Kerala High Court
K.Jayakumaran Nair vs M/S. Vertex Securities Ltd on 22 August, 2005
Equivalent citations: AIR 2005 KERALA 294, (2005) 5 KHCACJ 202 (KER), 2005 (3) ARBI LR 481, 2005 (5) KHCACJ 202, (2005) 3 KER LJ 402, (2005) 3 ARBILR 481
IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRP No. 1272 of 2004
1. K.JAYAKUMARAN NAIR, S/O.KUTTAPPAN NAIR,
... Petitioner
Vs
1. M/S. VERTEX SECURITIES LTD.,
... Respondent
For Petitioner :SRI.DINESH MATHEW J.MURICKEN
For Respondent :SRI.K.GOPALAN
The Hon'ble MR. Justice S.SANKARASUBBAN
Dated : 22/08/2005
O R D E R
S.Sankarasubban,J.@@ jAAAAAAAAAAAAAAAAAA ==================@@ jAAAAAAAAAAAAAAAAAA C.R.P.No.1272 of 2004@@ jAAAAAAAAAAAAAAAAAAAAA =====================@@ jAAAAAAAAAAAAAAAAAAAAA @@ j Dated this the 22nd day of August, 2005.@@ jAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAAA @@ j ORDER@@ jEEEEE .SP 2 This Civil Revision Petition is filed against the order passed by the 1st Additional Sub Court, Ernakulam in I.A.No.47 of 2004 in O.S.No.283 of 2003. Revision petitioner is the defendant in the suit and the respondent is the plaintiff. The suit was filed for recovery of money. The plaintiff in the plaint contended that it is a member of National Stock Exchange, Cochin Stock Exchange and the Bombay Stock Exchange and the defendant was a client of the plaintiff and in the transaction, the plaint claim is due from the defendant.
2. The defendant filed a written statement. Subsequently, the court framed issues on 15.12.2003 and the plaintiff paid the balance court fee on 3.1.2004. .PA CRP 1272/04 : 2 :
The suit was listed for trial on 28.10.2004. It was at this stage that I.A.No.47 of 2004 was filed. In that application, it was stated by the petitioner to refer the dispute for arbitration to the authorities mentioned in the contract note.
3. The respondent filed objections to the application. The contention raised was that the conditions mentioned in Section 8 of the Arbitration Act (hereinafter referred to as "the Act") have not been complied with. It was further stated that as per the Byelaw, if any dispute arises, the matter should be referred to arbitration within six months from the raising of the dispute. The court held that the period was over and hence, reference to arbitration is not possible. Thus, I.A.No.47 of 2004 was dismissed on the ground that the claim has become barred as per the Byelaws of the plaintiff. It is the above order that is challenged before this court. .PA CRP 1272/04 : 3 :
4. Learned counsel for the petitioner argued that the question whether the claim is barred by limitation or not is to be looked into by the arbitrator and not by the court. Once there is an arbitration clause, the matter has to be referred to arbitration subject to the conditions in Section 8 of the Act. Learned counsel for the respondent submitted that the other two findings are not correct.
5. After hearing both sides, I am of the view that the conditions for reference mentioned in Section 8 of the Act have not complied with. Section 8 of the Act is as follows: "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". It is clearly stated that the .PA CRP 1272/04 : 4 :
application has to be made not later than submitting the first statement. In this case, the application was made only after the issues were raised and the balance court fee was paid and the case was included in the list for hearing. The contention that since this matter has been raised in the written statement that is enough. A perusal of the written statement will show that no request has been made for arbitration. On the other hand, what is raised in the written statement in paragraph 2 is as follows: "As per the Arbitration & Conciliation Act, 1996 there is a specific bar under Section 5 of the said Act barring the civil court from exercising its jurisdiction where there is an Arbitration clause. As per the Bombay Stock Exchange byelaw as well as National Stock Exchange of India Ltd. byelaw and the contract note between the plaintiff and defendant the dispute between the plaintiff defendant has to be resolved through arbitration. Hence, the suit itself is not maintainable..." No application is made to refer the matter for arbitration. .PA CRP 1272/04 : 5 :
In view of the above, I am of the view that since the application for reference is belated, the application is liable to be dismissed. Hence, it is not necessary for me to consider the other findings in the order. The Civil Revision Petition is dismissed.
.SP 1 S.Sankarasubban,@@ AAAAAAAAAAAAAAAA Judge.@@ AAAAAA ess 18/8@@ AAAAAAAA .PA This Civil Revision Petition is filed against the order passed by the Ist Additional Sub Court, Ernakulam in I.A.No.47 of 2004 in O.S.No.283 of 2003. It is the order passed in I.A.No.47 of 2004 that is being challenged. Revision petitioner is the defendant in O.S.No.283 of 2003 and the respondent is the plaintiff in the suit. The suit was filed for recovery of money.
2. The averment in the suit is that the plaintiff is a member of National Stock Exchange, Cochin Stock Exchange and the Bombay Stock Exchange and the defendant was a client of the plaintiff and in the transaction the plaint claim is due from the defendant.
The defendant specifically contended in the counter to attachment application as well as in the written .PA CRP 1272/04 : 2 :
statement that as per the Byelaw of the Stock Exchange the dispute is liable to be resolved through arbitration and as such suit is not maintainable. In spite of the contention in the written statement, the court below proceeded with the suit and hence, the petitioner filed I.A.No.47 of 2004 under Section 8 of the Arbitration and conciliation Act to refer the dispute for arbitration. The respondent contended that the dispute could not be referred for arbitration, since the application was belated and the original contract note was not produced. The court below considered the contention of both the parties and came to the conclusion that the arbitration request ought to have been raised by the parties within six months and since the dispute was not raised within six months, the request for arbitration cannot be allowed. It is against the above order that this Civil Revision Petition is filed.
3. Section 8 of the Arbitration Act states as .PA CRP 1272/04 : 3 :
follows: "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". In the written statement filed by the petitioner in paragraph 2, it is stated as follows: "As per the Arbitration & Conciliation Act, 1996 there is a specific bar under Section 5 of the said Act barring the civil court from exercising its jurisdiction where there is an Arbitration clause. As per the Bombay Stock Exchange byelaw as well as National Stock Exchange of India Ltd. byelaw and the contract note between the plaintiff and defendant clearly state that the dispute between the plaintiff and defendant has to be resolved through arbitration. Hence, the suit itself is not maintainable and the suit is liable to be dismissed on the ground of lack of jurisdiction of this Honourable Court". So, the contention taken is that the suit is not maintainable. .PA CRP 1272/04 : 4 :
4. It is seen that after filing the written statement, the court proceeded with the suit and framed issues on 15.12.2003 and the plaintiff paid the balance court fee on 3.1.2004. The suit was listed for trial on 28.10.2004. It was at that stage the application was filed as I.A.No.47 of 2004. It is considering this application that the order was passed by the lower court dismissing the application on the ground of delay. In considering the application, the court below found that there has been a request for arbitration in the written statement filed. It was not barred by limitation and the contract was produced by the plaintiff to show that there was no illegality.
5. Learned counsel for the petitioner argued that the question whether the request for arbitration is barred by limitation is the question to be considered by the arbitrator and it cannot be considered by the court. Learned counsel for the respondent submitted that his client has filed W.P.(C)No.35244 of 2004 challenging the findings which .PA CRP 1272/04 : 5 :
are found against the respondent. According to him, the application was not filed in accordance with Section 8 of the Arbitration Act (for short `the Act'). According to me, I.A.No.47 of 2004 filed by the petitioner is in violation of Section 8 of the Act. It is true that in the written statement, it is mentioned that there is an arbitration clause. But what is stated is that the suit should be dismissed. There was no prayer to refer for arbitration. It is also seen that the court fee was paid. It was thereafter that the application was made. This is in violation of Section 8 of the Act. Hence, I am of the opinion that the rejection of the application is correct, though on other account.
Civil Revision Petition is dismissed. Writ Petition has become infructuous, since the Civil Revision Petition is dismissed. Writ Petition is dismissed as infructuous.
.SP 1 S.Sankarasubban,@@ AAAAAAAAAAAAAAAA Judge.@@ AAAAAA ess 16/8@@ AAAAAAAA