Gauhati High Court
North Eastern Electric Power ... vs Jiban Kumar Saha on 24 June, 1999
Equivalent citations: AIR2000GAU80, AIR 2000 GAUHATI 80, (2000) 3 CURCC 298 (2000) 2 GAU LR 242, (2000) 2 GAU LR 242
Author: H.K.K. Singh
Bench: H.K.K. Singh
ORDER H.K.K. Singh, J.
1. This is an application under Section 115 of the C.P.C. read with Article 227 of the Constitution of India against the order dated 4-11-1998 passed by the learned Civil Judge (Senior Division) No. 1. West Tripura, Agartala in Money Suit No. 71 of 1998 thereby rejecting the prayer of the petitioner herein for stay of further proceedings of the suit in view of the Arbitration Clause in the Contract Agreement entered into between the parties.
2. The respondent as plaintiff brought a suit for recovery of Rs. 33,750/- from the petitioners herein. It was averred in the plaint that there was a contract agreement dated 2-11-1995 between the parties for construction of 'A type residential building at the permanent Colony of Agartala Gas Turbine Power Project, Ramchandranagar, Tripura West' and on completion of the works the-plaintiff submitted the final bill for an amount of Rs. 67,500/-, But out of the aforesaid amount a sum of Rs. 33,750/- was deducted by the defendants, According to the plaintiff the act of deduction of the said amount was improper and not sustainable in law. Hence, the suit.
3. In response to the summons for institution of the suit, the defendants filed an application which has been styled as one under Order VII, Rule 11. CPC for rejection of the plaint. It was averred in the petition that the agreement entered into between the parties for construction of" the building under No. NEEPCO/CE(C}/Conl/AGTPP/18/ 95-96. dated 2-11-1995 contained in Arbitration Clause under Clause No. 66 of the Agreement. Thus, according to the contesting defendants as the matter was covered by the Arbitration Clause, the plaint was to be rejected under Order VII, Rule 11 of C.P.C.
4. The plaintiff also filed a written objection to the aforesaid application for stay of the suit/rejection of the plaint and after hearing the parties the learned trial Court passed the impugned order thereby rejecting the application of the defendants holding, inter alia, that the deduction of the amount of Rs. 33,750/- was made on ground which are not related to the agreement between the parties.
5. I have heard Mr. D,K. Biswas, the learned counsel appearing on behalf of the petitioners as well as Mr. S.M. Chakraborty, the learned counsel for the respondent.
6. At the very outset Mr.D.K. Biswas, the learned counsel for the petitioners has submitted that though the application filed by the defendants before the trial Court was styled as one under Order VII, Rule 1 l, CPC. the averments made in the petition clearly suggest that the aforesaid application may be taken as one under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') . The learned counsel has further submitted that as per the provision of Section 5 of the Act the present matter in which the parties have agreed that the matter should be decided upon by the Arbitrator as per the Arbitration Agreement, the trial Court should have referred the parties to the Arbitration for settlement of the dispute. Mr. S.M. Chakraborly, the learned counsel for the respondent, on the other hand, has submitted that there is no ground for interfering with the order passed by the learned trial Court.
7. As Mr. Biswas has submitted that in the matters covered by Arbitration Clause, the intervention of any judicial authority is barred under Section 5 of the Act, it will be pertinent to reproduce the aforesaid provision, which are given below :
"5. Extent of judicial intervention. -- Notwithstanding anything contained in any other law for the time being in force, in matters governed by this part, no judicial authority shall intervene except where so provided in this Part."
8. Again Section 8 of the Act is also relevant and the same is also reproduced below :--
"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 which submitting his first statement on the substance of the dispute refer the parties to arbitration.
(2) The application referred to in Subsection (1) shall not be entertained unless it is accompanied by the original arbitration agreement or by 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."
9. Section 5 of the Act starts with a non abstante clause over riding any other law for the time being in force, in the matters governed by Part 2 of the Act and It is prescribed that no judicial authority shall intervene except where so provided for in this Part.
10. In the present case, there is no dispute that there is a written contract with arbitration clause entered into between the parties as noted above. The question to be determined here is whether the application filed by the defendants was in accordance with the provision of law and whether the matter/dispute nowpending before the Civil Court was covered by Arbitration Clause.
11. Under Sub-section (1) of Section 8 of the Act, it is provided that a party may apply to the Court for reference of the matter to arbitration if the subject-matter is covered by the Arbitration Clause and this should be done at the stage not later than when submitting the first statement to the Court. And by Sub-section (2) of Section 8 of the Act it is provided that the aforesaid application under Sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. Thus it is clear that the aforesaid application should enclose the Arbitration Agreement or a copy thereof.
12. In the present case, on perusal of the records, it is found that at the time of filing of the application by the defendants, an extract copy of the agreement was enclosed, wherein it is found that under paragraph 66 the word 'arbitration' is found and again an extract of paragraph 66'l(a) to (J)' are also found and after that there is another paragraph heading as "Ration at the instance of the Corporation". The requirement of law is that the original Arbitration Agreement or a certified copy thereof should be filed. In the present case, the so-called agreement is nothing, but a part of the extract copy of the Arbitration Agreement which is neither the original nor a certified copy.
13. In order to ascertain as to whether a matter is covered by an Arbitration Agreement entered into between the parties, a perusal of the entire agreement is necessary. In the present case, the learned Court below has made an attempt to find out as to whether the dispute between the parties is covered by the Arbitration Agreement or not and the learned trial Court has come to a definite finding that the matter cannot be held to be covered by the Arbitration Agreement.
14. The jurisdiction of the Civil Court is not completely ousted even if the matter is covered by the Arbitration Clause. It is manifest from the reading of the provision contained in Section 8 of the Act that if the procedural requirements as provided for under Sub-section (2) of Section 8 of the Act are not complied with then the application under Sub-section (1) has to be rejected.
15. Mr. Biswas has cited one decision of Himachal Pradesh High Court in the case of Mohan Singh, v. H.P. State Forest Corporation, reported in (1998) 4 CCC 325 . In the aforesaid case the High Court held that the order of the trial Court referring the matter to the Arbitration was found to be valid and proper in view of the nature of the dispute which was found to be covered by the Arbitration Clause entered into between the parties . In our present case, as noted above, without perusal of the original agreement including the Arbitration Agreement entered into between the parties, it cannot be decided as to whether the matter pending before the Civil Court is one which is covered by the Arbitration Clause.
16. Arbitration Agreement is a solemn agreement entered into between the parties for resolution of the dispute. The provision regarding reference of the matter pending before the Civil Court to the Arbitration as provided for under Section 8 of the Act has got to be strictly complied with. In other words, unless the procedural and other requirement of law as provided under Section 8 is not complied with strictly then the matter should not be referred to the Arbtiration and the suit should proceed before the Civil Court.
17. For the foregoing reasons, I am of the opinion that the defendants, petitioners herein could not made out a case for referring the matter now pending before the Civil Court, to the Arbitration.
18. Accordingly, this revision petition stands dismissed. No costs.