Calcutta High Court (Appellete Side)
Super Diamond Nirman(P) Ltd. And Anr vs Abhishek Saraf And Ors on 9 March, 2017
Author: Sanjib Banerjee
Bench: Sanjib Banerjee
1
AD 3
09-03-2017
s.d. FMA 350 of 2017
with
CAN 1054 of 2017(sec.5)
With
CAN 1046 of 2017(stay)
Super Diamond Nirman(P) Ltd. and anr.
Vs.
Abhishek Saraf and ors.
Mr. Abhrajit Mitra
Mr. Mainak Bose
Mr. Aritra Basu
Mr. Ratul Das
Mr. Abhijit Sarkar
....for the appellants.
Mr. Dhiraj Trivedi
Mr. Amit Sharma
Mr. Bhupendra Gupta
Ms. Abha Tiwari
....for the respondent nos. 1 to 3.
In view of the good grounds shown for the marginal delay, the appeal is entertained on merits by condoning such delay. CAN 1054 of 2017 stands allowed.
The appellants question the propriety of an order dated September 14, 2016 by which their petition under 2 Section 8 of the Arbitration and Conciliation Act, 1996 has been rejected on divers grounds.
The first ground evident from the order impugned is technical in nature, that the original arbitration agreement or a certified copy thereof was not filed before the suit court. It is not necessary to go into such technical aspect in the light of the view proposed to be expressed on the substantive ground.
There is no dispute that the plaintiff nos. 1 and 2 entered into an arbitration agreement with the first defendant while obtaining the allotment of a flat at the relevant complex. There is also no doubt that the predecessor-in-interest of the plaintiff no. 3 entered into a similar arbitration agreement with the first defendant at the time that such predecessor was allotted a flat at the same complex. However, the third plaintiff was a subsequent transferee and, as such, the assignee of the terms and conditions governing his predecessor-in-interest and the first defendant. It does not appear from the relevant documents that when the third plaintiff took over the flat or executed documents in such regard by which he bound himself to the terms and conditions of the agreements between his predecessor and the first 3 defendant, there was any specific reference to any arbitration clause or any arbitration agreement. It is judicially acknowledged that upon the assignment of an agreement or the assignment of the terms and conditions of an agreement and the rights and obligations thereunder from one to another, the commercial terms and the rights and obligations thereunder stand assigned; but the arbitration clause may not stand assigned unless there is a specific reference to such arbitration clause.
However, without confining this decision to such ground alone, it may also observed that the very nature of the suit was such that the subject-matter thereof would be incapable of being governed by the individual arbitration agreements between the individual allottees and the first defendant developer of the complex. It appears that leave under Order I Rule 8 of the Code has been sought by the plaintiff and an application in such regard is pending before the trial court. It is possible that the individual plaintiffs may have individual arbitration agreements with one or more defendants but when the claim is on behalf of the allottees or flat-owners collectively, the individual arbitration agreements may not be efficacious. Even otherwise, since all the parties to the suit are not parties to 4 the individual arbitration agreements cited by the first defendant, there cannot be a common reference covering the entirety of the subject-matter of the suit without the active consent of the parties to the suit. Ordinarily, when the subject-matter of a suit cannot be carried to an arbitral reference without some other overt act of the parties, a petition for such reference may not be entertained or allowed by court. In this case even if the court allowed the appellants' petition for a reference to be conducted, no arbitral reference could have been commenced or effectively concluded without the parties to the individual arbitration agreements consenting to a common reference and without the second and third defendants, with whom there may not be any arbitration agreement, agreeing to be bound by the arbitration agreement and the reference thereunder.
The order impugned does not appear to be erroneous in its essence. Since the nature of the suit and the claims thereunder were such as could not have been conveniently referred to a sole arbitral reference, the trial court was justified in rejecting the petition under Section 8 of the said Act of 1996.
5
FMA 350 of 2017 and CAN 1046 of 2017 stand disposed of on the above basis and with a request to the trial court to hear out the pending applications in the suit without undue delay and take proper steps for the expeditious disposal of the suit.
There will be no order as to costs.
(Sanjib Banerjee, J. ) ( Siddhartha Chattopadhyay, J. )