THE GAUHATI HIGH COURT (THE HIGH COURT OF ASSAM, NAGALAND, MIZORAM & ARUNACHAL PRADESH) 1. KANHAIYA LAL KANKANI CRP 17 of 2017 2. SMT. RAJ KUMARI KANKANI..Petitioners -Versus- 1. AMBIKA SUPPLY AND SERVICES PVT. LTD. 2. SRI MANDIP KUMAR JALAN..Respondents BEFORE HON BLE MR. JUSTICE KALYAN RAI SURANA Advocates for the Petitioners : Mr. O.P. Bhati, Mr. M.K. Jain, : Mr. P.K. Bajaj, Mr. S. Khan, Mr. T.C. Das, : Mr. D. Sarma. Advocates for the Respondents : Mr. S. Chamaria, Mr. M. Phukan, : Mr. S. Chandra, Mr. D. Sharma. : Date of hearing : 06.04.2017, 27.04.2017. Date of judgment and order : 30.05.2017. JUDGMENT AND ORDER (CAV) Heard Mr. O.P. Bhati, the learned counsel for the petitioners as well as Mr. S. Chamaria, the learned counsel for the respondents. 2) By filing this application under section 115 of the Civil Procedure Code read with Article 227 of the Constitution of India, the petitioners have questioned the legality and validity of (i) the order dated 14.12.2016 passed by the learned Munsiff No.2, Kamrup (Metropolitan), Guwahati, in Misc.(J) Case No. 234/2016, in T.S. No.53/2016 as well as (ii) the consequential order dated 14.12.2016 passed by the learned Munsiff No.2, Kamrup (Metropolitan), Guwahati, in T.S. No.53/2016. By the said orders, the plaint of the petitioners/ plaintiffs was CRP 17/2017 Page 1 of 8
rejected under the provisions of Order VII Rule 11(d) of the Civil Procedure Code. 3) The case of the parties, relevant for the purpose of this revision is that the petitioners had purchased a residential flat together with a car parking space in an apartment building promoted/built by the respondents. An agreement for sale for the same was executed on 02.03.2010 and registered as Deed No. 1142 dated 04.03.2010. Thereafter, a sale deed for the said flat was executed and registered as Deed No. 6980 dated 05.08.2011. However, the petitioners took possession of the flat without the parking space. On verbal protest for not giving the parking space, the respondents by a letter dated 20.08.2011, allotted a temporary parking space to the petitioners from 20.08.2011 to 10.09.2011. Thereafter, vide letter dated 14.12.2012, the respondents officially handed over the possession of the said flat and parking space. Thereafter, the petitioners had instituted T.S. No. 53/2016, inter-alia, praying for a decree directing the respondents/ defendants to allot proper parking space as per GMDA (Guwahati Metropolitan Development Authority) approved plan. The said suit was made over for trial to the Court of learned Munsiff No.2, Kamrup (Metropolitan), Guwahati (hereinafter referred to as the Trial Court for short). 4) The respondents/ defendants contested the suit by filing written statement and they also filed a separate application under the provisions of Order VII Rule 11 of the Civil Procedure Code for rejection of the plaint, which was registered as Misc.(J) Case No. 234/2016. In the said application, it was inter-alia, projected that the sale deed contained a covenant that various terms narrated in the Deed of Agreement for Sale bearing Deed No. 1142 dated 04.03.2010 would squarely be followed up while executing the said Sale Deed No. 6890 dated 05.09.2011. On the said basis, it was further projected that the Agreement for Sale as well as Sale Deed are both interconnected to each other and are to be read as a whole. Thus, as the Agreement for Sale contained a clause for settling all disputes through arbitration process, the present suit filed CRP 17/2017 Page 2 of 8
by the petitioners/ plaintiffs was liable to be rejected. The petitioners contested the said application by filing their written objection. The learned Trial Court after hearing the learned counsel for the parties, by an order dated 14.12.2016 passed in Misc. (J) Case No. 234/16, which is hereinafter referred to as the impugned order, by relying on the clause 10.1 arrived at a finding that Hence, in the presence of this clause 10.1 on which both the parties have admitted to refer the dispute to arbitration, the filing of the present suit become barred under Order VII Rule 11(d) of CPC since the matter deals with Arbitration & Conciliation Act, 1996. The matter in dispute of this suit would be decided through arbitration. Therefore, the plaint of this suit is liable to be cancelled/ rejected. Consequently, on Misc. (J) Case No. 234/16, being allowed, the suit was also disposed-of. 5) Aggrieved by the order of rejection of the plaint, the petitioners have filed this application. The learned counsel for the petitioners has submitted that the impugned order was without jurisdiction because if at all the court was of the opinion that there was a valid arbitration clause, then by applying the provisions of section 8 of the Arbitration and Conciliation act, the dispute ought to have been referred to arbitration. Moreover, the provisions of Order VII Rule 11(d) would apply only where the suit appears from the statement in the plaint to be barred by any law. In support of his submissions, the learned counsel for the petitioners has read the plaint and has submitted that there is no statement in the plaint from which the suit appeared to be barred by law. It is further submitted that this Court in exercise of extraordinary superintending jurisdiction over the courts below, was only required to test the impugned order in the touchstone of correctness and it ought not to refer the dispute to arbitration as provided in section 8 of the Arbitration & Conciliation Act, 1996 without interpreting the contents of the Agreement for Sale and the Sale Deed. In support of his contentions, the learned Counsel for the petitioners has cited the following cases:- a. State of Gujrat, etc. V. Vakhtsinghji Sursinghji Vaghela & Ors. Etc., AIR 1968 SC 1481; CRP 17/2017 Page 3 of 8
b. P. Anand Gajapathi Raju & Ors. V. P.V.G. Raju (Died) & Ors., (2000) 4 SCC 539; c. Vadivellu V. Sundaram & Ors., (2000) 8 SCC 355; d. M/s. Estralla Rubber V. Dass Estate (Pvt.) Ltd., (2001) 8 SCC 97; e. S.B.P. & Co. V. Patel Engineering Ltd. & Anr., (2005) 8 SCC 618; f. N. Radhakrishnan V. Maestro Engineers & Ors., (2010) 1 SCC 72. 6) Per contra, the learned counsel for the respondents has supported the impugned order and submits that there is no illegality in the said order as the respondents/ defendants had the option either to file an application under Order VII Rule 11(d) of the Civil Procedure Code or to file an application under section 8 of the Arbitration & Conciliation Act, 1996. Therefore, as the jurisdiction of the learned Trial Court was invoked under the provisions of Order VII Rule 11(d) of the Code, the impugned order was correctly passed by the court having jurisdiction to pass such an order. It is also submitted that the rejection of plaint amounts to the passing of a decree and, as such, the revision in the present form was not maintainable. In order to supplement his argument, the learned Counsel for the respondents has relied on the following cases:- a. Sopan Sukhdeo Sable & Ors. V. Assistant Charity Commissioner & Ors., (2004) 3 SCC 137; b. C. Natajan V. Ashim Bai & Anr., (2007) 14 SCC 183; c. Mangluram Dewangan V. Surendra Singh & Ors., (2011) 12 SCC 773; d. Om Aggarwal V. Haryana Financial Corporation & Ors., (2015) 4 SCC 371; e. Rishabh Chand Jain V. Ginesh Chandra Jain, (2016) 6 SCC 675; f. Nimai Kar V. Bishnupada Saha & Anr., 2010 (5) GLT 384; g. Indian National Trade Union Congress & Ors. V. Hiranya Bora, 2016 (4) GLT 268. 7) At the outset it is would be pertinent to mention that the respondents had entered appearance in this case by filing their vakalatnama. Hence, a formal notice of motion was issued by order dated 10.02.2017. As the respondents had CRP 17/2017 Page 4 of 8
filed their affidavit-in- opposition in the matter and, as such, on completion of pleadings and with the consent of the learned counsel for both sides, the matter was heard for disposal at the admission stage itself. 8) This Court, upon hearing the learned counsel for both sides, has also perused the materials available on record as well as the cases cited by them. This Court is of the opinion that the only question which is required to be decided herein are a. Whether the learned trial Court was right in ordering the plaint to be rejected by the impugned orders under the provisions of Order VII Rule 11(d)? b. Whether the correct recourse for the said learned court, in the facts and circumstances of the said case ought to have been to referred the dispute to arbitration under section 8 of the Arbitration & Conciliation Act, 1996? 9) In the said context, none of the cases cited by the learned Counsels for the parties are found to be relevant in the context or to the aforesaid two questions formulated by this Court. Hence, this court has not burdened this judgment with the various paragraphs thereof on which the learned counsels for the parties had relied upon. 10) On the perusal of the plaint, which is annexed to this application, this court could not find any statement from which it could be culled out that the plaint was barred by any law in force. Rather, it was a point of defence taken by the respondents in their written statement that there existed an arbitration clause in their agreement for sale. 11) This court finds that the learned counsel for the respondents is right in submitting that the rejection of plaint amounts to a decree. In this regard, one may refer to the definition of decree as provided in section 2(2) of the Civil Procedure Code, by which decree includes rejection of plaint. Thus, once the CRP 17/2017 Page 5 of 8
learned Trial Court has ordered rejection of plaint, it would amount to a decree against the petitioners/plaintiffs in respect of the claim made in the suit, for which the petitioners would be precluded from approaching the appropriate forum for redressal of their dispute through arbitration. This court is of the considered opinion that having rejected the plaint, the further direction of the dispute in the suit would be decided by arbitration is of no relief to the petitioners as the decree which follows from rejection of the plaint would continue to create a legal obstacle for the petitioner to file and/or sustain any subsequent proceedings, including arbitration owing to the well settled legal principles that there cannot be an estoppel against a statute. 12) In light of the above, this court is of the opinion that the learned Trial Court had committed jurisdictional error in passing the impugned order, which has caused failure of justice to the petitioner. The existence of an arbitration clause, if the same is valid, would only entail an order under section 8 of the Arbitration & Conciliation Act, 1996 to refer the dispute to arbitration. The learned counsel for the respondent has not been able to point out any provisions of law in force, which precludes any person from instituting a civil suit because of a mere existence of arbitration clause in the agreement between the parties. The plain reading of the language of the provisions of section 8 of the Arbitration & Conciliation Act, 1996, as held by the Hon ble Supreme Court of India in the case of P. Anand Gajapathi Raju (supra) is that the language of section 8 is preemptory. It is, therefore, obligatory for the Court to refer the parties to arbitration in terms of their agreement. Therefore, the first question is decided in favour of the petitioners. 13) Hence, this is found to be a fit and proper case to exercise jurisdiction under Article 227 of the Constitution of India to set aside and quash the impugned orders, viz., (i) the order dated 14.12.2016 passed by the learned Munsiff No.2, Kamrup (Metropolitan), Guwahati, in Misc.(J) Case No. 234/2016, in T.S. No.53/2016 as well as (ii) the consequential order dated 14.12.2016 CRP 17/2017 Page 6 of 8
passed by the said learned Court in T.S. No.53/2016. Hence, the T.S. No. 53/2016 is restored to file. 14) In so far as the second question is concerned, it is seen that as per the case of Indian National Trade Union Congress (supra), this court has held that The provisions of section 8(1) of the Act would come into play if and only if an application is made by any of the parties to an arbitral agreement requesting for reference of the dispute to arbitration not later than submitting the first statement on the substance of dispute. Thus, as per the opinion of this court, when there was no application under section 8 of the arbitration & Conciliation Act, 1986 before the learned Trial Court, the said learned Court could not have referred the dispute to arbitration. However, in view of above, this court is of the view that in the present case in hand, the respondents/ defendants had, along with submitting their statement of defence, filed an application under Order VII Rule 11(d) of the Civil Procedure Code, as such, on the restoration of the suit to file, this court deems it expedient for the ends of justice, to allow the respondents/ defendants to file an application under section 8 of the Arbitration & Conciliation Act, 1996, if so advised. In the considered view of this court, the respondents cannot be left remediless for filing an application under Order VII Rule 11(d) and not filing application under section 8 of the said 1996 Act. In this regard and for the ends of justice, it is provided that if the respondents/ defendants file an application under section 8 of the Arbitration & Conciliation Act, 1996 in accordance with the law within a period from 15 (fifteen) days from the date of restoration of the suit to file, the learned Court of Munsiff No.2, Kamrup (Metropolitan), Guwahati, shall entertain the same as if the same is filed not later than filing the first statement of defence and upon hearing the parties thereon, shall decide the matter de-novo without being influenced by this order of by the previous orders impugned herein. 15) This revision is, thus, allowed. The parties are left to bear their own cost. CRP 17/2017 Page 7 of 8
16) The parties are directed to appear before the learned Trial Court on 15.06.2017 without any further notice for appearance in T.S. No. 53/2016. JUDGE Mkumar. CRP 17/2017 Page 8 of 8