ASSAM STATE TRANSPORT CORPORATION v. GHOSH BROTHERS MOTORS PRIVATE LIMITED
2018-02-13
A.K.GOSWAMI
body2018
DigiLaw.ai
JUDGMENT/ORDER : 1. Heard Mr. I. Choudhury, learned senior counsel for the petitioner. Also heard Mr. D. Das, learned senior counsel, appearing for the respondent. 2. By this application under Section 115 of the Code of Civil Procedure, 1908 read with Article 227 of the Constitution of India, the petitioner challenges (i) the order dated 01.09.2015 passed by the learned Civil Judge No.3, Kamrup (M) at Guwahati in Title Suit No.184/2015 rejecting a petition filed under Order 7 Rule 11 read with Section 151 CPC, registered as Petition No.2381/2015, (ii) an order of status quo dated 27.05.2015 passed by the learned Civil Judge No.3, Kamrup (M) in Misc. (J) Case No.118/2015 arising out of Title Suit No.184/2015 and (iii) prays for setting aside and quashing the proceeding in Title Suit No.184/2015 pending in the Court of the learned Civil Judge No.3, Kamrup (M) at Guwahati. 3. Pursuant to a Notice Inviting Tender (NIT) dated 08.05.2010 issued by the petitioner, inviting tenders for running the Yatri Nivas situated at Assam State Transport Corporation (ASTC) Complex, Paltanbazar, Guwahati, the respondent had responded and being successful, an Agreement of Licence was entered into by and between the petitioner and the respondent on 22.01.2011. Clause-21 of the said Agreement provides a power/right to revoke the Deed of Licence executed with the Licensee subject to the conditions stated thereon being satisfied. It also provided for termination of the Deed of Licence for any other reasons. Clause-22 of the Agreement provides that if any difference and dispute arises between the parties during the period of the Agreement, the same may be settled amicably and in case of failure, such difference/dispute may be referred to arbitration proceeding as per the Arbitration and Conciliation Act, 1996 (for short, "1996 Act"). 4. A notice for termination of allotment and Deed of Agreement dated 19.04.2012 was issued by the Managing Director of ASTC indicating therein that there was default in payment of monthly licence fee for 12 (twelve) months as well as violation of the terms and conditions of the Deed of Agreement including construction of 22 (twenty-two) new rooms without any permission and consent from the Licensor. On 26.02.2015, a notice was issued to the respondent by the Managing Director, ASTC asking, amongst others, to pay the entire outstanding licence fee amounting to Rs.
On 26.02.2015, a notice was issued to the respondent by the Managing Director, ASTC asking, amongst others, to pay the entire outstanding licence fee amounting to Rs. 4,35,90,000/- excluding the Service Tax to ASTC immediately and to vacate and hand over the Yatri Nivas to the Licensor within 1 (one) month. 5. On 22.05.2015, the respondent filed a petition under Section 11 of the 1996 Act before this Court, which was registered as Arbitration Petition No.15/2015. This Court, by order dated 22.05.2015, disposed of the said petition holding that in view of the limited jurisdiction under Section 11 of the 1996 Act, which is confined to appointment of arbitrator, it would not be appropriate for the Court to pass any order in respect of the notice issued by the first party to the Licensee. Accordingly, the second party to the Agreement, i.e. the petitioner, was given liberty to invoke arbitration clause through due process and apply for relief before the competent forum. 6. By letter dated 22.05.2015, the petitioner prayed for referring the dispute/disputes to arbitration proceeding and 4 (four) days later, the respondent filed a suit in the Court of the learned Civil Judge No.1, Kamrup (M) at Guwahati, which was registered as Title Suit No.184/2015. It is submitted by the learned counsel appearing for the parties that subsequently the said suit was transferred to the Court of the learned Civil Judge No.3, Kamrup (M) at Guwahati for disposal. The respondent also filed an application under Section 39 of the Specific Relief Act, 1963 read with Order 39 Rules 1 & 2 and Section 151 CPC for grant of injunction, which was registered as Misc. (J) Case No.118/2015. 7. The learned trial Court, by an order passed on 27.05.2015, after hearing the learned counsel for the plaintiff, directed maintenance of status quo as regards possession of the suit premises and fixed 17.06.2015 for service report and objection. The petitioners filed objection to the injunction application on 17.06.2015 and on that day, also filed an application under Order 7 Rule 11 read with Section 151 CPC. The petitioner had stated that they had also filed another petition being Petition No.2854/2015 seeking leave to file written statement and counter-claim at a later stage in the event of dismissal of the application No.2381/2015 (herein mentioning the date of application as 16.06.2015).
The petitioner had stated that they had also filed another petition being Petition No.2854/2015 seeking leave to file written statement and counter-claim at a later stage in the event of dismissal of the application No.2381/2015 (herein mentioning the date of application as 16.06.2015). It is also stated that on refusal to grant leave, the petitioners filed written statement. The copy of the petition and the order passed thereon are, however, not annexed with this petition. On a specific query of the Court, Mr. Choudhury submits that the said petition was rejected on 17.06.2015 and the written statement was filed on 21.07.2015. 8. Mr. Choudhury submits that the learned Court below committed manifest illegality in rejecting the application under Order 7 Rule 11 read with Section 151 CPC as filing of the suit was an abuse of the process of the Court. He has submitted that the arbitration petition was filed before this Court by arraying the State of Assam as a party respondent but in order to avoid notice under Section 80 CPC, deliberately, State of Assam was not made a party respondent. He has strenuously argued that the suit filed by the respondent was not maintainable as this Court had granted liberty to the respondent to invoke the forum of arbitration and the learned trial Court failed to consider this aspect of the matter. Mr. Choudhury submits that though the application under Order 7 Rule 11 read with Section 151 CPC did not mention the sub-clauses under the aforesaid provision, the application has to be construed to be one under Clause (a) and Clause (d) of Order 7 Rule 11 CPC. The learned senior counsel also submits that having regard to the factual matrix, the order dated 27.05.2015 granting injunction in favour of the respondent is also liable to be interfered with. The learned counsel in support of his contentions has placed reliance on the judgments of the Supreme Court in the case of Popat and Kotecha Property Vs. State Bank of India Staff Association, reported in (2005) 7 SCC 510 , with particular reference to Paragraphs-16 & 17 thereof as well as Ramesh Chandra Sankla & Ors. Vs. Vikram Cement & Ors., reported in (2008) 14 SCC 58 , with particular reference to Paragraphs-90, 91, 92 & 98. 9. Mr.
State Bank of India Staff Association, reported in (2005) 7 SCC 510 , with particular reference to Paragraphs-16 & 17 thereof as well as Ramesh Chandra Sankla & Ors. Vs. Vikram Cement & Ors., reported in (2008) 14 SCC 58 , with particular reference to Paragraphs-90, 91, 92 & 98. 9. Mr. Das, on the other hand, has submitted that the learned trial Court was wholly justified in rejecting the application Order 7 Rule 11 read with Section 151 CPC. He has submitted that though Mr. Choudhury has argued that the application was one under Clause (a) also, the application does not disclose that any plea was taken with regard to non-disclosure of a cause of action. He submits that the projection made in the said application was that in view of the arbitration clause, the suit is not maintainable. He also submits that the injunction matter is yet to be heard after the objection was filed and, therefore, when such an order dated 27.05.2015 was challenged after a lapse of about 6 (six) months, no interference is called for with regard to the same. He has placed reliance on a judgment of this Court in the case of M/s Maa Sarada & Co. Vs. Sahidul Hoque (CRP No.223/2016), disposed of on 30.01.2018. 10. Upon hearing the learned counsel appearing for the parties and on perusal of the materials on record, I find considerable force in the submission of Mr. Das. 11. At the outset, it will be appropriate to take note of the provision of Section 8 of the 1996 Act 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.
(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." 12. 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. 13. In M/s Maa Sarada & Co. (supra), it was held that under the 1996 Act, 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 1996 Act only provides that when an application in terms of Section 8 is made then the court shall refer the parties to arbitration. Therefore, Order 7 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. 14. If the petitioner was aggrieved by the order passed on 17.06.2015 by rejection of Misc. (J) Case No.118/2015, they could have assailed the said order by filing an appeal and before filing the written statement, could have filed an application under Section 8 of the 1996 Act.
14. If the petitioner was aggrieved by the order passed on 17.06.2015 by rejection of Misc. (J) Case No.118/2015, they could have assailed the said order by filing an appeal and before filing the written statement, could have filed an application under Section 8 of the 1996 Act. A perusal of the application filed under Order 7 Rule 11 read with Section 151 CPC goes to show that emphasis was placed on Clause-22 of the Agreement providing for arbitration and it was also pleaded that in view of the order dated 22.05.2015 passed in Arbitration Petition No.15/2015, it was not open to the plaintiff to file the suit and on the aforesaid premises, the suit was contended to be an abuse of the process of the Court. 15. It is to be noticed that by the aforesaid order dated 22.05.2015, liberty was granted to the respondent to invoke arbitration clause. The respondent, after giving a notice for arbitration, immediately filed the suit and in such a situation, it was open to the petitioner to have filed an appropriate application before the learned trial Court for referring the parties to arbitration. Instead of doing so, the application under Order 7 Rule 11 CPC read with Section 151 CPC was filed and not only that, the petitioner had also filed written statement on 21.07.2015, thus, surrendering to the jurisdiction of the learned Civil Court. 16. In Popat and Kotecha Property (supra), it was observed that if on a meaningful and not formal reading of the plaint, it is manifestly vexatious and meritless in the sense of not disclosing a clear right to sue, it should exercise the power under Order 7 Rule 11 CPC. In the instant case, there is no whisper in the entire application under Order 7 Rule 11 read with Section 151 CPC that there was patent lack of cause of action. 17. In Ramesh Chandra Sankla (supra), the Supreme Court had reiterated that while exercising supervisory jurisdiction, a High Court not only acts as a Court of law but also as a Court of equity and that it is, therefore, also the duty of the Court to ensure that power of superintendence must advance the ends of justice and uproot injustice. The learned trial Court, in absence of any application under Section 8 of the 1996 Act, had rightly rejected the application for rejection of the plaint.
The learned trial Court, in absence of any application under Section 8 of the 1996 Act, had rightly rejected the application for rejection of the plaint. In the fact situation, equitable considerations do not come into play. 18. In view of the above discussions, I find no merit in this application and accordingly, the civil revision petition is dismissed. 19. However, as it is pointed out by the learned counsel appearing for the parties that though the objection was filed by the respondent, the Misc. (J) Case No.118/2015 is not yet heard, the learned trial Court is directed to hear the parties and decide the injunction application within a period of 1 (one) month from the date of appearance of the parties. The learned trial Court is also directed to make an endeavour to dispose of the suit within a period of 8 (eight) months from the date of appearance of the parties. 20. The parties to the proceedings, either by themselves or through their learned counsel, will appear before the learned trial Court on 26th February, 2018.