CALCUTTA HIGH COURT DISMISSED SECTION 8 APPLICATION DUE TO NON-RENEWAL OF ORIGINAL AGREEMENT; ARBITRATION CANNOT BE INFERRED FROM PARTIES' CONDUCT ALONE

The Calcutta High Court in the case Tarit Mitra and Anr. vs Sharad Goenka observed and has adjudicated on the matter which involves a civil suit for possession of premises from the tenants and an application made under Section 8 of the Arbitration and Conciliation Act, 1996 by the tenants seeking to refer the dispute to arbitration based on the tenancy agreement which had expired a few years ago and was not novated or renewed.

The High Court in the case observed and has emphasized that while the tenancy may be established by conduct, arbitration cannot be inferred from the parties' conduct alone.

The bench headed by Justice Sugato Majumdar in the case stated that the existed no arbitration agreement within the meaning of section 7 of the Act.

Facts of the Case; The Defendant, Mr Sharad Goenka entered into a monthly tenancy agreement in 2006 with the original landlady for the premises in question. Thus, the said agreement was valid for 5 years and the two incidental agreements regarding the tenancy were also signed along with the main agreement. All these agreements contained an arbitration clause to refer any dispute to arbitration. The original lady passed away in 2012 and left behind her legal heir Joy Mitra who also passed away 6 years later.