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TMI Blog2014 (6) TMI 208X X X X Extracts X X X X X X X X Extracts X X X X ..... tion proceedings. The orders passed by the Court protecting the possession based upon the Respondent's statement and the consent order so recorded, ought to have taken note of before proceeding with the matter in such fashion. Arbitrator has no jurisdiction to entertain and/or decide the dispute so raised/referred by the parties, based upon the alleged arbitration clause in the agreement between the parties. The dispute so referred itself was not arbitrable. - Therefore, there is no question of invoking the principle of “estoppal” and/or “waiver” by the parties. The Court, under Section 34 of the Arbitration Act, is therefore required to adjudicate and decide this issue as it goes to the root of the matter. The Petitioner has raised those grounds in the petition. Therefore, in view of the reasons so recorded above, I am inclined to observe that the sole Arbitrator has no jurisdiction to try and entertain the reference and as the same was beyond its competence and jurisdiction. Therefore, I am inclined to quash and set aside the award and also the consequential orders/reliefs so granted. This order, in no way, deny the rights of the Respondent to invoke the appropriate proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IIrd Agreement, the Petitioner was again appointed as a licensee of the Respondent in respect of the godown for a period of 6 years i.e. initially for 3 years renewable for further 3 years. On 3 March 2002, the Respondent executed No Objection Certificate recording their no objection to the Petitioner to enter into warehousing agreements with their customers. 5 On 5 November 2004, the Respondent by their Notice demanded arrears of rent and alleged subletting by the Petitioner. On 9 November 2004, the Respondent terminated the triparty agreement entered into between the Petitioner and the Respondent with one of the Petitioner's custo0mer and called upon them to vacate the premises. On 30 November 2004, the Respondent purported to terminate the Agreement, unilaterally on false and frivolous grounds and threatened dispossession. The Petitioner filed Arbitration Petition No.540 of 2004 under Section of the Arbitration Act to prevent and/or restraint the Respondent from in any manner dispossessing the Petitioner from the godown and/or from in any manner disturbing, interfering with the possession and conduct of the business of warehousing by the Petitioner from the godown an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the learned Arbitrator to restraint the Respondent from interfering with their possession and or business. The Respondent also filed interim application under section 17 of the Arbitration Act for removal of petitioner and for the possession of the godown. 10 On 2 May 2009, the learned Arbitrator rejected the objections of the petitioner by keeping all points open. 11 On 3 July 2009, the petitioner received various bills (75 nos) dated 1 July 2009 from the Respondent towards license fees/godown charges and other charges/taxes from March 2003June 2009. All the license fees/charges were paid by the petitioner. The petitioner proposed to withdraw the Arbitration reference in the arbitration meeting dated 3 July 2009, but the same was opposed by the Respondent. 12 On 16 September, 2009, the Petitioner decided to handover the possession of the godown and had withdrawn prayers (a) to (c ) of the Statement of Claim, keeping other prayers for consideration. On 28 October 2009, the Petitioner filed written objection to the purported claims of the Respondent, raised vide all bills dated 1 July 2003. 13 The Respondent was granted time to file the counter claim. On 10 February 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act on 18 March 2010. The learned Arbitrator kept all these objections with the main matter for final disposal. 18 The issues of possession and the relationship of the premises were not decided when objection was raised. The learned Arbitrator even at that time proceeded further to deal with all the issues including the possession of the premises and the relationship in question. The learned Arbitrator, based upon the agreement between the parties, as the possession was handed over, the claims of licence fee/rent have been adjudicated and awarded. The reason so given by the learned Arbitrator has a foundation of the principle of mesne profit. The question of jurisdiction and that there was no intention at any point of time to create a licensor and/licensee relationship between the parties as contemplated under Section 41 of the Presidency Small Causes Court Act, 1882 (For short, Act of 1882 ) need to be adjudicated first and accordingly, restricted submissions were made by the counsel appearing for the parties. 19 In view of Section 41(1) of the Act of 1882, it is clear that the Court of Small Causes shall have the jurisdiction to entertain and try all Suits and proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clear, there is very little that the Courts can do about it. . 23 The reference was also made to Section 3(a) of the Maharashtra Rent Control Act, 1999 which reads thus: 3 Exemption. (1) This Act shall not apply ( a) to any premises belonging to the Government or a local authority or apply as againstny tenancy, licence or other like relationship created by a grant from or a licence given by the Government in respect of premises requisitioned or taken on lease or on licence by the Government, including any premises taken on behalf of the Government on the basis of tenancy or of licence or other like relationship by, or in the name of any officer subordinate to the government authorised in this behalf, but it shall apply in respect of premises let, or given on licence, to the Government or a local authority or taken on behalf of the Government on such basis by, or in the name of, such officer. Section 19 of the Presidency Small Causes Court Act of 1882 reads thus: 19 Suits in which Court has no jurisdiction. The Small Cause Court shall have no jurisdiction in ( a) .. to (g) ... (h) Suits for the specific performance or rescission contracts ; (i) ...... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself for 33 months and more than 11 months. The concept of license as provided under the Transfer of Properties Act and as explained by the Courts, in my view, covers the case in hand. Therefore, in view of specific provisions of rent and related statute as available for evicting such occupants/licensee and for the claim towards the occupation and/or service charges, as awarded, also falls within the prohibited provisions of law. It cannot be permitted to be within the power of the Arbitrator, as done in the present case. The Arbitrator has no power and authority to entertain such claim and pass such order of eviction. It is without jurisdiction and contrary to the provisions of Rent Control Legislation, as well as, the Small Causes Court Act. 24 Having once observed above, I am inclined to accept the contention led by the Petitioner's counsel that such dispute is not Arbitral, the remedy is elsewhere. Therefore, if the Arbitrator has no authority and/or power in view of the specific provisions available, any order so passed by the Arbitrator, in my view, goes to the root of the matter and it is without jurisdiction. The award so passed in all other connected and related ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and decide the disputes specified in the Section. That was a case of agreement between the licensor and the licensee, containing the clauses of Arbitration. The relevant conclusion is as under: 40. [ .....] The question whether the exclusive jurisdiction of the Small Causes Court vested in terms of section 41 of the Act of 1882 is ousted, if an agreement between the licensor and licensee contains a clause for arbitration, the same will have to be answered in the negative. For, section 5 of the Act of 1996 in that sense is not an absolute non obstante clause. Section 5 of the Act of 1996 cannot affect the laws for the time being in force by virtue of which certain disputes may not be submitted to arbitration, as stipulated in section 2(3) of the Act of 1996. We hold that section 41 of the Act of 1882 falls within the ambit of section 2(3) of the Act of 1996. As a result of which, even if the Licence Agreement contains Arbitration Agreement, the exclusive jurisdiction of the courts of Small Causes under section 41 of the Act of 1882 is not affected in any manner. Whereas, Arbitration Agreement in such cases would be invalid and inoperative on the principle that it would be again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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