Analysis of Vidya Drolia & Ors. v. Durga Trading Corporation — 2019
CIVIL APPEAL NO.2402 OF 2019
FACTS OF THE CASE
- On 2 February 2006, the appellant/tenant and respondent/landlord entered into a tenancy agreement regarding certain structures and godowns. As per the agreement, the tenancy period was ten years, the tenant should vacate the premises after the expiration of the term, and as per clause 23 of the tenancy agreement, if any dispute arises in respect of this agreement, then it shall be resolved via arbitration.
- The civil jurisdiction of the High Court of Kolkata shall be their venue of arbitration.
- The respondent sent the reminder to the appellant in August 2015 and in December 2015 regarding the expiry of the ten years on 1 February 2016. However, the appellant/tenant didn’t vacate the place, and then the respondent invoked the arbitration.
- Respondent filed a petition for the appointment of arbitrator under section 11 before the Calcutta High Court. Appellant objected to the petition, and while arguing that the dispute is non-arbitrable, although the court rejected the appellant's argument and passed the order for appointment of an arbitrator, then arbitral proceedings began.
- In the matter of Hemangini enterprises versus Kamaljit Singh Ahluwalia 2017 10SCC 706, The court held in its judgement that disputes between tenant and landlord where transfer of property act 1882 applies then such disputes between such parties are not arbitrable, so considering this judgement the appellant filed the review application before the High Court of Calcutta. However, the court dismissed the review application. Later, the appellant filed an appeal in Supreme Court.
REFERENCE OF THE PRECEDENTS
In the matter of Natraj Studios Ltd versus Navrang Studios 1980, 1 SCC 523 held that the dispute between tenants and landlords should be referable solely to small causes Court in Bombay jurisdiction as the case dealt with the Bombay rent act, it was concluded that the dispute was non-arbitrable.
Booz Allen and Hamilton Inc v. SBI Home Finance Ltd and Others (2011) 5 SCC 532. In this judgment, the court emphasised the expression of arbitrability in this Supreme Court held that disputes concerning special statutes are non-arbitrable.
Supreme Court in this Vidya Drolia 2019 case held that in a matter of Natraj Studios and Booz Allen Hamilton, a transfer of property act did not come in the picture whereas while stating that Soundness of Hemangini enterprises Judgement was not that reasonable and must be reviewed by a three-judge bench, it stated that transfer of property act is not a special statute so the dispute arising under this act are arbitrable further it is stated that transfer of property act does not contain any such provision which nullifies the arbitrability of disputes.
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