Research › Search › Judgment

Allahabad High Court · body

2011 DIGILAW 1619 (ALL)

Nandita Agrawal Proprietor v. Indian Oil Corporation Ltd. and another

2011-07-07

DILIP GUPTA

body2011
Dilip Gupta, J.;- This petition seeks the quashing of the arbitration proceedings before the Sole Arbitrator, Sri S.H. Riaz, Indian Oil Corporation Ltd. between M/s. Indian Oil Corporation Limited (hereinafter referred to as the 'Corporation') and M/s. Manas Petro Yard, Gorakhpur including the quashing of the minutes of the proceedings held on 13th December, 2010 before the Arbitrator. 2. The petitioner was appointed as a Dealer for the retail sale/supply of Petrol/HSD Motor Oil Grease and other Petroleum Products on the terms and conditions set out in the Memorandum of Agreement made on 11th March, 2005 between the Corporation and Smt. Nandita Agrawal proprietor of M/s Manas Petro Yard, Gorakhpur. It is the case of the petitioner that since the officers of the Corporation caused hindrance in the business, the petitioner sent a letter dated 4th July, 2009 to the Corporation for surrendering the Dealership and in continuation of the aforesaid letter, the petitioner sent another letter dated 10th July, 2009 for removal of the fitments and accessories of the Corporation installed in the premises. The petitioner also claims to have given a notice dated 31st December, 2009 to the landlord for termination of the tenancy of the land leased for doing business. 3. The Corporation, however, filed Suit No.154 of 2010 on 16th February, 2010 in the Court of Civil Judge (Senior Division), Gorakhpur against Nandita Agrawal (opposite party first set) and Navin Priya Das and Asthabhuja Das (opposite parties second set) for the relief that the opposite party first set may be directed to assign the petrol pump to the plaintiff-Corporation in terms of Clause 57 of the Agreement. The opposite parties second set had executed the lease deed of the land on which the business was being carried. In the Suit, the petitioner claims to have filed counter claim and the landlord also filed a written statement in April, 2010. 4. In the meantime, by the letter dated 7th October, 2010 the Director, Marketing of the Corporation informed the petitioner that a Sole Arbitrator had been appointed in terms of Clause 69 of the Agreement. In the Suit, the petitioner claims to have filed counter claim and the landlord also filed a written statement in April, 2010. 4. In the meantime, by the letter dated 7th October, 2010 the Director, Marketing of the Corporation informed the petitioner that a Sole Arbitrator had been appointed in terms of Clause 69 of the Agreement. The petitioner raised objection to the arbitration proceedings through letter dated 23rd October, 2010 stating that the Corporation had exercised its option of filing Original Suit No.154 of 2010 under Clause 68 of the Agreement and so, assuming without admitting, that there was an arbitration clause, the arbitration proceedings could not have been initiated by the Corporation under Clause 69 of the Agreement. The objection was reiterated by the petitioner in the subsequent letter dated 28th October, 2010. The Arbitrator, however, rejected the objections filed by the petitioner by the order dated 13th December, 2010 holding that pendency of the suit before the Civil Judge cannot be taken as an impediment in continuance of the arbitration proceedings and, accordingly, directed the petitioner to file the statement of defence. 5. This petition has, accordingly, been filed for quashing the proceedings initiated by the Arbitrator as also the minutes of the proceedings held on 13th December, 2010 before the Arbitrator. 6. A counter affidavit to the writ petition has been filed by the Corporation stating that the letters dated 8th August, 2006 and 7th December, 2006, which the petitioner claims to have sent for supplying the signed copy of the Dealership Agreement, were not received by the Corporation. It has also been stated that the Corporation sent letters dated 25th September, 2009 and 8th December, 2009 to the petitioner for assigning the premises to the Corporation in accordance with Clause 57 of the Dealership Agreement but when the petitioner refused to hand over the site, the Corporation filed the suit. It has further been stated that the landlords of the leased land are none other than the father-in-law and real brother of the father-in-law of the petitioner and the alleged termination of lease was collusive. It has further been stated that the landlords of the leased land are none other than the father-in-law and real brother of the father-in-law of the petitioner and the alleged termination of lease was collusive. It has also been stated that since Clause 69 of the Dealership Agreement provided for arbitration, the Corporation filed an application in Suit No.154 of 2010 for withdrawal of the suit, which application was allowed by the Court by the order dated 10th February, 2011 and thereafter arbitration proceedings were initiated by the Corporation. The Corporation has further stated that in view of the arbitration clause contained in the Dealership Agreement, the Corporation is justified in appointing the Arbitrator who is proceeding in the matter. 7. I have heard Sri Siddharth Nandan, learned counsel for the petitioner and Sri Sanjeev Singh, learned counsel appearing for the Corporation. 8. Sri Siddharth Nandan, learned counsel for the petitioner has contended that when 'Arbitration Agreement' has been defined under Section 7 of the Act to mean 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, it will not cover a case where the party aggrieved has an option of either filing a suit or initiating arbitration proceedings. In this connection, he has placed before the Court Clauses 68 and 69 of the Dealership Agreement and has submitted that Clause 68 of the Agreement provides for filing of a suit in respect of any claim or dispute arising under the Agreement and so when the Corporation exercised this option by filing Original Suit No.154 of 2010 in the Court of Civil Judge (Senior Division), Gorakhpur on 16th February, 2010, it was precluded from initiating arbitration proceedings under Clause 69 of the Agreement, unless there was a fresh consent between the parties that they will resort to arbitration. In support of this contention, he has placed reliance upon the decision of the Supreme Court in Wellington Associates Ltd. Vs. Kirti Mehta, AIR 2000 SC 1379 . He has also submitted that the word "shall" used in Clause 69 of the Agreement should be read as "may" and in support of this contention, he has placed reliance upon the decision of the Supreme Court in State of U.P. Vs. Manbodhan Lal Srivastava, AIR 1957 SC 912 . Kirti Mehta, AIR 2000 SC 1379 . He has also submitted that the word "shall" used in Clause 69 of the Agreement should be read as "may" and in support of this contention, he has placed reliance upon the decision of the Supreme Court in State of U.P. Vs. Manbodhan Lal Srivastava, AIR 1957 SC 912 . He has further submitted that even otherwise, while allowing the withdrawal application filed by the Corporation in Original Suit No.154 of 2010, the Court did not give permission to the Corporation to resort to other remedies and, therefore, also the arbitration proceedings could not have been restored to by the Corporation. In support of his contention, he has placed reliance upon the Order XXIII Rule 1(4) and Order II Rule 2 of the Code of Civil Procedure and the decision of the Supreme Court in Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P., Gwalior & Ors. AIR 1987 SC 88 . It is, therefore, his submission that that the Arbitrator committed an illegality in rejecting the objection filed by the petitioner against the initiation of the arbitration proceedings by the Corporation. 9. Sri Sanjiv Singh, learned counsel appearing for the respondent-Corporation, however, submitted that Clause 69 of the Dealership Agreement clearly provides for arbitration and, therefore, the Corporation is justified in taking recourse to such proceedings. It is his submission that though the Corporation may have filed Original Suit No.154 of 2010, but when it was advised, the Corporation moved an application dated 12th April, 2010 under Order XXIII Rule 1 of the Code of Civil Procedure with a prayer that the plaintiff may be granted permission to withdraw the suit for the reason stated in the application, namely that an arbitration clause existed to which the plaintiff desires to take recourse to. The said application was allowed with costs of Rs.2000/- and the plaintiff was granted permission to withdraw the suit but it was also ordered that the counter claim filed by the defendant shall remain pending. It is, therefore, his submission that when reason was stated in the withdrawal application, the plaintiff cannot be prevented from taking recourse to arbitration proceedings under Clause 69 of the Dealership Agreement when the application was allowed and the plaintiff was granted permission to withdraw the suit. It is, therefore, his submission that when reason was stated in the withdrawal application, the plaintiff cannot be prevented from taking recourse to arbitration proceedings under Clause 69 of the Dealership Agreement when the application was allowed and the plaintiff was granted permission to withdraw the suit. In support of his contention he has placed reliance upon the decision of the Supreme Court in Parasrampuria Synthetics Ltd. Vs. Ceat Financial Services Ltd. & Ors., 2001 (1) SCC 291 . It is also his contention that the petitioner is not justified in asserting that since the Corporation had initially filed a suit it could not subsequently take recourse to arbitration proceedings. 10. I have considered the submissions advanced by learned counsel for the parties. 11. In order to appreciate the contentions advanced by learned counsel for the parties, it will be necessary to refer to the Clauses 68 and 69 of the Dealership Agreement which are reproduced below:- "68. This agreement has been made in Allahabad and all payments thereunder shall be due and made in unless otherwise directed by the Corporation. The courts in the city of alone shall have jurisdiction to entertain any suit, application or other proceeding in respect of any claim or dispute arising under this agreement. 69. Any dispute or difference of any nature whatsoever or regarding any right, liability, act, omission or account of any of the parties hereto arising out of or in relation to this agreement shall be referred to the sole arbitration of the Director Marketing of the Corporation, or of some officer of the Corporation who may be nominated by the Director Marketing. The Director will not be entitled to raise any objection to any such arbitrator on the ground that the arbitrator is an officer of the Corporation or that he has to deal with the matters to which the contracts relates or that in the course of his duties or differences. In the event of the arbitrator to whom the matter is originally referred being transferred or vacating his office or being unable to act for any reason the Director Marketing as aforesaid at the time of such transfer, vacation of office or inability to act shall designate another person to act as arbitrator in accordance with the term of the agreement. Such person shall be entitled to proceed with the reference from the point at which it was left by his predecessor. It is also at term of this contract that no person other than the Director Marketing or person nominated by such Director Marketing of the Corporation as aforesaid shall act as arbitrator hereunder. The award of the Arbitrator so appointed shall be final, conclusive and binding on all parties to the Agreement, subject to the provision of the Arbitrator Act, 1990 or any statutory modification of or re-enactment thereof and rules made thereunder and for the time being in force shall apply to the arbitration proceedings under this clause." (emphasis supplied) 12. The first contention of learned counsel for the petitioner is that since the Agreement provides for both the remedies, namely filing of a suit and taking recourse to arbitration proceedings, the Corporation could have taken recourse to one of such proceedings and having opted for the remedy of filing a suit, the Corporation is precluded from initiating arbitration proceedings, unless a fresh consent to arbitration is executed between the parties. In this connection, he has placed reliance upon the decision of the Supreme Court in Wellington Associates (supra) and in particular to the following paragraphs :- "9. Before referring the said section, I shall refer to the relevant Clauses 4 and 5 in the two agreements dated 15.8.1995. They read as follows: "Clause 4: It is hereby agreed that, if any dispute arises in connection with these presents, only Courts in Bombay would have Jurisdiction to try and determine the suit and the parties hereto submit themselves to the exclusive jurisdiction of the Courts in Bombay. Clause 5: It is also agreed by and between the parties that any dispute or differences arising in connection with these presents may be referred to arbitration in pursuance of the Arbitration Act, 1947, by each party appointing one arbitrator and the arbitrators so appointed selecting an umpire. The venue of arbitration shall be at Bombay." ....... 21. Does Clause 5 amount to an arbitration clause as defined in Section 2(b) read with Section 7? I may here state that in most arbitration clauses, the words normally used are that "disputes shall be referred to arbitration". But in the case before me, the words used are 'may be referred'. 22. 21. Does Clause 5 amount to an arbitration clause as defined in Section 2(b) read with Section 7? I may here state that in most arbitration clauses, the words normally used are that "disputes shall be referred to arbitration". But in the case before me, the words used are 'may be referred'. 22. It is contended for the petitioner that the word 'may' in Clause 5 has to be construed as 'shall'. According to the petitioner's counsel, that is the true intention of the parties. The question then is as to what is the intention of the parties? The parties, in my view, used the words 'may' not without reason. If one looks at the fact that Clause 4 precedes Clause 5, one can see that under Clause 4 parties desired that in case of disputes, the Civil Courts at Bombay are to be approached by way of a suit. Then follows Clause 5 with the words' it is also agreed' that the dispute 'may' be referred to arbitration implying that parties need not necessarily go to the Civil Court by way of suit but can also go before an arbitrator. Thus, Clause 5 is merely an enabling provision as contended by the respondents. I may also state that in cases where there is a sole arbitration clause couched in mandatory language, it is not preceded by a clause like Clause 4 which discloses a general intention of the parties to go before a Civil Court by way of suit. Thus, reading Clause 4 and Clause 5 together, I am of the view that it is not the intention of the parties that arbitration is to be the sole remedy. It appears that the parties agreed that they can "also " go to arbitration also in case the aggrieved party does not wish to go to a Civil Court by way of a suit. But in that event, obviously, fresh consent to go to arbitration is necessary. Further, in the present case, the same Clause 5, so far as the venue of arbitration is concerned, uses word 'shall'. The parties, in my view, must be deemed to have used the words 'may' and 'shall' at different places, after due deliberation. 23. A somewhat similar situation arose in B. Gopal Das v. Kota Straw Board AIR 1971 Raj. 258 . The parties, in my view, must be deemed to have used the words 'may' and 'shall' at different places, after due deliberation. 23. A somewhat similar situation arose in B. Gopal Das v. Kota Straw Board AIR 1971 Raj. 258 . In that case the clause read as follows: "That in case of any dispute arising between us, the matter may be referred to arbitrator mutually agreed upon and acceptable to you and us." It was held that fresh consent for arbitration was necessary. No doubt, the above clause was a little clearer there than in the case before me. In the above case too, the clause used the word 'may' as in the present case. The above decision is therefore directly in point. .......... 25. Suffice it to say, that the words 'may be referred' used in Clause 5, read with Clause 4, lead me to the conclusion that Clause 5 is not a firm or mandatory arbitration clause and in my view, it postulates a fresh agreement between the parties that they will to go to arbitration. Point 2 is decided accordingly against the petitioner." (emphasis supplied) 13. The aforesaid decision of the Supreme Court has to be examined in the light of Clauses 68 and 69 of the Dealership Agreement executed between the Corporation and the petitioner. According to the learned counsel for the petitioner, the Clauses are identical, whereas according to the learned counsel for the respondent, there is a substantial difference inasmuch as Clause 5 of the Agreement which came up for consideration before the Supreme Court in Wellington Associates (supra) provides that any dispute or difference arising in connection with the Agreement "may" be referred to arbitration whereas Clause 69 of the Agreement under consideration in this writ petition provides that any dispute or difference arising out of or in relation to the Agreement "shall" be referred to sole arbitration of the Director Marketing of the Corporation. 14. The question that arose before the Supreme Court in Wellington Associates (supra) was whether section 7(1) of the Act dealing with arbitration agreement postulates an agreement which necessarily or rather mandatorily requires the appointment of an Arbitrator. The Supreme Court observed that Section 7 does not cover a case where the parties agree that they "may" go to a suit or they "may" also go for arbitration. The Supreme Court observed that Section 7 does not cover a case where the parties agree that they "may" go to a suit or they "may" also go for arbitration. It is in this light that the Supreme Court examined Clauses 4 and 5 of the Arbitration and observed that the use of word "may" in Clause 5 denotes that it was not the intention of the parties that arbitration is to be the sole remedy and that the parties had agreed that they can "also" go for arbitration in case they do not wish to go to a Civil Court but in that event, fresh consent to go for arbitration would be necessary. 15. The Clauses under consideration in the present petition are entirely different. Clause 69 provides that any dispute or difference of any nature whatsoever or regarding any right, liability, act or omission arising out of or in relation to the Agreement "shall" be referred to the sole arbitration of the Director Marketing of the Corporation. It also provides that the award of the Arbitrator so appointed shall be final, conclusive and binding on all the parties to the Agreement, subject to the provisions of the Act. The Arbitration Clause 69 is, therefore, couched in a mandatory language and it cannot be said that the parties had agreed that they can also go to arbitration in case the aggrieved party does not go to Civil Court. 16. The contention of Sri Siddharth Nandan, learned counsel for the petitioner, however, is that the word "shall" occurring in Clause 69 of the Agreement should be read as "may" and for this submission, he has placed reliance upon the following paragraph of the decision of the Supreme Court in Manbodhan Lal Srivastava (supra):- "11. An examination of the terms of Art. 320 shows that the word "shall" appears in almost every paragraph and every clause or sub-clause of that article. If it were held that the provisions of Art. 320(3)(c) are mandatory in terms, the other clauses or sub-clauses of that article will have to be equally held to be mandatory. An examination of the terms of Art. 320 shows that the word "shall" appears in almost every paragraph and every clause or sub-clause of that article. If it were held that the provisions of Art. 320(3)(c) are mandatory in terms, the other clauses or sub-clauses of that article will have to be equally held to be mandatory. If they are so held, any appointments made to the public services of the Union or a State, without observing strictly, the terms of these sub-clauses in clause (3) of Art. 320, would adversely affect the person so appointed to a public service, without any fault on his part and without his having any say in the matter. This result could not have been contemplated by the makers of the Constitution. Hence, the use of the word "shall" in a statute, though generally taken in a mandatory sense, does not necessarily mean that in every case it shall have that effect, that is to say, that unless the words of the statute are punctiliously followed, the proceeding or the outcome of the proceeding, would be invalid. On the other hand, it is not always correct to say that where the word "may" has been used, the statute is only permissive or directory in the sense that non-compliance with those provisions will not render the proceeding invalid. In that connection, the following quotation from Crawford on "Statutory Construction" - Art. 261 at p. 516, is pertinent : "The question as to whether a statute is mandatory or directory depends upon the intent of the Legislature and not upon the language in which the intent is clothed. The meaning and intention of the Legislature must govern, and these are to be ascertained, not only from the phraseology of the provision, but also by considering its nature, its design, and the consequences which would follow from construing it the one way or the other........" 17. The submission of learned counsel for the petitioner cannot be accepted. The aforesaid decision is in the context of Article 320 of the Constitution, while what is under consideration is a particular Clause of the arbitration agreement between the parties. 18. An "arbitration agreement" is a commercial document inter parties and must be interpreted so as to give effect to the contract rather to invalidate it. The aforesaid decision is in the context of Article 320 of the Constitution, while what is under consideration is a particular Clause of the arbitration agreement between the parties. 18. An "arbitration agreement" is a commercial document inter parties and must be interpreted so as to give effect to the contract rather to invalidate it. Thus, instead of adopting a narrow and pedantic approach, preference should be given to the commonsense approach in construing an arbitration clause, particularly to perpetuate the intention of the parties to get their disputes resolved through the alternate disputes redressal method of arbitration. The Court, therefore, should, if the circumstances allow, lean in favour of giving effect to the arbitration clause to which the parties have agreed and seek to give effect to the intentions. Halsbury's Laws of England, Volume 2(3) Fourth Edition, provide the following general guiding principles for construction of arbitration agreements:- "(i) words must be understood in their plain, ordinary and popular sense unless they have generally acquired a peculiar sense distinct from the popular sense; (ii) if detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business common sense, it must be made to yield to business common sense; (iii) to the extent that the drafting of a term gives rise to lacunae of lacks clarity, the considerations of the court should not be driven by semantic niceties, but should be guided by the intentions of the parties; (iv) in ascertaining the intention of the parties, the court should seek to ascertain the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract; the court is therefore entitled to consider any factual material which would have affected the way in which the language of a document would have been understood by a reasonable man, save for previous negotiations between the parties and declaration of subjective intent (which are excluded for reasons of practical policy)" 19. Clause 69 of the Agreement, when read in the light what has been stated above, leaves no manner of doubt that it is couched in a mandatory language and the parties had agreed that any dispute or difference shall be referred to the sole arbitration of the Director Marketing of the Corporation. 20. In such circumstances, the first contention of the learned counsel for the petitioner cannot be accepted. 21. The second contention of the learned counsel for the petitioner is that though the Corporation may have filed an application for withdrawal of the suit under Order XXIII Rule 1 CPC, but the Court only permitted withdrawal of the suit and did not grant any permission to take recourse to other proceedings and, therefore, in the absence of such liberty to the plaintiff-Corporation, it could not have taken recourse to arbitration proceedings. In this connection, learned counsel has placed reliance upon the decision of the Supreme Court in Sarguja Transport Service (supra), wherein it was observed:- "7. The Code as it now stands thus makes a distinction between 'abandonment' of a suit and 'withdrawal' from a suit with permission to file a fresh suit. It provides that where the plaintiff abandons a suit or withdraws from a suit without the permission, referred to in sub-rule (3) of Rule 1 of Order XXIII of the Code, he shall be precluded from instituting any fresh suit in respect of such subject-matter or such part of the claim. The principle underlying Rule 1 of Order XXIII of the Code is that when a plaintiff once institutes a suit in a Court and thereby avails of a remedy given to him under law, he cannot be permitted to institute a fresh suit in respect of the same subject-matter again after abandoning the earlier suit or by withdrawing it without the permission of the Court to file fresh suit. Invito beneficium non datur. The law confers upon a man no rights or benefits which he does not desire. Whoever waives, abandons or disclaims a right will lose it. Invito beneficium non datur. The law confers upon a man no rights or benefits which he does not desire. Whoever waives, abandons or disclaims a right will lose it. In order to prevent a litigant from abusing the process of the Court by instituting suits again and again on the same cause of action without any good reason the Code insists that he should obtain the permission of the Court to file a fresh suit after establishing either of the two grounds mentioned in sub-rule (3) of Rule 1 of Order XXIII. The principle underlying the above Rule is founded on public policy, but it is not the same as the Rule of res judicata contained in section 11 of the Code which provides that no court shall try any suit or issue in which the matter directly or substantially in issue has been directly or substantially in issue in a former suit between the same parties, or between parties under whom they or any of them claim, litigating under the same title, in a Court competent to try such subsequent suit or the suit in which such issue has been subsequently raised, and has been heard and finally decided by such Court. The Rule of res judicata applies to a case where the suit or an issue has already been heard and finally decided by a Court. In the case of abandonment or withdrawal of a suit without the permission of the Court to file a fresh suit, there is no prior adjudication of a suit or an issue is involved, yet the Code provides, as stated earlier, that a second suit will not lie in sub-rule (4) of Rule 1 of Order XXIII of the Code when the first suit is withdrawn without the permission referred to in sub-rule (3) in order to prevent the abuse of the process of the Court. 9. The point for consideration is whether a petitioner after withdrawing a writ petition filed by him in the High Court under Article 226 of the Constitution of India without the permission to institute a fresh petition can file a fresh writ petition in the High Court under that Article. On this point the decision in Daryao's case (supra) is of no assistance. On this point the decision in Daryao's case (supra) is of no assistance. But we are of the view that the principle underlying Rule 1 of Order XXIII of the Code should be extended in the interests of administration of justice to cases of withdrawal of writ petition also, not on the ground of res judicata but on the ground of public policy as explained above. It would also discourage the litigant from indulging in bench-hunting tactics. In any event there is no justifiable reason in such a case to permit a petitioner to invoke the extraordinary jurisdiction of the High Court under Article 226 of the Constitution once again. While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdrawal does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission. ...................." (emphasis supplied) 22. Learned counsel for the respondent-Corporation has, however, referred to the withdrawal application filed by the Corporation in Original Suit No.154 of 2010 and has submitted that from the averments made in the application and the oder passed by the District Judge on 10th February, 2011 allowing the application, it is clear that the Corporation could initiate arbitration proceedings. 23. The application filed by the Corporation for withdrawal of Original suit No.154 of 2010 mentions that in accordance with the agreement entered into between the parties, the dispute was required to be settled by arbitration and, therefore, the suit was not maintainable. It mentions that, in such circumstance, the plaintiff seeks permission to withdraw the suit so that appropriate proceedings in accordance with law could be taken. It mentions that, in such circumstance, the plaintiff seeks permission to withdraw the suit so that appropriate proceedings in accordance with law could be taken. The Civil Judge (Senior Division), Gorakhpur, after referring to the aforesaid application filed by the Corporation under Order XXIII, Rule 1 C.P.C. and the objection filed by the petitioner-defendant that the application should be rejected because the petitioner-defendant had filed a written statement and counter claim, observed that since the plaintiff desired to withdraw the suit, permission to withdraw the the suit should be granted but the counter claim should be permitted to continue. 24. It is, therefore, clear that the Court had granted permission to the plaintiff to withdraw the suit in view of the averments made in the application filed by the Corporation under Order XXIII Rule 1 C.P.C. Though liberty may not have been given to the Corporation to initiate arbitration proceedings, yet in the application filed by the Corporation it was clearly stated that the plaintiff had sought permission to withdraw the suit to enable it to initiate arbitration proceedings as contemplated under the Agreement. 25. The issue, therefore, that arises for consideration is whether the Corporation could have initiated arbitration proceedings when after granting permission to the plaintiff to withdraw the suit, the Court had not given liberty to it to initiate arbitration proceedings. The decision of the Supreme Court in Sarguja Transport Services (supra) was explained subsequently in Haryana State Co-operative Land Development Bank Vs. Neelam, 2005 AIR SCW 1439 wherein also such liberty was not granted by the High Court while dismissing the writ petition. The Supreme Court observed that the respondent workman could approach the Labour Court even after the writ petition filed by it before the High Court was permitted to be withdrawn. The order of the High Court dismissing the writ petition is :- "Learned counsel for the petitioner prays that this petition be dismissed as withdrawn so that the petitioner may approach the Labour Court. Dismissed as withdrawn". It is in context of such an order passed by the High Court that the Supreme Court observed :- "9. The writ petition filed by the Respondent concededly was not adjudicated on merit. Apparently, she did not avail the alternative remedy which was more efficacious. Dismissed as withdrawn". It is in context of such an order passed by the High Court that the Supreme Court observed :- "9. The writ petition filed by the Respondent concededly was not adjudicated on merit. Apparently, she did not avail the alternative remedy which was more efficacious. Before the Labour Court even disputed questions of fact could be gone into and adjudicated upon which would ordinarily not be permissible in a writ proceeding. If the Respondent had made a prayer for withdrawal of a writ petition on the said ground, she cannot be denied the remedy available to her in another jurisdiction in terms of the provisions of the statute. The principles embodied in Order 23 Rule 1 of the Code of Civil Procedure laying down a public policy is not applicable to a case of this nature. A writ petition filed by the Respondent could have been dismissed even on the ground that another alternative remedy which was more efficacious was available and furthermore on the ground that the writ court would not go into the disputed question of fact. Even in such an event, it was open to the Respondent herein to approach the Labour Court or to take recourse to other remedies which were otherwise available to her. 10. In Sarguja Transport (supra), it was observed : ".........While the withdrawal of a writ petition filed in a High Court without permission to file a fresh writ petition may not bar other remedies like a suit or a petition under Article 32 of the Constitution of India since such withdrawal does not amount to res judicata, the remedy under Article 226 of the Constitution of India should be deemed to have been abandoned by the petitioner in respect of the cause of action relied on in the writ petition when he withdraws it without such permission." 11. The Labour Court, therefore, in our opinion, wrongly applied the principles of res judicata." 26. In the present case also, the Corporation had not taken steps to file a separate suit, but had initiated arbitration proceedings in terms of Clause 69 of the Agreement. The Corporation cannot, therefore, be precluded from initiating arbitration proceedings under Clause 69 of the Agreement in view of the aforesaid decision of the Supreme Court. 27. The second contention of learned counsel for the petitioner, therefore, cannot also be accepted. 28. The Corporation cannot, therefore, be precluded from initiating arbitration proceedings under Clause 69 of the Agreement in view of the aforesaid decision of the Supreme Court. 27. The second contention of learned counsel for the petitioner, therefore, cannot also be accepted. 28. Thus, for all the reasons stated above, there is no merit in this petition. It is, accordingly, dismissed.