Sunday, 14 January 2018

Good legal article on appellate jurisdiction

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Whether tenancy agreement can be referred to arbitration if there is arbitration clause?

In the light of the foregoing discussion and the authority of the precedents, we hold that both by reason of Section 28 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and by reason of the broader considerations of public policy mentioned by us earlier and also in Deccan Merchants Cooperative Bank Ltd. v. Dalichand Jugraj Jain, the Court of Small Causes has and the arbitrator has not the jurisdiction to decide the question whether the Respondent-licensor landlord is entitled to seek possession of the two Studios and other premises together with machinery and equipment from the Appellant-licensee tenant. That this is the real dispute between the parties is abundantly clear from the petition filed by the Respondents in the High Court of Bombay, Under Section 8 of the Arbitration Act seeking a reference to Arbitration. The petition refers to the notices exchanged by the parties, the Respondent calling upon the Appellant to hand over possession of the Studios to him and the Appellant claiming to be a tenant or protected licensee in respect of the Studios. The relationship between the parties being that of licensor-landlord and licensee tenant and the dispute between them relating to the possession of the licensed demised premises, there is no help from the conclusion that the Court of Small Causes alone has the jurisdiction and the arbitrator has none to adjudicate upon the dispute between the parties.

23. Yet in another case of Booz Allen & Hamilton Inc. (supra), this Court (two Judge Bench) speaking through R.V. Raveendran J. laid down the following proposition of law after examining the question as to which cases are arbitrable and which are non-arbitrable:

36. The well-recognised examples of non-arbitrable disputes are: (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes.

24. Keeping in view the law laid down by this Court in aforementioned two decisions and applying the same to the facts of this case, we have no hesitation to hold that both the Courts below were right in dismissing the Appellant's application filed Under Section 8 of the Act and thereby were justified in holding that the civil suit filed by the Respondent was maintainable for grant of reliefs claimed in the plaint despite parties agreeing to get the disputes arising therefrom to be decided by the arbitrator.


Civil Appeal No. 16850 of 2017 (Arising out of S.L.P. (C) No. 27722/2017) and (D. No. 21033/2017)

Decided On: 12.10.2017

Himangni Enterprises  Vs Kamaljeet Singh Ahluwalia

Hon'ble Judges/Coram:
R.K. Agrawal and Abhay Manohar Sapre, JJ.

Citation: AIR 2017 SC 5137
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Whether arbitration proceeding can be initiated after imposition of moratorium as per Insolvency Code?

The mandate of the new Insolvency Code is that the moment an
insolvency petition is admitted, the moratorium that comes into
effect under Section 14(1)(a) expressly interdicts institution or
continuation of pending suits or proceedings against Corporate
6) This being the case, we are surprised that an arbitration
proceeding has been purported to be started after the imposition of
the said moratorium and appeals under Section 37 of the Arbitration
Act are being entertained. Therefore, we set aside the order of
the District Judge dated 06.07.2017 and further state that the
effect of Section 14(1)(a) is that the arbitration that has been
instituted after the aforesaid moratorium is non est in law.
CIVIL APPEAL NO. 16929 OF 2017
(Arising out of S.L.P. (C) No. 18195/2017)
Dated: 23-10-2017
Citation: AIR 2017 SC 5124
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What is distinction between power of civil court and arbitrator regarding grant of injunction?

 The dispute in between the parties arising out of an arbitration agreement would also come within the purview of the expression "decree' when it was adjudicated by a civil court. But, if it was adjudicated by the Arbitral Tribunal or the Arbitrator, it would be an award and not a decree as defined under Section 2(2) of the Code of Civil Procedure, though it may be a deemed decree for the purpose of execution. The difference is that the decree passed by a civil court would be a decree in persona or a decree in rem. A decree of declaratory relief granted would be a decree in rem (judgment in rem). The Arbitral Tribunal or the Arbitrator did not have any authority or jurisdiction to pass any award in rem (judgment in rem) like in the case of a decree in rem or judgment in rem of a civil court. The expression "award" means the amount of money that a court decides should be given to someone who has won a case; the decision to give money; to make an official decision to give something to someone as a payment, prize, etc. (See Oxford Advanced Learner's Dictionary, A.S. Hornby, 7th Edition.) The expression "award", n. is defined as a final judgment or decision, especially, one by an arbitrator or by a jury assessing damages. (See Black's Law Dictionary, Eighth Edition.) The expression should be understood in its plain legal meaning and the Arbitral Tribunal or the Arbitrator is expected to pass only an award as envisaged under the provisions of the Act. In other words, when there is a suit which was filed for an adjudication of a dispute other than payment of money or questions involving payment of money or settlement of account, there cannot be an application of the provisions contained in the Act, including Section 8 to refer the parties for arbitration or for appointment of an Arbitrator for deciding the issue in dispute. The matters which are amenable for an award alone can be referred under Section 8 of the Act. This makes the difference in the position of law applicable to the civil court and the Arbitral Tribunal or the Arbitrator, as envisaged under the Act. So, the matters which would require a decree in rem or judgment in rem like in the case of declaration of title of immovable property or a status of a person cannot be referred for arbitration as there is complete lack of jurisdiction either with the Tribunal or with the Arbitrator, as the case may be, under the Act.

17. A reference of a matter for arbitration which requires a judgment in persona or decree in persona further stood as again restricted by the application of Sections 38 and 39 of the Specific Relief Act and no decree of perpetual injunction or mandatory injunction (decree in persona) can be granted by the Arbitral Tribunal or Arbitrator under the Act.

18. Order XXXIX Rules 1 to 3 of the Code of Civil Procedure deals with exercise of power to grant or refuse interim order of either mandatory or prohibitory injunction. The very same power is also vested with the Arbitral Tribunal under Section 17 of the Arbitration and Conciliation Act. But, that does not mean that the Arbitral Tribunal has jurisdiction to pass a decree of permanent prohibitory injunction or mandatory injunction or a decree of declaration of title of immovable property or status of a person. So, a suit either for declaration of title, declaration of right or interest over immovable property, declaration of status of a person, for a decree of permanent prohibitory injunction or a decree of mandatory injunction are not amenable to any of the provisions contained in the Arbitration and Conciliation Act, 1996, including Section 8 of the Act and hence revision fails.

CRP No. 560 of 2013 (B) and I.A. No. 2410/2013 in C.R.P. No. 560/2013

Decided On: 05.07.2017

Shriram Transport Finance Co. Ltd. Vs. Naduvacheri Balakrishnan and Ors.

Hon'ble Judges/Coram:
P. Somarajan, J.

Citation: AIR 2017 Kerala 252
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