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2021 DIGILAW 478 (RAJ)

Prahlad Nath v. Sunder Nath @ Samundra Nath

2021-02-24

ARUN BHANSALI

body2021
JUDGMENT 1. This appeal is directed against judgment and decree dated 01.06.2019 passed by the Additional District Judge No.2, Bhilwara, whereby, the appeal filed by the appellant against judgment and decree dated 01.03.2019 passed by Civil Judge Mandal, District-Bhilwara, has been dismissed. 2. The plaintiff filed the suit for injunction against respondents Sunder Nath and Banshi Nath alongwith the Mining Department. 3. On filing of the suit, an application under Order VII Rule 11 CPC was filed inter alia indicating that as there is arbitration agreement between the parties in the partnership deed, the suit was barred and plaint was liable to be rejected under Order VII Rule 11 (d) CPC. 4. The application was contested by the appellant, however, the trial court while referring to the provisions of Section 8 of the Arbitration & Conciliation Act, 1996, ('the Act') came to the conclusion that as there was arbitration agreement between the parties, the plaint was liable to be rejected under Order VII Rule 11 (d) CPC. 5. Feeling aggrieved the appellant filed first appeal. 6. The first appellate court, reiterating the findings recorded by the trial court, rejected the appeal. 7. Learned counsel for the appellant made submissions that both the courts below were not justified in rejecting the plaint under provisions of Order VII Rule 11 CPC as barred by law based on the provisions of Section 8 of the Act. 8. Submissions were made that as in the suit Mining Department was also a party, which was not a party to the arbitration agreement, the provisions of Section 8 had no application. 9. Further submissions were made that the application was not filed under Section 8 of the Act and was filed under Order VII Rule 11 CPC and, therefore, also the same was liable to be rejected. 10. Submissions were also made that as there were allegations of fraud and malpractices, only the civil court could have dealt with the said aspect and matter could not have been referred to arbitration and on that count also the judgments impugned deserves interference / give rise to substantial questions of law. 11. I have considered the submissions made by learned counsel for the appellant and have perused the material available on record. 11. I have considered the submissions made by learned counsel for the appellant and have perused the material available on record. Both the courts have, concurrently, came to the conclusion that there was arbitration agreement between the appellant and Sunder Nath and Banshi Nath contained in the partnership deed. 12. It is true that the application was filed under Order VII Rule 11 CPC instead of Section 8 of the Act, however, the court with reference to provisions of Section 8 of the act has passed the order. 13. Hon'ble Supreme Court in P. Anand Gajapathi Raju v. P.V.G. Raju : (2000) 4 SCC 539 , has laid down that once the provisions of Section 8 are applied, the suit is liable to be dismissed and, therefore, merely because the application was filed under Order VII Rule 11 CPC, by itself cannot give rise to a substantial question of law. 14. So far as the submissions made regarding the allegations being that of fraud in the plaint are concerned, a larger Bench of Hon'ble Supreme Court in Vidya Drolia & Ors. v. Durga Trading Corporation: (2020) 4 DNJ (SC) 1368 has, exhaustively, dealt with the said aspect and has came to the following conclusion: "In view of the aforesaid discussions, we overrule the ratio in N. Radhakrishnan inter alia observing that allegations of fraud can be made a subject matter of arbitration when they relate to a civil dispute. This is subject to the caveat that fraud, which would vitiate and invalidate the arbitration clause, is an aspect relating to non-arbitrability." 15. So far as the submissions made regarding the Mining Department being not a party to the arbitration agreement is concerned, a perusal of the plaint allegations indicates that the dispute is inter se the partners of the Firm and essentially for implementing the resolution by way of the suit the department was made party. As such the department has no role in the dispute itself as such the presence of the department as a party to the suit was of no consequence. 16. In view thereof, the appeal does not give rise to any substantial question of law. The same is, therefore, dismissed.