The learned District Judge, lower Appellate Court relied
upon Section 89 of the CPC in coming to the conclusion that the
matter should be referred to arbitrator. I am afraid that this view
of the learned lower Appellate Court was totally incorrect. The
purpose of referring disputes to arbitrator is that long pending
disputes before the Courts are avoided. There is no purpose of
sending a dispute to arbitrator after trial has been completed in
the Civil Court and the matter decided on merits. Both Section 8 of
the Act and Section 89 of the CPC are applicable when the suit or
other proceedings before the Court are at the initial stage and the
Courts are of the view that the matters can be decided through the
means of an alternative dispute redressal system. After the dispute
has been settled by the Trial Court, it would be of no use to refer it
for arbitration though such a position may arise if at the appellate
stage, the Court feels that there can be mediation between the
parties. In the present case, it appears that before the Trial Court,
the defendants did not press for referring the dispute for
arbitration.
THE HIGH COURT OF TRIPURA
AGARTALA
SAO NO. 03 of 2011
Sri Chanchal Ghosh,
- Vs. –
Tripura Truck Owners Syndicate,
BEFORE
HON’BLE THE CHIEF JUSTICE MR. DEEPAK GUPTA
Citation;AIR 2015 Tripura
This
appeal
is
directed
against
the
order
dated
22.02.2002 passed by the learned District Judge, West Tripura,
Agartala, whereby he allowed the appeal of the respondents
(hereinafter referred to as the ‘defendants’) and set aside the
Judgment & Decree dated 10.05.2010 passed by the learned Civil
Judge (Jr. Divn.), No. 2, Agartala in Suit No. M.S. 5 of 2008 on
the ground that the matter was required to be referred to
arbitration.
2.
The plaintiff is the owner of a truck and was a member
of the defendant-Tripura Truck Owners Syndicate. The appellant
filed a suit for recovery of Rs. 43,728/- along with interest @ 12%
per annum on the ground that his truck had been deputed by the
defendants and therefore, he was entitled to this amount from the
defendant-Syndicate. I am purportedly not going into the facts in
detail because in view of the decision which this Court proposes to
take, it should not be appropriate to express any opinion on the
merits of the dispute between the parties. The defendants
contested the case and one of the grounds of contest was that the
suit was not maintainable as there was an arbitration clause for
settling the disputes between the parties. The learned trial Judge
did not agree with the defendants and the suit was tried and
decreed. The defendants filed an appeal and the learned Appellate
Court held that there was an arbitration agreement between the
parties and in terms of such agreement, the matter was required
to be referred to arbitration. The learned Appellate Court,
therefore, set aside the Judgment and decree and the suit was
remanded to the Trial Court with a direction to consider the
arbitration clause contained in the By-laws/Constitution of the
defendants and to dispose of the matter by following the procedure
prescribed in Section 89 of the CPC. Aggrieved by this order, the
plaintiff has filed the present appeal.
3.
No substantial question of law was framed at the time
of filing of appeal, but in my view, the following substantial
questions of law arise in the appeal:-
i) Whether an application under Section 8 of the Arbitration
and Conciliation Act must be filed and pressed before filing
of the first written statement before the party claiming
benefit of the arbitration clause can rely upon the same?
ii) Whether it is necessary to produce the arbitration
agreement at the time of filing of the application under
Section 8 of the Arbitration and Conciliation Act?
iii) Whether Section 89 of the CPC has any application to
the facts of the case?
4.
Section 8 of the Arbitration and Conciliation Act
(hereinafter referred to as ‘the Act’) reads as follows:-
“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 when submitting his first statement
on the substance of the dispute, refer the parties to
arbitration.
(2) The application referred to in sub-section (1)
shall not be entertained unless it is accompanied by the
original arbitration agreement or 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.”
A bare perusal of this Section shows that when any
action is brought before a Judicial Authority and such action is the
subject matter of an arbitration agreement then if a party to the
said action applies before filing his first statement on the
substance of the dispute, the Court may refer the matter to
arbitration. Sub-section (2) of Section 8 of the Act states that the
application under sub-section (1) shall not be entertained unless it
is accompanied by the original arbitration agreement or a duly
certified copy thereof.
5.
We are not concerned with sub-section(3) of the
clause. Sub-section (1) of Section 8 of the Act contemplates that a
party who wants to take benefit of the arbitration clause and wants
the matter to be referred to arbitrator must apply to the Court
before filing its first statement for referring the dispute to
arbitration. The application must be for making a reference of the
dispute to arbitration.
6.
In the present case, the relevant portion of the written
statement filed by the defendants reads as follows:-
“1.
That the Money Suit by the Plaintiff is not
maintainable, firstly because in the face of the statement
made in Paragraph-2 the Plaintiff is debarred from bringing
any suit in the Civil Court being prohibited by the
provisions of Clause-50 of the Constitution of Tripura Truck
Owners Syndicate. There being no exception to the clause
the suit should be dismissed on this ground alone.”
This is the entire averment in the written statement
with regard to the alleged arbitration agreement. Assuming for the
sake of deciding the matter that no separate formal application
under Section 8 of the Act is required to be filed then also in terms
of Section 8 of the Act, the party must apply for referring the
dispute to arbitration. In this objection, there is no prayer that the
dispute be referred to arbitration. The only issue raised is that the
suit be dismissed in view of the prohibition contained in Clause 50
of the Constitution of the Tripura Truck Owners’ Syndicate. Even
the word ‘arbitration’ is not mentioned in this portion of the written
statement. Therefore, I am of the considered view that there was
no proper application, formal or otherwise, for referring the dispute
to arbitration.
7.
Further, as pointed out above, sub-section (2) of the
Act clearly provides that the application referred to in sub-section
(1) of the Act shall not be entertained unless it is accompanied by
the original arbitration agreement or a duly certified copy thereof.
Even a clause of the Constitution, in my opinion, can constitute an
arbitration agreement. However, either the original Constitution or
a duly certified copy thereof containing Clause 50 should have
been filed before the Trial Court.
8.
The defendants did not even care to produce the
Constitution or a certified copy thereof containing Clause 50 before
the Trial Court. This was produced only before the Appellate Court.
Therefore, even if it is presumed that there was an application for
referring the dispute to arbitration since neither the original
arbitration agreement nor certified copy thereof had been filed, the
application itself could not have been entertained.
9.
The learned District Judge, lower Appellate Court relied
upon Section 89 of the CPC in coming to the conclusion that the
matter should be referred to arbitrator. I am afraid that this view
of the learned lower Appellate Court was totally incorrect. The
purpose of referring disputes to arbitrator is that long pending
disputes before the Courts are avoided. There is no purpose of
sending a dispute to arbitrator after trial has been completed in
the Civil Court and the matter decided on merits. Both Section 8 of
the Act and Section 89 of the CPC are applicable when the suit or
other proceedings before the Court are at the initial stage and the
Courts are of the view that the matters can be decided through the
means of an alternative dispute redressal system. After the dispute
has been settled by the Trial Court, it would be of no use to refer it
for arbitration though such a position may arise if at the appellate
stage, the Court feels that there can be mediation between the
parties. In the present case, it appears that before the Trial Court,
the defendants did not press for referring the dispute for
arbitration.
10.
I have gone through the order sheets of the Trial Court
and I find that it was never argued before the Trial Court that
before the trial of the suit is proceeded with, the Trial Court should
decide the question as to whether the dispute is required to be
referred to arbitration or not.
11.
The issues framed in the suit are as follows:-
“I S S U E S
1) Whether the suit is maintainable in law and form?
2) Whether the plaintiff is entitled to realise an amount of
Rs. 43728/- at an interest of 12% from the defendants?
3) Whether the plaintiff is entitled to any other relief or
reliefs in this case?”
12.
These issues also do not contemplate the reference of
the dispute to arbitration. Therefore, I am clearly of the view that
Section 8 of the Arbitration and Conciliation Act has no applicability
to the facts and circumstances of the case and similarly Section 89
of the CPC could not have been pressed into use to set aside the
Judgment passed by a Trial Court on merits after the trial have
been completed. Therefore, all the substantial questions of law
framed are answered in favour of the plaintiff and against the
defendants.
13.
In this view of the matter, the appeal is allowed. The
order of the learned lower Appellate Court is set aside and the
matter is remanded to the lower Appellate Court to decide the
appeal on merits on the other issues.
14.
The party through the counsel are directed to appear
before the learned Trial Court on 18th December, 2014 and the
learned Trial Court shall hear and dispose of the appeal as early as
possible and not later than 31st March, 2015.
CHIEF JUSTICE
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