Rutu Tushar Vacchani v. Devyaniben Satishbhai Patel
2014-09-05
AKIL KURESHI
body2014
DigiLaw.ai
ORDER Akil Abdul Hamid Kureshi, J. 1. These petitions arise out of a common background. We may refer to facts as emerge in IAAP No. 13/2014. The petitioner seeks appointment of an arbitrator to resolve the disputes between the petitioner and the respondent arising out of an agreement dated 5.8.2002 titled as leave and license agreement. Under such agreement, the petitioner was put in possession of an immovable property in the nature of a shop on 1.6.2002 and was allowed to use the same upto 31.5.2012 for a period of 10 years with agreed rent of Rs. 2500/- per month revised by 15% every three years. Undisputedly, the petitioner enjoyed the use, occupation and possession of the said property for the period envisaged in the agreement. The petitioner however, wanted to continue to use the said property on the same or similar terms. It appears that the petitioner and the respondent did try to work out fresh arrangement. The same however, did not materialise. Apprehending eviction, the petitioner moved the Civil Court for interim protection by filing arbitration application under section 9 of the Arbitration and Conciliation Act, 1996. Case of the respondent however, is that before moving the Civil Court the petitioner had already lost the possession. Be that as it may, I am not concerned with these factual disputes. Insofar as this petition is concerned, in view of the rival contentions, following two clauses of the said agreement dated 5.8.2002 which are relevant when translated read as under:-- "4 The said property is given by the Second party to the First party from 1.6.2002 to 31.5.2012 for a period of 10 years for use only as an office. Upon completion of the said period, the First party shall have to handover the possession to the Second party and the Second party would receive such possession. If an extension in the said period is to be granted, it would be compulsory to make a fresh agreement and only thereafter, the property would be put to same use. 8. In connection with the said property, if any dispute arises in future, the same would be resolved through arbitration and neither side would approach any other forum." 2.
If an extension in the said period is to be granted, it would be compulsory to make a fresh agreement and only thereafter, the property would be put to same use. 8. In connection with the said property, if any dispute arises in future, the same would be resolved through arbitration and neither side would approach any other forum." 2. Counsel for the petitioner submitted that in view of such clauses of the agreement, the disputes pertaining to non renewal of the agreement and forcible summary eviction of the petitioner by the respondent would be an arbitrable dispute. Arbitration agreement would survive the main agreement itself. He relied on the decision of the Supreme Court in case of Reva Electric Car Co. P. Ltd. v. Green Mobil reported in AIR 2012 Supreme Court 739 in this respect. Counsel further submitted that while making reference to the arbitrator, it is optional for the Chief Justice or his designate to decide the question of limitation or whether the cause is a different one. In this respect, he relied on the decision of the Supreme Court in case of Schlumberger Asia Services Ltd. v. Oil & Natural Gas Corporation Ltd. reported in 2013 (7) Supreme Court Cases 562 : (AIR 2013 SC (Civil) 2640). 3. On the other hand, learned counsel Shri Kapadia for the respondent opposed the petition contending that the petitioner has no right to repossess the property once he lost the possession. Upon termination of agreement and the period of lease, with afflux of time, the petitioner had no right to continue in possession of the property. Any reference to the arbitrator to resolve such disputes would not be permissible since according to the counsel, the petitioner has no cause of action. In this respect counsel relied on the following decisions: 1) Maria Margarida Sequeria Fernandes and Ors. v. Erasmo Jack de Sequeria (Dead) through LRs reported in AIR 2012 Supreme Court 1727. 2) Deutsche Post Bank Home Finance Limited v. Taduri Sridhar and another reported in ( (2011) 11 Supreme Court Cases 375 : AIR 2011 SC 1899 ). 3) U.P. Rajkiya Nirman Nigam Ltd. v. Indure Pvt. Ltd. and others reported in (1996) 2 Supreme Court Cases 667 : ( AIR 1996 SC 1373 ). 4. Counsel further contended that in any case, the arbitration clause would not cover the present disputes.
3) U.P. Rajkiya Nirman Nigam Ltd. v. Indure Pvt. Ltd. and others reported in (1996) 2 Supreme Court Cases 667 : ( AIR 1996 SC 1373 ). 4. Counsel further contended that in any case, the arbitration clause would not cover the present disputes. The agreement came to an end with afflux of time. All the disputes pertaining to the property which arose after the termination of agreement would not be a part of the arbitration clause. 5. Having thus heard learned counsel for the parties and having perused the documents on record, it is undisputedly true, as contended by Shri Kapadia, that before reference to an arbitration can be made, Chief Justice or his designatee must ascertain that there is a valid and legal arbitration clause and that the arbitrable disputes have arisen. So much is plain from the decision of the Constitution Bench in case of SBP & Co. v. Patel Engineering Ltd. and another reported in (2005) 8 Supreme Court Cases 618 : (AIR 2006 SC 450). However, his further contention that I must examine whether the claim sought to be raised by the petitioner before the arbitrator if eventually the reference is made, must also have a legal basis, would be in my opinion entering into an arena of judging the merits of the claim. As long as valid legal arbitrable issue is arising and is otherwise not bit by any of the apparent disqualification such as being hopelessly time barred by limitation or long forgone cause or cause which has been given up by the petitioner, the question of referring the dispute for arbitration would arise. If ultimately, such a request is made, would the arbitrator decide in favour of the petitioner or otherwise is not the subject matter upon which the Chief Justice or his designatee may be in a position to deliberate. 6. Having said so, the central question is, is there an arbitration clause in connection with the disputes between the petitioner and the respondent which the petitioner seeks to resolve through the forum of arbitration? In this context, one needs to peruse the above clauses of agreement more closely. Clause 4 envisages putting the petitioner in possession of the properties of the respondent for a period of 10 years from 1.6.2002. He would enjoy use and occupation thereof upon payment of rent which would be revised periodically.
In this context, one needs to peruse the above clauses of agreement more closely. Clause 4 envisages putting the petitioner in possession of the properties of the respondent for a period of 10 years from 1.6.2002. He would enjoy use and occupation thereof upon payment of rent which would be revised periodically. Said clause envisages that upon completion of the period of agreement, if the question of renewing the term arises, both sides would enter into a fresh agreement. Only thereupon the petitioner would be authorised to continue to use the property. In this context, if we look at arbitration clause, it envisages reference to arbitration of any dispute which may arise between the parties regarding the subject matter property. This clause must be understood as to include within its sweep all disputes between the petitioner and the respondent arising out of the agreement in question. If any dispute which is not part of the said agreement, the arbitration clause would not apply. The terms of agreement were plain. Under the agreement the petitioner was to enjoy the use and occupation of property for a period of 10 years on agreed terms. Once such period was over, the question of any further bilateral rights and obligation would arise only if a fresh agreement in writing was entered into between the parties. Admittedly, in the present case this was not so. Any dispute regarding any cause or reason why such fresh agreement did not materialise, cannot be seen as part of such agreement. This is an independent dispute, quite outside of the terms of such agreement. 7. Primarily, the petitioner's grievances are two folds. Firstly, that the respondent ought to have renewed the contract or at any rate the contract by virtue of conduct of the parties, should be seen to have renewed and secondly, that summary eviction forcibly undertaken was illegal. In my opinion, both these questions are outside the purview of arbitration, in my opinion, since such disputes do not arise within the agreement between the parties. Decision in case of Reva Electric Car Co. P. Ltd. v. Green Mobil ( AIR 2012 SC 739 ) (supra), was rendered in different factual background. It was a case where the Supreme Court held that the agreement between the parties was terminated on 7.10.2009. It was also held that the disputes had arisen between the parties at that time.
Decision in case of Reva Electric Car Co. P. Ltd. v. Green Mobil ( AIR 2012 SC 739 ) (supra), was rendered in different factual background. It was a case where the Supreme Court held that the agreement between the parties was terminated on 7.10.2009. It was also held that the disputes had arisen between the parties at that time. It was in this context held that subsequent termination of the agreement would not destroy the arbitrability of the disputes which had already arisen. 8. I am also conscious that in a given case, if the agreement is so worded and the disputes arise within contractual relations between the parties, the arbitration clause can outlive the agreement itself. However, in the present case, this is not the reason on which I am inclined to dismiss the petition. In the present case, I am inclined to hold that the disputes raised by the petitioner did not arise within the agreement in question and that therefore, an arbitration clause which would cover the disputes arising out of such agreement would govern such issues. In the result, Arbitration Petitions are dismissed. Petition dismissed