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2014 DIGILAW 333 (CAL)

Deb Kumar Basu v. Amarpali Barter (P) Ltd.

2014-04-08

ASIM KUMAR RAY

body2014
JUDGMENT 1. This revisional application is directed against the order dated 5-7- 2013 as corrected by the order dated 15-7-2013 passed in Title Suit No. 13652 of 2012 (Deb Kumar Basu and Ors.–vs- Smt. Anita Paul and Ors. ) by learned Civil Judge (Senior Division ), 2nd Court, Alipore, South 24- Parganas whereby an application under Section 5 and 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act ) filed by opposite party No. 1/defendant No. 4 was allowed and Title Suit No. 13652 of 2012 was stayed subject to the outcome of the arbitration proceeding . 2. A brief background leading to the presentation of this revisional application is that petitioners as plaintiffs instituted Title Suit No. 13652 of 2012 before the Court of learned Civil Judge (Senior Division), 2nd Court, Alipore, South 24Parganas praying for declaration, partition and consequential relief. They also filed an application for temporary injunction and obtained an ad interim order of injunction restraining the opposite party No. 1/defefendant No. 4 from disturbing their peaceful possession or from changing the nature and character in respect of the suit property. The said interim order was extended from time to time. The opposite party No. 1 entered appearance. He submitted an application under Section 5 and 8 of the Act praying for stay of further proceeding of the suit. On hearing the parties the order impugned was passed giving rise to this revisional application. 3. Mr. Bidyut Kumar Banerjee, learned senior advocate appearing on behalf of the petitioner has contended that the application should not have been entertained by the learned Court below as the provisions laid down in Section 8 (2) of the act was not complied with. The application was not accompanied by the original arbitration agreement or duly certified copy thereof. It was accompanied with a photocopy of the agreement. The suit was for partition as well as for declaration. The bifurcation of causes of action for invoking application of Section 8 of the act is not permissible. Ashok Kumar Pal /O.P. No. 3 is one of the necessary parties in the suit who was not a party to the agreement and as such there was no scope for referring the matter to arbitration. Notice for referring the matter to arbitration was not in accordance with clause 6 of the arbitration agreement. Ashok Kumar Pal /O.P. No. 3 is one of the necessary parties in the suit who was not a party to the agreement and as such there was no scope for referring the matter to arbitration. Notice for referring the matter to arbitration was not in accordance with clause 6 of the arbitration agreement. It was insufficient to commence the arbitration proceeding. The opposite party did not disclose about an application submitted before this Court under Section 11 of the act at the time of filing application under Section 5 and 8 of the Act. It was suppressed. Petitioners cannot be estopped to raise points against the arbitration as their application being GA No. 1095 of 2013 was not decided on merit. There is scope of attraction of Section 16 (2) of the Act. He has referred to Sections 11, 16(2), 21 and 37(2) of the Act. He has relied on decisions reported in AIR 2003 SC 2252 (Sukanya Holdings Pvt. Ltd. –vs- Jayesh J. Pandya and another), AIR 2004 SC 3145 (Milkfood Ltd. –vs- M/s. GMC Ice Cream (P) Ltd.), (1997) 10 SCC 538 (Collector of Customs, Calcutta vs- The Plate Co. of India Ltd.) and AIR 2006 Rajasthan 43 (Tata Finance Ltd. –vs- Sumit Khamsera and another) in support of his contention. 4. Mr. Saptangshu Basu, learned senior advocate appearing for the opposite party has contended that the Suit was not a suit for partition. The plaint has been couched in such a manner so as to wriggle out of the provisions of the Arbitration and Conciliation Act, 1996. The petitioner has suppressed the order of appointment of arbitrator by this Hon’ble Court in AP No. 751 of 2012 and GA No. 1095 of 2013 on consent. The opposite party No. 1 has given notice to the petitioners to initiate arbitral proceeding as per the arbitration agreement and the arbitral proceeding was set in motion on appointment of arbitrator by this Court. The photocopy of the arbitration agreement was annexed with the application under Section 5 and 8 of the Act and the same cannot be highlighted to show non-compliance of Section 8 (2) of the Act as the petitioners took part in the process of appointment of arbitrator. There was no violation of natural justice. He has referred to Section 11 and 21 of the act. There was no violation of natural justice. He has referred to Section 11 and 21 of the act. He has relied on two unreported decisions of this Court passed in CO No. 1029 of 2012 (Romola Bhattacharjee –vs- Twilight Properties Pvt. Ltd. & Ors.) and CO No. 2576 of 2013 (M/s. PAM Infrastructure Projects Ltd. –vs- Lourdes Textile Pvt. Ltd. and another). 5. Minutely perused the revisional application, annexure thereto and the affidavits used by both the parties. Perused the relevant sections referred to by the learned advocates of the parties. Gone through the decisions placed before this Court. 6. It is an admitted fact that there was a development agreement which was entered into on 15-10-99 by the owners i.e. legal heirs of late Mukul Chandra Bose and Kali Shankar Bose, since deceased with the opposite party No. 1/defendant No. 4 for the purpose of development of the suit property appertaining to premises No. 39 and 39(1) Padma Pukur Road, Kolkata- 700 020, P.S. Ballygunje. The suit has been filed praying for a declaration that the agreement dated 15-10-99 has already rescinded and lost its legality, validity and force and is in no more effective and binding upon the plaintiffs. There was a prayer for preliminary decree for partition declaring the share of the plaintiffs and final decree accordingly. The copy of plaint has been annexed with the application. On perusal of the same it appears that there is some averment vide para 4, 15, 16, 21 and 23 projecting the case of the plaintiff for partition beside declaration. On close look of the plaint it appears that the main thrust of the plaint is against the agreement dated 15-10-1999. The main prayer is also on the same line. The master brain has couched the plaint so that it may be given a shape that the same is meant for partition and declaration. It has been projected that there are more than one cause of action so the suit may be beyond the track of the provisions of the Act. 7. At the cost of repetition, admittedly there is an arbitration agreement i.e. agreement dated 15-10-1999 for development of the suit property. Affidavit used by the opposite party No. 1 has annexure to show that notice was served upon the petitioners on 22nd June, 2012 as per agreement dated 15-10-99. 7. At the cost of repetition, admittedly there is an arbitration agreement i.e. agreement dated 15-10-1999 for development of the suit property. Affidavit used by the opposite party No. 1 has annexure to show that notice was served upon the petitioners on 22nd June, 2012 as per agreement dated 15-10-99. Subsequently, the opposite party No. 1 filed an application under Section 11 of the act praying for an appointment of arbitrator and the said application was registered as AP No. 751 of 2012. Application was taken up by this Court and an order was passed on 26th February, 2013. On perusal of the said order it appears that the existence of arbitration agreement was not questions by the respondents/petitioners herein. Mr. Dip Narayan Mitra was appointed as arbitrator. Subsequently the petitioner filed GA No. 1095 of 2013 praying for recalling the order dated 26th February, 2013. The said GA was taken up disposal and it has been disposed of by an order dated April 9, 2013 by this Hon’ble Court. The said order runs as follows: “GA No. 1095 of 2013 is an application for, in effect, changing the personnel of the arbitrator appointed by the order dated November 26, 2013. Since the parties are now agreed, the order dated February 26, 2013 is modified and Mr. P.K. Mullick, Sr. Advocate is appointed arbitrator in place and stead of the arbitrator named in the said order on the same terms and conditions. GA No. 1095 of 2013 is disposed of without any order as to costs.” 8. The order dated February 26, 2013 was modified and Mr. P.K. Mullick, Senior Advocate was appointed as arbitrator. That order was passed on consent of the parties. The petitioners were represented before the Court. The arbitral proceeding was started and the learned arbitrator held three sittings wherein both the parties participated. Copy of the minutes of the sittings have been annexed with the affidavit filed by the opposite party No. 1 /defendant No. 4 vide page No. 130, 131 and 132. 9. The revisional application is totally silent regarding the application under Section 11 of the Act, GA No. 1095 of 2013 and the orders passed by this Court on two occasions. The petitioners effectively participated at the time of disposal of application under Section 11 of the Act and GA No. 1095 of 2013. 9. The revisional application is totally silent regarding the application under Section 11 of the Act, GA No. 1095 of 2013 and the orders passed by this Court on two occasions. The petitioners effectively participated at the time of disposal of application under Section 11 of the Act and GA No. 1095 of 2013. The revisional application is also silent regarding the sittings already held by the learned arbitrator wherein they took part. 10. It is a fact that the application under Section 5 and 8 of the act was filed with a photocopy of the arbitration agreement but the same shall not be viewed treating it as lapses and non-compliance of provisions laid down in Section 8 (2) of the Act as the petitioner had a role in the appointment of the arbitrator before this Court. The order was passed on consent and that is why natural justice demands that non-submission of the original copy of the arbitration agreement or certified copy is not fatal. 11. In Sukanya Holdings Pvt. Ltd. –vs- Jayesh J. Pandya and another), reported in AIR 2003 SC 2252 , Section 5 and 8 of the act were dealt with. The Court held: “For interpretation of Section 8, Section 5 would have no bearing because it only contemplated that in the matters governed by Part –I of the Act, Judicial authority shall not intervene except where so provided in the Act. Except Section 8, there is no other provision in the Act that in a pending suit, the dispute is required to be referred to the arbitrator. Further, the matter is not required to be referred to the 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; (3) such application is not accompanied by the original arbitration agreement or duly certified copy thereof. This would, therefore, mean that 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.” 12. This would, therefore, mean that 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.” 12. In Milkfood Ltd. –vs- M/s. GMC Ice Cream (P) Ltd., reported in AIR 2004 SC 3145 has dealt with Section 21 of the Act. The Court held: “Once it is so construed , indisputedly the service of notice and/or issuance of request for appointment of an arbitrator in terms of arbitration agreement must be held to be determinative of the commencement of the arbitral proceeding.” 13. In Kifayatullah Haji Gulam Rasool and others –vs- Smt. Bilkish Ismail Mehsania and others, reported in AIR 2000 Bombay 424, the Hon’ble Apex Court dealt with Section 21 of the act and has observed “if in the arbitral agreement parties provide any other mode for commencement of the arbitral proceedings, the arbitral proceedings will commence in accordance therewith.” 14. In Tata Finance Ltd. –vs- Sumit Khamsera and another, reported in AIR 2006 Rajasthan 43, the Court has dealt with Section 8 and 11 of the act. 15. In Tin Plate Co. of India Ltd. –vs- Collector of Customs, Calcutta, reported in (1997) 10 SCC 538 , the Court has dealt with the intention of the party for deriving wrongful gain by way of suppression. 16. In the body of the order this Court has expressed that the arbitration agreement was put to action by the opposite party No. 1/defendnt No. 4 and the petitioner participated before this Court for appointment of arbitrator. The arbitrator was appointed on consent. In the aforesaid background the decision cited by the learned advocate of the petitioners regarding noncompliance of the provisions laid down in Section 8 (2) as well as clause 6 of the arbitration agreement are not helpful in this case. This Court has already dealt with about the silence of the revisional application regarding the appointment of the arbitrator and taking part of the petitioners in the day to day sitting before the learned arbitrator. 17. Taking the said background in mind, this Court find reason to express that the decisions reported in AIR 2006 Rajasthan 43 is not helpful to the petitioner. 18. 17. Taking the said background in mind, this Court find reason to express that the decisions reported in AIR 2006 Rajasthan 43 is not helpful to the petitioner. 18. On the contrary, two unreported decisions referred to by the learned advocate appearing for the opposite party No. 1 based on the clouching of pleading /plaint to avoid the process of arbitration and these decisions are squarely applicable in this case as on close look of the plaint of Title Suit No. 13652 of 2012, it appears that the case was for a declaration aiming at the development agreement than that of the partition. 19. Taking the above said overall background in judicious mind I find reason to express that there is no illegality and impropriety in the order impugned. 20. The revisional application stands dismissed. 21. The application being CAN No. 1211 of 2014 stand disposed of.