Summary
In this 2019 order, the Court referred to three Judges the questions concerning arbitrability of Transfer of Property Act tenancy disputes and the scope of examination under Section 11(6A). It considered Himangni Enterprises to require reconsideration. The stay of arbitration was lifted, but execution of any resulting award required the Supreme Court’s permission.
Issues
- Whether a tenancy governed by the Transfer of Property Act is non-arbitrable.
- Whether examination of existence of an arbitration agreement under Section 11(6A) extends to non-arbitrability of the dispute.
Provisions considered
- Sections 11(6A) and 16(1), Arbitration and Conciliation Act, 1996The distinction between existence and validity of the agreement raised the question whether non-arbitrability was examinable at appointment; the question was referred for authoritative resolution. (¶¶ 5, 6, 7, 30)
- Sections 111, 114 and 114A, Transfer of Property Act, 1882The lease-determination and relief-against-forfeiture provisions did not indicate the kind of exclusive statutory adjudication or tenant-protection scheme relied upon in the special rent-control cases. (¶¶ 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 28)
- Sections 34, 46, 49, 53 and 74, Indian Trusts Act, 1882The statutory assignment of trust-related powers to the principal civil court illustrated exclusion of arbitration by necessary implication, contrasting with the tenancy provisions under consideration. (¶¶ 25, 26, 27, 28)
Held
- Existence and validity are distinct statutory concepts. Whether the limited inquiry under Section 11(6A) includes the dispute’s non-arbitrability was an important question requiring a three-Judge Bench. (¶¶ 5, 6, 7, 30)
- The Court doubted the reasoning that Transfer of Property Act tenancies were necessarily non-arbitrable. Sections 114 and 114A balance the rights of landlord and tenant; special rent-control legislation with exclusive forums stood on a different footing. (¶¶ 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24)
- Non-arbitrability can arise by necessary implication from a statute’s scheme. The Trusts Act’s designated judicial powers supplied an example; the Court did not find an equivalent exclusion in the Transfer of Property Act or Specific Relief Act. (¶¶ 25, 26, 27, 28)
- Himangni Enterprises required reconsideration by three Judges. The present order referred the questions rather than finally resolving the reference. (¶¶ 29, 30)
- Arbitral proceedings could continue and culminate in an award, but the award could not be executed without permission of the Supreme Court. (¶ 31)
Result
Questions referred to a three-Judge Bench. Appeal disposed of; stay of arbitration lifted subject to the restriction on execution of any award.