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.

IN THE SUPREME COURT OF INDIA

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,(2017) 10 SCC 706

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Whether power of attorney holder who executes tenancy agreement on behalf of landlord becomes landlord of tenanted premises?

In our opinion, Dhanapal was a power of attorney holder of A. Radhakrishnan. He executed the tenancy agreement on behalf of the original owner – A. Radhakrishnan in favour of respondent No.1. Such act done by Dhanapal did not create any right, title and interest in his favour and nor he ever asserted any such right in himself and indeed rightly qua A. Radhakrishnan or the appellants in relation to suit premises. That apart, respondent No.1 in clear terms admitted in his evidence and in the pleading of cases filed by him against the appellants about his status as being the tenant. In the light of this legal position, the High Court should have held this issue in appellants’ favour.

42) The law relating to power of attorney is governed by the provisions of the Power of Attorney Act, 1982. It is well settled therein that an agent acting under a power of attorney always acts, as a general rule, in the name of his principal. Any document executed or thing done by an agent on the strength of power of attorney is as effective as if executed or done in the name of principal, i.e., by the principal himself. An agent, therefore, always acts on behalf of the principal and exercises only those powers, which are given to him in the power of attorney by the principal. Any act or thing done by the agent on the strength of power of attorney is, therefore, never construed or/and treated to have been done by the agent in his personal capacity so as to create any right in his favour but is always construed as having done by the principal himself. An agent, therefore, never gets any personal benefit of any nature. Applying the aforesaid principle, this Court in Suraj Lamp and Industries Private Limited (2) vs. State of Haryana & Anr., (2012) 1 SCC 656 held in paragraphs 20 and 21 as under:

“20. A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property. The power of attorney is creation of an agency whereby the grantor authorises the grantee to do the acts specified therein, on behalf of grantor, which when executed will be binding on the grantor as if done by him (see Section 1-A and Section 2 of the Powers of Attorney Act, 1882). It is revocable or terminable at any time unless it is made irrevocable in a manner known to law. Even an irrevocable attorney does not have the effect of transferring title to the grantee.

21. In State of Rajasthan v. Basant Nahata, (2005) 12 SCC 77, this Court held: (SCC pp. 90 & 101, paras 13 & 52) “13. A grant of power of attorney is essentially governed by Chapter X of the Contract Act. By reason of a deed of power of attorney, an agent is formally appointed to act for the principal in one transaction or a series of transactions or to manage the affairs of the principal generally conferring necessary authority upon another person. A deed of power of attorney is executed by the principal in favour of the agent. The agent derives a right to use his name and all acts, deeds and things done by him and subject to the limitations contained in the said deed, the same shall be read as if done by the donor. A power of attorney is, as is well known, a document of convenience.

* * *

52. Execution of a power of attorney in terms of the provisions of the Contract Act as also thePowers of Attorney Act is valid. A power of attorney, we have noticed hereinbefore, is executed by the donor so as to enable the donee to act on his behalf. Except in cases where power of attorney is coupled with interest, it is revocable. The donee in exercise of his power under such power of attorney only acts in place of the donor subject of course to the powers granted to him by reason thereof. He cannot use the power of attorney for his own benefit. He acts in a fiduciary capacity. Any act of infidelity or breach of trust is a matter between the donor and the donee.” An attorney-holder may however execute a deed of conveyance in exercise of the power granted under the power of attorney and convey title on behalf of the grantor.” This was followed by this Court in Church of Christ Charitable Trust and Educational Charitable Society vs. Ponniamman Educational Trust, (2012) 8 SCC 706 (para 20)

43) When we apply this well settled principle of law to the facts of the case in hand, we are of the considered view that when Dhanapal, who was acting as an agent of A. Radhakrishnan on the strength of power of attorney, executed the tenancy agreement with respondent No. 1 in relation to the suit premises then he did such execution for and behalf of his principal - A Radhakrishnan, which resulted in creating a relationship of landlord and tenant between A. Radhakrishnan and respondent No. 1 in relation to the suit premises. In this execution, Dhanapal being an agent did not get any right, title and interest of any nature either in the suit premises or in tenancy in himself. The effect of execution of tenancy agreement by an agent was as if A. Radhakrishnan himself had executed with respondent No.1.

44) In view of the foregoing discussion, we are of the considered opinion that the High Court was not right in holding that the tenancy in relation to suit premises was with Dhanapal. 

Supreme Court of India

Tmt. Kasthuri Radhakrishnan & Ors vs M.Chinniyan & Anr on 28 January, 2016

Bench: J. Chelameswar, Abhay Manohar Sapre

Reportable

                      


                CIVIL APPELLATE JURISDICTION

                 CIVIL APPEAL No.5158 OF 2009




Citation;(2016)3 SCC296

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