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Satish Kumar Singal and ors. Vs. Jagdish Chander Singal and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revision No. 1154 of 2005
Judge
Reported in(2005)140PLR481
ActsArbitration Act, 1940 - Sections 2 and 33; Arbitration and Conciliation Act, 1996 - Sections 7; Code of Civil Procedure (CPC) , 1908 - Sections 115 and 151 - Order 39, Rules 1 and 2
AppellantSatish Kumar Singal and ors.
RespondentJagdish Chander Singal and ors.
Advocates: S.S. Bhinder, Adv.
DispositionPetition dismissed
Cases ReferredMunna Lal v. Suraj Bhan
Excerpt:
.....ad interim injunction - application allowed in part and interim order was passed - respondents filed appeal against interim order - during pendency of appeal, respondent no. 1 filed application with prayer for adjourning appeal on ground that parties have entered into agreement to appoint arbitrator to settle dispute -court found that no arbitration agreement has been produced on file and for long time no award has been passed - thus, court ordered for restoration of appeal - hence, present petition filed by petitioners - held, it is evident that there is no written agreement of arbitration attracting provisions of act - reference to mediation of third party, during pendency of appeal, filed by respondents against grant of interim order passed by civil judge would not amount to..........of the appeal, defendant-respondent no. 1 filed an application with a prayer for adjourning the appeal sine die (annexure p-2) on the ground that the parties have entered into an agreement to appoint arbitrator to settle the dispute. it was asserted that the arbitrator had started the proceedings and, therefore, the decision on the appeal be adjourned and, therefore, the decision on the appeal be adjourned sine die. it was further stipulated that any of the parties was entitled to get the appeal restored after the decision of the arbitrators. accordingly, the learned additional district judge vide his order dated 7.1.2002 adjourned the appeal sine die (annexure p-3). the aforementioned order reads as under:-'the case is fixed for arguments for today. inspite of arguments counsel for.....
Judgment:

M.M. Kumar, J.

1. This petitioner filed under Article 227 of the Constitution read with Sections 115 and 151 of the Code of Civil Procedure, 1908 (for brevity 'the Code') prays for setting aside order dated 10.1.2005 (Annexure P.1) passed by the Id. Addl. District Judge Bhatinda. The plaintiff-petitioners No. 2 and 4 have filed a civil suit for declaration seeking permanent injunction against the defendant-respondents. In the suit a prayer was made for restraining Municipal Committee, Bathinda respondent N o. 8 from changing entry in the column of ownership in the House Tax Assessment Registrar regarding Building No. 4443, situated at Old Satta Bazar, Bathinda from the name of plaintiff-petitioner No. 2 to any other name. A further direction was sought restraining defendant-respondent No. 1 from alienating any portion of the house and 1/2 share of plot No. 73 situated at Sector 15-A Noida. Along with the suit an application under Order XXXIX Rules 1 and 2 of the Code was also filed seeking ad interim injunction. The aforementioned application was partly allowed by the Civil Judge vide order dated 11.2.1999.

2. The defendant-respondents filed C.A. No. 15 of 7.3.1999 before the Ld. Addl. District Judge, Bhatinda against the afore mentioned interim order dated 11.2.1999. During the pendency of the appeal, defendant-respondent No. 1 filed an application with a prayer for adjourning the appeal sine die (Annexure P-2) on the ground that the parties have entered into an agreement to appoint arbitrator to settle the dispute. It was asserted that the arbitrator had started the proceedings and, therefore, the decision on the appeal be adjourned and, therefore, the decision on the appeal be adjourned sine die. It was further stipulated that any of the parties was entitled to get the appeal restored after the decision of the arbitrators. Accordingly, the learned Additional District Judge vide his order dated 7.1.2002 adjourned the appeal sine die (Annexure P-3). The aforementioned order reads as under:-

'The case is fixed for arguments for today. Inspite of arguments counsel for the appellant moved an application for adjournment of appeal as sine-die as the parties have entered into agreement to appoint the arbitrator to settle the dispute, which is not opposed by the opposite counsel. In view of the application the appeal is adjourned as sine-die. Lower court file be sent back and file of this Court be consigned to the record room.'

3. Similar statement was made before the Civil Judge and the proceedings in the civil suit were also adjourned sine die (Annexure P-4) vide order dated 7.1.2002 which reads as under:-

'Ld. Counsel for plaintiff has given a statement that since various cases related to the family properties has been referred to the Arbitrator, as such the present case may be adjourned sine-die. Ld. Counsel for defendants have also made a statement that they have no objection if the suit is adjourned sine-e-die. Heard. In view of their statement the suit is adjourned sine-die. File be consigned.'

4. The Arbitrator who was appointed by the parties, namely, Shri Nand Lal Garg had ceased to act as an Arbitrator. The Addl. District Judge further found that no other arbitration agreement has been produced on the file. For the last more than three years no award has been passed. In view of the afore-mentioned facts and circumstances, the appeal was ordered to be restored to its original number directing the hearing of the appeal and fresh notices were issued. The application for implement of L.Rs. of some the defendant-respondents was also ordered to be placed before the ld. Addl. District Judge who was to hear the appeal. It was further observed that the application filed by the other respondents on 28.10.2004 for passing order to refer the disputes for arbitration was also ordered to be placed on the main file which was to be considered at the appropriate stage.

5. Shri S.S. Bhinder, learned counsel for the petitioner has argued that once the matter has been referred to the Arbitrator, no proceedings in the appeal directed against the order dated 11.2.1999 passed under Order XXXIX Rules 1 and 2 of the Code could have been undertaken and the proceedings should have continued to remain adjourn sine die. He has placed reliance on a judgment of the Supreme Court in the case of P.Anand Gajapathi Raju and Ors. v. PVG Raju and Ors., A.I.R. 2000 S.C. 1886 in support of his submission and has argued that once the arbitration agreement covers all the disputes between the parties then the jurisdiction of the Civil Court is barred.

6. After hearing the learned counsel, I am of the considered view that order dated 10.1.2005 (Annexure P-1) passed by the learned Additional District Judge does not suffer from any legal infirmity warranting interference of this Court. It has been concluded that there is no arbitration agreement between the parties which may warrant reference to an arbitrator or continuation of the dispute for adjudication to a third person. The law requires existence of a written agreement as has been laid down by Section 2 of the Arbitration Act, 1940 and Section 7 of the Arbitration and Conciliation Act, 1996. In addition the Supreme Court has held in the case of K.K. Modi v. K.N.Modi, 1998(3) S.C.C. 573 that the attributes which must be present for an agreement to be considered as an arbitration agreement are:-

'(1) The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement.

(2) that the jurisdiction of the tribunal to decide the rights of parties must be derived either from the consent of the parties or from an order of the Court or from a statute, the terms of which make it clear that the process is to be an arbitration,

(3) the agreement must contemplate that substantive rights of parties will be determined by the agreed tribunal.

(4) that the tribunal will determine the rights of parties in an impartial and judicial ' manner with the tribunal owing an equal obligation of fairness towards both sides.

(5) that the agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law and lastly.

(6) the agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal.

The other factors which are relevant include whether the agreement contemplates that the tribunal will receive evidence from both sides and hear their contentions or at least give the parties an opportunity to put them forward; whether the wording of the agreement is consistent or inconsistent with the view that the process was intended to be an arbitration, and whether the agreement requires the tribunal to decide the dispute according to law.'

7. In K.K. Modi's case (supra) a family dispute for the distribution of assets owned by two brothers was to be settled in accordance with a scheme to be prepared by Bansi S. Mehta & C o. 11 was further provided by Clause 9 of the Memorandum of under-standing that any dispute regarding implementation or clarifications were to be referred to the Chairman of a public corporation. After receipt of various representations and help of experts the Chairman of the Corporation submitted his report which was not filed in Court as an award. The said report was challenged in an arbitration petition filed under Section 33 of 1940 Act by one party and the other party filed a suit. The question regarding nature of Clause 9 arose before the Supreme Court. The Supreme Court, concluded that there are broad tests which required to be followed to ascertain whether a clause in the agreement is to refer an issue to an expert or whether the parties have agreed to resolve disputes through arbitration. Those broad guide-lines are as under:-

'Therefore Indian courts have laid emphasis on (1) existence of disputes as against intention to avoid future disputes; (2) the tribunal or forum so chosen is intended to act judicially, after taking into account relevant evidence before it and the submissions made by the parties before it; and (3) the decision is intended to bind the parties. Nomenclature used by the parties may not be conclusive. One must examine the true intent and purport of the agreement. There are, of course, the statutory requirements of a written agreement, existing or future disputes and an intention to refer them to arbitration (vide Section 2 Arbitration Act, 1940 and Section 7 Arbitration and Conciliation Act, 1996.)'

8. After applying the aforementioned test their Lordships found that Clause 9 was not an arbitration clause because it did not contemplate any judicial determination by the Chairman of a public corporation. Similar view has been taken in the case of Munna Lal v. Suraj Bhan, (1975)1 S.C.C. 556 where the parties had asked a common friend to effect the partition. It was held that the parties did not intend to resort to any formal proceeding under the Arbitration Act.

9. When the principles enunciated by the Supreme Court are applied to the facts of the present case, it becomes evident that there is no written agreement of arbitration attracting the provisions of Arbitration Act. A mere reference to the mediation of a third party during the pendency of the appeal filed by the defendant-respondents against grant of interim order passed by the learned Civil Judge would not amount to making a reference to arbitration. It appears that the parties in order to resolve the dispute have agreed to appoint Mr. N.L. Garh at one stage and some one else at the later stage. However, no decision by those arbitrators had been pronounced till date. No reference to Arbitration Act was intended because that was not only kept pending but it could be revived as is clear from order dated 7.1.2002 (Annexure P-3). The aforementioned view is further fortified from the other order dated 7.1.2002 (Annexure P-4) adjourning the suit sine die. Another application filed by respondent Nos. 2, 3 and 5 on 28.10.2004 is pending and the same is ordered to be considered by the Id. Addl. District Judge at appropriate stage as is evident from the impugned order. Therefore, reference to third party would not mean that the provisions of Arbitration Act are attracted.

10. The judgment of the Supreme Court in P.Anand Gajapathi Raju's case (supra) on which reliance has been placed would not apply to the facts of the present case because in that case there was a written arbitration agreement covering all the disputes between the parties whereas in the present case the parties have agreed in appeal before the Id. Addl. District Judge for getting the dispute settled by the intervention of some respectable. Those persons have failed to pronounce their decision for the last more than three years which has resulted in the revival of the appeal. No manifest injustice has been caused to the plaintiff-petitioners by the revival of the appeal. It would rather expedite the administration of justice and the delay which has been caused would be remedied.

11. For the reasons mentioned above, this petition fails and the same is dismissed.


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