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Madhya Pradesh High Court · body

2005 DIGILAW 568 (MP)

Dabur India Ltd. v. Shreekrishna

2005-05-02

N.K.MODY

body2005
Judgment ( 1. ) BEING aggrieved by the order dated 17-1-2005 passed by Second Additional District Judge, Alirajpur in Civil Suit No. 2b/2004, whereby the application filed by the petitioner under Section 8 (1) of the Arbitration and Conciliation Act, 1996 which shall be referred hereinafter as Act of 1996 was dismissed, the present petition has been filed. ( 2. ) SHORT facts of the case are that respondents filed the suit for relaxation of Rs. 80,000. 00 alongwith interest on 23rd of August, 2004, wherein it was alleged that respondents entered into an agreement dated 15-2-1995 whereby the petitioner was appointed as Stockiest. It is further alleged that since there was a dispute, therefore suit for realisation of above amount was filed. During pendency of the suit, petitioner moved an application (Annexure A-2) under Section 8 (1) of the Arbtiration and Conciliation Act, 1996, wherein it is alleged that there was a clause of arbitration in the agreement itself, therefore, it was prayed that the matter be referred to the Arbtiration Tribunal. ( 3. ) LEARNED Counsel for the respondent submits that the application filed by the respondents was opposed on the ground that no agreement has taken place as the agreement was not containing the signature of the respondent. After accepting the contention raised by the respondents, the application filed by the petitioner was rejected. ( 4. ) BEING aggrieved by the impugned order passed by Learned Court below, petitioner has filed the present petition. ( 5. ) LEARNED Counsel for the petitioner submits that the case of the petitioner is covered under the provisions of the Act of 1996. It was further submitted that the word "arbitration Agreement " has been defined in the Arbitration Act, 1940 which reads as under : "2. Definitions.- In this Act, unless there is anything repugnant in the subject or context, (a) "arbitration agreement" means a written agreement to submit present or future differences to arbitration whether an arbitrator is named therein or not. " ( 6. ) IT was further submitted that in the New Act of 1996 the Arbitration Agreement has been defined under Section 2 (1) (b) which reads as under : "2. Definitions.- (i) In this Part, unless the context otherwise requires : (b) "arbitration agreement" means agreement referred to in Section 7. " ( 6. ) IT was further submitted that in the New Act of 1996 the Arbitration Agreement has been defined under Section 2 (1) (b) which reads as under : "2. Definitions.- (i) In this Part, unless the context otherwise requires : (b) "arbitration agreement" means agreement referred to in Section 7. " Section 7 of the Arbitration and Conciliation Act, 1996 reads as under:" ( 7. ) ARBITRATION agreement.- (1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in : (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. (5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract. " 7. Learned Counsel for the petitioner submits that from perusal of Section 7 of the Act, it is evident that the document is either required to be signed by the parties or an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement shall be treated as agreement. Learned Counsel for the petitioner submits that in the case reported in ,, AIR2003 SC 2881 , 2003 (5 )ALD26 (SC ), 2003 (2 )ARBLR666 (SC ), 2003 (4 )AWC2674 (SC ), 2003 (3 )BLJR2433 , (2003 )4 Complj311 (SC ), 2003 (3 )CTC438 , [2003 (4 )JCR140 (SC )], JT2003 (6 )SC 1 , (2003 ) 135 PLR746 , 2003 (5 )SCALE402 , (2003 )6 SCC503 , [2003 ]46 SCL337 (SC ), 2003 (2 )UJ1299 (SC ), Hindustan Petroleum Corp. Ltd. v. Pinkcity Midway Petroleums, in which no where stated that the agreement should be signed by the parties. Learned Counsel submits that the Honble Supreme Court has held that the language of Section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if as contended by a party in an agreement between the parties before the Civil Court, there is a clause for arbitration, it is mandatory for the Civil Court to refer the dispute to an arbitrator. It was further observed that in the instant case, the existence of an arbitral clause in the agreement is accepted by both the parties as also by the Courts below by the applicability thereof is disputed by the respondent and the said dispute is accepted by the Courts below. Be that as it may, at the cost of repetition, we may again state that the existence of the arbitration clause is admitted. If that be so, in view of the mandatory language of Section 8 of the Act, the Courts below ought to have referred the dispute to arbitration. Section 16 was empowered the Arbitration Tribunal to rule on its own jurisdiction including rule on any objection with respect to the existence or validity of the arbitration agreement. ( 8. ) LEARNED Counsel submits that from perusal of Annexure P-3 it is nowhere stated that agreement is required to be signed by the parties. Further reliance has been placed on ,, AIR1996 SC 320 , II (1995 )BC485 (SC ), JT1995 (7 )SC 207 , (1996 )I LLJ288 SC , 1995 (5 )SCALE574 , (1995 )6 SCC279 , [1995 ]supp3 SCR785 , 1996 (1 )SLJ145 (SC ), 1996 (1 )UJ30 (SC ), State Bank of Bikaner and Jaipur v. Prabhu Dayal Grover, wherein, in Para 3 of the agreement it was observed that it is not necessary that it should also be signed by the parties like any formal agreement relating to a contract. Further reliance has been placed on ,, AIR1999 SC 504 , 1999 (1 )ARBLR1 (SC ), (1999 )1 Complj13 (SC ), JT1998 (8 )SC 85 , 1999 (2 )KLT25 (SC ), (1999 ) I MLJ62 (SC ), (1999 )121 PLR842 , 1998 (6 )SCALE197 , (1999 )1 SCC1 , [1998 ]supp3 SCR42 , Rickmers Verwaltung Gmbh v. Indian Oil Corporation Ltd. , wherein the Honble Apex Court has observed that, "even if agreement not signed by the parties, consenses ad idem can be spelt out from contemporaneous correspondence exchanged between the parties". Further reliance has been placed on ,, AIR2002 SC 404 , 2002 (1 )ALT30 (SC ), 2001 (3 )ARBLR487 (SC ), 2002 (1 )AWC115 (SC ), 2002 (50 )BLJR971 , JT2001 (9 )SC 337 , 2001 (7 )SCALE560 , (2002 )1 SCC203 , Kalpana Kothari v. Sudha Yadav and Ors. , wherein it was held that, "provisions of Section 8 are all comprehensive and of a mandatory character". ( 9. ) FROM perusal of the order it is evident that only because the agreement is not signed, the application has been rejected. From perusal of Section 7 of the Act of 1996, it is evident that apart from signatures under Section 7 (4) (b) and (c) of the Act an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statements and defence in which the existence of agreement is alleged by one party and not denied by the other, inference can be drawn that there was an arbitration agreement. Since, all the record is not placed before this Court and is also not taken into consideration while passing the impugned order in view of the law laid down by the Apex Court in the cases of , AIR1999 SC 504 , 1999 (1 )ARBLR1 (SC ), (1999 )1 Complj13 (SC ), JT1998 (8 )SC 85 , 1999 (2 )KLT25 (SC ), (1999 )I MLJ62 (SC ), (1999 )121 PLR842 , 1998 (6 ) SCALE197 , (1999 )1 SCC1 , [1998 ]supp3 SCR42 (supra) and , AIR1996 SC 320 , II (1995 )BC485 (SC ), JT1995 (7 )SC 207 , (1996 )I LLJ288 SC , 1995 (5 )SCALE574 , (1995 )6 SCC279 , [1995 ]supp3 SCR785 , 1996 (1 )SLJ145 (SC ), 1996 (1 )UJ30 (SC ) (supra), the impugned order is set aside with a direction to the Court below to pass a fresh order after giving an opportunity of hearing to the parties to submit all the documents relating to arbitration. ( 10. ) WITH the aforesaid observations, petition is disposed of. C. C. as per rules.