Jaspal Singh, J. ( 1 ) THIS petition under Section 3 of the Foreign Awards (Recognition and Enforcement) Act, 1961 isproving to be quite thorny. It has witnessed lot of fire-workeven on the question as to whether I should frame issues or notand that if I should, what those issues should be. And, as ifall this was not enough, they expect me) to pass a speakingorder too. ( 2 ) AS we all know issues are framed to shorten the arenaof dispute and to ascertain and pin point where the two sidesdiffer so that no party to the suit is taken by surprise. Sincethe court should not determine an issue which does not ariseon the pleadings, it is essential to the right decision of a casethat appropriate issues are framed. The general principle oflaw seems to be that issues arise when a material propositionof fact or law is affirmed by one party and denied by the other andthat there must be a distinct issue for each material proposition of law or fact affirmed by one party and denied by theother. One thing more. It is primarily the duty of the Judgeto frame the issues in the case. ( 3 ) THE position in law being what has generally been noticed above, let me now proceed to first unfold the facts. ( 4 ) ONE Mr. D. P. Barua who was an executive in the emplovment of I. T. C. Ltd. entered into a so-called Corporationagreement. dated 11/09/1990 purportedly on behalfof the I. TC. Ltd. to purchase the shares held by one Mr C L. Anand and his Associates in the Company known as Toshibaanand Batteries Ltd. I. T. C. Ltd. claims that Mr. D. P. Baruawas never authorised by it to enter into the Agreement, that itwas never placed before the Board of Directors of the Company, that it would not have been sanctioned even otherwiseit being against its interests and that on 19-2-1991 the Boardof Directors of I. T. C. Ltd. had recorded that the Agreementwas ultra-vires and not binding on it. It further claims thateven after the so-called Agreement, negotiations had continuedand that consequently the said Agreement could not be takento be a concluded contract and, in any case, the said Agreement was given a go-bye by the parties and was never actedupon and that even otherwise it was illegal and void beingagainst the laws of the land. It further claims thateven after the so-called Agreement, negotiations had continuedand that consequently the said Agreement could not be takento be a concluded contract and, in any case, the said Agreement was given a go-bye by the parties and was never actedupon and that even otherwise it was illegal and void beingagainst the laws of the land. ( 5 ) IT appears that the Agreement aforesaid contains an Arbitration Clause as well and that taking advantage of the same,mr. C. L. Anand has taken steps for irrigation of arbitrationproceedings by approaching the International Chamber of Commerece. Hence the petition by I. T. C. Ltd. under Section 33of the Arbitration Act challenging the existence and validityof the Agreement and the Arbitration Clause. ( 6 ) IN response to the petition an application has been moved byrespondent No. 1 Mr. C. L. Anand under Section 3 of the Foreignawards (Recognition and Enforcement) Act, 1961 (hereinaftercalled the Act) alleging that the Agreement had been validly enteredinto, that it had been ratified and acted upon by the petitioner andfurther that it is estopped from challenging its validity, effect andexistence as also the Arbitration Clause and is bound by the sameand that in any case the International Court of Arbitration can gointo the pleas concerning the existence or validity of the agreementto arbitrate. ( 7 ) THE battle-lines are thus clearly drawn. While the petitioneritc Ltd. challenges the validity, effect and existence of the Agreement as also the Arbitration Clause on the ground that Mr. Baruahad no authority, that it was rejected by the Board of Directorswho never acted upon and was even otherwise null and void ananot binding on it, the applicant Mr. C. L. Anand refutes all this. ( 8 ) DURING arguments it was suggested that as the Internationalcourt of Arbitration itself can go into the pleas concerning the existence or validity of the agreement to arbitrate, I should rather refrain from looking into these questions. ( 9 ) AS pointed out by the Supreme Court in Renusagar Power Co. Ltd. v. General Electric Co. ( 8 ) DURING arguments it was suggested that as the Internationalcourt of Arbitration itself can go into the pleas concerning the existence or validity of the agreement to arbitrate, I should rather refrain from looking into these questions. ( 9 ) AS pointed out by the Supreme Court in Renusagar Power Co. Ltd. v. General Electric Co. (1984) 4 SCC 679 (1), the scheme thatemerges on a combind reading of Sections 3 and 7 of the Foreignawards Act clearly contemplates that questions of existence, validityor effect (scope) of the arbitration agreement itself, in cases wheresuch agreement is wide enough to include within its ambit such questions, may be decided by the arbitrators initially but their determination is subject to the decision of the court and such decision of thecourt can be had either before the arbitration proceedings commenceor during their pendency, if the matter is decided in a Section 3petition or can be had under Section 7 after the award is made andfiled in the court and is sought to be enforced by a party thereto. Ithas further been observed therein that in a section 3 petition thecourt has to decide the question of arbitrator s jurisdiction and suchdecision will be conclusive and binding on the arbitrator. This beingthe position I am: not inclined to decline to decide the dispute involved. ( 10 ) A few more things need to be noticed. Section 3 of the Actmakes it obligatory upon the court to pass the order staying the legalproceedings commenced by a ,party to the agreement if the conditionsthereto are fulfilled. And, what are those conditions ? The Supremecourt in Renusagar s case (supra) enumerates them for us. They are : (I) There must be an agreement to which Article III of theconvention set forth in the Schedule applies. (It is notdisputed that this is so in the instant case); (ii) a party to that agreement must commence legal proceedings against another party thereto. (It is again notdisputed that Renusagar and G. E. C. are the two partiesto the arbitration agreement and that Renusagar hascommenced legal proceedings against G. E. C. by filingsuit 832 of 1982); (iii) the legal proceedings must be "in respect of any matteragreed to be REFERRED TO arbitration" in such agreement. (It is again notdisputed that Renusagar and G. E. C. are the two partiesto the arbitration agreement and that Renusagar hascommenced legal proceedings against G. E. C. by filingsuit 832 of 1982); (iii) the legal proceedings must be "in respect of any matteragreed to be REFERRED TO arbitration" in such agreement. (The question whether this condition is fulfilled hereneeds to be decided); (iv) the application for stay must be made before filing thewritten statement or taking any other step in the legalproceedings. (Admittedly this condition is fulfilled); (v) the Court has to be satisfied that the- agreement is valid,operative and capable of being performed; this relatesto the satisfaction about the "existence and validity" ofthe arbitration agreement. (In the instant case thesequestions do not arise); (vi) the court has to be satisfied that there are disputes between the parties with regard to the matters agreed tobe referred; this relates to effect (scope) of the arbitration agreement touching the issue of arbitrability of theclaims. It will have to be dealt with while consideringthe satisfaction of condition (iii) above.)AS would be borne out from above, the petitioner I. T. C. Ltd. has urged that condition (v) is not satisfied while the applicantdenies it. It has thus become necessary for me to give decision andsince disputed questions of law and fact have been raised hence theneed to frame issues. ( 11 ) AS per Mr. Sanghi if at all the issues need to be framed Ishould proceed to frame only one issue namly : (1) Whether there is a valid subsisting arbitration agreement between the parties ? ( 12 ) AS noticed by me in the introductory part of this orderthe court must frame a distinct issue for each material propositionof law or fact affirmed by one party and denied by the other. Thisis what Order 14 of the Code of Civil Procedure requires. However, while dealing with a Section 3 petition ). It would not beeach and every proposition of law or fact arising on the pleadingswhich would need framing of an issue. The Court has to confineitself to the conditions required to be fulfilled for invoking Section3 and thus whatever be the range of the pleadings, the issues to beframed would be relevant to and limited by the said conditions. It would not beeach and every proposition of law or fact arising on the pleadingswhich would need framing of an issue. The Court has to confineitself to the conditions required to be fulfilled for invoking Section3 and thus whatever be the range of the pleadings, the issues to beframed would be relevant to and limited by the said conditions. Keeping In view what has been noticed by me above, I framethe following issues : (1) Whether there is a valid subsisting arbitration agreement ? Onus on Applicant. (2) Whether D. P. Barua had the authority to enter intoarbitration agreement. If so to what effect ? Onus onapplicant. (3) What is the effect of the rejection of the Agreement bythe Board of Directors of I. T. C. Ltd. Onus on petitioner company. (4) Whether the Agreement dated 11/09/1990had been given a go bye by the parties and was neveracted upon by them ? If so, to what effect ? Onuson Petitioner Company. (5) Whether the Agreement dated 11/09/1990was not a concluded contract. If so to what effect ?onus on Petitioner Company. Whether non-compliance with the provisions of Section372 of the Companies Act, 1956 and of other laws ofindia render die Agreement dated 11/09/1990of no effect, null and void and not binding on I. T. C. Limited ? Onus on Petitioner Company. (7) Relief.