J. K. Lakshmi Cement Limited v. Rajasthan Cement Agency
2017-07-06
SANGEET LODHA
body2017
DigiLaw.ai
ORDER : Sangeet Lodha, J. This petition is directed against order dated 21.5.16 passed by the Additional District Judge No. 2, Abu Road in Civil Suit No. 146/15, whereby an application preferred by the petitioner/defendant under section 8 of the Arbitration and Conciliation Act, 1996 ('the Act'), has been dismissed. 2. The facts relevant are that the respondent-plaintiff filed a suit for recovery of Rs. 6,12,750/- against the petitioner. The respondent, a cement dealer, has claimed the amount on the ground that on the basis of the reward points, it was entitled for a Micro Oven and a Hyundai i10 car. The suit is being contested by the petitioner Company by filing a written statement thereto. The petitioner Company has denied the claim of the respondent alleging "Unfair Trade Practice". The petitioner Company also filed an application under Section 8 of the Act, alleging that as per Clause 10 of the agreement dated 16.10.08 executed between the parties, the dispute sought to be raised is referable to the arbitration and thus, the civil court has no jurisdiction to entertain the suit. 3. The application has been rejected by the court below observing that the dispute raised in the suit is not covered by Clause 10 of the agreement and therefore, the same cannot be referred to the arbitration. Hence this petition. 4. Learned counsel appearing for the petitioner submitted that as per Clause 10 of the agreement entered into between the parties the dispute if any regarding products/services shall not constitute a claim against the Company and its agency and the matter can be referred to the Chief of Marketing of the Company whose decision will be final and binding to all. Learned counsel would submit that the dispute with regard to the prices on the basis of reward points certainly relate to product and services and thus, the claim of the respondent being covered by the arbitration clause in the agreement has to be referred to the arbitration. Learned counsel urged that there being arbitration clause in the agreement and the dispute sought to be raised being not incapable of adjudication and settlement by arbitration, the same must be referred to the arbitration and therefore, the court below was not justified in rejecting the application preferred by the petitioner under Section 8 of the Act.
Learned counsel urged that there being arbitration clause in the agreement and the dispute sought to be raised being not incapable of adjudication and settlement by arbitration, the same must be referred to the arbitration and therefore, the court below was not justified in rejecting the application preferred by the petitioner under Section 8 of the Act. In support of the contention, learned counsel has relied upon a decision of the Hon'ble Supreme Court in the matter of 'A. Ayyasamy v. A. Paramasivam & Ors.' (Civil Appeal Nos. 8245-8246 of 2016), decided vide judgment dated 4.10.16. 4.1. I have considered the submissions of the learned counsel and perused the material on record. 5. The Clause 10 of the agreement alleged to be arbitration clause reads as under : "10. The existence of a dispute if any regarding the products/services shall not constitute a claim against the company and its agency. The matter can be referred to Chief of Marketing of the Company, whose decision will be final and binding to all." 6. Indisputably, the respondent-plaintiff has filed the claim for recovery of money on the basis of the reward points earned and the same does not relate to the products/services as such which is not treated to be a claim against the Company or its agency capable of reference to arbitration and thus, the court below has committed no error in holding that the dispute raised in the suit by the respondent-plaintiff raising a claim on the basis of the reward points is not covered by the arbitration clause in the contract. 7. In the matter of A. Ayyasamy's case (supra) relied upon by the petitioner, the Hon'ble Supreme Court has observed that while dealing with the application under Section 8 of the Act, it has to be kept in mind that so far as statutory scheme of the Act is concerned, it does not specifically exclude any category of cases as not arbitrable. Such categories of non-arbitrable subjects are carved out by the Courts, keeping in mind the principle of common law that certain dispute which are of public nature etc.
Such categories of non-arbitrable subjects are carved out by the Courts, keeping in mind the principle of common law that certain dispute which are of public nature etc. are not capable of adjudication and settlement by arbitration and for resolution of such disputes, Courts i.e. public fora are better suited than a private forum of arbitration, therefore, the inquiry of the Court while dealing with the application under Section 8 of the Act, should be on the aforesaid aspect, viz. whether the nature of the dispute is such that it cannot be referred to arbitration even if there is an agreement between the parties. In the considered opinion of this Court, the aforesaid decision of the Hon'ble Supreme Court deals with the aspect of non-arbitrable disputes and it is nowhere laid down that even if a particular category of dispute is not covered by arbitration agreement between the parties yet while dealing with the application under Section 8 of the Act, it would be appropriate for the court to refer the dispute to the arbitration. 8. In this view of the matter, in the considered opinion of this Court, the order impugned passed by the court below does not suffer from any infirmity or illegality or jurisdictional error so as to warrant interference by this Court in exercise of its re-visional jurisdiction. 9. In the result, the petition fails, it is hereby dismissed.