Saturday, April 29, 2023

PRELIMINARY DECREE OF PARTITION: LAW AND LIMITATION

 




PRELIMINARY DECREE OF PARTITION: LAW AND LIMITATION

 

A suit for partition when filed generally contains prayer for preliminary decree followed with final decree. The ascertaining of share in the property between the claimant/legal heirs are prima face decided while passing preliminary decree. The final decree therefore may entail ministerial acts only as that may relate to demarcation and for that purpose appointment of Local Commissioner and if the property is not capable of divided by metes and bounds, then the auction sale or private sale could be contemplated in the final decree. The partition suit in itself is quite different in its nature and therefore, the provisioning of preliminary decree is made for this purpose, unlike any conventional suits.

The another dimension that emerges is as regards whether the suit shall terminate upon passing of preliminary decree and if it is not so, whether the proceedings thereafter shall be deemed to be a continuous proceedings, or still further, whether any application for seeking pronouncing of final decree shall be required, once preliminary decree is pronounced.

Assuming that any application for seeking pronouncing of final decree shall be required, then the next question shall ipso facto arise what will be the limitation period for any such application? In other words, if the application after passing of preliminary decree shall be required for pronouncing final decree, the trap of limitation shall follow. The question therefore arise- whether final decree could be dropped on the premise that it was barred by limitation? The endeavour is made herein to unravel the aspect fully and completely.

Conventional wisdom shall suggest that once the rights/shares of the plaintiff had been finally determined by a preliminary decree, there should not be a limitation period for an application for affecting the actual partition/division in accordance with the preliminary decree, as it should be considered to be an application made in a pending suit. Still, the issue of limitation is often raked up in the context when a preliminary decree is passed in a partition suit. It is contended that a right enures to the plaintiff to apply for a final decree for division of the suit property by metes and bounds; that whenever an application is made to enforce a right or seeking any relief, such application is governed by the law of limitation; that an application for drawing up a final decree would be governed by the residuary Article 137 of Limitation Act, 1963 (‘Act’ for short) which provides a period of limitation of three years; that as such right to apply accrues on the date of the preliminary decree, any application filed beyond three years from the date of preliminary decree would be barred by limitation.

The Supreme Court in a matter captioned as Shub Karan Bubna @ Shub Karan Prasad Bubna Vs Sita Saran Bubna & Ors in SLP No. 17932 OF 2009 has dealt with the issue in great length. The basic parameter and concept of partition may require further elucidation, though.



PARTITION: Concept

 

‘Partition’ is a re-distribution or adjustment of pre-existing rights, among co-owners/coparceners, resulting in a division of lands or other properties jointly held by them, into different lots or portions and delivery thereof to the respective allottees. The effect of such division is that the joint ownership is terminated and the respective shares vest in them in severally. A partition of a property can be only among those having a share or interest in it. A person who does not have a share in such property cannot obviously be a party to a partition. ‘Separation of share’ is a species of 'partition’. When all co-owners get separated, it is a partition. Separation of share/s refers to a division, where, only one or only a few among several co-owners/coparceners get separated, and others continue to be joint or continue to hold the remaining property jointly without division by metes and bounds. For example, where four brothers owning a property divide it among themselves by metes and bounds, it is a partition. But if only one brother wants to get his share separated and other three brothers continue to remain joint, there is only a separation of the share of one brother. In a suit for partition or separation of a share, the prayer is not only for declaration of plaintiff’s share in the suit properties, but also division of his share by metes and bounds.

 

This involves three issues:

(i)          whether the person seeking division has a share or interest in the suit property/properties;

(ii)        whether he is entitled to the relief of division and separate possession; and

(iii)       how and in what manner, the property/properties should be divided by metes and bounds?

In a suit is for partition or separation of a share, the court at the first stage decides whether the plaintiff has a share in the suit property and whether he is entitled to division and separate possession. The decision on these two issues is exercise of a judicial function and results in first stage decision termed as ‘decree’ under Order 20 Rule 18(1) and termed as ‘preliminary decree’ under Order 20 Rule 18(2) of the Code. The consequential division by metes and bounds, considered to be a ministerial or administrative act requiring the physical inspection, measurements, calculations and considering various permutations/ combinations/alternatives of division is referred to the Collector under Rule 18(1) and is the subject matter of the final decree under Rule 18(2).

The Rule 18 of Order 20 of the Code of Civil Procedure (‘Code’ for short) deals with decrees in suits for partition or separate possession of a share therein which is extracted below:

 


18. Decree in suit for partition of property or separate possession of a share therein.-- Where the Court passes a decree for the partition of property or for the separate possession of a share therein, then,

(1) if and in so far as the decree relates to an estate assessed to the payment of revenue to the Government, the decree shall declare the rights of the several parties interested in the property, but shall direct such partition or separation to be made by the Collector, or any gazetted subordinate of the Collector deputed by him in this behalf, in accordance with such declaration and with the provisions of section 54;

 

(2) if and in so far as such decree relates to any other immovable property or to movable property, the Court may, if the partition or separation cannot be conveniently made without further inquiry, pass a preliminary decree declaring the rights of the several parties, interested in the property and giving such further directions as may be required.”

 

The terms 'preliminary decree' and 'final decree' used in the said rule are defined in Explanation to section 2(2) of the Code and reads thus :

 

“A decree is preliminary when further proceedings have to be taken before the suit can be completely disposed of. It is final when such adjudication completely disposes of the suit. It may be partly preliminary and partly final.”

 

Section 54 of the Code dealing with partition of estate or separation of share, relevant for purposes of Rule 18(1) reads thus:

 

“Where the decree is for the partition of an undivided estate assessed to the payment of revenue of the government, or for the separate possession of a share of such an estate, the partition of the estate or the separation of the share shall be made by the Collector or any gazetted sub-ordinate of the Collector deputed by him in this behalf, in accordance with the law (if any) for the time being in force relating to the partition, or the separate possession of shares, of such estates.”

 

Rule 13 of Order 26 of the Code dealing with Commissions to make partition of immovable property, relevant for purposes of Rule 18(2) reads thus :

“Where a preliminary decree for partition has been passed, the Court may, in any case not provided for by section 54, issue a commission to such person as it thinks fit to make the partition or separation according to the rights as declared in such decree.”

Once a court passes a preliminary decree, it is the duty of the court to ensure that the matter is referred to the Collector or a Commissioner for division unless the parties themselves agree as to the manner of division. This duty in the normal course has to be performed by the court itself as a continuation of the preliminary decree. Sometimes, either on account of the pendency of an appeal or other circumstances, the court passes the decree under Rule 18(1) or a preliminary decree under Rule 18(2) and the matter goes into storage to be revived only when an application is made by any of the parties, drawing its attention to the pending issue and the need for referring the matter either to the Collector or a Commissioner for actual division of the property.

The following principles emerge in the above backdrop and relating to partition suit.

 

(i)            If estate assessed to payment of revenue to the government (agricultural land), the court is required to pass only one decree declaring the rights of several parties interested in the suit property

with a direction to the Collector (or his subordinate) to effect actual partition or separation in accordance with the declaration made by the court in regard to the shares of various parties and deliver the respective portions to them, in accordance with section 54 of Code.

 

It is necessary for two reasons:

(ia)      Revenue Authorities are more conversant with matters relating to

agricultural lands and apart from that safeguarding the revenue interest of government;

(ib)      Where the Collector acts in terms of the decree, the matter does not come back to the court at all. The court will not interfere with the partitions by the Collector, except to the extent of any complaint of a third party affected thereby.

So far as immovable properties (other than agricultural lands paying land revenue) are concerned including moveable assets  following situation shall emerge:

(ia) where the court can conveniently and without further enquiry make the division without the assistance of any Commissioner, or where parties agree upon the manner of division, the court will pass a single decree comprising the preliminary decree declaring the rights of several parties and also a final decree dividing the suit properties by metes and bounds.

(iia) where the division by metes and bounds cannot be made without further inquiry, the court will pass a preliminary decree declaring the rights of the parties interested in the property and give further directions as may be required to effect the division. In such cases, normally a Commissioner is appointed (usually an Engineer, Draughtsman, Architect, or Lawyer) to physically examine the property to be divided and suggest the manner of division. The court then hears the parties on the report, and passes a final decree for division by metes and bounds.

The function of making a partition or separation according to the rights declared by the preliminary decree is entrusted to a Commissioner, as it involves inspection of the property and examination of various alternatives with reference to practical utility and site conditions. When the Commissioner gives his report as to the manner of division, the proposals contained in the report are considered by the court; and after hearing objections to the report, if any, the court passes a final decree whereby the relief sought in the suit is granted by separating the property by metes and bounds. It is also possible that if the property is incapable of proper division, the court may direct sale thereof and distribution of the proceeds as per the shares declared.

The preliminary decree could be passed by a trial court suo motu or upon filing of application under Order 12 Rule 6 of the Code of Civil Procedure id the admission in the pleadings are conspicuous. In Delhi Jal Board vs. Surendra P. Malik SCC OnLine Del 292 , it is held that:

 

8. The provision confers almost sweeping powers on the Court to render a speedy judgment in the suit to save the parties from going through the rigmarole of a protracted trial. The only pre-requisite for this is that there must be admissions of fact arising in the suit, be that in the pleadings or otherwise or orally or in writing. Such admission of facts must be clear and unequivocal, unconditional and unambiguous and may relate to the whole claim or a part of it. These need not be made specifically or expressly and could be a constructive admissions also. Whether or not such admission arose in the suit would depend on the facts and circumstances of the case. If it involved disputed facts, claims and counter claims requiring evidence of parties for determination of issues or where the defence of a party touched the root of the matter, a judgment could not be passed under Order, 12 Rule 6 dispensing with the trial because the valuable right of going to trial could not be taken away from the party unless the claim was admitted. A duty was, therefore, cast on the court to ascertain the admission of facts and to render judgment on these either in respect of the whole claim or part of it. The court could do so on its own or on the application of a party and without waiting for the determination of any other question between the parties….”.

 

The Delhi High Court very recently in a matter captioned as Bhushan Kumar Gupta Vs Rajinder Kumar Gupta CS(OS) 244/2022 was pleased to pass preliminary decree of partition upon filing of application under Order 12 Rule 6 of Code of Civil Procedure and after finding admission in the pleadings as regards the entitlement of shares between parties. Thus, what clearly emanates from here is that a preliminary decree could be passed as per the record or after application filed to that effect.  

 

LAW OF LIMITATION

After having dealt with the broad concept of partition, preliminary decree and final decree, it would be worthwhile to deliberate on the question -whether the provisions of Limitation Act are inapplicable to an application for drawing up a final decree.

 

The Section 3 of the Limitation Act, 1963 provides that subject to sections 4 to 24, every suit instituted, appeal preferred and application made after the prescribed period shall be dismissed. The term 'period of limitation' is defined as the period of limitation prescribed for any suit, appeal or application by the Schedule to the Act (vide clause (j) of section 2 of the Act). The term “prescribed period” is defined as the period of limitation computed in accordance with the provisions of the said Act. The Third Division of the Schedule to the said Act prescribes the periods of limitation for Applications. The Schedule does not contain any Article prescribing the limitation for an application for drawing up of a final decree. Article 136 prescribes the limitation for execution of any decree or order of civil court as 12 years when the decree or order becomes enforceable. Article 137 provides that for any other application for which no period of limitation is provided elsewhere in that division, the period of limitation is three years which would begin to run from the time when the right to apply accrues. It is thus clear that every application which seeks to enforce a right or seeks a remedy or relief on the basis of any cause of action in a civil court, unless otherwise provided, will be subject to the law of limitation. But where an application does not invoke the jurisdiction of the court to grant any fresh relief based on a new cause of action, but merely reminds or requests the court to do its duty by completing the remaining part of the pending suit, there is no question of any limitation. Such an application in a suit which is already pending, which contains no fresh or new prayer for relief is not one to which Limitation Act, 1963 would apply. These principles are evident from the provisions of the Code and the Limitation Act and also settled by a series of judgments of different High Court over the decades.

For example, Lalta Prasad vs. Brahma Din [AIR 1929 Oudh 456], Ramabai Govind v. Anant Daji [AIR 1945 Bom. 338], Abdul Kareem Sab vs. Gowlivada S. Silar Saheb [AIR 1957 AP 40], A. Manjundappa v. Sonnappa & Ors. [AIR 1965 Kar. 73], Sudarsan Panda & Ors. v. Laxmidhar Panda & Ors. [AIR 1983 Orissa 121], Laxmi v. A.Sankappa Alwa [AIR 1989 Ker. 289].

On similar lines are the following judgments:

Phoolchand vs. Gopal Lal [AIR 1967 SC 1470], Hasham Abbas Sayyad v. Usman Abbas Sayyad & Ors. [2007 (2) SCC 355] and Bikoba Deora Gaikwad v. Hirabai Marutirao Ghorgare [2008 (8) SCC 198].

It is a common event that that the defendants in a partition suit does not voluntarily divide the property merely on the passing of a preliminary decree. Thus, what follows is to file another proceedings i.e execution proceedings for seeking enforcement of decree. Obviously, a litigant coming to court seeking relief is not interested in receiving a paper decree, therefore, when he succeeds in establishing his case he will be keen to reap the fruit of decree. As regards, partition a litigant feels amused as to why should he be required to get a preliminary decree first, then file an application and obtain a final decree and then file an execution to get the actual relief. Obviously, people may have a query - why not a continuous process?

A misconceived notion also prevails in some trial judge’ mind to the effect that their role is just to adjudicate and once preliminary decree of partition is passed, that is the only judicial function. Consequently, adequate importance is not given to the final decree proceedings and execution proceedings which are considered to be ministerial functions. The focus is on disposing of cases, rather than ensuring that the litigant gets the relief. But the focus should not only be on early disposal of cases, but also on early and easy securement of relief for which the party approaches the court. This is also a fact that many a time, a party exhausts his finances and energy by the time he secures the preliminary decree and has neither the capacity nor the energy to pursue the matter to get the final relief. As a consequence, we have found cases where a suit is decreed or a preliminary decree is granted within a year or two, the final decree proceeding and execution takes decades for completion.

Ideally, in suits for partition and other suits involving declaration of the right and ascertainment/quantification of the relief, the process of the suit should be continuous, consisting of the first stage of determination and declaration of the right, second stage of ascertainment/division/quantification, and the third stage of execution to give actual relief.

 

Conclusion

What emanates, thus, from the foregoing that the Code of Civil Procedure does not prescribe filing of any application for seeking final decree after pronouncing of the preliminary decree, of course, there may be local amendments to the contrary, in that case the situation may be different. When a preliminary decree is passed in a partition suit, the proceedings should be continued by fixing dates for further proceedings till a final decree is passed. It is the duty and function of the court. Performance of such function does not require a reminder from the litigant. The mindset should be to expedite the process of dispute resolution. What therefore clearly follows as is held by Supreme Court in Shub Karan Bubna (supra) that the application filed by the plaintiff for drawing up of a final decree, was rightly held to be not subject to any period of limitation. The limitation period therefore shall not apply for seeking pronouncing of final decree even if any application is filed to that effect. Needless to say that passing of preliminary decree and subsequent passing of final decree shall be a continuous process and therefore the limitation period shall have no applicability in this regard.  

                                           --------------

                                           Anil K Khaware

Founder & Senior Associate

Societylawandjustice.com

Monday, April 24, 2023

AARBITRATION & ARBITRABILITY

 


ARBITRATION & ARBITRABILITY

The issue of landlord-tenant dispute and that of fraud determined in the light of Vidya Drollia case

In Vidya Drolia and Ors. v.  Durga Trading Corporation and Others[i] the Supreme Court has dealt with comprehensively as regards the ambit and amplitude and have settled various issues that remained within the realm of probabilities. The aforesaid judgment of Supreme Court has therefore settled the ambiguity that persisted before. To begin with, doubts persisted as r4egards arbitrability of landlord tenancy disputes. This is no more in doubt. 

In Booz Allen and Hamilton Inc v. SBI Home Finance Ltd and Others[ii]  the Supreme Court has emphasised the expression of arbitrability and held that disputes concerning special statutes are non-arbitrable.

The Supreme Court has overruled its decision in Himangni Enterprises The Supreme Court has overruled its decision in Himangni Enterprises Vs Kamaljeet Singh Ahluwalia[iii]  wherein it was ruled that landlord-tenant disputes covered and governed by special statutes would not be arbitrable if a specific court or forum has been given exclusive jurisdiction to apply and decide special rights and obligations.”

It is observed in Vidya Drollia (Supra) that :

“landlord-tenant disputes are not actions in rem but pertain to subordinate rights in personam that arise from rights in rem. Such actions normally would not affect third-party rights or have erga omnes affect or require centralized adjudication. An award passed deciding landlord-tenant disputes can be executed and enforced like a decree of the civil court. Landlord-tenant disputes do not relate to the inalienable and sovereign functions of the State. The provisions of the Transfer of Property Act do not expressly or by necessary implication bar arbitration.”

The Supreme Court in Vidya Drolia (Supra) case has held that in  Booz Allen Hamilton (Supra),  Transfer of Property Act was not considered, whereas, while stating that Soundness of Hemangini enterprises (Supra) was not that reasonable and must be reviewed by a three-judge bench, it stated that Transfer of Property Act is not a special statute so the dispute arising under this act are arbitrable. Further, it is stated that Transfer of Property Act does not contain any such provision which nullifies the arbitrability of disputes. In Vidya Drollia (Supra) the Supreme Court has disagreed with Himangni Enterprises (Supra) and has held that disputes arising out of lease deeds shall be governed by the Transfer of Property Act, 1882, hence, were arbitrable, if they meet certain criteria. Apart from settling the conundrum around arbitrability of tenancy disputes under lease deeds, Vidya Drolia (Supra) touched upon other legal positions in connection with the Arbitration and Conciliation Act, 1996 ("Act").

In fact, Vidya Drolia (Supra) puts forward a fourfold test to determine the arbitrability of subject matters of a dispute. The Supreme Court has made it clear that the test is not a straight jacket formula and exists for the purpose of gaining certainty to confirm whether the subject matter of the dispute would be non-arbitrable. A subject matter is non-arbitrable if:

1.   it is an action in rem and no subordinate action in personam arises out of it.

2.   it has the erga omnes effect, i.e., adjudication on the subject matter would affect individuals who are not parties to arbitration.

3.   it involves inalienable functions of the state.

4.   it is expressly or impliedly non-arbitrable by virtue of law.

By applying the above test, it was held that lease deeds are arbitrable if they are not covered under special statues.



Issue of Fraud

Further, in Vidya Drolia (Supra), the Supreme Court has also reaffirmed the law laid down in Avitel Post Studioz Ltd & Ors Vs HSBC PI Holdings (Mauritius) Ltd [iv] Civil Appeal No. 5145 of 2016 as regards the issue of fraud and its arbitrability.  It overruled its decision in N. Radhakrishnan Vs Maestro Engineers & Ors[v]  and held that fraud renders a dispute non-arbitrability only if: 

1.   In a clear case where the arbitration clause or agreement itself cannot be said to exist; or 

2.   If allegations are made against the State or its instrumentalities of arbitrary, fraudulent, or mala fide conduct which requires a public enquiry.

The Court further observed that “it would be grossly irrational and completely wrong to mistrust and treat arbitration as flawed and inferior adjudication procedure” thus marking a clear shift in judicial perception and its increasing faith in the process of arbitration.

In Avitel Post (Supra)  it is held as under:

 

“it is clear that serious allegations of fraud arise only if either of the two tests laid down are satisfied and not otherwise. The first test is satisfied only when it can be said that the arbitration clause or agreement itself cannot be said to exist in a clear case in which the court finds that the party against whom breach is alleged cannot be said to have entered into the agreement relating to arbitration at all. The second test can be said to have been met in cases in which allegations are made against the State or its instrumentalities of arbitrary, fraudulent, or mala fide conduct, thus, necessitating the hearing of the case by a writ court in which questions are raised which are not predominantly questions arising from the contract itself or breach thereof but questions arising in the public law domain.”

 

The judgment in Avitel Post Studioz Limited interprets Section 17 of the Contract Act to hold that Section 17 would apply if the contract itself is obtained by fraud or cheating. Thereby, a distinction is made between a contract obtained by fraud, and post contract fraud and cheating. The latter would fall outside Section 17 of the Contract Act and, therefore, the remedy for damages would be available and not the remedy for treating the contract itself as void.



Who decides 'non-arbitrability'?

To arrive at the answer, the Supreme Court has examined the following circumstances:

(i)          when a request for reference to arbitration is sought before a civil court (section 8),

(ii)         when an application for appointment of an arbitrator is made (section 11),

(iii)        when arbitration has commenced but statement of defense is yet to be filed (section 16), and

(iv)        when an arbitral award is sought to be set aside (section 34).

Since the 2016 amendment of the Act, a court, under section 8, is statutorily required to examine the validity of the arbitration agreement. Under section 16, an arbitrator is empowered to decide on arbitrability. Should the question of arbitrability be decided in favour of the claimant, the defense may appeal under section 34 and challenge arbitrability only after publication of award.

As for section 11, the judicial view has evolved in four phases since the enforcement of the Act. Until 2005, the SC was of view that appointment of an arbitrator under section 11(6) was merely an administrative order. In 2005, a constitutional bench of the Supreme Court constituting Seven (7) judges in a matter reported as SBP & Co. Vs Patel Engineering Ltd & Anr[vi]  overruled this ratio. Thus, the scope of the courts under 11(6) was interpreted11 as follows:

“the court must look into its own jurisdiction, existence of arbitration agreement and arraying of appropriate parties. The court may examine if the claim is time barred and whether the contracted is concluded. However, the court shall not consider the arbitrability and merits of the claim. It was also held that should an objection as to the arbitrability be raised on the ground that agreement was obtained by fraud, etc., the court would then be required to consider its validity”.

With the amendment of the Act in 2016, the scope of courts under section 11(6) was curtailed with the introduction of Section 11 (6A) which required that a court must confine its findings only to the extent of existence of an arbitration agreement. Section 11(6A) later came to be omitted by way an amendment in August 2019.

With the above history in mind, Vidya Drolia, examines the principles of separability and competence-competence in the context of section 16 and held that 'the courts at the referral stage do not perform ministerial functions.' Section 16 gives the arbitration clause a life of its own. Therefore, for the purposes of both sections 8 and 11, 'the courts at the referral stage are not to decide on merits, except when permitted by the legislation either expressly or by necessary implication, such questions of non-arbitrability.'

While distinguishing between validity and arbitrability, the Supreme Court held that:

'only when the court is certain that no valid arbitration agreement exists or the disputes/subject matter are not arbitrable, the application under section 8 would be rejected. At this stage, the court should not get lost in thickets and decide debatable questions of facts. Referral proceedings are preliminary and summary and not a mini trial.'

The Supreme Court steered clear from commenting on whether an on-going arbitration under section 8(3) must be stayed or deferred during the pendency of application under section 8(1).

With respect to section 11The Supreme Court in Vidya Drollia( Supra) has held that mandate for a court is to satisfy itself as to the existence of an arbitration agreement. However, with abundant caution, the Supreme Court  further states that 'The court is not powerless and would not act beyond jurisdiction, if it rejects an application for reference, when the arbitration clause is admittedly or without doubt is with a minor, lunatic or the only claim seeks a probate of a will.'

In effect, it is the arbitrator who has the authority under section 16 to consider arbitrability of a dispute. Once held to be arbitrable, the baton then gets passed on to the court under section 34 only for a 'second-look' on the question of arbitrability. While entertaining applications under sections 8 and 11, courts must restrict their examination to the existence of an arbitration agreement and not embark on determining arbitrability of the dispute. The judicial precedents on section 11 set prior to the 2016 amendment are no longer applicable despite the 2019 amendment.

Lastly, while considering the principles applicable in interpretation of arbitration clauses, the SC held that in purely commercial disputes, the principle of liberal interpretation must be adopted.

The Supreme Court has thus propound a fourfold test for determining when the subject matter of a dispute in an arbitration agreement is not arbitrable:

 

(1) when cause of action and subject matter of the dispute relates to actions in rem, that do not pertain to subordinate rights in personam that arise from rights in rem.

 

(2) when cause of action and subject matter of the dispute affects third party rights; have erga omnes effect; require centralized adjudication, and mutual adjudication would not be appropriate and enforceable;

 

(3) when cause of action and subject matter of the dispute relates to inalienable sovereign and public interest functions of the State and hence mutual adjudication would be unenforceable; and

 

(4) when the subject-matter of the dispute is expressly or by necessary implication non-arbitrable as per mandatory statute(s).

 

According to Supreme Court, these tests are not watertight compartments; they dovetail and overlap, albeit when applied holistically and pragmatically will help and assist in determining and ascertaining with great degree of certainty when as per law in India, a dispute or subject matter is non-arbitrable. Only when the answer is affirmative that the subject matter of the dispute would be non-arbitrable.                       

CONCLUSION

Therefore what is clear as on today is that in Vidya Drolia (Supra), the Supreme Court has taken a pro-arbitration stance by laying a catena of precedents. Lease deeds are arbitrable if they are not covered by special statutes. The applicability of Transfer of Property Act 1882 shall not bar arbitrability as the same was not construed as special statute, unlike Rent Control Acts. Similarly, it is categorically held that the allegations of fraud can be made subject matters of arbitration, only, when they are in connection with a civil dispute, and do not have the seriousness of circumstances better described under criminal laws. It is the Arbitral Tribunal that has the first authority to determine arbitrability. The 'second-look' over arbitrability is conferred to the courts under section 34 of the Act. F course, the courts are not precluded , albeit as rare exercise of power to protect parties to a dispute and in such apt cases , the courts may, under sections 8 and 1 of the Act may examine arbitrability, when the very validity of arbitration agreement is put to question.                                  --------------

                                                    Anil K Khaware
                                                    Founder & Senior Associate
                                                    societylawandjustice.com

[i]AIR (2019) SC 3498

[ii](2011) 5 SCC 532

[iii](2017) 10 SCC 706

[iv]Civil Appeal No. 5145 of 2016(Supreme Court)

[v](2010) 1 SCC 72

[vi](2005) 8 SCC 618  

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