In a significant ruling, the Bombay High Court has clarified that statutory protections granted to tenants under the Maharashtra Rent Control Act, 1999, cannot be sidestepped by invoking the Arbitration and Conciliation Act, 1996, to seek their speedy eviction. Justice Somasekhar Sundaresan, while dismissing a petition filed under Section 9 of the Arbitration Act, emphasized that interim measures under this section are intended to aid arbitral proceedings and cannot be employed to override special statutory frameworks like the Rent Act.
The case was initiated by SJK Buildcon LLP, a developer, which had entered into a Development Agreement on February 12, 2024, with the landlords of a property known as Keni House. As part of this agreement, the landlords appointed the developer as their attorney to handle redevelopment matters, including disputes concerning possession. When some tenants, described as “non-cooperating tenants or illegal occupants” in the petition, resisted vacating their premises, the developer sought the appointment of a Court Receiver to take possession of the property for redevelopment.
The dispute primarily involved legal heirs of deceased tenants, who were already recognized as protected tenants by a binding decree from the Small Causes Court. Among them was Supriya Sengupta, one of the legal heirs, whose occupancy had been the subject of litigation all the way up to the Supreme Court.
The Court noted that the protected tenants were not merely occupants but decree-holders, having secured their tenancy rights through two concurrent rulings of the Small Causes Court, which remained unchallenged. It was also observed that the Landlords, despite being aware of the tenants’ protected status, continued to support the developer's plea for eviction by labeling them as illegal occupants.
Highlighting the fundamental nature of Section 9 of the Arbitration Act, the Court stated:
“The jurisdiction of Section 9 of the Act is one that is in aid of arbitral proceedings. The measures that the Court may issue are meant to be aimed at protecting the subject-matter of the dispute, which is meant to be resolved by arbitration.”
The Court also pointed out that even when third-party interests are impacted, such parties must be heard before any order is passed under Section 9. However, in this case, the Court found no arbitration dispute that justified invoking this provision against the protected tenants.
Further, the Court underlined that the eviction of tenants for redevelopment purposes is an issue governed exclusively by Section 16 of the Maharashtra Rent Control Act. As per the Court, the attempt to remove the tenants through arbitration proceedings was an outright bypass of the lawful jurisdiction of the Small Causes Court, which remains the correct forum for such matters under Section 33 of the Rent Act.
In drawing parallels, the Court cited the Supreme Court’s ruling in Bajarang Shyamsunder v. Rajesh Bajranglal Dabriwala, which had resolved a similar conflict between the Maharashtra Rent Control Act and the SARFAESI Act. The Supreme Court had ruled that the rights of a lawful tenant could not be overridden by another statute merely because it carried a non-obstante clause. Notably, Section 9 of the Arbitration Act does not carry a non-obstante clause at all.
The judgment also addressed the position of Supriya Sengupta, who had been granted time by the Supreme Court to vacate her premises by January 31, 2025. The High Court clarified that since contempt proceedings regarding non-compliance had already been initiated before the Supreme Court, it was not appropriate for the High Court to interfere or issue further directions on this aspect.
Concluding the case, Justice Sundaresan ruled that the Petition could not be entertained under the Arbitration Act for the reliefs sought, stating:
“The jurisdiction of the Small Causes Court cannot be simplistically circumvented by invoking Section 9 of the Act and ignoring the decreed status of the Protected Tenants.”
With this, the Court dismissed the developer’s petition without granting any interim reliefs and firmly reinforced the tenants' statutory protections under the Maharashtra Rent Control Act.
Case Title: SJK Buildcon LLP vs Kusum Pandurang Keni & Ors.
Case Number: Commercial Arbitration Petition (L) No. 20834 of 2024
Coram: Justice Somasekhar Sundaresan
Judgment Date: April 16, 2025
For Petitioner: Mr. Mayur Khandeparkar a/w Sarthak Utangale i/b M/s. Utangale & Co.
For Respondent Nos. 1 & 2: Mr. Abhishek Kothari i/b Rishabh Botadra.
