Supreme Court reiterates: Lease/Tenancy matters not governed under special statutes but TP Act, 1882, are open to arbitration

The Supreme Court observed that a contract is void if prohibited by a statute under a penalty, even without express declaration that the contract is void

A petition was filed under Section 11(5) of the Arbitration and Conciliation Act, for resolving a dispute in case of a lease deed by appointing a Sole Arbitrator. The matter was being considered by the Hon’ble Chief Justice SA Bobde led three Judge-Bench. 

“The Petitioner had instituted the petition under Section 11(5) of the Arbitration and Conciliation Act, 1996 (‘Act,   1996’   for   short)   seeking   appointment   of   a   Sole Arbitrator   for   resolving   the   disputes   that   have   arisen between the parties in relation to the SubLease deed dated 14.11.2018”

The Court further added that prior to consideration of appointment of Arbitrator, the first part of Clause 12 providing for Arbitratiom needs to be elaborated to consider the arbitrability of the dispute relating to Lease or Tenancy, Agreements/Deeds when such lease is Governed by Transfer of Property Act, 1882 and iron out creases on the legal aspect. 

In the instant case, the petitioner invoked the Arbitration Clause and proposed the name of Justice (Retired) Mukul Mudgal as the Sole Arbitrator. The respondent did not reply to the said notice nr objected to the Arbitrator proposed by the petitioner. 

The Court then added that since the dispute between the parties is to be resolved through Arbitration, the Prayer made in this petition is liable to be accepted. 


“In the result, the petition is allowed. Shri Justice (Retired) Mukul Mudgal, former Chief Justice of Punjab and Haryana High Court is appointed as the Sole Arbitrator to resolve the dispute between the parties. The arbitral fee shall be payable as provided under the Fourth Schedule to the Act, 1996. There shall be no order as to costs in this petition.”