1. By this suit, the plaintiffs, who are described as Petitioners in the suit seek to file the arbitration agreement under section 20 of the Arbitration Act, 1940 (for short, ‘the Act’) in this Court as also an order of reference of plaintiffs' claim against the defendants to arbitration in accordance therewith.

2. Though short but an interesting question of law arises for consideration in the present proceedings. The circumstances giving rise to the present proceedings in which the question of law arises are these:

3. By a Deed of Lease dated 3rd September, 1984 entered into between the plaintiffs on the one hand and the President of India on behalf of Bombay Telephones on the other hand, the plaintiffs granted lease of the premises mentioned therein to Bombay Telephones for the purpose of housing telephone offices for the consideration therein mentioned. The lease was for a period of 3 years from 8th August, 1983 and it was agreed by and between the parties thereto that after expiry of the period of 3 years, the same would be renewed for a further period of 3 years if so desired by the Bombay Telephones, the lessees, on the same terms and conditions and that the Lease would come to an end at the end of the sixth year. As provided in the said Deed of Lease, after expiration of six years lease period, further renewal if desired by the lessees would be on the terms to be mutually decided between the parties thereto. The said Deed of Lease contained an arbitration clause which reads as under:

“That it is hereby expressly agreed that if at any time there shall arise any dispute, doubt, difference or question with regard to the interpretation of or meaning of any of the terms and conditions of this demise or in respect of the rights, duties and liabilities of the parties hereto or in any way touching or arising out of these present or otherwise in relation to the premises then every such dispute, difference, doubt or question (except the decision whereof is herein expressly provided for) shall be referred to the sole arbitration of the Director General Posts and Telegraphs or in case his designation is changed or his office is abolished, the officer who for the time being is entrusted whether or not in addition to other functions, with the functions of the Director General of Posts and Telegraphs, by whatsoever designation such official may be called or if he be unable or unwilling to act, then of an officer appointed by him in this behalf. It will be no objection to any such appointment that the person appointed is a Government Servant, that he had to deal with the matters to which the indenture of lease relates and that in the course of his duties as such Government servant has expressed views on all or any of the matters in dispute or difference. The decision of the Arbitration shall be final and binding on the parties to this deal. The provision of the Indian Arbitration Act, 1940, or any statutory modifications or re-enactments thereof and the rules made thereunder for the time being in force shall apply to such arbitration and this deed shall be deemed to be a submission to arbitration within the meaning of the said Act.”

4. The defendants were incorporated on 1st April, 1986 and are successors-in-title to the Bombay Telephones. The lease period of three years from 8th August, 1983 was extended for three years from 8th August, 1986 and expired on 7th August, 1989. Both parties have admitted that the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 (for short, ‘the bombay rent act’) apply to the premises leased to the defendants. Before the expiry of the lease, by their letter dated 20th February, 1989 addressed to the General Manager of the defendants, the plaintiffs informed the defendants that the lease of the said premises was to expire on 7th August, 1989 and requested the defendants to release the said premises to enable the plaintiffs to allot the same to the Life Insurance Corporation of India. By the letter dated 21st March, 1989 addressed by the Estate Officer of the defendants to the 1st plaintiff, the defendants intimated to the plaintiffs their decision for continuation of lease in respect of the said premises for a further period of five years with effect from 8th August, 1989 on the same terms and conditions and sought confirmation of the plaintiffs in respect thereto. By their letter dated 5th April, 1989 addressed to the Estate Officer of the defendants, the plaintiffs declined to extend the lease period for further five years on the same terms and conditions as desired by the defendants and inter alia informed the defendants that the said Deed of Lease provided for such further renewal only on terms and conditions to be mutually agreed upon. By their further letter dated 3rd July, 1989 addressed also to the Estate Officer of the defendants, the plaintiffs communicated to the defendants the terms on which the plaintiffs were willing to extend the lease period in respect of the said premises. The plaintiffs inter alia intended that the defendants might increase monthly rent in respect of the said premises to the plaintiffs which the defendants were not agreeable. On the expiration of the said period of six years, the defendants have continued to occupy the said premises on monthly tenancy basis and claim to be monthly tenants of the plaintiffs duly protected by the provisions of the Bombay Rent Act. Since the disputes arose by and between the plaintiffs and the defendants which, according to the plaintiffs, were referable to arbitration in accordance with the said arbitration agreement contained in the said Deed of Lease, the plaintiffs through their advocate's letter dated 13th September, 1990 called upon the defendants to appoint arbitrator and refer the disputes for arbitration. Since the defendants did not appoint the arbitrator nor made reference of the disputes to arbitration, the present suit has been filed for filing the arbitration agreement between the parties in this Court and making reference of plaintiffs' claim against the defendants for reasonable monthly rent in respect of the said premises to arbitration in accordance therewith. Pending the hearing of this Suit, the plaintiffs, through their advocate's letter dated 30th November, 1993 addressed to the defendants, have purported to terminate the tenancy of the defendants in respect of the said premises. The defendants have disputed the validity of the purported termination of defendants' monthly tenancy in respect of the said premises and have sought protection of the bombay rent act.

5. Mr. Chitnis, the learned counsel for the defendants, has submitted that the suit being misconceived is not maintainable as the arbitration agreement between the plaintiffs and the defendants has ceased to exist since the tenure of the said Deed of Lease dated 3rd September, 1984 in which the arbitration agreement contained has expired on 7th August, 1989 and thereafter the defendants have continued to occupy the said premises as monthly tenants of the plaintiffs. Mr. Chitnis has further submitted that while purporting to terminate tenancy of the defendants in respect of the said premises, the plaintiffs accepted the defendants as monthly tenants of the plaintiffs protected under the provisions of the Bombay Rent Act and the dispute pertaining to enhancement of monthly rent in respect of the said premises, in view of section 28 of the Bombay Rent Act is not referable to arbitration. Plaintiffs have submitted that the dispute between the plaintiffs and the defendants relating to reasonable rent in respect of the said premises payable by the defendants to the plaintiffs is referable to arbitration in accordance with the said arbitration agreement between the parties which has not ceased to be applicable.

6. It is admitted position that the provisions of the Bombay Rent Act are applicable to the premises in question and the relationship of landlord and tenant between the plaintiffs and the defendants exist. section 28 of the Bombay Rent Act reads as under:

“Notwithstanding anything contained in any law and notwithstanding that by reason of the amount of the claim or for any other reason, the suit or proceeding would not, but for this provision, be within its jurisdiction ………..

(b) elsewhere, the Court of the Civil Judge (Junior Division) having jurisdiction in the area in which the premises are situate or, if there is no such Civil Judge, the Court of the Civil Judge (Senior Division) having ordinary jurisdiction, shall have jurisdiction to entertain and try any suit or proceeding between a landlord and a tenant relating to the recovery of rent or possession of any premises to which any of the provisions of this Part apply and to decide any application made under this Act and to deal with any claim or question arising out of this Act or any of its provisions; and, subject to the provisions of sub-section (2), no other Court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question.”

7. The words ‘relating to’ in section 28 are very wide and include any suit or proceeding in connection with or having direct bearing on the question of recovery of rent or possession of the premises. Therefore, even if the suit is not for recovery of rent or possession, if the relief claimed in the suit is in regard to or in respect of recovery of rent or possession, it will come within the ambit of this section. Section 28 confers jurisdiction upon the Special Court not only to decide the question referred to in the section, but also all matters which are incidental or ancillary to the determination of these questions. The words of section 28 are wide enough to include every suit between a landlord and tenant whether the tenancy is contractual or is continued by reason of the provisions of the Bombay Rent Act, provided the relief asked for relates to recovery of rent or possession.

8. As held by the Honourable Supreme Court in the case of Natraj Studios (P.) Ltd. v. Navrang Studios reported in (1981) 1 SCC 523 : AIR 1981 SC 537, the Bombay Rent Act is a welfare legislation aimed at the definite social objective of protection of tenants against harassment by landlords in various ways. It is a matter of public policy. The Scheme of the bombay rent act shows that the conferment of exclusive jurisdiction on certain courts is pursuant to the social objective at which the legislation aims. Public policy requires that contracts to the contrary which nullify the rights conferred on tenants by the bombay rent act cannot be permitted. Therefore public policy requires that parties cannot also be permitted to contract out of the legislative mandate which requires certain kind of disputes to be settled by Special Courts constituted by the Act. Hence, arbitration agreements between parties whose rights are regulated by the bombay rent act cannot be recognised by a Court of law.

9. In Greater Bombay, exclusive jurisdiction is given to the Court of Small Causes, Bombay and jurisdiction is denied to other Courts to entertain and try any suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of any premises; to try any suit or proceeding between a landlord and a tenant relating to recovery of rent or possession of any premises; to try any suit or proceeding between a licensor and a licensee relating to the recovery of licence fee or charge; to decide any application made under the bombay rent act; and to deal with any claim or question arising out of the bombay rent act or any of its provisions. The claim of the plaintiffs for reasonable monthly rent in respect of the said premises by enhancement of rent provided for in the said Deed of Lease is a claim or question arising out of the bombay rent act. It also relates to recovery of rent by the landlords from the tenants in respect of the premises governed by the provisions of the Bombay Rent Act since expression “suits relating to the recovery of rent or possession” in section 28 has a wider connotation than the expression “suits for the recovery of rent or possession”.

10. The concluding words of section 28 of the Bombay Rent Act namely that ‘No other Court shall have jurisdiction to deal with such claim or question’ are very important. When the intention of the legislature is to constitute certain Courts which have been given power to deal with certain specified matters as enacted in the bombay rent act exclusive jurisdiction is given to such Courts, and although section 28(1) does not, in express terms, exclude an arbitrator, it must be held that, by necessary implication, an arbitrator is prevented from dealing with matters which arise under the bombay rent act. In this view, I am supported by the judgment of the Division Bench of our Court in the case of Sabavva Kom Hanmappa Simpiger v. Basappa Andaneppa Chiniwar reported in 57 Bom. L.R 261 wherein it has been held as under:—

“The words, ‘no other Court shall have jurisdiction to entertain any such suit, proceeding or application or to deal with such claim or question’ in section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, exclude reference to arbitration of a dispute relating to recovery of rent or possession of premises to which provisions of Part II of the Act apply.”

11. The manner in which the arbitration agreement as contained in the said Deed of Lease is worded, it is not possible to hold that on expiration of the period of lease mentioned therein the agreement has ceased to be applicable. However, the legislative intent embodied in the bombay rent act and the public policy did not permit the parties thereto to contract out of legislative mandate which requires the dispute of the nature raised by the plaintiffs to be settled by the Special Court constituted by the bombay rent act.

12. In the circumstances, there neither exists enforceable arbitration agreement between the parties in respect of claim raised by the plaintiffs nor the plaintiffs' claim is referable to arbitration. Hence, the plaintiffs are not entitled to the relief prayed for in the Suit. The Suit is, therefore, dismissed. However, there shall be no order as to costs of the Suit.

13. C.C expedited.

Suit dismissed.