Read Time: 07 minutes

Synopsis

The Punjab and Haryana High Court while disposing of a petition was of the opinion that seeking recovery of lease amount in terms of the agreement does not fall within the exclusive jurisdiction of Rent Controller and rather can be adjudicated by the Arbitrator.

The bench further appointed Inderjeet Mehta, District & Sessions Judge, (Retd.), as the sole arbitrator to resolve disputes between the parties.

“Keeping in view the nature of controversy involved in both the cases, I find that the claim of the petitioner in respect of recovery of arrears of lease amount does not fall under the ambit of Rent Act, 1973 as the petitioner is not claiming any eviction of the respondent on the grounds available under the provisions of Rent Act, 1973. Petitioner has sought recovery of lease amount in terms of the agreement and such dispute does not fall within the exclusive jurisdiction of Rent Controller, rather can be adjudicated by the Arbitrator”, a bench of Justice Raj Mohan Singh opined.

In the present lessor-lessee matter, the petitions were preferred under Section 11(5) of the Arbitration and Conciliation Act, 1996 for appointment of an independent Arbitrator to adjudicate the dispute between the parties.

The parties entered into a lease agreement where the lease was to start from 01.03.2011 and was to expire on 30.06.2022. The entire tenure of the lease was a lock-in period in view of clause 2 of the lease deed. However, the respondent terminated the lease prematurely in violation of the lease agreement and stopped remitting rent since April 2020. According to the agreement, neither of the parties could have validly terminated the lease except in certain situations, which in this case did not arise at all.

The petitioner then after sending a notice, nominated the name of Justice Kailash Gambhir (Retd.) as the sole Arbitrator to proceed with the arbitration proceedings between the parties. He had also granted 15 days to accept the nomination, after which it would be deemed to be accepted. While the respondent in its reply notice denied the ability to remit the outstanding amount towards rent for the remaining tenure of the lease and also rejected the name of the nominated Arbitrator by the petitioner.

Now it was the case of the petitioner that he did not claim eviction of the respondent on any of the grounds available to the landlord under the provisions of the Rent Act, 1973. Petitioner further submitted that since the only recovery of the lease amount in terms of the lease agreement was sought, then such dispute would not fall under the exclusive jurisdiction of the Rent Controller under the Rent Act, 1973.

Considering the factual matrix, arguments advanced and judgments referred to by the parties, the Court held, “The notice of termination of lease deed dated 03.07.2020 does not specify any ground for terminating the lease deed and the ground no.5 pleaded in the notice does not correspond to clause 32 of the lease deed. Evidently, the petitioner is not seeking ejectment of the respondent, rather claim of the petitioner is only in respect of recovery of rent which is being sought upto 30.06.2022 with liberty to initiate any other remedy for ejectment (if any) in terms of grounds taken in the rejoinder. The pleaded case of the petitioner cannot be read beyond the scope of pleadings. Even otherwise, the Arbitrator can decide his jurisdiction under Section 16 of the Act”.

Case Title: Rohit Sawhney vs. M/s DLF Power and Services Ltd.