Calcutta High Court
M/S.Bhairab Karmakar And Construction ... vs Sarbari Biswas on 8 August, 2008
Author: Patherya
Bench: Patherya
1
AP NO.50 OF 2008
IN THE HIGH COURT AT CALCUTTA
ORIGINAL ORDINARY CIVIL JURISDICTION
IN THE MATTER OF :
M/S.BHAIRAB KARMAKAR AND CONSTRUCTION COMPANY
VS
SARBARI BISWAS
MR.BISWANATH MITRA,MR.ANUPAM ACHARYA,MR.ARIJIT
BANERJEE,ADVOCATES FOR THE PETITIONER
MR.KOUSHIK ROY,MR.SOURAV CHOUDHURY,ADVOCATES FOR
THE RESPONDENT
BEFORE:
The Hon'ble JUSTICE PATHERYA Date : 8th August, 2008 THE COURT: This is an application filed under section 11(6) of the Arbitration and Conciliation Act, 1996.
The case of the petitioner is that there was a development agreement between the parties and the same contained an arbitration clause being clause 13.6.
By letter dated 25th October, 2007, the arbitration clause was invoked and the respondent was called upon to appoint its arbitrator. The said letter was addressed to the respondent at the address given in the agreement but the letter has returned with the endorsement "left". This amounts to good service and, therefore, this application is maintainable. The address given is the same as set out in the affidavit- in-opposition. In fact, the section 9 application filed before the District Judge, North 24-Parganas, Barasat was also served at the said address and the respondent contested the said application. Therefore, the service effected on the respondent is deemed service under section 3(1)(b) and 3(2) of the 1996 Act. As no steps were taken by the respondent to appoint an arbitrator, the instant application has been filed. 2
Counsel for the respondent submits that the development agreement between the parties dated 23rd February, 2004 and the power of attorney executed thereunder was terminated and cancelled respectively. Monies have been refunded and such refund has also been accepted. The cancellation has been published in the Bengali newspapers, therefore, recession of the arbitration agreement stands cancelled and cannot be acted upon. The cancellation has not been challenged, and, therefore is valid. The arbitration clause contained in clause 13.2 of the agreement is vague and uncertain. The procedure for appointment of arbitrator has not been followed as the requisite thirty days notice has not been served. All disputes cannot be referred to arbitration and, therefore, the necessity to invoke section 11(6) does not exist.
Reliance has been placed on a decision reported in AIR 2000 Patna 200, (2004)1 SCC 73 and AIR 2004 Madras 127. No relationship can be continued by force and in view of no service effected the procedure of section 11 has not been followed. Hence, no order be passed on this application.
Counsel for the petitioner in reply submits that even on cancellation of the parent agreement, namely, the development agreement herein the arbitration clause survives. Termination and its validity will be decided by the arbitral tribunal and the decisions cited are not applicable in the instant case. The application filed under section 9 was contested by the respondent and an order passed. No appeal has been filed from the said order. Therefore, orders be passed as sought.
Having considered the submissions of the parties and in view of section 3(1)(b) and section 3(2) of 1996 Act service is deemed to be effected and received as the same has been sent to the last known address of the respondent herein.3
There is no reason for non-receipt of the notice at the said address as the address at which the letter dated 25th October, 2007 was sent and the address set out in the affidavit-in-opposition affirmed on 4th June, 2008 is the same. Therefore, the despatch of the letter dated 25th October, 2007 at the said address is deemed to have been received as per section 3(1)(b) and 3(2) of the 1996 Act.
The cancellation of the parent agreement will not automatically terminate the arbitration agreement. The arbitration agreement will survive even in spite of cancellation of the parent agreement. As the agreement was terminated on 14th September, 2007 and notice given on 25th September, 2007, there is no question of limitation involved.
In fact, after issuance of notice on 25th October, 2007, the petitioner waited for not only thirty days but till 29th January, 2008 before filing the instant petition. Therefore, for all the said reasons, this application is maintainable and the matter be placed before the Hon'ble Chief Justice and/or the designate judge for appointment of arbitrator under section 11(6) of the 1996 Act.
The decisions relied on by the respondent are not applicable to the facts of the instant case.
All parties concerned are to act on a xerox signed copy of this order on the usual undertakings.
(PATHERYA,J.) S.Bhattacharyya R.O.(Ct.)