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2013 DIGILAW 693 (MAD)

R. Raghavan v. R. Venkitapathy

2013-01-31

VINOD K.SHARMA

body2013
JUDGMENT 1. Application No.99 of 2013 under Order XIV Rule 8 of O.S. Rules r/w Order 7 Rule 11 of C.P.C. has been filed to reject the plaint being barred under the Arbitration and Conciliation Act. 2. The plaintiff/non applicant has filed a suit for declaration that the order of the defendant No.5 to 7 i.e. Arbitral Tribunal, dated 23.7.2012 is illegal and invalid with consequential relief to declare the additional claims submitted by the defendants 1 to 4 are void, ultra vires the Arbitration and Conciliation Act, 1996. 3. The plaintiff has also prayed for permanent injunction restraining the defendant No.5 to 7 from proceeding with enquiry in pursuance to the order, dated 23.7.2012. The prayer is also for mandatory injunction directing the defendants 5 to 7 to render the reasoned award upon the materials and records before it in the form of claims, counter claims, objections, documents marked as exhibits and oral evidence placed before the Arbitral Tribunal upto 1.7.2011. 4. Pending suit, this application has been filed by the defendant No.1, by pleading therein that the averments made in the plaint shows that suit has been filed to challenge the order of Arbitral Tribunal, dated 23.7.2012 with consequential relief arising out of the impugned order. 5. The ground on which the maintainability of suit has been challenged is that suit is barred under section 5 of the Arbitration and Conciliation Act which reads as under: "Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this part". 6. It is contended that reading of the Arbitration and Conciliation Act shows that Act does not contemplate that impugned order be challenged in civil suit and that section 34 contemplates an application for setting aside the Arbitral award on certain grounds. Whereas section 37 provides for appeal against the orders. 7. It is submitted that judicial intervention is limited to section 8, 9 and 11 of the Arbitration and Conciliation Act, and the suit as framed does not fall under any of such provisions, therefore is barred under section 5 of the Arbitration and Conciliation Act. Therefore, plaint deserves to be rejected. 8. 7. It is submitted that judicial intervention is limited to section 8, 9 and 11 of the Arbitration and Conciliation Act, and the suit as framed does not fall under any of such provisions, therefore is barred under section 5 of the Arbitration and Conciliation Act. Therefore, plaint deserves to be rejected. 8. The learned Senior counsel appearing on behalf of the applicant/defendant, vehemently contended that the relief claimed in the suit clearly shows that the plaintiff has challenged the order passed by the Arbitral Tribunal, dated 23.7.2012 and has sought consequential relief flowing therefrom and therefore, plaint deserves to be rejected. 9. The application is opposed by the learned counsel for the plaintiff/non applicant. It is vehemently contended that the parties to the litigation had filed different suits in this Court i.e. C.S. No.689 of 2001, C.S.No.711 of 2002, C.S.No.640 of 2005, C.S.No.22 of 2005, C.S.No.737 of 2004, C.S.No.119 of 2005. In the suits, the parties agreed that their dispute arising in relation to partnership deed, dated 23.3.1997 be resolved by referring it to arbitration. The parties had agreed that the Arbitration shall be conducted by a Panel of Arbitrators consisting of retired Judges of Hon'ble High Court, Madras. 10. It was vehemently contended by the learned counsel for the plaintiff/non applicant that the parties agreed to refer the dispute in the different suits referred to above, for adjudication through arbitration. In none of the suits, there was issue of dissolution of partnership therefore, it is not open to the Arbitral Tribunal to go beyond the scope of reference so as to include dispute which was not subject matter of the suits agreed to be referred to arbitration. 11. It was thus vehemently contended that once order is beyond the scope of reference and does not within the jurisdiction of the Arbitral Tribunal, it is open to the plaintiff to challenge it by filing civil suit. The suit therefore discloses cause of action and cannot be said to be barred under law to invoke Order 7 Rule 11 C.P.C. 12. On consideration, I find that this application deserves to succeed. The suit therefore discloses cause of action and cannot be said to be barred under law to invoke Order 7 Rule 11 C.P.C. 12. On consideration, I find that this application deserves to succeed. The reading of the prayer in the suit itself shows that the plaintiff/non applicant has invoked civil Court jurisdiction to challenge the order passed by the Arbitral Tribunal to consider certain disputes which according to the learned counsel for the plaintiff/ non applicant are not covered by the reference, whereas the stand of the defendants/applicant is that it is so covered. 13. It is not for this Court to go into this controversy, as whether the award qua dissolution would be maintainable or not as it will be open to the plaintiff/non applicant to challenge the award under section 34 of the Arbitration and Conciliation Act by raising all available grounds including the points raised in this suit. Even if the pleadings of suit are taken on its face value, the suit is certainly barred under section 5 of the Arbitration and Conciliation Act. 14. No judicial authority can interfere with the Arbitral proceedings. "There is no provision under the Act to challenge the order passed by the Arbitral Tribunal by invoking civil jurisdiction of this Court, even interim award can only be challenged under section 34 of the Arbitration and Conciliation Act and not by invoking civil jurisdiction of this Court. 15. Thus, it can safely be said that suit as framed is barred under section 5 of the Arbitration and Conciliation Act, therefore the plaint is liable to be rejected under Order 7 Rule 11 of C.P.C. 16. This view finds force from the judgment of the Hon'ble Supreme Court in C.D.C. Financial Services (Mauritius) vs. BPL Communication Ltd. and others (2003)12 SCC 140) wherein the Hon'ble Supreme Court was pleased to lay down that High Court cannot interfere with the arbitration proceedings in violation of mandate of section 5 of the Arbitration and Conciliation Act even in exercise of writ jurisdiction. The application is ordered. The plaint is rejected with liberty to the plaintiff/non applicant to raise all the points raised herein under section 34 of the Act, if so advised. No costs.