Exclusive Small Causes Court jurisdiction bars arbitration where a licence dispute substantially concerns recovery of possession and continued occupation.

Section 41(1) of the Presidency Small Cause Courts Act, 1882 gives the Court of Small Causes exclusive jurisdiction over disputes between licensor and licensee relating to recovery of possession of immovable property, licence fee or charges. The expression "relating to" is to be read broadly, so the court must look to the real nature of the dispute, its foundation and the reliefs sought rather than the form of the pleadings. Where a licensee under a leave and licence agreement seeks renewal, continuation of possession and injunctions against termination, eviction and interference, the dispute is substantively one for recovery of possession and falls within Section 41(1). The special forum is not displaced by the arbitration clause.

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Issues: Whether a dispute arising out of a leave and licence agreement, in which the licensee sought renewal and protection against termination and recovery of possession, was barred from arbitration by Section 41 of the Presidency Small Cause Courts Act, 1882.

Analysis: Section 41(1) confers exclusive jurisdiction on the Court of Small Causes in suits and proceedings between licensor and licensee relating to recovery of possession of immovable property or licence fee or charges. The expression "relating to" is of wide amplitude and requires the Court to examine the real nature of the dispute, its foundation, and the reliefs sought, ignoring the form in which the pleadings are framed. Where the parties stand in a pre-existing licensor-licensee relationship and the licensee seeks continuation of that relationship, along with injunctions restraining termination, eviction, and interference with possession, the dispute is substantively one relating to recovery of possession. The exception in Section 41(2) does not extend to the Arbitration and Conciliation Act, 1996 so as to override the special forum created by Section 41(1). The arbitration clause cannot, therefore, be invoked to confer jurisdiction on the arbitral tribunal over such a dispute.

Conclusion: The dispute was held to fall within the exclusive jurisdiction of the Court of Small Causes under Section 41(1) of the Presidency Small Cause Courts Act, 1882, and arbitration was barred; the petition was dismissed.

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