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2014 DIGILAW 352 (TRI)

Chanchal Ghosh v. Tripura Truck Owners Syndicate

2014-11-03

DEEPAK GUPTA

body2014
JUDGMENT Deepak Gupta, CJ. 1. This appeal is directed against the order dated 22.02.2002 passed by the learned District Judge, West Tripura, Agartala, whereby he allowed the appeal of the respondents (hereinafter referred to as the 'defendants') and set aside the Judgment & Decree dated 10.05.2010 passed by the learned Civil Judge (Jr. Divn.), No. 2, Agartala in Suit No. M.S. 5 of 2008 on the ground that the matter was required to be referred to arbitration. 2. The plaintiff is the owner of a truck and was a member of the defendant-Tripura Truck Owners Syndicate. The appellant filed a suit for recovery of Rs. 43,728/- along with interest @ 12% per annum on the ground that his truck had been deputed by the defendants and therefore, he was entitled to this amount from the defendant-Syndicate. I am purportedly not going into the facts in detail because in view of the decision which this Court proposes to take, it should not be appropriate to express any opinion on the merits of the dispute between the parties. The defendants contested the case and one of the grounds of contest was that the suit was not maintainable as there was an arbitration clause for settling the disputes between the parties. The learned trial Judge did not agree with the defendants and the suit was tried and decreed. The defendants filed an appeal and the learned Appellate Court held that there was an arbitration agreement between the parties and in terms of such agreement, the matter was required to be referred to arbitration. The learned Appellate Court, therefore, set aside the Judgment and decree and the suit was remanded to the Trial Court with a direction to consider the arbitration clause contained in the By-laws/Constitution of the defendants and to dispose of the matter by following the procedure prescribed in Section 89 of the CPC. Aggrieved by this order, the plaintiff has filed the present appeal. 3. No substantial question of law was framed at the time of filing of appeal, but in my view, the following substantial questions of law arise in the appeal:- i) Whether an application under Section 8 of the Arbitration and Conciliation Act must be filed and pressed before filing of the first written statement before the party claiming benefit of the arbitration clause can rely upon the same? ii) Whether it is necessary to produce the arbitration agreement at the time of filing of the application under Section 8 of the Arbitration and Conciliation Act? iii) Whether Section 89 of the CPC has any application to the facts of the case? 4. Section 8 of the Arbitration and Conciliation Act (hereinafter referred to as 'the Act') 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." A bare perusal of this Section shows that when any action is brought before a Judicial Authority and such action is the subject matter of an arbitration agreement then if a party to the said action applies before filing his first statement on the substance of the dispute, the Court may refer the matter to arbitration. Sub-section (2) of Section 8 of the Act states that the application under sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. 5. We are not concerned with sub-section(3) of the clause. Sub-section (1) of Section 8 of the Act contemplates that a party who wants to take benefit of the arbitration clause and wants the matter to be referred to arbitrator must apply to the Court before filing its first statement for referring the dispute to arbitration. The application must be for making a reference of the dispute to arbitration. 6. In the present case, the relevant portion of the written statement filed by the defendants reads as follows:- "1. The application must be for making a reference of the dispute to arbitration. 6. In the present case, the relevant portion of the written statement filed by the defendants reads as follows:- "1. That the Money Suit by the Plaintiff is not maintainable, firstly because in the face of the statement made in Paragraph-2 the Plaintiff is debarred from bringing any suit in the Civil Court being prohibited by the provisions of Clause-50 of the Constitution of Tripura Truck Owners Syndicate. There being no exception to the clause the suit should be dismissed on this ground alone." This is the entire averment in the written statement with regard to the alleged arbitration agreement. Assuming for the sake of deciding the matter that no separate formal application under Section 8 of the Act is required to be filed then also in terms of Section 8 of the Act, the party must apply for referring the dispute to arbitration. In this objection, there is no prayer that the dispute be referred to arbitration. The only issue raised is that the suit be dismissed in view of the prohibition contained in Clause 50 of the Constitution of the Tripura Truck Owners' Syndicate. Even the word 'arbitration' is not mentioned in this portion of the written statement. Therefore, I am of the considered view that there was no proper application, formal or otherwise, for referring the dispute to arbitration. 7. Further, as pointed out above, sub-section (2) of the Act clearly provides that the application referred to in sub-section (1) of the Act shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Even a clause of the Constitution, in my opinion, can constitute an arbitration agreement. However, either the original Constitution or a duly certified copy thereof containing Clause 50 should have been filed before the Trial Court. 8. The defendants did not even care to produce the Constitution or a certified copy thereof containing Clause 50 before the Trial Court. This was produced only before the Appellate Court. Therefore, even if it is presumed that there was an application for referring the dispute to arbitration since neither the original arbitration agreement nor certified copy thereof had been filed, the application itself could not have been entertained. 9. This was produced only before the Appellate Court. Therefore, even if it is presumed that there was an application for referring the dispute to arbitration since neither the original arbitration agreement nor certified copy thereof had been filed, the application itself could not have been entertained. 9. The learned District Judge, lower Appellate Court relied upon Section 89 of the CPC in coming to the conclusion that the matter should be referred to arbitrator. I am afraid that this view of the learned lower Appellate Court was totally incorrect. The purpose of referring disputes to arbitrator is that long pending disputes before the Courts are avoided. There is no purpose of sending a dispute to arbitrator after trial has been completed in the Civil Court and the matter decided on merits. Both Section 8 of the Act and Section 89 of the CPC are applicable when the suit or other proceedings before the Court are at the initial stage and the Courts are of the view that the matters can be decided through the means of an alternative dispute redressal system. After the dispute has been settled by the Trial Court, it would be of no use to refer it for arbitration though such a position may arise if at the appellate stage, the Court feels that there can be mediation between the parties. In the present case, it appears that before the Trial Court, the defendants did not press for referring the dispute for arbitration. 10. I have gone through the order sheets of the Trial Court and I find that it was never argued before the Trial Court that before the trial of the suit is proceeded with, the Trial Court should decide the question as to whether the dispute is required to be referred to arbitration or not. 11. The issues framed in the suit are as follows:- "ISSUES 1) Whether the suit is maintainable in law and form? 2) Whether the plaintiff is entitled to realise an amount of Rs. 43728/- at an interest of 12% from the defendants? 3) Whether the plaintiff is entitled to any other relief or reliefs in this case?" 12. These issues also do not contemplate the reference of the dispute to arbitration. 2) Whether the plaintiff is entitled to realise an amount of Rs. 43728/- at an interest of 12% from the defendants? 3) Whether the plaintiff is entitled to any other relief or reliefs in this case?" 12. These issues also do not contemplate the reference of the dispute to arbitration. Therefore, I am clearly of the view that Section 8 of the Arbitration and Conciliation Act has no applicability to the facts and circumstances of the case and similarly Section 89 of the CPC could not have been pressed into use to set aside the Judgment passed by a Trial Court on merits after the trial have been completed. Therefore, all the substantial questions of law framed are answered in favour of the plaintiff and against the defendants. 13. In this view of the matter, the appeal is allowed. The order of the learned lower Appellate Court is set aside and the matter is remanded to the lower Appellate Court to decide the appeal on merits on the other issues. 14. The party through the counsel are directed to appear before the learned Trial Court on 18th December, 2014 and the learned Trial Court shall hear and dispose of the appeal as early as possible and not later than 31st March, 2015.