Allahabad High Court Judgement

Allahabad High Court Judgement

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JUDGEMENT HEADLINE : Arbitration Agreement” Contemplates Agreement By The Parties To The Dispute And Not A Unilateral Instrument.
JUDGEMENT TITLE : Smt.Krishna Premmai Devidasi Vs. International Society For Krishna Conscieusness And Others On 31/08/2012 By Allahabad High Court
CASE NO : CIVIL REVISION NO. 388 OF 2012
CORAM : Hon'ble Pankaj Mithal,J.

HIGH COURT OF JUDICATURE AT ALLAHABAD

A F R

[Reserved]
Case :- CIVIL REVISION No. - 388 Of 2012

Petitioner :- Smt.Krishna Premmai Devidasi
Respondent :- International Society For Krishna Conscieusness And Others
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
Respondent Counsel :- Vivek Saran

Connected With:-

Case :- CIVIL REVISION No. - 389 Of 2012

Petitioner :- Smt. Krishna Premmai Devidasi
Respondent :- International Society For Krishna Consciousness & Others
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
Respondent Counsel :- Vivek Saran


Hon'ble Pankaj Mithal,J.

The Two Revisions Under Section 25 Of The Provincial Small Causes Court Act, 1887 Are Based Upon The Identical Facts Involving The Same Controversy.
The Controversy Is With Regard To Tenancy Between The Plaintiff Respondent And The Defendant Revisionist.
The Shops In Question Which Are Under Tenancy Of The Defendant Revisionists Are Owned By The Plaintiff Respondent ISKCON A Registered Society. The Relationship Of Landlord And Tenant Between Them Is Not Disputed.
The Plaintiff Respondent Instituted Two Separate Suits Before The Small Causes Court For Arrears Of Rent And Eviction Against The Defendant/revisionist In Connection With Both The Shops Separately. In The Said Suits On Account Of Default Of The Tenant Defendant Revisionist In Depositing The Entire Admitted Amount Along With 9% Interest And The Monthly Rent Thereof Her Defence Was Struck Off Under Order 15 Rule 5 CPC As Applicable To The State Of U.P. Thereafter, Defendant Revisionist In The Suits Moved Applications Under Section 8 Of The Arbitration And Conciliation Act, 1996 (hereinafter Referred To As "Act") Contending That The Rules And Regulations Of The Plaintiff Respondent Society Contains An Arbitration Clause And In View Of It, The Dispute In Both The Cases Is Referable To Arbitration.
The Above Applications Of The Defendant Revisionist Have Been Rejected By The Court Below By Separate But Identical Orders Passed On 5.5.2012.
It Is Against The Above Two Orders Of Identical Nature Based Upon The Similar Sets Of Facts And Circumstances That The Defendant Revisionist Has Preferred These Revisions.
I Have Heard Sri Shashi Nandan, Senior Advocate Assisted By Sri Udyan Nandan, Learned Counsel For The Defendant Revisionists And Sri Vivek Saran, Learned Counsel For The Defendant Respondents.
Both The Parties Who Alone Are The Contesting Parties Agree For Final Disposal Of The Revision At This Very Stage As The Facts Are Not Disputed And The Question Involved Is Purely Legal In Nature.
The Other Respondents Are Only Proforma Respondents And It Was Not Felt Necessary To Either Serve Or Hear Them.
The Sole Question Which Crops Up For Consideration Is Whether In View Of Arbitration Clause In The Rules And Regulations Of The Society, The Instant Dispute Between The Landlord And Tenant Is Referable To Arbitration Under Section 8 Of The Act.
Principally, All Civil Disputes Whether Contractual Or Non-contractual Or Otherwise Are Capable Of Being Adjudicated By The Civil Court Unless The Jurisdiction Of The Civil Court Is Expressly Or Impliedly Barred. Arbitration Is An Alternative Dispute Redressal System Which Is Of A Voluntary Nature. Therefore, Parties At Litigation Can Be Relegated To The Aforesaid Alternative Dispute Redressal System Only If They Volunteer To Do So Or Had Agreed To Get The Disputes Between Them Resolved Through Arbitration Excluding The Jurisdiction Of The Civil Court.
Section 8 Of The Act Is A Step For Reference Of Disputes Between The Parties To Arbitration Provided Such Disputes Are "subject Matter Of Arbitration Agreement" And Instead Of Availing The Remedy Of Arbitration, They Are Brought Before The Court.
The Relevant Provision Of Section 8 Of The Act Reads As Under:-
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. ....................
3. ....................."


The Aforesaid Provision In Unequivocal Terms Envisages That Where An Action Is Brought Before The Judicial Authority In A Matter Which Is "subject Matter Of Arbitration Agreement" And If Any Of The Parties Applies For Referring The Matter To Arbitration Instead Of Getting It Adjudicated By The Court, Such Judicial Authority Is Obliged To Refer The Parties To Arbitration.
In The Above Provision The Words "subject Matter Of Arbitration Agreement" Are Of Prime Importance. It Is Only Those Matters Which Are "subject Matter Of Arbitration Agreement" Which Can Be Referred To Arbitration Under Section 8 Of The Act.
'Arbitration Agreement' Has Been Defined Under Section 7 Of The Act To Mean An Agreement By The Parties To Submit To Arbitration All Or Certain Disputes Arising Between Them. It Also Provides That The Arbitration Agreement Shall Be In Writing.
For The Sake Of Convenience The Relevant Part Of Section 7 Of The Act Is Quoted Below:-
(1) "In This Part,"arbitration Agreement" Means An Agreement By The Parties To Submit To Arbitration All Or Certain Disputes Which Have Arisen Or Which May Arise Between Them In Respect Of A Defined Legal Relationship, Whether Contractual Or Not.
(2)..................
(3) An Arbitration Agreement Shall Be In Writing.
(4).................
(a)............
(b)............
(c)............
(5)....................."
In View Of The Above Provision Ignoring The Manner In Which The Arbitration Agreement In Writing May Be Expressed, The Most Important Element In Constituting An Arbitration Agreement Is An "agreement By The Parties" In Writing.
The Agreement By The Parties Conceives Of Consent Of Both The Parties In Contrast To An Unilateral Agreement. Therefore, For Making A Reference Under Section 8 Of The Act, Two Things Are Of Prime Importance, Namely, Arbitration Agreement Which Has To Be An Agreement Between The Parties To The Dispute; And That It Should Be Touching The "subject Matter Of The Dispute". Thus, Before Making A Reference Under Section 8 Of The Act, It Is Obligatory Upon The Court Or The Judicial Authority To Decide Whether There Exists An Agreement Between/amongst The Parties Regarding Arbitration, Apart From Other Things.
In The Present Context, It Is Admitted To The Parties That There Is No Agreement Or Contract Of Tenancy Between Them In Writing Which May Contain An Arbitration Agreement. The Entire Emphasis Of The Defendant Revisionist Is Upon The Rules And Regulations Of The Society Which Contains The Following Clause Concerning Arbitration:-
C. Arbitration:
"All Disputes, Differences And Questions Of Any Nature Which At Any Time Arise Between ISKCON And Any Of Its Members, Officers, Representatives, Volunteer Workers, Persons Working For The Society And Persons Having Any Agreement Or Transaction With ISKCON Subject To The Provisions Contained Within These Rules And Regulations, Or Any Of Them, Out Of Construction Or Or Concerning Anything Contained In Or Arising Out Of Rules And/or Bye-Laws Of ISKCON, Or As To The Rights, Duties Or Liabilities Under The Said Rules And/or Bye-Laws Or Out Of The Affairs Of The Society, Shall Be Referred To Any Arbitrator"

The Aforesaid Arbitration Clause Is Contained In The Rules And Regulations Of The Society. It Is Not A Part Of Any Agreement Which May Have Been Entered Into Between The Parties. It Is Therefore Not An Agreement By The Parties So As To Make It An Arbitration Agreement Under Section 7 Read With Section 8 Of The Act.
The Defendant Revisionist While Making An Application For Reference Under Section 8 Of The Act Dated 12.3.2012, Which Has Been Filed As One Of The Annexures To The Stay Application, Simply States That According To Rules And Regulations Of The Society, A Copy Of Which Has Been Brought On Record, The Dispute Between The Parties Falls Within The Purview Of Arbitration And Is Referable To An Arbitrator. The Above Application Nowhere In Clear Terms States That There Exists An Arbitration Agreement Between The Parties Or That There Is An Agreement Between Them To Submit Disputes To Arbitration.
In This View Of The Matter, The Arbitration Clause That Exists In The Rules And Regulations Of The Society Is Of A General Nature But Is Not An Agreement Between The Parties So As To Constitute It To Be An Arbitration Agreement For Making A Reference To Arbitration Under Section 8 Of The Act.
In Yogi Agrawal Vs. Inspiration Clothes & U And Others (2009)1 SCC 372 The Apex Court Was Seized With A Similar Controversy Relating To Section 7 And 8 Of The Act. Their Lordships Of The Supreme Court Held That When A Party Invokes Section 8 Of The Act By Alleging Existence Of An Arbitration Agreement, It Is Incumbent Upon Him To Establish Such An Arbitration Agreement And That It Is Applicable To The Transaction Concerned. It Is Fundamental That To Constitute An Arbitration Agreement For The Purpose Of Section 7 And 8 Of The Act, Two Conditions Must Be Satisfied Namely It Should Be Between The Parties To The Dispute And Secondly It Should Relate To Or Be Applicable To The Dispute.
In View Of The Above Decision Also Satisfaction Of The Twin Conditions Laid Down Therein Including The One That The Arbitration Agreement Should Be Between The Parties To The Dispute Is Mandatory.
In The Instance Case, As Pointed Out Above, The Arbitration Clause Contained In The Rules And Regulation Of The Society Is An Unilateral Document To Which Defendant Revisionist Is Not A Party And, As Such, It Is Not An Agreement Between The Parties To The Dispute So As To Constitute An Arbitration Agreement For The Purposes Of Section 8 Of The Act.
In View Of The Aforesaid Facts And Circumstances, I Am Of The Opinion That The Dispute In The Two Suits Which Is Essentially One Between The Landlord And The Tenant Is Not Referable To Arbitration Under Section 8 Of The Act And Therefore The Court Below Has Not Committed Any Illegality In Rejecting The Applications Of Both The Defendant Respondents.
Revisions Are Therefore Merit-less And Are Dismissed.
Date: August 31, 2012.
SKS
































A F R
[Reserved]
Case :- CIVIL REVISION No. - 388 Of 2012
Petitioner :- Smt.Krishna Premmai Devidasi
Respondent :- International Society For Krishna Conscieusness And Others
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
Respondent Counsel :- Vivek Saran
Connected With:-
Case :- CIVIL REVISION No. - 389 Of 2012
Petitioner :- Smt. Krishna Premmai Devidasi
Respondent :- International Society For Krishna Consciousness & Others
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
Respondent Counsel :- Vivek Saran
Hon'ble Pankaj Mithal,J.
The Two Revisions Under Section 25 Of The Provincial Small Causes Court Act,
1887 Are Based Upon The Identical Facts Involving The Same Controversy.
The Controversy Is With Regard To Tenancy Between The Plaintiff Respondent And
the Defendant Revisionist.
The Shops In Question Which Are Under Tenancy Of The Defendant Revisionists
are Owned By The Plaintiff Respondent ISKCON A Registered Society. The Relationship
of Landlord And Tenant Between Them Is Not Disputed.
The Plaintiff Respondent Instituted Two Separate Suits Before The Small Causes
Court For Arrears Of Rent And Eviction Against The Defendant/revisionist In Connection
with Both The Shops Separately. In The Said Suits On Account Of Default Of The Tenant
defendant Revisionist In Depositing The Entire Admitted Amount Along With 9% Interest
and The Monthly Rent Thereof Her Defence Was Struck Off Under Order 15 Rule 5 CPC As
applicable To The State Of U.P. Thereafter, Defendant Revisionist In The Suits Moved
applications Under Section 8 Of The Arbitration And Conciliation Act, 1996 (hereinafter
referred To As "Act") Contending That The Rules And Regulations Of The Plaintiff
respondent Society Contains An Arbitration Clause And In View Of It, The Dispute In Both
the Cases Is Referable To Arbitration.
2
The Above Applications Of The Defendant Revisionist Have Been Rejected By The
court Below By Separate But Identical Orders Passed On 5.5.2012.
It Is Against The Above Two Orders Of Identical Nature Based Upon The Similar
sets Of Facts And Circumstances That The Defendant Revisionist Has Preferred These
revisions.
I Have Heard Sri Shashi Nandan, Senior Advocate Assisted By Sri Udyan
Nandan, Learned Counsel For The Defendant Revisionists And Sri Vivek Saran, Learned
counsel For The Defendant Respondents.
Both The Parties Who Alone Are The Contesting Parties Agree For Final Disposal
of The Revision At This Very Stage As The Facts Are Not Disputed And The Question
involved Is Purely Legal In Nature.
The Other Respondents Are Only Proforma Respondents And It Was Not Felt
necessary To Either Serve Or Hear Them.
The Sole Question Which Crops Up For Consideration Is Whether In View Of
arbitration Clause In The Rules And Regulations Of The Society, The Instant Dispute
between The Landlord And Tenant Is Referable To Arbitration Under Section 8 Of The Act.
Principally, All Civil Disputes Whether Contractual Or Non-contractual Or
otherwise Are Capable Of Being Adjudicated By The Civil Court Unless The Jurisdiction
of The Civil Court Is Expressly Or Impliedly Barred. Arbitration Is An Alternative
dispute Redressal System Which Is Of A Voluntary Nature. Therefore, Parties At
litigation Can Be Relegated To The Aforesaid Alternative Dispute Redressal System Only
if They Volunteer To Do So Or Had Agreed To Get The Disputes Between Them Resolved
through Arbitration Excluding The Jurisdiction Of The Civil Court.
Section 8 Of The Act Is A Step For Reference Of Disputes Between The Parties To
arbitration Provided Such Disputes Are "subject Matter Of Arbitration Agreement" And
instead Of Availing The Remedy Of Arbitration, They Are Brought Before The Court.
The Relevant Provision Of Section 8 Of The Act Reads As Under:-
1. "A Judicial Authority Before Which An Action Is Brought In A Matter
3
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. ....................
3. ....................."
The Aforesaid Provision In Unequivocal Terms Envisages That Where An Action
is Brought Before The Judicial Authority In A Matter Which Is "subject Matter Of
arbitration Agreement" And If Any Of The Parties Applies For Referring The Matter To
arbitration Instead Of Getting It Adjudicated By The Court, Such Judicial Authority Is
obliged To Refer The Parties To Arbitration.
In The Above Provision The Words "subject Matter Of Arbitration Agreement"
are Of Prime Importance. It Is Only Those Matters Which Are "subject Matter Of
arbitration Agreement" Which Can Be Referred To Arbitration Under Section 8 Of The
Act.
'Arbitration Agreement' Has Been Defined Under Section 7 Of The Act To Mean
an Agreement By The Parties To Submit To Arbitration All Or Certain Disputes Arising
between Them. It Also Provides That The Arbitration Agreement Shall Be In Writing.
For The Sake Of Convenience The Relevant Part Of Section 7 Of The Act Is
quoted Below:-
(1) "In This Part,"arbitration Agreement" Means An Agreement
by The Parties To Submit To Arbitration All Or Certain Disputes Which
have Arisen Or Which May Arise Between Them In Respect Of A Defined
legal Relationship, Whether Contractual Or Not.
(2)..................
(3) An Arbitration Agreement Shall Be In Writing.
(4).................
(a)............
(b)............
(c)............
(5)....................."
In View Of The Above Provision Ignoring The Manner In Which The Arbitration
4
agreement In Writing May Be Expressed, The Most Important Element In Constituting
an Arbitration Agreement Is An "agreement By The Parties" In Writing.
The Agreement By The Parties Conceives Of Consent Of Both The Parties In
contrast To An Unilateral Agreement. Therefore, For Making A Reference Under Section
8 Of The Act, Two Things Are Of Prime Importance, Namely, Arbitration Agreement
which Has To Be An Agreement Between The Parties To The Dispute; And That It Should
be Touching The "subject Matter Of The Dispute". Thus, Before Making A Reference
under Section 8 Of The Act, It Is Obligatory Upon The Court Or The Judicial Authority To
decide Whether There Exists An Agreement Between/amongst The Parties Regarding
arbitration, Apart From Other Things.
In The Present Context, It Is Admitted To The Parties That There Is No Agreement
or Contract Of Tenancy Between Them In Writing Which May Contain An Arbitration
agreement. The Entire Emphasis Of The Defendant Revisionist Is Upon The Rules And
Regulations Of The Society Which Contains The Following Clause Concerning
arbitration:-
C. Arbitration:
"All Disputes, Differences And Questions Of Any Nature Which
at Any Time Arise Between ISKCON And Any Of Its Members,
officers, Representatives, Volunteer Workers, Persons Working For The
Society And Persons Having Any Agreement Or Transaction With
ISKCON Subject To The Provisions Contained Within These Rules
and Regulations, Or Any Of Them, Out Of Construction Or Or
concerning Anything Contained In Or Arising Out Of Rules
and/or Bye-Laws Of ISKCON, Or As To The Rights, Duties Or Liabilities
under The Said Rules And/or Bye-Laws Or Out Of The Affairs Of The
Society, Shall Be Referred To Any Arbitrator"
The Aforesaid Arbitration Clause Is Contained In The Rules And Regulations Of
the Society. It Is Not A Part Of Any Agreement Which May Have Been Entered Into
between The Parties. It Is Therefore Not An Agreement By The Parties So As To Make It
an Arbitration Agreement Under Section 7 Read With Section 8 Of The Act.
5
The Defendant Revisionist While Making An Application For Reference Under
Section 8 Of The Act Dated 12.3.2012, Which Has Been Filed As One Of The Annexures
to The Stay Application, Simply States That According To Rules And Regulations Of The
Society, A Copy Of Which Has Been Brought On Record, The Dispute Between The Parties
falls Within The Purview Of Arbitration And Is Referable To An Arbitrator. The Above
application Nowhere In Clear Terms States That There Exists An Arbitration Agreement
between The Parties Or That There Is An Agreement Between Them To Submit Disputes To
arbitration.
In This View Of The Matter, The Arbitration Clause That Exists In The Rules And
Regulations Of The Society Is Of A General Nature But Is Not An Agreement Between The
parties So As To Constitute It To Be An Arbitration Agreement For Making A Reference To
arbitration Under Section 8 Of The Act.
In Yogi Agrawal Vs. Inspiration Clothes & U And Others (2009)1 SCC 372
the Apex Court Was Seized With A Similar Controversy Relating To Section 7 And 8 Of
the Act. Their Lordships Of The Supreme Court Held That When A Party Invokes
Section 8 Of The Act By Alleging Existence Of An Arbitration Agreement, It Is
incumbent Upon Him To Establish Such An Arbitration Agreement And That It Is
applicable To The Transaction Concerned. It Is Fundamental That To Constitute An
arbitration Agreement For The Purpose Of Section 7 And 8 Of The Act, Two Conditions
must Be Satisfied Namely It Should Be Between The Parties To The Dispute And
secondly It Should Relate To Or Be Applicable To The Dispute.
In View Of The Above Decision Also Satisfaction Of The Twin Conditions Laid
down Therein Including The One That The Arbitration Agreement Should Be Between The
parties To The Dispute Is Mandatory.
In The Instance Case, As Pointed Out Above, The Arbitration Clause Contained In
the Rules And Regulation Of The Society Is An Unilateral Document To Which
defendant Revisionist Is Not A Party And, As Such, It Is Not An Agreement Between The
parties To The Dispute So As To Constitute An Arbitration Agreement For The Purposes Of
6
Section 8 Of The Act.
In View Of The Aforesaid Facts And Circumstances, I Am Of The Opinion That The
dispute In The Two Suits Which Is Essentially One Between The Landlord And The Tenant
is Not Referable To Arbitration Under Section 8 Of The Act And Therefore The Court
below Has Not Committed Any Illegality In Rejecting The Applications Of Both The
defendant Respondents.
Revisions Are Therefore Merit-less And Are Dismissed.

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