Final Order 1

Order Details: Notice of Motion
Pdf Text: :1: N.M. No.1801/2018 in Sum. Suit No.1097/2015
IN THE BOMBAY CITY CIVIL COURT AT MUMBAI
NOTICE OF MOTION NO.1801 OF 2018
CNR NO.: MHCC010058602018
IN
SUMMARY SUIT NO. 1097 OF 2015
Siyaram Silk Mills Ltd., ]...Plaintiff
V/s.
M/s. Anil Kumar & Bros. and others ]...Defendants
Appearances:
Advocate Mr. Manjarekar for the plaintiff.
Advocate Ms. Jyoti Rajput for defendant Nos. 1 and 3.
CORAM : HER HONOUR JUDGE
S.P. AGARWAL
(C.R.NO.9)
DATED : 2nd FEBRUARY, 2019.
ORAL ORDER
1. Defendants have filed the present Notice of Motion contending
that suit be dismissed and referred the parties to arbitration in terms of
Agreement between them and plaintiff. Defendants have stated that the
original and certified copies of Franchise Agreement are retained by the
plaintiff.
2. It appears that, defendants have produced photocopies of the
Franchise Agreement between them and the plaintiff. It appears there is
clause 17 in the Franchise Agreement which runs as under :
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Article 17Arbitration; Severability
“In the event of any dispute arising out of or related to
this Agreement which cannot be resolved through
discussions/negotiations between the parties, the same
shall be settled exclusively by arbitration in accordance
with the Arbitration and Conciliation Act, 1996 or any
statutory modification or enactment thereof. The
language of the arbitration shall be English and the
venue of arbitration shall be Mumbai. All proceedings
shall be in English” and clause 14 of Loan Agreement
runs as under:
“14. In the event of any dispute arising out of or
related to this Agreement which cannot be resolved
through discussions/negotiations between the parties,
the same shall be settled exclusively by arbitration in
accordance with the Arbitration and Conciliation Act,
1996 or any statutory modification or enactment
thereof. The language of the arbitration shall be
English and the venue of arbitration shall be Mumbai.
All proceedings shall be in English”
It appears plaintiff had taken no objection about existence of
this clause in the agreement and that dispute in suit is arising out of
Franchise and Loan Agreement. Hence, as per Section 8 of the
Arbitration and Conciliation Act, 1996 it will be proper to refer the
parties to arbitration.
3. Ld. Advocate for the defendants has cited the judgment of the
Hon'ble Apex Court in case of Hindustan Petroleum Corpn. Ltd. Vs.
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Pinkcity Midway Petroleums reported in MANU/SC/0482/2003 in
Civil Appeal NO.5156 of 2003 (Arising out of SLP ( C) No.21154 of
2002) decided on 23.07.2003 in which it is held that “in cases where
there is an arbitration clause in the agreement, it is obligatory for the
Court to refer the parties to arbitration in terms of their arbitration
agreement”. In the case in hand also there is expressed clause in the
Franchise Agreement between the parties to refer the dispute to
arbitration. It appears that the dispute in the suit is on the basis of
Franchise Agreement between the parties. Hence, this case law is
squarely applicable to the case in hand.
4. Ld. Advocate for the plaintiff has cited judgment in case of M.
Shankara Reddy and another Vs. Amara Ramakoteswara Rao and 3
others in which it is held that “Section 8 of the Arbitration and
Conciliation Act, 1996 only empowers the Court to “refer” the parties to
arbitration but does not give the Court an option to reject a plaint. Section
8 of the Act is not a bar to a Civil Court”. In the case in hand also
defendant has prayed for dismissal of the suit on the ground that there
is arbitration clause in the Agreement executed between them and
plaintiff. But as per cited case law, such clause is not creating a bar to
civil court but requires to refer dispute to arbitrator. Therefore, suit
cannot be dismissed or rejected on this ground. This case law is
squarely applicable to case in hand.
5. Ld. Counsel for the plaintiff further cited judgment of the
Hon'ble Delhi High Court in case of Arti Jethani vs. Daehsan Trading
(India) Pvt. Ltd & Ors. in which it is held that “the application under
consideration having not been filed on or before filing of written
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statement, but having been filed about four weeks after the written
statement had been filed and after 8 days of filing of replication, one of the
prerequisite conditions for referring the parties to arbitration under
Section 8 of Arbitration and Conciliation Act does not stand fulfilled in
this case”. In case in hand, it appears the delay on the part of parties to
appear in the suit is condoned as per Notice of Motion No. 993/2016.
It appears the defendant has filed one Notice of Motion No. 918/2017
for rejection of plaint on the same ground that there is arbitration
clause in the Agreement between the parties and such application is not
pressed and thereafter, the present application to refer the parties to
arbitration is filed. Hence, it appears the present application is filed by
defendant before submitting his first statement on the substance of the
dispute, which is one of the requirements as per Section 8 of the
Arbitration and Conciliation. Therefore, it cannot be said that
defendants have not filed the present application on or before making
first statement on dispute. Filing of Notice of Motion for delay are
incidental proceeding and not the main proceeding. Hence, it will be
proper to refer the dispute for arbitration.
6. As discussed above, it will be proper to refer the dispute for
arbitration. Defendants have also prayed plaintiff to direct to produce
original and certified copies of Franchise Agreement. Plaintiff has not
objected for the same. Hence, it will be proper to direct plaintiff to
produce original or certified copies of such Agreement. Hence,
following order :
ORDER
1. Notice of Motion No. 1801/2018 is partly allowed.
2. Dispute in Summary Suit No.1097/2015 be referred to arbitrator
as contemplated under Clause 17 of the Franchise Agreement
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executed between the parties annexed with the plaint dated 21st
June, 2008 and Clause 14 in Loan Agreement.
3. Both the parties are directed to suggest the name of the arbitrator.
4. Plaintiff is directed to produce original or certified copy of
Franchise Agreement and Loan Agreement.
5. Notice of Motion No.1801/2018 stands disposed of.
(S.P. AGARWAL)
Judge,
Date: 02.02.2019. City Civil Court,
Gr. Bombay.
Dictated on : 02.02.2019
Transcribed on : 02.02.2019
Signed on : 02.02.2019
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CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER.”
05.02.2019 At 2:00 p.m. Mr. Subhash Sukhdeo Poul
UPLOAD DATE AND TIME NAME OF STENOGRAPHER
Name of the Judge (With Court
Room No.)
HHJ Ms. S.P. Agarwal
(C.R.NO.09)
Date of pronouncement of
Judgment/Order
02.02.2019
Judgment/Order signed by P.O. on 02.02.2019
Judgment/Order uploaded on 05.02.2019
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