Tenancy Disputes Under 2001 Act Non-Arbitrable, Rent Tribunal Has Exclusive Jurisdiction: Rajasthan HC

The Rajasthan High Court on 22 May held that landlord–tenant disputes governed by the Rajasthan Rent Control Act, 2001 are non-arbitrable and fall within the exclusive jurisdiction of the Rent Tribunal, even where the lease agreement contains an arbitration clause.

A Division Bench of Justices Arun Monga and Sandeep Shah, however, set aside the Commercial Court's order and restored the arbitral award in favour of the legal representatives of late Ramesh Chandra Patel against City Pulse Enterprise Private Limited on procedural grounds relating to Section 29A of the Arbitration and Conciliation Act, 1996. It observed:

“under the Rajasthan Rent Control Act, 2001, a tenant enjoys certain statutory protections and can be evicted only on the grounds specified under Section 9 of the Act of 2001 and not otherwise. This, coupled with the language employed under Sections 18 and 29 of the Act of 2001, leaves no manner of doubt that insofar as disputes between landlord and tenant are concerned, including matters ancillary thereto, neither the Civil Court nor any other authority would have jurisdiction to adjudicate upon the same and such disputes are liable to be decided exclusively by the Rent Tribunal in accordance with the provisions of the Act of 2001. Thus, the dispute in question was liable to be adjudicated only by the Rent Tribunal and was not arbitrable.”

The dispute arose from a sub-lease agreement dated 9 April 2009 executed between the predecessors of the Patel family and City Pulse Enterprise Private Limited concerning a 34,900 sq. ft. property at Fatehpura, Village Dewali, Udaipur. The lease was initially for 50 years, later extended to 75 years on 20 April 2011, and further extended to 90 years through an extension deed dated 09 January 2016. City Pulse Enterprise was required to pay monthly rent of Rs. 6 lakh along with periodic escalation.

According to the landlords, the company defaulted on lease rentals, utility charges, and urban development tax after 1 March 2020. The agreement contained an arbitration clause under Clause 5(e), providing for resolution of disputes through a sole arbitrator seated at Udaipur.

Following disputes, the landlords approached the High Court under Section 11 of the Arbitration Act for appointment of an arbitrator. On 3 August 2022, Justice R.S. Jhala (Retd.) was appointed as sole arbitrator by consent of parties. After his withdrawal upon appointment to the Rajasthan Human Rights Commission, Justice N.N. Mathur (Retd.) was appointed as substitute arbitrator on 18 August 2023.

The arbitral tribunal passed its award on 31 July 2024 in favour of the landlords and rejected the counterclaim of City Pulse Enterprise. The company challenged the award under Section 34 before the Commercial Court at Udaipur, which set aside the award on 25 February 2026, holding that the arbitral mandate had expired under Section 29A and that the dispute fell within the exclusive jurisdiction of the Rent Tribunal.

The landlords challenged this order before the High Court under Section 37. Senior Advocate Vikas Balia, appearing for the landlords, argued that City Pulse Enterprise had waived jurisdictional objections by consenting to arbitration, participating in proceedings, and filing a counterclaim without invoking Section 16 of the Arbitration Act.

He further argued that an application seeking extension of the arbitral mandate under Section 29A was already pending before the High Court when the Commercial Court passed its order.

The High Court reiterated that disputes governed by the Rajasthan Rent Control Act, 2001 are non-arbitrable and fall within the exclusive jurisdiction of the Rent Tribunal. However, it held that the Commercial Court erred in setting aside the award solely on the ground of expiry of mandate under Section 29A while an extension application was already pending consideration.

Relying on Booz Allen and Hamilton Inc. v. SBI Home Finance Limited & Ors. and earlier precedents, the Court reaffirmed that tenancy disputes under special rent control statutes are non-arbitrable. At the same time, it clarified that the award could not have been invalidated merely on the Section 29A ground in the manner adopted by the Commercial Court, and at best its enforceability would depend on the outcome of the pending extension application.

Accordingly, the High Court quashed the Commercial Court's order dated 25 February 2026 and restored the arbitral award dated 31 July 2024.

Appearances for appellants (Legal Representatives of Late Shree Ramesh Chandra Patel): Senior Advocate Vikas Balia; Advocates Mrigraj Singh Rathore, Anshuman Mohapatra, Praveen Singh Rathore.

Appearances for respondent (City Pulse Enterprise Private Limited): Advocates Vinish Mittal, Aditi Moad.