Delhi District Court
Dr. Manu Kaushal vs M/S Aakash Educational Services Ltd on 12 November, 2010
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IN THE COURT OF SH. S. S. MALHOTRA, ADDL. DISTRICT
JUDGE,EAST, KARKARDOOMA COURTS, DELHI
Suit No. 275/10
Date of filing of suit : 26.02.2010
Date of arguments : 27.10.2010
Date of order : 12.11.2010
IN THE MATTER OF :
Dr. Manu Kaushal
S/o Sh. Manu Kaushal
House No. 1238, Sector23B,
Chandigarh, Punjab .....Plaintiff
V
M/s Aakash Educational Services Ltd.
Aakash Tower, Plot No. 4,
Sector11, Dwarka, New Delhi110075 .....Defendant no. 1
2 Mr. Vijay Bahl,
G69, Cannought Circus,
New Delhi110001 ......Defendant no. 2
ORDER:
1 By this order, I shall dispose off the application of the defendant Under Sections 5 and 8 of the Arbitration & Conciliation Act.
2 Before coming to the facts of the application of the defendant Under Sections 5 and 8 of the Arbitration & Conciliation Act, brief 2/10 facts as stated by the plaintiff in the suit for declaration and permanent injunction are that the plaintiff is a Doctor by profession and is imparting Medical Education. He was appointed as an Associate Professor, GradeI in Chemistry Department with the defendant no. 1 with a job profile of delivering lectures to the students of the defendant Institute w.e.f. 28.05.2009 and was made to sign a document titled 'Salary and Terms & Condition' on 'Take It Or Leave It' basis under duress and the plaintiff was never informed with respect to the covenants prior to leaving his previous service and only when the plaintiff had left the previous service, he was compelled to sign the memorandum with the defendant and even the documents were not allowed to be read by the plaintiff. He continued his services with the defendant under hostile circumstances and since beginning the defendant was not treating him the with respect, to which he deserved because of his services cadre and he was subjected to lot of harassment in the form of long working hours of work and even for the extended working hours which proved detrimental to the health of the plaintiff and once he was not even allowed to take medical leave because of such hostile behaviour of the defendant. The plaintiff had written a letter to the defendant no. 1 but of no use and in December, 2009, when the plaintiff needed 3/10 medical attention due to ill health and he proceeded on medical leave but the defendant no. 1 instead to adopting a sympathetic attitude towards the plaintiff served him with a termination notice on 21.12.2009 and even demanded Rs. 38,18,000/ as penal damages from the plaintiff which notice was duly replied by the plaintiff but ultimately, the defendant had referred the matter to the Ld. Arbitrator thereby initiating the arbitral proceedings against the plaintiff, in which the plaintiff had appeared and informed the Ld. Arbitrator requesting him to become the Arbitrator in the dispute where the plaintiff even had appeared but it is further stated that the defendant no. 1 is acting illegally, wrongfully and in breach of its contractual obligations in as much the defendant is attempting and threatening to proceed with the arbitration proceeding to recover the illegal and baseless amount of Rs. 38,90,616/ and as such he has filed the present suit for restraining the defendants to stop the arbitral proceedings and also to declare that the document titled 'Salary and Terms & Condition' as entered into in between the plaintiff and the defendant no. 1 as void and the rights and liabilities arising out of that document as unenforceable and further calling upon the defendant to file original document titled as 'Salary and Terms & Condition' in the court and also pass a decree in favour of the 4/10 plaintiff for permanent injunction thereby, restraining the Arbitrator to proceed with the arbitration proceedings.
3 The defendant no. 1 was served and instead of filing written statement, he has filed an application Under Sections 5 and 8 of the Arbitration & Conciliation Act i.e. the application under disposal stating therein that the present application is filed seeking rejection of the plaint as the jurisdiction of Civil Court except in accordance with the provisions of Arbitration & Conciliation Act, 1996 is barred. It is further stated in the application that the plaintiff was offered an appointment as an Associate Professor GradeI in Chemistry Department by the defendant no. 1 and he was governed by the terms and conditions contained in 'Services Rules Manual for the Employees' as faculty members but the plaintiff remained absent which was contrary to the terms and conditions and after service of demand letter dated 21.12.2009, legal notice was issued to the plaintiff, the plaintiff did not comply with the said notice dated 21.12.2009, rather issued another notice through his counsel dated 28.12.2009 and since the dispute had arisen in between the parties with respect to the terms and conditions of the employment and since these terms and conditions includes the Arbitration Clause, therefore, the defendant no. 1 invoked the Arbitration Clause and the 5/10 matter was referred to the Ld. Arbitrator who entered into the reference and issued notice to the parties and by way of present suit, the plaintiff is seeking declaration that the document containing terms and conditions governing employment of the plaintiff is void and unenforceable and it is submitted that since the defendant no. 1 has invoked the Arbitration Clause which governs the terms and conditions of employment of the plaintiff and as such the present suit before the Civil Court is liable to be dismissed and the matter has to be referred to the Ld. Arbitrator. It is further stated that no suit seeking permanent injunction against the arbitrator to proceed with the proceedings is maintainable as the Arbitration & Conciliation Act is a complete Code in itself and no relief seeking restraining order against the arbitrator who is performing the statutory duties is maintainable and therefore, it is prayed that the court may please refer the matter to the arbitrator already appointed in terms of the arbitration clause.
4 Plaintiff has filed reply to the application of the defendant no. 1 Under Section 5 & 8 of the Arbitration & Conciliation Act, 1996 taking preliminary objections that the application of defendant no. 1 be dismissed as the defendant has not come to the court with clean hand. The defendant has not placed all the necessary and material 6/10 facts before the court. The said document titled as ''Salary Term and Condition'' was signed by the plaintiff under duress after exercising undue influence, duress, coercion by the defendant no. 1, the same is void ab initio and malafide. On merits, the facts of the application are generally and the facts mentioned in the plaint are reiterated.
5 I have heard the arguments and perused the record. It is not disputed by the plaintiff at all that the agreement with respect to the terms and conditions of the plaintiff were entered into. The plaintiff is claiming that said agreement was entered into under duress, coercion and undue influence and therefore, this agreement has to be declared as null and void, since the plaintiff had signed the same under duress. On the other hand ld. counsel for defendant no. 1 has argued that the document titled salary terms and conditions is admitted by the defendant which contains an Arbitration Clause. The Arbitrator has already been appointed and therefore, this court should direct the plaintiff to join the arbitral proceedings and the court should refer the parties to the Ld. Arbitrator already appointed in terms of the arbitration clause.
6 I have perused the documents filed by the plaintiff i.e. ''Service Rules Manual for the Employees'' as Faculty Members. Para 37 7/10 reads as under:
''In case of any dispute or dispute between you and the company regarding the interpretation of these terms and conditions, nonpayment of any claim or any dispute arising out of or in pursuant to these terms and conditions, the same shall be referred to Sole Arbitrator who shall be appointed by Chairman of M/s Aakash Educational Services Ltd. The proceedings shall be conducted at New Delhi under the provisions of Arbitration & Conciliation Act and the Courts at Delhi only shall have the jurisdiction over the matter and / or for enforcement as the case may be. If an Arbitrator to whom the matter is referred refuses to act or for any reasons, does not enter the reference or after entering into the reference proceedings are abandoned or kept in abeyance or not proceeded with, it shall be lawful for the Chairman of M/s Aakash Educational Services Ltd. to appoint another person to act as Arbitrator in the manner aforesaid. Such person shall be entitled to proceed with reference from the stage at which was left by his predecessor, if both the 8/10 parties consent to this effect, failing with the Arbitrator will be entitled to proceed denovo''.
7 I have also perused the other documents where the plaintiff executed a personal guarantee and declaration and in para 5 thereof also includes the Arbitration Clause.
8 The plaintiff has sought two reliefs in his plaint. One for declaration that the document titled salary terms and conditions be declared as null and void and secondly, that the Ld. Arbitrator be restrained from continuing with the arbitral proceedings. As far as the first relief is concerned, the court is of the opinion that the Arbitration & Conciliation Act, 1996 is a complete Code in itself. Section 16 of the Arbitration & Conciliation Act, 1996 empowers the Arbitrator to decide about his own jurisdiction. Section 18 of the Arbitration & Conciliation Act, 1996 speaks about the granting equal opportunity to all the parties. Therefore, the question as to whether document as entered into in between the parties is to be declared as null and void or whether the same has been executed under duress or coercion has to be raised before the Ld. Arbitrator and he is competent to enough to dispose off such issues. It is well settled law that if an Arbitration Clause is entered into in between the parties then the jurisdiction of Civil Court is barred. Therefore, the relief as is 9/10 being claimed by the plaintiff for declaration that the agreement with respect to the salary terms and conditions be declared as null and void is the sole prerogative of the arbitrator and this court does not have the jurisdiction to entertain.
9 As far as the second relief for granting injunction against the arbitrator not to proceed with the arbitral proceedings is concerned, It is well settled law that the Ld. Arbitrator acts as an independent judge who exercise all the judicial powers to decide the controversy in between the parties. The stature of the Ld. Arbitrator is such that he has all the powers to dispose off all the controversies which have been brought before him and infact the office of the Ld. Arbitrator is quasi judicial in its character. Therefore, the court is of the opinion that the plaintiff should raise this issue before the Ld. Arbitrator who is competent enough to answer such issue and decide the matter. Further, Section 41 (a) of Specific Relief Act reads as under: 41 Injunction when refused--An injunction can not be granted
(a) to restrain any person from prosecuting judicial proceeding pending at the institution of the suit in which the injunction is sought, unless such restraint is necessary to prevent a multiplicity of proceedings. 10/10 10 Therefore, this court is of the considered opinion that the office of the Arbitration which is discharging quasi judicial function deemed to have been an institution to dispose off judicial proceeding filed before him and can not be restrained by way of any injunction to pursue the proceedings. As far as this relief of the plaintiff is concerned, the same is also not maintainable before this court. Accordingly, the suit of the plaintiff is rejected forthwith and he is at liberty to join the proceedings before the Ld. Arbitrator after legal advise.
11 File be consigned to record room.
ANNOUNCED IN OPEN COURT (S.S. MALHOTRA)
ON 12 NOVEMBER, 2010
th
ADDL. DISTRICT JUDGE /
KARKARDOOMA COURTS/DELHI