- (1.) THE Court : This is an application under section 34 of the Arbitration Act, 1940 for stay of a winding up proceedings pending before the Company Court. THE winding up proceeding was instituted by the respondents for failure of the petitioner in paying rents amounting to Rs. 92,000/- to the respondents.
(2.) THE petitioner's case in short is that an Indenture of Lease dated 28th February, 1986 was executed and registered between the petitioner on the one hand and the respondent on the other for lease of a premises for 20 years at a monthly premium of Rs. 11500/- and Rs. 1 lakh being deposited as a security deposit by the lessee with the lessor which is not to carry any interest and refundable at or on termination of the tenancy between the parties. THE petitioner's case is that this is a premises tenancy and by virtue of section 5 of the Premises Tenancy Act as no consideration can pass for creation of premises tenancy, there was a violation which is to be visited with penalty under section 30 of the Act, the deposit of Rs. 1 lakh by the petitioner in that event is liable to be adjusted against monthly rent. Petitioner did not pay monthly rent from April, 1993 to December, 1993. It is alleged that if adjustment is allowed there would not be any question of any rent being in arrear. THEre is also a provision in the said Indenture of Lease for referring disputes and differences between the parties touching or arising in respect of, the lease to arbitration and that being so, section 34 of the Arbitration Act has every manner of application in the winding up proceedings that has been brought by the respondent/lessor against the petitioner/lessee and accordingly the petitioner has prayed for stay of the Company Petition No. 35 of 1994 and mandatory injunction directing the respondents to adjust the said sum of Rs. 1 lakh against arrear monthly rents amounting to Rs. 92000/-. Mr. Kar appearing for the respondent submitted at the outset that this is not a question of adjustment of Rs. 1 lakh deposited by the respondent as the respondent has already fallen in arrear of paying rents amounting to Rupees two lakh twenty five thousand. Mr. Kar submitted that the present petitioner are unable to pay rents for some reason or other and that being so are not entitled to carry on their business and as such the winding up proceedings had to be brought. Mr. Kar also submitted that there is practically no dispute between the parties relating to the Deed of Indenture being referrable to arbitration and that from the conduct of the present petitioner it will appear that they are not ready and willing to refer the matter to arbitration. Mr. Kar's further submission is that this being a lease in respect of a running Factory premises with fittings and fixtures, West Bengal Premises Tenancy Act has no application. He also contended that section 34 of the Arbitration Act has no applicability in a pending Company Court case for winding up. In respect of this contention Mr. Kar has relied on the decisions of Patna, Madras and Punjab and Haryana High Courts reported in AIR 1968 Patna 289, 41 Company Cases 548 and 70 Company Cases 197. It may be pointed out in this connection that against Mr. Kar's submission on this point Mr. Saha, learned advocate appearing for the respondent placed his reliance on a decision of a single Judge of this Court not yet reported. It appears that the said judgment was delivered on January 24, 1994 in Company Petition No. 84 of 1992, (Central Inland Water Transport Corporation Ltd. v. Neptun Engineering Services) wherein all such decisions cited by Kar have been distinguished by Hon'ble Mr. Justice Ajoy Nath Ray of this Hon'ble Court. I have gone through a xerox copy of the said judgment and I feel I have no reason to differ from the said decision. Accordingly the question whether section 34 of the Arbitration has any applicability in a Company Case or not is set at rest so far at least this case is concerned. Agreeing with the said decision, I held that section 34 of the Arbitration Act is applicable in a winding up proceedings and Mr. Kar's objection on this scope is overruled.
(3.) REGARDING Mr. Kar's objection that there is no dispute between the parties relating to the Deed of Indenture so much so that Arbitration proceeding can be taken recourse to, it appears that in paragraph 10 of the present petition, the petitioner has noted the disputes which are referable to arbitration. The alleged disputes are four in number and mentioned in sub-paragraph (a) to (d). On a close reading of these paragraphs it will appear that these are all interlinked and hinged on the question whether Premises Tenancy Act has any applicability in the instant Lease. The Provision as to arbitration as contained in the said lease provides that every disputes or difference arising between the parties to the said Deed in the matter of working out the Agreement shall be referred to arbitration and the provisions of the Arbitration Act shall be applicable. The disputes No. (a) to (d) of paragraph 10 of the petition do not appear to be in the working of the Agreement or in pursuance thereof but is a question of law whether this Lease comes within the purview of the West Bengal Premises Tenancy Act. Mr. Saha in this connection relied on a decision in Vulcan Insurance Company Limited v. Maharaj Singh reported in AIR 1976 SC 287 wherein it was held that whenever there is a dispute between the parties over which arbitration clause in question applies, then the application under section 20 cannot be dismissed on the ground that the claim would not ultimately succeed either on fact or on law and in such a case the dispute has to be left for the decision of the Arbitrator. But here it is not the question that the dispute or difference between the parties had arisen out of the Agreement of Lease or while working out the lease agreement. It is purely a question of interpretation of a Statute to find out whether the instant lease is independent of the W.B.P.T. Act or not. In this view of the matter the Supreme Court decision is distinguishable and in all consideration I hold that the disputes raised in paragraph 10 of the Application is not referable to arbitration.;