Research › Search › Judgment

Himachal Pradesh High Court · body

2011 DIGILAW 2251 (HP)

Reliance Infratel Ltd. v. Chanderwati

2011-06-22

DEEPAK GUPTA

body2011
JUDGMENT: Deepak Gupta, J. (Oral) 1. The question of law which arises for decision in this case is whether an application for referring a dispute to Arbitration Under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) must be accompanied by the original or certified true copy of the arbitration agreement or not? 2. The present petition is directed against the order dated 19.11.2010 passed by the learned Civil Judge, Junior Division, Kasauli whereby she rejected the application filed by the petitioners (here-in-after referred to as the defendants) for referring the dispute to arbitration. It is not necessary to either give detailed facts or go into the other aspects of the matter since one of the grounds on which the application was rejected was that the present petitioners did not alongwith the application file the original arbitration agreement or a certified copy thereof. 3. The facts necessary for disposal of the case are that an agreement was entered between the parties whereby the petitioner-Company agreed to take on lease certain property of the plaintiff and the said lease agreement contained an arbitration agreement. The plaintiff-respondent filed a suit claiming the lease money, whereas the case of the defendants is that it never took possession of the leased property. The defendants filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 before the learned trial Court praying that the lease agreement itself contained an arbitration clause and therefore, the matter be referred to arbitration. 4. I am not going into the merits of the case and I am deciding the case solely on the issue as to whether the application under Section 8 of the Act was maintainable without filing the original arbitration agreement or a certified copy thereof. 5. Shri Narender Sharma, learned counsel for the petitioner-Company submits that the case of the plaintiff itself is based on the lease agreement which itself contained the arbitration clause and therefore, mere non-filing of the original agreement or a certified copy thereof would not affect the rights of the petitioners-defendants to claim that the dispute should be referred to arbitration. 6. At the outset, it may be submitted that the mere existence of an arbitration clause does not oust the jurisdiction of the Civil Court. A party can file a suit on the basis of an agreement containing an arbitration clause. 6. At the outset, it may be submitted that the mere existence of an arbitration clause does not oust the jurisdiction of the Civil Court. A party can file a suit on the basis of an agreement containing an arbitration clause. The defendant may not object to the dispute being decided by the Civil Court and may not file an application under Section 8 of the Act. In case, it wants that the dispute should be referred to arbitration he must follow the procedure laid down in Section 8 of the Act, which reads as follows:- “8. Power to refer parties to arbitration where there is an arbitration agreement – (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.” 7. Sub-section (1) of the Act clearly provides that before the party who wants the matter to be referred to arbitration files his first statement it must move the application for referring the dispute to the arbitration. In case, a written statement is filed then the defendant looses his right to have the matter referred to arbitration. Sub-section (2) of Section 8 clearly provides that an application under sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. This section is couched in mandatory language and it debars the Civil Court from entertaining an application under subsection (1) unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Thus, the law requires that the application under Section 8 of the Act must be accompanied by the original arbitration agreement or a duly certified copy thereof. 8. Thus, the law requires that the application under Section 8 of the Act must be accompanied by the original arbitration agreement or a duly certified copy thereof. 8. The Apex Court in Sukanya Holdings Pvt. Ltd. vs. Jayesh H. Pandya and another, (2003) 5 SCC 531 dealing with Section 8 held that a matter which is pending in Civil Court is not required to be referred to Arbitral Tribunal, if (1) the parties to the arbitration agreement have not filed any such application for referring the dispute to the arbitrator; (2) in a pending suit, such application is not filed before submitting first statement on the substance of the dispute; or (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that the Arbitration Act does not oust the jurisdiction of the civil court to decide the dispute in a case where parties to the arbitration agreement do not take appropriate steps as contemplated under sub-sections (1) and (2) of Section 8 of the Act. 9. The Apex Court in Atul Singh and others vs. Sunil Kumar Singh and others, (2008) 2 SCC 602 again considered this question and held as follows:- “19. There is no whisper in the petition dated 28.2.2005 that the original arbitration agreement or a duly certified copy thereof is being filed alongwith the application. Therefore, there was a clear noncompliance with sub-section (2) of Section 8 of the 1996 Act which is a mandatory provision and the dispute could not have been referred to arbitration. Learned counsel for the respondent has submitted that a copy of the partnership deed was on the record of the case. However, in order to satisfy the requirement of sub-section (2) of Section 8 of the Act, Defendant 3 should have filed the original arbitration agreement or a duly certified copy thereof alongwith the petition filed by him on 28.2.2005, which he did not do. Therefore, no order for referring the dispute to arbitration could have been passed in the suit.” 10. Mr. Narender Sharma, learned counsel for the petitioner-Company has relied upon the observation of the Apex Court in Bharat Sewa Sansthan vs. U.P. Electronics Corporation Ltd. (2007) 7 SCC 737. In my view this judgement is not applicable to the facts of the present case and can be distinguished. Mr. Narender Sharma, learned counsel for the petitioner-Company has relied upon the observation of the Apex Court in Bharat Sewa Sansthan vs. U.P. Electronics Corporation Ltd. (2007) 7 SCC 737. In my view this judgement is not applicable to the facts of the present case and can be distinguished. First of all, in that case the Apex Court has made it clear that it was exercising its extraordinary jurisdiction under Article 142 of the Constitution of India. Secondly, a perusal of paras 23 and 24 of the judgement of the Apex Court reveals that in that case the party which had filed the application under Section 8(1) of the Act it had stated that the original agreement is with the other party and therefore, it is filing the photocopies of the arbitration agreement. It was in this context the Apex Court held that the photocopy could be relied upon on relegating the parties to arbitration. In the present case, it is not the case of the petitioners that the original agreement was not available with it. There is nothing which prevented the petitioner-Company from filing the original agreement or certified copy thereof. Therefore, the application under Section 8(1) of the Act was not entertainable by the learned trial Court and has rightly been rejected. There is no merit in the petition, which is accordingly rejected. No costs.