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2007 DIGILAW 543 (UTT)

ESCORTS FINANCE LIMITED v. SANDEEP GOYAL

2007-11-05

PRAFULLA C.PANT

body2007
JUDGMENT Hon. Prafulla C. Pant, J. Heard learned counsel for the parties. 2. By means of this writ petition, the petitioner has sought writ in the nature of certiorari quashing the order dated 20th June 2006, passed in Civil Suit No. 27 of 2004, by learned Civil Judge (Senior Division), Pauri Garhwal, rejecting the application 72-C, moved by the defendant (present petitioner). 3. Brief facts of the case are that the plaintiffs (present respondents) instituted aforesaid civil suit before the trial Court for injunction against the defendant/petitioner, restraining them from interfering in the possession of machines purchased by them, from the defendant. It appears that temporary injunction application was moved in the Suit and the trial court granted temporary injunction in favour of the plaintiff/respondents. Aggrieved by said order, the defendant filed in the earlier round of litigation Appeal from Order No. 478 of 2004. The said Appeal from Order was decided on 7th July 2005, affirming the application for temporary injunction. Meanwhile, the defendant/petitioner had moved application i.e. application under Section 5 read with Section 8(1) of the Arbitration and Conciliation Act, 1996, in March 2005, praying that the suit be dismissed, as the dispute between the parties is cognizable by the Arbitrator under the Arbitration Clause entered into between the parties. Said application was heard on merits by the trial court, which rejected the application on the ground that while deciding the application for temporary injunction, the defendant/petitioner had not raised the plea that the dispute was cognizable by the Arbitrator under the Arbitration clause. Hence, this writ petition is filed before this Court. 4. Meanwhile, it appears that a Civil Appeal No. 3444 of 2007 was filed before the Apex court against the judgment and order dated 7th July 2005, passed in Appeal from Order no. 478 of 2004, arising out of order dated 17.11.2004, passed in the suit by the trial court. The Apex court passed the following order on 3rd of August 2007: "Leave granted. Appellant is aggrieved by and dis-satisfied with the impugned judgment and order of the High Court dated 7.7.2005 refusing to interfere with the order of Civil Judge, Sr. Division passed in O.S. No. 27 of 2004 dated 17.11.2004 allowing the petition for injunction filed by the plaintiff-respondent herein. Appellant is aggrieved by and dis-satisfied with the impugned judgment and order of the High Court dated 7.7.2005 refusing to interfere with the order of Civil Judge, Sr. Division passed in O.S. No. 27 of 2004 dated 17.11.2004 allowing the petition for injunction filed by the plaintiff-respondent herein. One of the contentions raised by learned counsel appearing on behalf of the appellant is that keeping in view the fact that the parties have entered into an arbitration agreement, the suit was not maintainable. It is not in dispute that an application under Section 5 of the Arbitration and Conciliation Act, 1996 was filed by the appellant which has been decided against it. A writ petition being W.P. (MS) No. 1866/2006 is pending thereagainst. By reason of the impugned judgment, the High Court has refused to interfere with the order dated 17.11.2004 passed by the Civil Judge (S.D.) But keeping in view the facts and circumstances of this case, we are of the opinion that the interest of justice would be subserved if the High Court is requested to consider the matter pending before it as expeditiously as possible and preferably within a period of four weeks from the date of communication of this order. In the event the said application is allowed, it may consider the desirability of modifying the order of injunction suitably. The appeal is disposed of on the above terms." 5. Learned counsel for the petitioner drew attention of this Court to principle of law laid down in Rashtriya Ispat Nigam Ltd. And another Vs. Verma Transport Company; reported in (2006) 7 Supreme Court Cases 275. In said case, the Apex court while interpreting the provisions of sub-section (1) of Section 8 of the Arbitration and Conciliation Act, 1996, has held that merely for the reason that application for reference is filed subsequent to the filing of the objection to grant ex-parte temporary injunction, does not amount to surrendering to the jurisdiction or waiving of right to Arbitration. In view of said principle of law, this court is of the view that the trial court by rejecting the application vide impugned order dated 20th June 2006, merely on the ground that at the time of deciding the application for temporary injunction, no objection is raised as to jurisdiction on the ground that there existed an arbitration clause in the agreement between the parties. 6. 6. For the reasons as discussed above, this writ petition is allowed. The order dated 20th June 2006, passed by the trial court in Suit No. 27 of 2004, is set aside. The application No. 72-C, moved by the defendant/petitioner stands allowed. The Civil Suit No. 27 of 2004 between the parties stands dismissed with the observation that the parties would be at liberty to get their dispute decided by the Arbitrator in terms of the arbitration clause of the agreement, entered into between them.