2017 (12) TMI 1678 - HC - Indian Laws

Maintainability of reference petition - case of petitioner is that the jurisdiction lies only with the Rent Control Authority - whether the proceedings under Section 90 of the Act is without jurisdiction and the same is not maintainable? - Held that - The issue decided in the case of A. AYYASAMY VERSUS A. PARAMASIVAM AND ORS. 2016 (10) TMI 1147 - SUPREME COURT OF INDIA , where it was held that if the jurisdiction of an ordinary civil court is excluded by the conferment of exclusive jurisdiction on a specified court or tribunal as a matter of public policy such a dispute would not then be capable of resolution by arbitration. The impugned proceedings issued under Section 90 of the Tamil Nadu Cooperative Societies Act, 1983 by the respondents, is without jurisdiction and therefore the impugned summons issued by the 1st respondent is liable to be quashed - petition allowed.

Summary

Issues Involved:
1. Jurisdiction of the Rent Control Authority vs. Arbitration under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983.
2. Maintainability of the writ petition without exhausting the appeal remedy provided under Section 152(1) of the Tamil Nadu Co-operative Societies Act, 1983.
3. Applicability of precedents regarding arbitration and tenancy disputes.

Detailed Analysis:

1. Jurisdiction of the Rent Control Authority vs. Arbitration under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983:
The petitioner firm entered into a rental agreement with the second respondent, which expired on 30.10.2013. Due to a dispute in rent payment, the petitioner sent a legal notice and later filed RCOP No.71 of 2015 before the Rent Control Authority. However, the second respondent filed an Arbitration Reference Petition under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983. The petitioner argued that the Rent Control Authority had exclusive jurisdiction over the matter, and the arbitration proceedings were without jurisdiction. The court considered precedents, including the Supreme Court decisions in A. Ayyasamy vs. A. Paramasivam & Ors., Booz Allen & Hamilton Inc. v. SBI Home Finance Limited, and others, which emphasized that disputes relating to eviction or tenancy matters governed by special statutes are non-arbitrable and fall within the exclusive jurisdiction of specified courts.

2. Maintainability of the writ petition without exhausting the appeal remedy provided under Section 152(1) of the Tamil Nadu Co-operative Societies Act, 1983:
The respondent contended that the petitioner should have appealed the award before the Appellate Authority under Section 152(1) of the Act before filing the writ petition. The petitioner countered that the arbitration proceedings themselves were without jurisdiction, making the appeal remedy irrelevant. The court found merit in the petitioner’s argument, holding that if the initial proceedings were without jurisdiction, the requirement to exhaust appeal remedies did not apply.

3. Applicability of precedents regarding arbitration and tenancy disputes:
The court relied on several precedents to support its decision. In A. Ayyasamy vs. A. Paramasivam & Ors., the Supreme Court highlighted that disputes falling exclusively within the domain of public fora are non-arbitrable. Similarly, in Reliance Digital Media Ltd. vs. Jawed Habib Hair Xpreso Ltd., the Punjab and Haryana High Court held that eviction can only be ordered through court processes, not by an arbitral tribunal. The Supreme Court in Deccan Merchants Co-operative Bank Ltd. vs. M/s. Dalichand Jugraj Jain & Ors. and Natraj Studios (P) Ltd. vs. Navrang Studios & anr. reiterated that disputes concerning eviction fall within the exclusive jurisdiction of the courts specified by rent control statutes. The Madras High Court in The Manager, Co-op. Tex. & anr. vs. The Secretary Co-op. Urban Bank Ltd. and H. Vijaya Samundeeswari vs. The Dindigul District Co-op. Milk Producers Union Limited. also supported the view that tenancy disputes are not arbitrable and must be resolved by civil courts.

Conclusion:
In light of the facts and precedents, the court concluded that the proceedings under Section 90 of the Tamil Nadu Co-operative Societies Act, 1983, were without jurisdiction. Consequently, the impugned summons issued by the first respondent was quashed, and the writ petition was allowed. The connected miscellaneous petition was also closed, with no order as to costs.