Judgment :- 1. Petitioners herein have called in question the order dated 18.10.2010 in O.S.5146/10 (on I.A.III) filed under Section 8 of the Arbitration and Reconciliation Act, 1996, whereby the learned trial judge has referred the dispute between the parties for arbitration. 2. Heard Sri S. Srivatsa, learned senior counsel representing the petitioners and Sri Sreenidhi for the contesting respondent. 3. Before adverting to the contentious issues raised, legal and factual, urged by the learned counsel on both sides, a brief reference to the factual matrix would be necessary. It is: a) Petitioners claim to have transacted with M/s B and B Infrastructure Limited, a company registered and incorporated under the Companies Act, 1956, (hereinafter referred to as the 1st respondent company, for short) for joint development of the property owned by them. The terms and conditions of the venture were incorporated into an agreement dated 15.5.2003 styled as ‘Agreement for Development and Marketing’ which contained several covenants for putting the project in execution. However, the main condition appears to be that 1st respondent company would invest its money and build residential and commercial complexes on the property which would be marketed to prospective buyers and the share of the petitioners together as also the 1st respondent company would be in the ratio of 30:70. In other words, after the project is complete, 1st respondent company would be entitled to 70% share in the superstructure so built to use it in the manner it desires for commercial exploitation. Similarly, petitioners are reserved the right to utilize 30% of the structure in terms of the agreement. b) In pursuance to the agreement, petitioners appear to have parted with their land on which construction commenced, but is not yet complete. During this period, certain events occurred, straining the relationship between the parties, of course not to the extent of severing the tie created under the agreement. The agreement subsists and is enforceable against each other. c) It is also material to note and as is canvassed by the learned counsel on both sides, petitioners are joint owners who joined together for a common cause to partake in the project and entered into binding contract with the 1st respondent company, a juristic person. However, it is on record that the juristic person was represented by its managing director, Sri S.K. Bhaskar Raju and director, Smt. Anuipama B. Raju. However, it is on record that the juristic person was represented by its managing director, Sri S.K. Bhaskar Raju and director, Smt. Anuipama B. Raju. They are no doubt signatories to the agreement in question, but have done so as representing M/s B & B Infrastructure Limited. d) To ensure smooth progress of the project and its execution, petitioners together executed a deed of general power of attorney in favour of the 1st respondent company dated 15.5.2003 on the date of the agreement itself appointing the 1st respondent company as its attorney to present, do and perform all acts, deeds and things which they would do to complete the project. The authority so conferred is spelled out in the deed annexed to the petition. It is not in dispute. e) The grievance of the petitioners is, in the recent past, they have learnt that the director of the company, Smt. Anupama Raju allegedly misused the power of attorney executed in favour of the company and executed a deed of sale dated 11.11.2005 in favour of the 1st respondent company (party to the grant) selling unto it 70% of the undivided share in the immovable property which was made available for the joint venture. Petitioners allege such transfer by Anupama Raju was without valid authority as she had, at no point of time, been appointed by them as attorney to represent them. Besides, they also apprehend that the transfer so effected is with a sinister design to deprive them of their property and cause impediments in the claim which they can legitimately enforce under the joint agreement. In fact, a serious apprehension is entertained in their mind that the transaction virtually infringes their right as owners of the property and the right they derive under the agreement. With this plea, they filed O.S.5146/07 seeking a decree to declare that the sale deed dated 11.11.2005 executed by Anupama Raju (arrayed in the party array as 3rd defendant) in favour of the 1st respondent company is without authority and not binding on them, and also sought a decree of permanent injunction to restrain the respondents herein, their agents or attorneys or any one claiming through/under them from disturbing their peaceful possession and enjoyment of the schedule property. f) In response to the summons issued in the suit, respondents entered appearance. f) In response to the summons issued in the suit, respondents entered appearance. The 1st respondent company filed an application, I.A.III under Section 8 of the Arbitration and Reconciliation Act with the principal prayer to refer the dispute between the parties for arbitration and to dismiss the suit. g) The application was resisted by the petitioners. The learned trial judge, by the impugned order, allowed the application and referred the dispute between the parties for arbitration. Assailing it, this revision is filed. 4. At the threshold, the question regarding maintainability of the revision petition was urged which, by a separate order, has been answered. The petition is held maintainable under Section 115, C.P.C. and is taken up for final disposal on merit. 5. Learned senior counsel, Sri Srivatsa would contend, the trial court has seriously erred in failing to notice that the relief in the suit is annulment/cancellation of the sale deed executed by the 3rd defendant in her personal capacity, transferring 70% of the share in the schedule property. They have, therefore, questioned her authority to do so and thus, the lis is basically between the petitioners and the 3rd defendant. The beneficiaries/transferees named in the deed of sale is the 1st respondent company and therefore, the company had to be necessarily brought into the party array as 1st defendant, but sine it is a juristic person, its managing director is brought in as 2nd defendant. He would thus submit that bringing them into the party array is for the purpose of complete and full adjudication of the rights of the parties. 6. It is assertively urged by Sri Srivatsa that the agreement dated 15.5.2003 which brought the petitioners and 1st respondent company into a binding contract contains no clause to deal with the issues of the nature that is the subject matter of adjudication in the suit by ARBITRATION. He draw my attention to the arbitration clause he submits only dispute between the parties inter se under the agreement is referable to arbitration and no other dispute, if it arises between individuals like the one in the suit. The clause reads thus: “In the event of any dispute arises between the parties the same shall be resolved by referring the dispute to arbitrators. The parties to this agreement nominate one arbitrator on his behalf and the said arbitrators shall appoint an umpire. The clause reads thus: “In the event of any dispute arises between the parties the same shall be resolved by referring the dispute to arbitrators. The parties to this agreement nominate one arbitrator on his behalf and the said arbitrators shall appoint an umpire. The decisions rendered by such arbitrators is binding upon both the parties.” Refereeing to it, he submits it is only with respect to a dispute arising between the parties to the agreement and not between others for that matter, 3rd defendant. The second contention is, even though there is such clause, a separate clause is incorporated in the agreement captioned as ‘Breach of Agreement’ whereby parties had agreed that each party is entitled to enforce the agreement by filing a suit for specific performance and each party shall be liable to pay such damages as maybe fixed by the court or arbitrator. He submits, the arbitration referred to in the agreement which was the basis for filing I.A.III does not refer to the petitioners and 3rd defendant. Therefore, no dispute between them could have been referred to arbitration for want of agreement. The only remedy to the petitioners was to file a comprehensive suit of civil nature which they did. Section 8 of the Arbitration Act would come into play only if it is shown on admitted facts or when parties to the suit are knit by agreement which contains a binding arbitration clause. Even presuming there is some clause in the agreement, it does not cover the dispute raised for adjudication in the suit. Thus, it is urged that the reference for arbitration is without basis and therefore, learned counsel seeks setting aside the impugned order. 7. In negation of these contentions, learned counsel, Sri Sreenidhi for Sri Raviverma Kumar, learned senior counsel, would contend that the power of attorney dated 15.5.2003 executed by the petitioners clearly spells out that they have conferred authority to the 1st respondent company, its managing director and Anupama Raju to do, execute and perform all such acts which they would do. In negation of these contentions, learned counsel, Sri Sreenidhi for Sri Raviverma Kumar, learned senior counsel, would contend that the power of attorney dated 15.5.2003 executed by the petitioners clearly spells out that they have conferred authority to the 1st respondent company, its managing director and Anupama Raju to do, execute and perform all such acts which they would do. He submits, by virtue of the said deed, unbridled authority is conferred to sell, transfer, encumber or deal with the schedule property for fulfillment of the joint development agreement, as petitioners were several in number and it was practically not possible to rope them each time for execution of the document, by mutual understanding, the deed of power of attorney was obtained by the 1st respondent to facilitate easy performance or compliance of the conditions in the agreement. He submits during the course of the project, the 1st respondent had to raise finance from banks and other financial institutions who insisted clear title in favour of the 1st respondent for such loan. He submits as under the agreement, the cost of construction has to be borne by the 1st respondent company and its directors, how they raise and mobilize finance shall be in their discretion. To avail such financial benefit, they had to satisfy the security demanded by financial institutions/bankers and it is only for that limited purpose, the deed of sale had to be executed. He submits, the deed of sale dated 11.11.2005 shows that there is no fraud or attempt to deprive any benefit under the agreement to the petitioners. The deed of sale pertains to 70% of the property and does not exceed that limit. At one time, he offered to say respondents are ready and willing to make a statement that 30% of the share in the property will be left unencumbered and protected to answer the claim of the petitioners. 8. Coming to the question of maintainability of the suit under Section 8 of the Arbitration Act, he submits petitioners and defendants 1, 2 and 3 are parties to the agreement and therefore, the acts done by is in conformity with the agreement. He draws the attention of the court to the arbitration clause which I have referred to above, pointing out that it binds the petitioners and defendants 1 to 3, and no issue is beyond the said clause. He draws the attention of the court to the arbitration clause which I have referred to above, pointing out that it binds the petitioners and defendants 1 to 3, and no issue is beyond the said clause. He submits, the dispute raised by the petitioners is regarding transfer of immovable property by the questioned deed of sale in favour of the 1st respondent company. Acquisition of property by sale under the questioned sale deed involves the 1st defendant company and therefore, the dispute being between the petitioners and 1st defendant company, it comes within the mischief of arbitration clause referred to above. 9. The second ground urged is that the deed of power of attorney cannot be construed as a document issued only in favour of the 1st defendant company. He draws my attention to page 4 of the deed of power of attorney where a clause is incorporated which reads thus: “And each and every one of us does hereby appoint and constitute M/s B & B Estates and Infrastructure Limited, represented by its M.D. Sri. S.K. Bhaskar Raju, s/o Sri S.K. Narasaraju, aged about 44 years and the director, Smt. Anupama B. Raju, w/o Mr. S.K. Bhaskar Raju, age 33 years, having its place of business at No.37, 4th Cross, Aga Abbas Ali Road, Ulsoor, Bangalore-560 042, As our attorney to act jointly or any one of them severally in our name and n behalf of each of us in the matter herein after mentioned either by themselves, through their authorised representatives in the following circumstances: …..” On this basis, it is urged that Anupama Raju and Bhaskar Raju have been conferred with the authority by way of authorization to act jointly or severally to do things enumerated therein. This, according to him, clothes Anupama Raju the authority to represent the petitioners. 10. He has placed on record the resolution of the board dated 25.4.2003 to substantiate that Anupama Raju was fully authorised by the 1st respondent to perform all acts and deeds that were conferred by the deed of general power of attorney on the 1st respondent company. This, according to him, clothes Anupama Raju the authority to represent the petitioners. 10. He has placed on record the resolution of the board dated 25.4.2003 to substantiate that Anupama Raju was fully authorised by the 1st respondent to perform all acts and deeds that were conferred by the deed of general power of attorney on the 1st respondent company. It reads as follows” ‘Resolved that Anupama Raju, director acting the agent/authorised person of Smt. Munna Bai and others based on the General Power of Attorney dated 15.5.2003 executed by Smt. Munna Bai and others in favour of the company, shall execute and register the sale deed in favour of the company in respect to the 70% undivided right, title, share on the property bearing Sy.No.47/1A and 47/2A, New Corporation Numbers 47/48-4, Tavarekere Village, now located within the administrative jurisdiction of 9th Bangalore Mahanagara Palike situated at 64th Ward, Malvala Valaya, Block, Jayanagar, East End B & D Bhanerghatta Road, Bangalore, measuring 4.27 acres as per the Joint Development Agreement and General Power of Attorney dated 15.5.2003. On the basis of this resolution, it is urged Anupama Raju executed the deed of sale by virtue of the authority conferred by Munna Bai and others (petitioners). It is difficult to accept that this resolution lawfully confers any right on Anupama Raju. The phraseology used in the resolution leaves no doubt that it is the 1st respondent who is authorising the 3rd defendant to execute the sale deed and that too, in its own favour. Factually, the narration made therein is incorrect. On the presumption that the power of attorney authorises Anupama Raju also this resolution has been passed. Besides, even if we accept that Anupama Raju had any right under the power of attorney, she could not have executed the sale deed in favour of the 1st respondent which is the attorney under the provisions of under the deed of General Power of Attorney. In other words, the attorney cannot execute a deed in his or its own favour, as he can only act on behalf of the donor and cannot be the recipient or beneficiary. Therefore, it has to be held that the resolution of the 1st respondent company cannot confer any authority n Anupama Raju to do any act which the petitioners have not conferred on her. The Resolution is virtually a delegation by the delegatee. Therefore, it has to be held that the resolution of the 1st respondent company cannot confer any authority n Anupama Raju to do any act which the petitioners have not conferred on her. The Resolution is virtually a delegation by the delegatee. The deed does not permit delegation of power conferred upon the 1st respondent to its own director. In this view of the matter, even if we construe the 1st respondent company could have authorised its director to perform all acts which it could perform by virtue of General Power of Attorney only in relation to third party and not in its own favour. 11. The next ground urged is, since she is the executant of the deed of sale in pursuance to the authority conferred under the deed of power of attorney dated 15.5.2003, the dispute is covered by the arbitration clause. 12. Learned counsel, in support of the contentions canvassed, seeks citational support in the decisions reported in: I) P. Anand Gajapathi Raju & Ors. Vs. P.V.G Raju (Died) & Ors. ([2000]4 SCC 539) Wherein at paragraph 8, the apex court has held as under: “In the matter before us, the arbitration agreement covers all the disputes between the parties in the proceedings before us and even more than that. As already noted, the arbitration agreement satisfies the requirements of Section 7 of the new Act. The language of Section 8 is peremptory. It is therefore, obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement. Nothing remains to be decided in the original action or the appeal arising therefrom. There is no question of stay of the proceedings till the arbitration proceedings conclude and the Award becomes final in terms of the provisions of the new Act. All the rights, obligations and remedies of the parties would now be governed by the new Act including the right to challenge the Award. The court to which the party shall have recourse to challenge the Award would be the Court as defined in Clause (e) of Section 2 of the new Act and not the Court to which an application under Section 8 of the new Act is made. An application before a Court under Section 8 merely brings to the Court’s notice that the subject matter of an arbitration agreement. An application before a Court under Section 8 merely brings to the Court’s notice that the subject matter of an arbitration agreement. This would not be such an application as contemplated under Section 42 of the Act as the Court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent Court within the meaning of Section 2(e) of the new Act.’ 13. Keeping in mind the contentions of the learned senior advocates, we have to consider whether in the given facts and circumstances, a case was made out to show that the lis between the parties is covered by the arbitration clause. 14. Not in dispute is the fact that the transaction between the parties for joint development of the property in question is between M/s B & B Infrastructure Limited, a juristic person and the petitioners. Bhaskar Raju and Anupama Raju are de facto representatives of the company and their acts are to be construed as acts of the company. In other words, they represent the company, but not as individuals. The other undisputed facts are, the deed of power of attorney dated 15.5.2003 has been executed by the petitioners appointing the company-M/s B & B Infrastructure Limited as their attorney. Since it is a juristic person, the authority so conferred had to be performed by persons representing the juristic person. Under the agreement, the 1st respondent company has been conferred with all rights as enumerated thereunder including the right to sell, alienate, but it is material to note that conferment of that power is for fulfillment of the joint venture. In other words, to give effect to the covenants, terms and conditions of the joint development, the deed of power of attorney has been executed. In this regard, the issue has to be examined under the provisions of Powers-of-Attorney Act, 1882. Section 1(a) is the definition inserted by Amendment Act of 1882 which reads as follows: “In this Act, power of attorney includes an instrument empowering a specific person to act for and in the name of the person executing it.” Therefore, it is an instrument empowering a specific person to act for and in the name of the person executing it. Examined in this background, it leaves no scope for doubt that by the deed of general power of attorney, the 1st respondent company is appointed the attorney and not Anupama Raju. Thus, within the meaning of Section 1(a), the 1st respondent is the ‘specific person’. Once we reach this conclusion, it shall not hold us long to infer that by virtue of the power conferred under the deed of power of attorney, the 1st respondent performs any act, it does, through Bhaskar Raju and Anupama Raju. All acts so done by them would be construed as acts done by the 1st respondent by virtue of the power conferred under the instrument and such acts shall be construed as acts, deeds and things done by the petitioners as if they were personally present. Therefore, Bhaskar Raju and Anupama Raju could not assume to themselves authority to act for and on behalf of the petitioners in their individual capacity and that to create any right in favour of the ‘Attorney’ viz the 1st respondent company whom they represent. In other words the “Specific person” appointed as Attorney could do acts on behalf of the person/persons appointing him/it in favour of third party and cannot create right in himself/itself. 15. Thus, unhesitatingly, it has to be recorded that Anupama Raju could not derive individual right under the deed of power of attorney. The only right she had was to represent the 1st respondent who was the donee as defined under the Act. However, at this juncture, it may not be appropriate to express any further opinion with regard to the deed of sale which she is alleged to have executed in favour of the 1st respondent as it is the subject of dispute in the civil suit. The observation made above is only for determining as to whether this act comes within the mischief of the arbitration clause mentioned in the agreement between the petitioners and 1st respondent company. Only for this purpose this issue is considered. 16. The main allegation of the petitioners is, by assuming to herself power under the deed of power of attorney, Anupama Raju has executed the sale deed dated 11.11.2005 in favour of 1st respondent who was appointed as Attorney of the petitioners. Therefore, it was without sanction of law and does not bind them. 16. The main allegation of the petitioners is, by assuming to herself power under the deed of power of attorney, Anupama Raju has executed the sale deed dated 11.11.2005 in favour of 1st respondent who was appointed as Attorney of the petitioners. Therefore, it was without sanction of law and does not bind them. It is her act which is brought in question and has to be tested in the suit. We have to now examine whether the grounds urged by the petitioners reveal the dispute is between the petitioners and 1st respondent alone, or between the petitioners and 3rd respondent, including the 1st respondent company. Perusal of grounds in the suit it could be held the petitioner’s grievance is against the 3rd respondent, questioning her authority to execute the deed of sale and not between parties to the grant. 17. The provision of Section 8 of the Arbitration Act envisages the judicial authority before whom an action is brought in a matter which is the subject matter of an arbitration agreement, shall, if the party so applies not later than when submitting his statement, refer the parties to Arbitration. It refers to ‘parties to the arbitration agreement’. Sub-sections (1) and (2) cannot be read in isolation, but have to be read with sub-section (1) of Section 7 of the Act which defines an arbitration agreement. It postulates “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.’ The form of agreement is spelled out in sub-section (2). Thus, a combined reading of Sections 7 and 8 shows….firstly, to ascertain existence of an arbitration agreement and secondly, the parties to the agreement. Section 2(h) of the Act defines ‘party’ as ‘a party to an arbitration agreement’. In the instant case, as rightly urged by Sri Srivatsa, the joint development agreement is inter se between the petitioners and 1st respondent company, represented by its managing director-Bhaskar Raju and Anupama Raju. Indisputably the arbitration clause in the agreement dated 15.5.2003 has to be construed as to mean and include only the petitioners and 1st respondent company and such agreement under Section 7 of the Act will be an arbitration agreement between those parties only. It undoubtedly excludes the 3rd defendant. Indisputably the arbitration clause in the agreement dated 15.5.2003 has to be construed as to mean and include only the petitioners and 1st respondent company and such agreement under Section 7 of the Act will be an arbitration agreement between those parties only. It undoubtedly excludes the 3rd defendant. Thus, the contention of the respondents that even though the principal grievance of the petitioners is against the acts of the 3rd defendant since she has create a beneficial interest (sale) in favour of the 1st respondent, the dispute should be construed to be inter se between the petitioners and the 1st defendant company, is unacceptable. 18. Learned senior counsel, Sri Srivatsa has referred to three decisions in this regard, amongst which decisions in the case of SUKANYA HOLDINGS (P) LTD .vs. JAYESH H.PANDYA AND ANOTHER ([2003] 5 SCC 531) wherein the apex court, examining the conspectus of the provisions of Arbitration and Reconciliation Act, 1996, has held as under: 13.) Secondly, there is no provision in the Act that when the subject matter of the suit includes subject-matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject matter of the suit to the arbitrators. 14.) Thirdly, there is no provision as to what is required to be done in a case where some parties to the suit are not parties to the arbitration agreement. As against this, under Section 24 of the Arbitration Act, 1940, some of the parties to a suit could apply that the matters in difference between them be referred to arbitration and the court may refer the same to arbitration provided that the same can be separated from the rest of the subject-matter of the suit. The section also provided that the suit would continue so far as it related to parties who have not joined in such application.’ Therefore, it is clear the apex court has affirmatively held with reference to the repealed provisions of the Act of 1940 that there was a possibility of referring the dispute pertaining to a portion of the agreement and retaining the other matters in dispute in a civil suit for adjudication. In the present enactment, there is no such scope and hence, if a suit is filed which lies outside the arbitration agreement and is also between some of the parties who are not parties to the arbitration agreement, taking recourse to exercise of power under Section 8 of the Arbitration Act may not be proper. 19. In the case of N.RADHAKRISHNAN Vs. MAESTRO ENGINEERS AND OTHERS ( 2009(13) SCALE 403 ), the apex court concurring with its earlier decision in the case of ABDUL KADIR SHAMSUDDIN BUBERE .vs. MAHAV PRABHAKAR OAK AND ANOTHER ( AIR 1962 SC 406 ), wherein it was held that ‘there is no doubt that where serious allegations of fraud are made against a party and the party who is charged with fraud desires that the matter should be tried in open court, that would be a sufficient cause for the court not to order an arbitration agreement to be filed and not to make the reference…’, has held as under: ‘11.) In our view and relying on the aforesaid observations of this Court in the aforesaid decision and going by the ratio of the above mentioned case, the facts of the present case does not warrant the matter to be tried and decided by the Arbitrator, rather for the furtherance of justice, it should be tried in a court of law which would be more competent and have the means to decide such a complicated matter involving various questions and issues raised in the present dispute. This view has been further enunciated and affirmed by this Court in the decision of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. MANU/SC/0401/1999 : AIR 1999 SC 2354 wherein this Court under para 4 observed: Sub-section (1) of Section 8 provides that where the judicial authority before whom an action is brought in a matter, will refer the parties to arbitration the said matter in accordance with the arbitration agreement. This, however, postulates, in our opinion, that what can be referred to the Arbitrator is only that dispute or matter which the Arbitrator is competent or empowered to decide. 20. It may not be necessary to extract the discussion and conclusion of the apex court in the said decision. This, however, postulates, in our opinion, that what can be referred to the Arbitrator is only that dispute or matter which the Arbitrator is competent or empowered to decide. 20. It may not be necessary to extract the discussion and conclusion of the apex court in the said decision. Suffice to record that the ultimate opinion of the apex court is, where in a suit serious allegations of fraud are made and there are other issues which require detailed consideration, reference to arbitration under Section 8 may not be the proper course. The dictum of the decisions of the apex court referred to supra persuades me to accept the contention of Sri Srivatsa that as petitioners have made 1st serious allegations against the 3rd defendant of alleged fraud to benefit the respondent company and as the 3rd defendant is not a party to the arbitration agreement, the trial court could not have referred the dispute to arbitration in exercise of power conferred under Section 8. Being of this view, I am satisfied the impugned order is not sustainable as it amounts to frustrating the legal course adopted by the petitioners against the person who is not party to the arbitration agreement. 21. In the result, the revision is allowed. The impugned order dated 18.10.2010 passed in I.A.III in O.S.5146/10 is set aside and the suit is restored to the file of the trial court with a direction to proceed with the case and dispose of the suit as expeditiously as possible. The respondents can avail the benefit of filing written statement which the trial court shall allow, as the time prescribed under the Code of Civil Procedure has already expired.