Research › Search › Judgment

Gauhati High Court · body

2018 DIGILAW 166 (GAU)

MAA SARADA AND CO v. SAHIDUL HOQUE

2018-01-30

A.K.GOSWAMI

body2018
JUDGMENT & ORDER : 1. Heard Mr. S. Murarka, learned counsel appearing for the petitioner. Also heard Mr. R. De, learned counsel appearing for the respondent. 2. This application under Article 227 of the Constitution of India read with Section 151 CPC is filed by the petitioner challenging the order dated 04.05.2016, passed by the learned Munsiff No. 1, Dhubri, in Title Suit No. 28/2015, rejecting an application filed under Order VII Rule 11 CPC. 3. The plaintiff/respondent filed a suit in the court of the learned Munsiff No. 1, Dhubri, wherein the same was registered as T.S. No. 28/2015. The suit was for declaration of specific performance of contract and for permanent injunction. In the suit, the following prayers were made by the plaintiff: (a) For a decree of specific performance of contract directing the defendant to receive the outstanding amount of Rs. 1,40,700/- (one lakh forty thousand seven hundred only) from the plaintiff under the hire-Purchase Agreement dated 18.03.2011 executed by and between the plaintiff and the defendant. (b) For a decree directing the defendant to issue a Loan Clearance Certificate to the plaintiff after receiving the outstanding amount of Rs. 1,40,700/- (one lakh forty thousand seven hundred only) from the plaintiff. (c) A perpetual injunction be awarded restraining the defendant from taking over the possession of the said truck of the plaintiff. (d) For a declaration that the Hire-Purchase Agreement shown to be executed by the plaintiff on 03.04.2014 is manufactured/fabricated one and the same is null and void in the eye of law. (e) For a further declaration that the defendant is not entitled to recover and realize Rs. 5,15,373/- or any amount from the plaintiff under the fake Hire-Purchase Agreement dated 03.04.2014. (f) Cost of the suit and any other relief to which the plaintiff is entitled under law and equity." 4. The defendant filed written statement on 22.04.2015. In paragraph 1 (b) and paragraph 1 (c), of the written statement, it is stated as follows: "1. (a) *** *** *** (b) That, this court has got no jurisdiction to try this suit. The Hire-purchase agreements and Agreement of Arbitrations executed and signed between the plaintiff and the defendant on 18.03.2011 and on 30.04.2014, where in Clause 22 each of which provides for arbitration for resolution of any dispute or difference between the parties arising out of or relating to the contract. The Hire-purchase agreements and Agreement of Arbitrations executed and signed between the plaintiff and the defendant on 18.03.2011 and on 30.04.2014, where in Clause 22 each of which provides for arbitration for resolution of any dispute or difference between the parties arising out of or relating to the contract. Section 2 (e) of ARBITRATION AND CONCILIATION ACT, 1996 read with other provisions thereof which clearly says that "the civil court means the principal civil court or original jurisdiction in the district and does not include any civil court of a grade inferior to such principal civil court." As such this Honble Court, i.e. Munsiff Court lacked jurisdiction to entertain the suit and the case. (c) That, this suit is barred under the provisions of the Arbitration and Conciliation Act, 1996, the Indian Contract Act, the Specific Relief Act (as the petitioner has acquired no legal right to seek for negative declaration) as well as under the principles of Estoppel, Waiver and Acquiescence." 5. In the plaint, there is reference to two Hire-Purchase Agreements: one dated 18.03.2011 and the other dated 03.04.2014. The plaintiff admits the Hire-Purchase Agreement dated 18.03.2011 and contends that the Hire-Purchase Agreement dated 03.04.2014 is a manufactured/fabricated document. 6. The petitioner had the occasion to approach this Court earlier by filing an application under Article 227 of the Constitution of India read with Section 151 CPC, which was registered as CRP 417/2016, wherein the orders dated 22.04.2015, passed by the learned Munsiff No. 1, Dhubri, in Misc. (J) Case No. 25/2015 (in T.S. No. 28/2015) and the order dated 01.09.2015, passed by the learned Civil Judge, Dhubri, in Misc. Appeal No. 7/2015, whereby the petitioner was restrained from taking possession of the vehicle, had been put to challenge. The aforesaid Civil Revision Petition was allowed by an order dated 09.10.2015, setting aside the order passed by the learned Munsiff granting injunction, which was affirmed in Title Appeal No. 7/2015. 7. On 09.02.2016, the petitioner filed a petition under Order VII Rule 11 CPC stating that the suit is barred under Section 8 of the Arbitration and Conciliation Act, 1996 (for short, "Act of 1996") and under Section 9 CPC. An objection was filed to the said petition. The learned court below, by the order dated 04.05.2016, rejected the petition. It is as against the said order dated 04.05.2016 that this instant revision petition has been filed. 8. An objection was filed to the said petition. The learned court below, by the order dated 04.05.2016, rejected the petition. It is as against the said order dated 04.05.2016 that this instant revision petition has been filed. 8. The argument of Mr. Murarka is that in the written statement filed by the defendant, plea was taken that the civil court had no jurisdiction to try the suit and, therefore, the learned court below committed manifest illegality in rejecting the aforesaid petition. He has drawn the attention of the court to paragraph 9 of the judgment dated 09.10.2015, passed in CRP 417/2015, to contend that this court had already recorded a finding that the dispute relating to the Agreement dated 18.03.2011 is required to be sent to arbitration. It is submitted by him that the learned trial court, on a totally erroneous premise, that the validity and legality of the Agreement dated 03.04.2014 cannot be decided by the arbitrator, had opined that the suit needs to be decided by the civil court. 9. Mr. De, on the other hand, has submitted that there is no question of referring the parties to arbitration as the petitioner did not file any application in terms of Section 8 of the Act of 1996 before submitting its first statement of defence and the petitioner had participated in the proceeding and issues were also famed in the suit on 18.08.2015. There is no bar as such for the civil court to adjudicate the disputes which are arising out of an agreement in which there is an arbitration clause, but if any application is filed in consonance with Section 8 of the Act of 1996 before filing of the first statement of defence, then it becomes obligatory for the court to refer the parties to arbitration. He submits that as there is no inherent bar, very filing of the petition under Order VII Rule 11 CPC is misconceived. He has placed reliance on the judgment of this court in the case of West Bengal State Electricity Board and Others vs. Ms. Shanti Companies Pvt. Ltd., reported in AIR 2004 Gauhati 70, Mahesh Kumar vs. Rajasthan State Road Transport Corporation, Jodhpur., reported in AIR 2006 Rajasthan 56 and Arti Jethani vs. Daeshsan Trading (India) Pvt. Ltd., reported in 2011 (2) Arb. LR 382. 10. Shanti Companies Pvt. Ltd., reported in AIR 2004 Gauhati 70, Mahesh Kumar vs. Rajasthan State Road Transport Corporation, Jodhpur., reported in AIR 2006 Rajasthan 56 and Arti Jethani vs. Daeshsan Trading (India) Pvt. Ltd., reported in 2011 (2) Arb. LR 382. 10. At the outset, it will be appropriate to take note of the provision of Section 8 of the Act of 1996 as it stood at the relevant point of time, i.e., prior to the amendment with effect from 23.10.2015. Section 8 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." 11. In West Bengal State Electricity Board (supra), after submitting written statement the defendants filed an application under Section 8 seeking reference of the dispute to arbitration. This court, in such circumstances, had held that the application filed was not maintainable and the court, under Section 8, can refer for arbitration a dispute pending in a civil suit only when the party or parties concerned make application for getting the dispute referred to arbitration before submitting written statement. If, despite existence of arbitration clause the parties choose to contest the suit, the powers under Section 8 cannot be invoked. 12. In Arti Jethani (supra) , the Delhi High Court had held that mere disclosure of arbitration agreement in the written statement and claiming that civil court has no jurisdiction to try the suit would be of no consequence unless the written statement itself contains a prayer for referring the dispute for arbitration. 13. In Mahesh Kumar (supra), the Rajasthan High Court had held that a separate application is required to be filed under Section 8 (1) of the Act of 1996 and the plea cannot be taken in the written statement. 14. 13. In Mahesh Kumar (supra), the Rajasthan High Court had held that a separate application is required to be filed under Section 8 (1) of the Act of 1996 and the plea cannot be taken in the written statement. 14. Section 8 (1) does not in terms speak about filing of an application, but the expression used therein is "if a party so applies.". However, close on the heels of Section 8 (1) , a reference is made in Section 8 (2) to "the application referred to in sub-section (1) " providing that such an application shall not be entertained unless it is accompanied by original arbitration agreement or a duly certified copy thereof. Section 8 (3) also reiterates the expression "an application", when it provides that 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. 15. A comprehensive reading of Section 8 would go to show that filing of an application is a condition precedent for referring the parties to arbitration and such application is required to be filed not later than when submitting the first statement on the substance of the dispute. 16. In the instance case, no such application was filed. Coming to the argument of Mr. Murarka that it would suffice if requisite averments are made in the written statement, it is seen that there is no prayer in the written statement to refer the parties to arbitration. A perusal of paragraph 1 (b) and 1 (c) of the written statement of the petitioner would go to show that it was contended that the court of Munsiff lacked jurisdiction to entertain the suit as it is not the Principal Civil Court and that suit is barred under certain Acts including the Act of 1996. There is no averment that because of the arbitration clause, the parties are to be referred to arbitration. Not only that, the petitioner had willingly participated in the proceeding. This exposes the hollowness of the contention of the petitioner. 17. Under the Act of 1996, there is no total ouster of jurisdiction of the Civil Court where there is an arbitration clause in the contract between the parties in the suit. Not only that, the petitioner had willingly participated in the proceeding. This exposes the hollowness of the contention of the petitioner. 17. Under the Act of 1996, there is no total ouster of jurisdiction of the Civil Court where there is an arbitration clause in the contract between the parties in the suit. Therefore, it cannot be countenanced that jurisdiction of the civil court is barred to entertain a suit only because there is an arbitration clause in the contract agreement. The Act of 1996 only provides that when an application in terms of Section 8 is made then the court shall refer the parties to arbitration. Therefore, Order VII Rule 11 (d), which provides that the plaint shall be rejected where the suit appears from the statement in the plaint to be barred by any law, is clearly not attracted. 18. The reference made to the earlier order of this court in CRP 417/2015 is also misplaced. In the said order, at paragraph 9, no doubt, it was stated that where there is an arbitration clause in the agreement, it is obligatory on the part of the court to refer the parties to arbitration in terms of their arbitration agreement. The said statement has to be understood in the general context and it cannot be stretched to say that the requirement of Section 8 of the Act of 1996 to apply for referring the matter to arbitration was done away with. 19. In view of the above discussion, I am of the considered opinion that the petition under Order VII Rule 11 CPC was totally misconceived and no interference is called for with regard to the impugned order. 20. Accordingly, the revision petition is dismissed. No cost.