tenant with regards to the 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 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 claim before the learned Arbitrator. Even in such proceedings, if the circumstances as contained in Section 114 and 114A of the TP Act arise, it could be brought up before the learned Arbitrator who would take note of the same and act in accordance with the law qua passing the award.”
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