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2007 DIGILAW 1900 (DEL)

RUCHI SOYA INDUSTRIES LTD. v. MADAN EXIM (P) LTD.

2007-11-20

BADAR DURREZ AHMED

body2007
JUDGMENT IA No. 4851/2007 in CS (OS) 177/2007 Badar Durrez Ahmed, J.:- This is an application under Section 8 of the Arbitration and Conciliation Act, 1996 filed on behalf of the defendant for reference of the disputes to arbitration. According to the learned Counsel for the defendant, the suit filed by the plaintiff for recovery of Rs. 74,55,585/- from the defendant is based on several agreements entered into between the plaintiff and the defendant and/ or the sister concern of the defendant. The agreements being 1.11.2000, 31.12.2001 and 1.8.2002. The learned Counsel for the defendant also submits that a lease agreement had also been entered into between the parties on 4.7.2003. It is contended by the learned Counsel that the agreements dated 1.11.2000, 31.12.2001 and the lease agreement dated 4.7.2003 contain arbitration clauses. The only agreement which does not contain an arbitration clause is the one dated 1.8.2002. He submits that the plaintiff has filed the suit basing its claim on a running account being maintained between the parties which had been maintained since the year 2000 as a result of the first agreement dated 1.11.2000. He submits that since the running account between the parties is the subject matter of the suit and that the running account has reference to the agreements dated 1.11.2000 and 31.12.2001 as both contained arbitration clauses, the matter was referable to arbitration and the defendant has rightly invoked the provision of Section 8 of the Arbitration and Conciliation Act, 1996. He also submits that the lease agreement also contains an arbitration clause and the transaction between the parties also included the lease arrangement that has been entered into between them. 2. The learned Counsel for the plaintiff contended that the agreement dated 1.11.2000, 31.12.2001 and 1.8.2002 existed at different points of time. The sequence was that first there was the agreement dated 1.11.2000 which terminated by efflux of time. Then came the agreement dated 31.12.2001, which also terminated by efflux of time and, finally, came the agreement dated 1.8.2002 in respect of which the present suit has been filed. The learned Counsel for the plaintiff submitted that at the time the agreement dated 1.8.2002 was entered into, there was no dispute between the parties in respect of their dealings. The disputes have arisen only subsequently. The learned Counsel for the plaintiff submitted that at the time the agreement dated 1.8.2002 was entered into, there was no dispute between the parties in respect of their dealings. The disputes have arisen only subsequently. Insofar as the lease agreement dated 4.7.2003 is concerned, the learned Counsel for the plaintiff contended that the same has also expired through efflux of time on 15.1.2004 and no claim whatsoever is based on that lease agreement. Consequently, the only agreement in respect of which the suit has been filed is the agreement dated 1.8.2002 which admittedly does not contain an arbitration clause. 3. Having heard the Counsel for the parties, I am inclined to agree with the submissions made by the learned Counsel for the plaintiff. The agreements were sequenced in time and the later agreements supplanted the earlier agreements even if they did not expire by efflux of time. Consequently, the surviving agreement describing the commercial relationship between the parties was the agreement dated 1.8.2002. Admittedly, that agreement did not contain any arbitration clause. The parties were conscious of the fact that the earlier agreements had contained the arbitration clause and being conscious of this, they entered into the agreement dated 1.8.2002 without insisting upon an arbitration clause. The intention of the parties is clear that they do not want arbitration. Insofar as the lease agreement is concerned, this is a separate and parallel transaction on which the plaintiff does not found his claim at all. The result of this discussion is that there is no arbitration clause governing the dispute between the parties and, consequently, this application is liable to be dismissed. It is dismissed. 4. The learned Counsel for the defendant seeks time to file the written statement. The same be filed within four weeks. The replication, if necessary, be filed within two weeks thereafter. 5. List before the Joint Registrar on 22.1.2008 for admission/ denial of documents. The parties may file the documents before that date. After completing the admission/ denial of documents, list before Court for framing of issues on 28.3.2008. Application dismissed.