R.F. Nariman, J. - (1.) Leave granted.
(2.) The facts, in this appeal, are as follows: (i) A Tenancy Agreement was entered into between the landlord's predecessor-in-title (Shree Bajrang Land & Trading Company) and the appellants/tenant on 02.02.2006 in respect of certain godowns and other structures. (ii) The maximum period of tenancy was for 10 years. The initial period was 5 years, with an option for renewal for another 5 years with a 10% enhancement in the rent. (iii) It was agreed that the tenant should pay the agreed rent of Rs.12,985/- per month. It was also agreed that upon expiry or earlier determination of the lease, the tenant shall deliver vacant and peaceful possession of the premises. Clause 23 of the aforesaid Agreement stated as follows: "23. That in case of any disputes, differences and/or claims arising by and between the parties out of this agreement and/or in respect to the subject matter of this agreement, the same shall be referred to the Arbitral Tribunal consisting of three arbitrators, out of which one arbitrator shall be appointed by the party of the first part, one by the party of the other part collectively and the Presiding Arbitrator shall be appointed mutually by the two arbitrators so appointed by the parties. The decision of the Arbitral Tribunal shall be final and binding on the parties. The Arbitration proceedings shall be governed by the provisions of Arbitration & Conciliation Act, 1996 with all statutory modifications for the time being in force. The venue of arbitration shall always be within the Ordinary Original Civil Jurisdiction of the High Court at Kolkata." (iv) On 16.10.2012, the tenancy was attorned in the name of the respondent, and the appellants paid rent to the respondent as the earlier landlord had surrendered his leasehold rights in favour of the respondent with effect from 01.11.2012. (v) On 24.08.2015, a letter was sent by the respondent calling upon the appellants to deliver vacant and peaceful possession on the expiry of the 10 year period, i.e., on 01.02.2016. A reminder to this effect was also sent on 30.12.2015. As the tenant did not vacate the premises, arbitration was invoked by the respondent on 29.02.2016 by a notice sent to the appellants. (vi) On 28.04.2016, the respondent filed the present Section 11 petition before the Calcutta High Court for appointment of an arbitrator. (vii) On 07.09.2016, the High Court passed the impugned order appointing an arbitrator, after rejecting the appellants' objections on arbitrability of the dispute between the parties. After this, the arbitral proceedings began and we are informed that as many as 18 sittings have taken place. (viii) Meanwhile, however, on 12.10.2017, a judgment was delivered by this Court in Himangni Enterprises v. Kamaljeet Singh Ahluwalia, 2017 10 SCC 706 ["Himangni Enterprises"], in which it was held that where the Transfer of Property Act, 1882 applied between landlord and tenant, disputes between the said parties would not be arbitrable. (ix) Even though four arbitration sittings took place after this judgment, a review/recall application was filed by the appellants before the Calcutta High Court on 04.06.2018 in the light of this judgment. This review was dismissed by the Calcutta High Court on 08.06.2018.
(3.) Mr. Debajyoti Basu, learned counsel appearing for the appellants has argued that the Transfer of Property Act is an Act which created rights in rem insofar as the landlord and tenant are concerned. He has further argued that the public policy contained in the statute in Sections 111(g), 114, and 114A, in particular, make it clear that by necessary implication the Arbitration & Conciliation Act, 1996 stands excluded. For this purpose, he also relied upon Section 2(3) of the Arbitration & Conciliation Act read with Section 5 thereof. He referred us to the statement of claim made before the learned Arbitrator and said that, in any event, grant of mesne profits would be outside the arbitration agreement inasmuch as mesne profits are to be decided by way of damages only after the agreement has come to an end. He also referred to and relied upon Order XX Rule 12 of the Code of Civil Procedure ["CPC"] to state that mesne profits could only be given in the manner provided in Order XX Rule 12, i.e., by a Civil Court and not by an arbitrator. He further went on to argue that even if it be held that certain sub-clauses of Section 111 would be arbitrable, yet it being clear that so far as at least arrears of rent and forfeiture are concerned, such disputes being non-arbitrable, it would be difficult to bifurcate the aforesaid grounds as often, one petition for eviction may contain several grounds, some of which are relatable to arrears of rent and forfeiture and some of which may relate to other grounds. Therefore, according to him, the entirety of the subject-matter of landlord and tenant disputes arising under the Transfer of Property Act is excluded by necessary implication. He also stated that it is well settled that this case is one of inherent lack of jurisdiction and that therefore, participation in the arbitral proceedings would make no difference as consent cannot confer jurisdiction, nor can waiver be inferred so as to confer jurisdiction. He relied strongly upon a number of judgments to buttress these submissions. In any event, according to him, this Court's judgment in Himangni Enterprises (supra) would apply on all fours in the facts of his case and would therefore, govern this case, which would necessarily lead to an arbitrator in the present proceedings having no jurisdiction to decide disputes between landlord and tenant. He also argued that Section 11(6A) of the Arbitration & Conciliation Act should be read in a purposive manner, and that "existence" of an arbitration agreement that is spoken of would also refer to disputes which are non-arbitrable as such.;