Landlord-Tenant Disputes Under Transfer Of Property Act Arbitrable Except When Covered By Rent Control Laws : Supreme Court

15th Dec

Landlord-Tenant Disputes Under Transfer Of Property Act Arbitrable Except When Covered By Rent Control Laws : Supreme Court

In a landmark judgment delivered on Monday, the Supreme Court overruled its 2017 judgment in Himangni Enterprises case to hold that landlord-tenant disputes are arbitrable except when they are covered by specific forum created by rent control laws. A three-judge Bench headed by Justice NV Ramana observed, "Landlord-tenant disputes are arbitrable as the Transfer of Property Act does not forbid or foreclose arbitration."
The Bench was answering a reference made by a Division Bench in 2019, while considering the appeal against Calcutta High Court order appointing an arbarbitrator in a dispute between landlord and tenant(Vidya Drolia and others v Durga Trading Corporation). It was urged to determine the correctness of the judgment in Himangni Enterprises v. Kamaljeet Singh Ahluwalia, 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 arbitration.

The three-Judge Bench, also comprising of Justices Sanjiv Khanna and Krishna Murari based its decision on the fact that landlord-tenant disputes are not actions in rem but pertain to subordinate rights in personam that arise from rights in rem.