We overrule the ratio laid down in Himangni Enterprises, (2017) 10 SCC 706 and hold, landlord-tenant disputes are Arbitrable as The Transfer of Property Act, 1882 does not forbid or foreclose Arbitration. However, landlord-tenant disputes covered and governed by Rent Control Legislation would not be Arbitrable when specific Court or Forum has been given exclusive jurisdiction to apply and decide special rights and obligations. Such rights and obligations can only be adjudicated and enforced by the specified Court/Forum, and not through Arbitration.
Lord Mustill’s well-known comparison of the relationship between Courts and Arbitrators to a relay race, reads:
“Ideally, the handling of Arbitrable Disputes should resemble a relay race. In the initial stages, before the Arbitrators are seized of the dispute, the baton is in the grasp of the Court; for at that stage there is no other organization which could take steps to prevent the Arbitration Agreement for being ineffectual. When the Arbitrators take charge they take over the baton and retain it until they have made an Award. At this point, having no longer a function to fill, the Arbitrators hand back the baton so that the Court can in case of need lend its coercive powers to the enforcement of the Award.”
Unfortunately, who decides Non-Arbitrability remains a vexed question that does not have a straightforward universal answer.
– Hon’ble Justice Sanjiv Khanna, Vidya Drolia v. Durga Traiding Corporation, [Civil Appeal No. 2402 of 2019].