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Smart Summary

Factual and Procedural Background

The petitioner, who is the tenant, filed an application under Order 7 Rule 11 of the Code of Civil Procedure to reject the plaint in a civil suit filed by the respondents, who are the landlords. The civil suit was instituted under Sections 16(1)(b) and 16(1)(g) of the Maharashtra Rent Control Act, 1999, seeking eviction and other reliefs against the tenant. The petitioner contended that as per Clause 14 of the lease agreement dated 4th August 1995, disputes between the landlord and tenant were to be referred to and resolved by an Arbitral Tribunal. The petitioner argued that since the respondents had themselves acted pursuant to Clause 14 by issuing a notice dated 8th June 2006 to initiate arbitration proceedings, the civil suit was barred and the dispute must be resolved through arbitration.

Legal Issues Presented

  1. Whether the civil suit filed by the landlords under the Maharashtra Rent Control Act, 1999 is maintainable despite the arbitration clause in the lease agreement.
  2. Whether the application under Order 7 Rule 11 of the Code of Civil Procedure to reject the plaint on the ground of arbitration clause should be allowed.
  3. Whether the jurisdiction of the Civil Court is ousted by Section 33 of the Maharashtra Rent Control Act, 1999 in favour of arbitration proceedings.

Arguments of the Parties

Petitioner’s Arguments

  • The Arbitration and Conciliation Act, 1996 is a comprehensive code governing arbitration proceedings.
  • Clause 14 of the lease agreement mandates that disputes between the parties be resolved by an Arbitral Tribunal, barring the civil court from entertaining the suit.
  • The respondents had invoked Clause 14 by issuing a notice calling upon the petitioner to appoint an arbitrator, thus acknowledging arbitration as the proper forum.
  • The plaint should be rejected under Order 7 Rule 11 of the Code of Civil Procedure as the relief claimed is barred by law and not maintainable before the Civil Court.
  • Reliance was placed on the Supreme Court judgments in Sasan Power Ltd. Vs. North American Coal Corpn. (India) (P) Ltd. (2016) 10 SCC 813 and Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. AIR 2011 SC 2649, which emphasize the exclusivity of arbitration where an arbitration clause exists.

Respondents’ Arguments

  • Section 33 of the Maharashtra Rent Control Act, 1999 ousts the jurisdiction of any other forum, including the Arbitral Tribunal, thereby conferring exclusive jurisdiction on the Civil Court to decide eviction suits.
  • The civil suit is maintainable and the respondents are entitled to prosecute their claim before the Civil Court.
  • Reliance was placed on the judgment in Ravindra Vs. L. & S. Constructions, 2010(1) Mh. L.J. 994, which supports the position that the Rent Control Act bars arbitration in eviction matters.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sasan Power Ltd. Vs. North American Coal Corpn. (India) (P) Ltd. (2016) 10 SCC 813 Exclusivity of arbitration proceedings where an arbitration clause exists. Petitioner relied on this judgment to argue that arbitration must be the forum for dispute resolution as per the lease agreement.
Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd. AIR 2011 SC 2649 Arbitration and Conciliation Act, 1996 is a complete code governing arbitration. Petitioner cited this case to support the contention that arbitration bars civil court proceedings.
Ravindra Vs. L. & S. Constructions, 2010(1) Mh. L.J. 994 Section 33 of Maharashtra Rent Control Act ousts jurisdiction of other forums including arbitration. Respondents relied on this precedent to assert that civil court has exclusive jurisdiction in eviction suits under the Rent Control Act.

Court's Reasoning and Analysis

The Court examined the applicability of Clause 14 of the lease agreement vis-à-vis Section 33 of the Maharashtra Rent Control Act, 1999. It noted that although the petitioner argued for arbitration based on the lease agreement and relevant Supreme Court precedents, the respondents relied on statutory provisions that exclude arbitration in eviction matters. The Court observed that issuing a notice under Clause 14 did not estop the respondents from filing the civil suit. After reviewing the trial Court’s order and the legal position, the Court found no jurisdictional error in rejecting the petitioner’s application to dismiss the plaint. The Court concluded that the civil court retains jurisdiction to entertain the eviction suit under the Rent Control Act despite the arbitration clause.

Holding and Implications

The writ petition is dismissed. The Court upheld the trial Court’s rejection of the application under Order 7 Rule 11 CPC, confirming the maintainability of the civil suit filed by the respondents under the Maharashtra Rent Control Act. The parties were directed to bear their own costs. This decision affirms the exclusive jurisdiction of the Civil Court in eviction matters under the Rent Control Act and clarifies that arbitration clauses in lease agreements do not oust such jurisdiction. No new precedent was set beyond the application of existing law.

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    SMT. MAJULABEN INDUKUMAR GHIYA v. GUNWANTIBEN KISHORCHANDRA SHAH AND OTHERS

    Judgment 1 wp2386.16.odt

    IN THE HIGH COURT OF JUDICATURE AT BOMBAY,

    NAGPUR BENCH, NAGPUR.

    WRIT PETITION NO. 2386 OF 2016

    Smt. Manjulaben Indukumar Ghiya, Aged 74 years, Occu. : Household, R/o. Deorankar Nagar, Badnera Road, Amravati, Tq. and Dist. Amravati.

    …. PETITIONER .

    // VERSUS //

    1. Gunwantiben Kishorchandra Shah, Aged 74 years, Occu.: Household,

    2. Manoj Kishorchandra Shah, Aged about 42 years, Occu.: Business,

    3. Jay Kishorchandra Shah, Age 38 years, Occu.: Business, All R/o. Riddhi-Siddhi Apartment, Kanta Nagar, Camp, Amravati, Tq. and Dist. Amravati.

    4. Priti Manojkumar Anandpara, Aged 45 years, Occu.: Household, R/o. Shrirpadh Apartment, Jalaram-2, Undersity Road, Rajkot (Gujrat), through constituted Attorney Manoj Kishorchandra Shah, Aged 42 years, Occu.: Business, R/o. Riddhi-Siddhi Apartment, Kanta Nagar, Camp, Amravati, Tq. and Dist. Amravati.

    …. RESPONDENTS.

    ___________________________________________________________________ Shri S.S.Alaspurkar, Advocate for Petitioner.

    Shri R.M.Sharma, Advocate a/w. Mr. Malviya, Adv. for Resp. Nos. 1 to 3. ___________________________________________________________________

    CORAM : Z.A.HAQ, J.

    DATED : FEBRUARY 07, 2017.

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    Leave to correct cause title is granted.

    ORAL JUDGMENT :

    1. Heard.

    2. RULE. Rule made returnable forthwith.

    3. The original defendant has challenged the order passed by the trial Court rejecting application (Exh.11) filed by the petitioner/ defendant under Order 7 Rule 11 of the Code of Civil Procedure.

    4. Undisputedly, the respondents/ plaintiffs are the landlord and petitioner / defendant is tenant. The respondents filed civil suit under Section 16(1)(b) and 16(1)(g) of the Maharashtra Rent Control Act, 1999 against the defendant praying for decree for eviction and other reliefs. In this civil suit, the defendant filed application (Exh.11) contending that as per clause 14 in the agreement of lease dated 4thAugust, 1995 the dispute between the landlord and tenant is required to be referred to and resolved by Arbitral Tribunal. The defendant contended that the plaintiffs also relied on Clause 14 of the agreement of lease and had issued notice dated 8th June, 2006 calling upon the defendant to take steps as per Clause 14 of the Agreement of Lease and to suggest the name of the Arbitrator the defendant intended to appoint. The submission on behalf of the defendant is that in

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    view of Clause 14 of the Agreement of Lease and the fact that the plaintiffs have themselves acted as per the above referred clause, the plaintiffs cannot maintain the civil suit and they will have to prosecute their remedy before the Arbitral Tribunal. The defendant prayed that the plaint be rejected under Order 7 Rule 11 of the Code of Civil Procedure as the relief claimed by the plaintiffs in the civil suit is barred by law and cannot be granted by the Civil Court.

    5. The advocate for the petitioner/ defendant argued that the Arbitration and Conciliation Act, 1996 is a complete Code in itself and in view of Clause 14 of the Agreement of Lease, the plaintiffs cannot file and maintain the civil suit for redressal of their grievance and they have to approach the Arbitral Tribunal. To support the submission reliance is placed on the judgment given in the case of Sasan Power Ltd. Vs. North Americal Coal Corpn. (India) (P) Ltd., reported in (2016) 10 SCC 813 (specifically paragraph No.81) and the judgment given in the case of Fuerst Day Lawson Ltd. Vs. Jindal Exports Ltd., reported in AIR 2011 SC 2649 (specifically paragraph No.72). It is submitted that the trial Court has committed an error in rejecting the application filed by the petitioner. It is prayed that the impugned order be set aside and the application (Exh.11) filed by the defendant be allowed.

    6. The advocate for the respondents/ plaintiffs has submitted that the provisions of Section 33 of the Maharashtra Rent Control Act, 1999 oust

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    the jurisdiction of any other forum including the Arbitral Tribunal and therefore, Civil Court has jurisdiction to entertain and decide the civil suit filed by the plaintiffs seeking decree for eviction under the provisions of the Maharashtra Rent Control Act, 1999. To support the submission reliance is placed on the judgment given in the case of Ravindra Vs. L. & S. Constructions, reported in 2010(1) Mh. L.J. 994.

    7. The point which falls for consideration in the petition is covered by the proposition laid down in the judgment given in the case of Ravindra Vitthalrao Songire (supra). Only because the plaintiffs have issued notice dated 8th June, 2006 and have called upon the defendant to propose the name of Arbitrator, it cannot be said that the plaintiffs are estopped from filing and prosecuting the civil suit.

    8. The learned trial Judge has adverted to all the relevant aspects and after considering the legal position has rightly rejected the application. I do not find any error of jurisdiction by the trial Court. I see no reason to interfere with the impugned order.

    The petition is dismissed. In the circumstances, the parties to bear their own costs.

    JUDGE

    RRaut..

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    SMT. MAJULABEN INDUKUMAR GHIYA v. GUNWANTIBEN KISHORCHANDRA SHAH AND OTHERS
    (Feb 7, 2017)