Can Landlord Tenant Disputes cover by Transfer of Property Act decided by way of Arbitration? HC replies, Read Order

 The Karnataka High Court has reiterated that Landlord-tenant disputes governed by the Transfer of Property Act are arbitrable as they are not action sin tem but pertain to subordinate rights in personam that arise from rights in tem.

 

The single-judge bench of Justice E.S. Indiresh in writ petition while referring to SC decision in Vidya Drolia Vs. Durga Trading Corporation, 2020 Latest Caselaw 659 SC to note that Landlord-tenant disputes normally wouldn't affect third-party rights or have erga omnes effect or require centralised adjudication.

The Respondent in the present matter filed suit seeking relief of ejectment, arrears of rent, damages and consequential injunction to restrain the petitioner from subletting the suit schedule property. The suit was transferred to the Commercial Court.

 The petitioner, entered appearance in the suit and filed application under Section 8 of Arbitration and Conciliation Act, 1996 seeking referring the parties to the arbitration in terms of the clause 12 of the lease. The Trial Court quashed the order allowing the same when the respondent objected.

Senior Counsel for the petitioner argued that the trial Court dismissed the application following the law laid down by the Hon'ble Apex Court in HIMANGI ENTERPRISES v. AMALJIT SINGH AHULVALIA the case of wherein the Hon'ble Supreme Court has held that the issue relating to the lease is not arbitral in nature. However, he invited the attention of the Court to the judgment in Vidya Drolia wherein the Top Court has held that judgment in HIMANGI ENTERPRISES (supra) requires re-look by a Bench of three Hon’ble Judges of Hon'ble Supreme Court and therefore contended that the impugned order passed following the judgment in HIMANGI (supra) is incorrect.

 The Court accepted the contention and allowed the petition. 

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