JUDGMENT 1. Three applications appeared in the cause list marked under one number for analogous hearing. There were two applications marked G.A. No. 2894 and G.A. No. 3294, made by The Peerless General Finance & Investment Company Limited. In the first application, the petitioner had prayed for an order for attachment before judgment, injunction and receiver. The prayer in the second application was for judgment upon admission. The third application, which had appeared in the cause list, was made by Mohon Gold Water Breweries Limited, the only contestant in these applications and shall be referred as the respondent hereafter. This application had been made under Section 8 of the Arbitration and Conciliation Act, 1996 with a prayer to stay the suit and, in terms of an arbitration agreement between the parties, refer the disputes to the arbitrator named in the agreement. A joint prayer was made by Counsels for the parties, and the third application mentioned above was taken up for hearing. 2. The facts of the matter of course were strictly not necessary to be gone into by Court in deciding this application. In order to appreciate the true scope of this application however, it would in my view be convenient to be appraised of the bare facts of the case. Pursuant to a Memorandum of Understanding dated May 5, 1992, which shall be referred hereinafter as M.O.U., the parties had subsequently entered into two agreements dated May 26, 1992 and June 4, 1992. In terms of the two agreements, it had been alleged by the respondent that it had paid and the petitioner had received, between June 5, 1992 and March 30, 1995, diverse sums of money which together with interest amounted to an aggregate sum of Rs. 11,76,37,138.67p. Except for a sum of Rs. 10,86,272.00p. according to the respondent no part of its dues had been paid by the petitioner in spite of demands. In those circumstances, the respondent had called back the advance and instituted this suit on July 7, 1997 before this Court, which has been marked C.S. No. 262 of 1997. 3. It had been alleged by the petitioner, that there was an arbitration agreement between the parties and the alleged disputes and differences in respect to which the respondent had instituted the suit ought to be referred to the agreed arbitrator for his decision. 3. It had been alleged by the petitioner, that there was an arbitration agreement between the parties and the alleged disputes and differences in respect to which the respondent had instituted the suit ought to be referred to the agreed arbitrator for his decision. The arbitration clause being part of Clause 7 in the M.O.U., Contended counsel for the petitioner, had been clearly and specifically incorporated in the two agreements by reason of the fact that in the agreement dated May 26, 1992, the parties had agreed that the M.O.U. would form part of the agreement. Therefore, he submitted that by valid incorporation of the M.O.U. the arbitration clause contained in the M.O.U. must be read into each of the two agreements. He interpreted the arbitration clause in the M.O.U. to be applicable, not just to all disputes and differences between the parties prior to documentation but, as stated in the petition, was also meant to apply to all disputes and differences arising out of or in connection with the said M.O.U. and the said agreements dated May 26, 1992 and June 4, 1992 at all subsequent stages thereafter. In support of his submissions, he cited and relied on the decisions reported in Dwarkadas and Co. vs. Daluram Goganmoll, AIR 1951 Cal 10 ; The Abu Road Electricity and Industries Co. Ltd. vs. Industrial Gases Ltd., AIR 1977 Cal 482 ; and Alimenta S.A. vs. National Agricultural Co-operative Marketing Federation of India Ltd. & another, AIR 1987 SC 643 . The alleged claim, according to him, had been made in the plaint against the petitioner and not against the guarantor who had however, been impleaded as the defendant No. 2, and that though no claim admittedly had been made against the bank, it had been implead as the defendant No. 3 in the plaint for no apparent reason. He submitted that both the defendant Nos. 2 and 3 were unnecessary parties, who had been impleaded only for the purpose of and with intent to avoid the arbitration clause. He argued, that in those circumstances, this Court in accordance with the provisions of Section 8 of The Arbitration & Conciliation Act, 1996 shall refer the parties to arbitration, and that shall will not be taken to mean may. He argued, that in those circumstances, this Court in accordance with the provisions of Section 8 of The Arbitration & Conciliation Act, 1996 shall refer the parties to arbitration, and that shall will not be taken to mean may. In support of his submissions, he cited and relied on the decisions reported in M/s. Srivenkateswara Constructions & other vs. Union of India, AIR 1974 AP 278 ; Biswanath Rungta vs. Oriental Industrial Engineering Co. Pvt. Ltd. & other, AIR 1975 Cal 222 ; Modi Korea Telecommunication Ltd. vs. Appcon Consultants Pvt. Ltd., 1999 (1) CLT 285 ; and 1997 (3) CHN 1. It was contended by counsel for the petitioner that the alleged claim which had been made by the respondent in Paragraph 10 of its plaint, was admittedly not covered by the arbitration agreement as there was no incorporation of the M.O.U. and hence this Court would follow the judicial pronouncement in the decision reported in AIR 1953 Cal 446 and bifurcate the two claims so as to allow both the arbitration proceedings as also the suit to subsist with regard to the respective claims. 4. According to the respondent, the M.O.U. was and understanding between the parties that the parties would enter into an agreement, and the arbitration clause was restricted to questions of documentation only. It was argued by Counsel, that the arbitration clause in the M.O.U. had not been validly incorporated in the agreements between the parties as otherwise the arbitration clause would have been specifically mentioned in the agreements, especially since the agreements contained a clause whereunder for the purpose of jurisdiction, exclusive power to try and determine all disputes between the parties had been conferred on the High Court at Calcutta. It was submitted, that the respondent enjoyed a second charge on the assets of the petitioner including all current and fixed assets which had been hypothecated by way of a first charge in favour of Indian Overseas Bank, and that was precisely why the bank had been impleaded in the suit as a necessary party for complete adjudication of its claim and controversy in the suit. The defendant No. 2, the guarantor; according to the respondent was liable to pay the claim and was, therefore, also a necessary party. The defendant No. 2, the guarantor; according to the respondent was liable to pay the claim and was, therefore, also a necessary party. It was argued by Counsel, that even if it could be assumed that there was a valid incorporation, the arbitration clause would not be binding on the defendant Nos. 2 and 3 and therefore, there could be no question of staying the snit. In accordance with the provisions of Order 34 Rule 1 of the Code of Civil Procedure also, he contended, it was mandatory and of course necessary that the bank ought to be impleaded in the suit. In support of his submissions, he cited and relied on the decisions reported in I.T.C. Classic Finance Ltd. vs. Grapco Mining and Co. Ltd. & another, AIR 1997 Cal 397 ; Dwarkadas and Co. vs. Daluram Goganmoll, AIR 1951 Cal 10 ; The Abu Road Electricity and Industries Co. Ltd. vs. Industrial Gases Ltd., AIR 1977 Cal 482 ; Governor-General in Council vs. Associated Live-Stock Farm (India) Ltd., AIR 1948 Cal 230; Asiatic Shipping Co. (Private) Ltd. vs. P.N. Djakarta Lloyd & another, AIR 1969 Cal 374 ; and (1964) 2 All ER 232. 5. If I may be permitted to consider the first question first, then I would commence by setting out the arbitration clause which the parties admitted was contained in the second paragraph of Clause 7 of the Memorandum of Understanding which I quote below: – "Any dispute and/or difference of opinion between the parties pending the final documentation and/or even thereafter shall be referred to the sole arbitration of Justice A.N. Sen (Retd.) whose decision shall be final and binding." This arbitration clause in the M.O.U., according to the petitioner, had been incorporated in the agreement dated May 26, 1992 by reason of the recital, which read as hereunder: – "AND WHEREAS pursuant to the same a Memorandum of Understanding was entered into between the respondent-company and P.G.F.I. on 5th May, 1992 inter alia embroidering broad terms of these presents which are stated herein. A copy of the said Memorandum of Understanding dated 5th May, 1992 is annexed hereto and is deemed to be the part of this agreement." It was contended on behalf of the petitioner, that the arbitration clause had also been incorporated in the agreement dated June 4, 1992, by reason of the provisions in Clause 2 which provided: – "2. A copy of the said Memorandum of Understanding dated 5th May, 1992 is annexed hereto and is deemed to be the part of this agreement." It was contended on behalf of the petitioner, that the arbitration clause had also been incorporated in the agreement dated June 4, 1992, by reason of the provisions in Clause 2 which provided: – "2. The parties hereby agree that the said advance shall be governed by and subject to the terms contained herein as well as those contained in the Agreement for Loan dated 26th May, 1992." In those facts and circumstances, there could be little doubt that the arbitration agreement, as contained in Clause 7 in the M.O.U. was clear and unambiguous. What was not clear and remained fairly ambiguous, according to the respondent, was whether the parties had intended to and validly incorporated the agreement in, and as contended by the petitioner could be regarded as deemed to be the part of the subsequent agreements. There was indeed consensus between the parties, as would appear from the above quoted portion of the recital in the agreement dated May 26, 1992 that the M.O.U. had been entered into by the parties, inter alia embroidering broad terms of these presents which are stated herein. A positive clarification, that the terms and conditions of the agreement dated May 26, 1992 were framed on the "broad terms" contained in the M.O.U. Indeed there was not even a whisper in the two agreements as to the arbitration clause contained in the M.O.U. Yet, had the parties not agreed in certain terms in the agreement dated May 26, 1992 that the M.O.U. would be deemed to be part of the agreement. It had been contended strongly on behalf of the respondent, that in the agreements, the Calcutta High Court had been given exclusive power to determine any differences and disputes between the parties including suits. Clause 28 of the agreement dated May 26, 1992 provided: – "28. For the purpose of jurisdiction Calcutta High Court shall have exclusively power to try and determine any difference and/or dispute arising out of this contract and no other Courts in India shall have jurisdiction and/or power to determine the scope, terms and purports of this agreement." Similarly, in Clause 11 of the agreement dated June 4, 1992, it had been stipulated between the parties: – "11. This agreement is executed in Calcutta and the money being repayable in Calcutta, the High Court of Calcutta shall have the jurisdiction to entertain any suit or matter arising out of this agreement." From a plain reading of the above two clauses contained in the two agreements it was fairly clear, that the parties had conferred jurisdiction on the Calcutta High Court exclusively to try and determine any difference and/or dispute arising out of this contract including, any suit or matter arising out of this agreement. In fact in the final paragraph of Clause 7 of the M.O.U., the parties had similarly reserved exclusive jurisdiction to the Calcutta High Court and I quote the paragraph here-in-below: – "For the purpose of jurisdiction Calcutta High Court shall have exclusive jurisdiction to try and entertain the disputes, if any, and no other Courts of India shall have any jurisdiction over the same." In other words, the parties had decided that in the event they were required to go to Court either before, during the pendency or even after the arbitral proceedings then the Calcutta High Court shall have exclusive jurisdiction to try and entertain their grievances. There was little substance in the contention by Counsel for the respondents that merely because the parties had conferred jurisdiction on the Calcutta. High Court, the arbitration clause neither was nor could be binding on the parties and had not been validly incorporated in the subsequent agreements. The possibility of the parties having disputes and differences either before during and even after the completion of the arbitration proceedings were always there. It was, and must have been, the intention of the parties that the Calcutta High Court shall have the exclusive jurisdiction in such eventuality. The M.O.U. as also the two subsequent agreements had been drawn up on behalf of the parties, I would dare say, by and upon the advice, the Lawyers who were both trustworthy and competent. Being fully aware of the arbitration clause in the M.O.U., the contention of the respondent that even though the M.O.U. had been agreed as deemed to be the part of, the agreements between the parties, in the absence of specific exclusion, the arbitration clause was neither incorporated in the agreements nor binding on the parties would, in my mind, be frivolous and without any base or basis whatsoever. A reasonable by-stander at the time of execution of the agreements would have without a second thought, understood the parties to have agreed that the arbitration clause in the M.O.U. was incorporated in the agreements and that no further mention in that respect was necessary in the body of the agreements. 6. I would hope that this Court was not being urged to understand the phrase "Any dispute and difference of opinion between the parties pending the final documentation............" to mean that the dispute and difference of opinion which related to documentation only. I am afraid that would be defiling the sanctity of the English language. Not that such atrocity is beyond human prowess. I however, refuse to be a party to it. The remaining portion of the sentence in my view actually clincted the issue, and/or even thereafter shall be referred to the sole arbitration of Justice A.N. Sen (Retd.), whose decision shall be final and binding. Simply put, not only those disputes and differences which arose before the completion of the final documentation but even those which may arise thereafter were to be referred to arbitration. It would be a ridiculous proposition that the parties had agreed to appoint a retired Hon'ble Judge of the Supreme Court of India to arbitrate on disputes relating to documentation of an agreement to lend and advance money. 7. Strong reliance was placed by Counsels for both the parties on the decisions reported in Dwarkadas and Co. vs. Daluram Goganmoll (supra); and The Abu Road Electricity and Industries Co. Ltd. vs. Industrial Gases Ltd. Reliance on behalf of the petitioner was, to substantiate that there had been valid incorporation of the arbitration clause into the subsequent agreements. On behalf of the respondent, the decision had been relied upon in support of its contention that incorporation was not valid because the arbitration clause contradicted the clause in the subsequent agreements where the parties had conferred power to the Calcutta High Court to decide any difference and dispute which may arise between them. On behalf of the respondent, the decision had been relied upon in support of its contention that incorporation was not valid because the arbitration clause contradicted the clause in the subsequent agreements where the parties had conferred power to the Calcutta High Court to decide any difference and dispute which may arise between them. In the decision reported in AIR 1951 Cal 10 , delivering the leading judgment Harris, C.J. concluded: – "From these observations of Lord Esher M.R. and Kay L.J., it is clear that the terms of one contract can be imported into a subsequent contract provided that when they are so imported they are not inconsistent with the terms of the subsequent contract. In so far as the imported terms are inconsistent with the terms of the subsequent contract they must be discarded but if they are consistent with the terms of the subsequent contract then they are rightly included in that subsequent contract." In AIR 1977 Cal 482 , in His Judgment Datta, J. laid down three principles regarding incorporation of the provision of one agreement into another agreement. Since the subject-matter of the M.O.U. and the subsequent agreements was loan, the third principle relating to the subject-matter of the two agreements being germain, does really concern this instant case. The other two principles are set out below: – "(a) A clause in an earlier contract can be imported into a subsequent contract if the language is appropriate, unambiguous and clear. (b) Such clause in the earlier contract can be written in bodily into the later contract if there is no inconsistency or vagueness or uncertainty." In the same decision, the Hon'ble Judges had held: – "Thus where, as in the instant case, the parties are aware of the arbitration clause of an earlier contract, the subject-matter of which is different from the contract which is being entered into by them, incorporates the terms of the earlier contract by reference by using general words, we do not thing there would be any bar to such incorporation merely because the subject-matters of the two contracts are, different unless however, the incorporation of the arbitration clause will be insensible or unintelligible." Both in the M.O.U. as also in the two agreements, the parties had agreed to confer jurisdiction to the Calcutta High Court and that the M.O.U. was deemed to be part of the agreements. Therefore, to read the arbitration clause as incorporated in the agreements, I would be inclined to hold was neither inconsistent nor vague or uncertain by any standard. The language in the subsequent agreement in my way of thinking, incorporating the clauses contained in the M.O.U. was quite appropriate, unambiguous and clear. It was quite commercial for the parties to have agreed to arbitration to resolve disputes between the parties as because the process was more likely to be expeditious and less expensive. 8. The suit which the respondent had instituted was not in the nature of a mortgage suit. Mortgage has been defined in Section 54 of the Transfer of Property Act as transfer of an interest in specific immoveable property. A charge on fixed assets would hardly come within the definition of a mortgage. No submission was made by Counsel for the respondent in that respect. No relief had been claimed against the bank, and nothing prevented the respondent from serving a notice on the bank in respect to the arbitration proceedings. The bank could hardly be said to be a necessary party. In any case impleading the bank as a necessary party would arise only if the respondent was in law entitled to file the suit. The guarantor was liable jointly and severally with the petitioner for the repayment of the loan to the respondent. The arbitration clause was not binding on him and that was conceded by Counsel for the petitioner. Nothing prevented the respondent from proceeding with the suit against the guarantor, at least I could not find any reason why there was so much objection on the part of the petitioner in the matter of bifurcation. The law as it stood as on date clearly was, that there was no absolute rule as to bifurcation and whether the Court would allow bifurcation would be decided by the Court on the basis of the facts and circumstances before it. 9. In those circumstances, I would be inclined to hold that the terms and conditions in the Memorandum of Understanding dated May 5, 1992 including the arbitration clause had been validly incorporated by specific reference in the agreement dated May 26, 1992 and accordingly later in the agreement dated June 4, 1992 and the petitioner and the respondent were bound by such arbitration agreement. I am also of the view that the circumstances of this case well warrants an order for bifurcation so that the arbitration proceedings may continue between the petitioner and the respondent, and the respondent may proceed with the suit against the guarantor. As to the contention by the respondent that the suit was a mortgage suit, I have expressed my views earlier and I hold that the suit was not a mortgage suit and the bank was not a necessary party. 10. For those reasons there shall be an order in terms of Prayers (a) and (b) of the petition. All interim orders made in the suit shall stand vacated. 11. By reason of this order there shall be no order in the two applications made by the petitioner, to which I have referred earlier in this order. All three applications are accordingly disposed of by this order. 12. The petitioner shall be entitled to the costs of this application which is assessed at 300 Gms. A xerox copy of this judgment duly signed by the Assistant Registrar of this Court be made available to the parties upon the understanding of their Advocates-on-Record to apply for and obtain certified copy thereof on payment of the usual charges.