HIGH COURT OF MADHYA PRADESH A.C. No.29 /2016 (Vijay Bahadur Singh Vs. Shri [ENTITY]) Indore, Dated: 21/2/2018 Shri [ENTITY], learned counsel for the applicant. Shri [ENTITY], learned counsel for the respondents.
Heard.
This arbitration case has been filed by the applicant under [SECTION](6) of the Arbitration and Conciliation Act, 1996 for appointment of the Arbitrator for resolving the dispute between the parties.
Learned counsel for the respondents has raised a preliminary objection that the relevant clause in the agreement dated 3/2/2012 is not the arbitration clause, therefore, the matter cannot be referred to the arbitration and the application is liable to be rejected.
Learned counsel for the applicant opposing the said preliminary objection has submitted that the arbitration clause exists.
Having heard the learned counsel for the parties and on perusal of the record, it is noticed that the agreement dated 3/2/2012 was entered into between the applicant and the respondents disclosing that the respondent [ENTITY] was the original owner of the property in question and earlier the youth forum of the respondent [ENTITY] had entered into an agreement with one [ENTITY] etc. (developers) for raising new commercial complex on the property in question but the developers after doing some work had stopped the construction, therefore, the agreement dated 3/2/2012 was entered into between the applicant and the respondents containing the clauses to the effect that the applicant will get the dispute resolved between the respondents and the developers at the expense of the applicant and in lieu thereof the respondents will give half portion of the complex to the applicant. Now the dispute is in respect of the claim of the applicant arising out of the said agreement.
Clause 17 of the agreement which said to be the arbitration clause reads as under:-
17- ;g fd mHk;i{kksa ds e/; ;fn bl vuqca/k ds laca/k esa fdlh Hkh izdkj dk dksbZ fookn mRiUu gksrk gS rks fookn ds fujkdj.k iap dh fu;qfDr dj iap fu.kZ; vuqlkj fd;k tkosxk vkSj ;fn iap }kjk fookn dk fujkdj.k ugh fd;k tk ldk rks mHk;i{k dks ;g vf/kdkj jgsxk fd vuqca/k i= dk mYya?ku djus okys i{k ds fo:) l{ke U;k;ky; esa ;ksX; dk;Zokgh dj vuqca/k i= dk ikyu djok ysosA The aforesaid clause reveals that any dispute between the parties was required to be decided by appointing the Panch (Arbitrator) failing which the concerned party was given liberty to approach the court for performance of the agreement.
To gather the intention of the parties, it is also necessary to refer to other clauses. [SECTION] of the agreement reads as under:-
5- ;g fd vki f}rh;i{k ds }kjk ldy iap chlk uhek lekt] /kkj dks ;g izLrko fn;k x;k gS fd lekt ds mij of.kZr dkEysDl esa tks v/kqjk fuekZ.k izFkei{k ds }kjk fd;k x;k gS ,oa lekt ds iqoZ ;qok e.My ds VLV ds }kjk o"kZ 1997 esa fd;s x;s djkj ds varxZr Msoyij ds }kjk tks v/kqjk fuekZ.k fd;k x;k gS mlds laca/k esa izFkei{k lekt ,oa MsoyilZ ds e/; fookn gS tks f}rh;i{k MsoyilZ ls ppkZ djds izFkei{k ,oa MsoyilZ ds e/; ds fookn dk fujkdj.k djok;saxsA mDr fujkdj.k esa tks Hkh /kujkf'k [kpZ gksxh mldk Hkqxrku f}rh;i{k }kjk MsoyilZ dks fd;k tkosxkA blds cnys izFkei{k }kjk f}rh;i{k dks izfrQy Lo:i if'pe fn'kk dh vksj cus dkEiysDl dks 1@2 Hkkx vFkkZr vk/kk Hkkx nsuk gksxkA vki f}rh;i{k }kjk fn;k x;k mDr izLrko lEiw.kZ lekttu }kjk ekU; fd;k tkdj ;g r; fd;k x;k gS iqoZ esa chlk uhek lekt ;qok e.My ds VLV ,oa MsoyilZ ds e/; ds ysu&nsu dk fuiVkjk djrs gSa rks lekt mij of.kZr dkEiysDl dk 1@2 Hkkx vFkkZr vk/kk Hkkx if'pe fn'kk dh vksj e; rok tehu ds vki f}rh;i{k dks varfjr dj nsxk ,oa vki f}rh;i{k ds [kpZ ls vkids i{k esa ;k vkids funsZf'kr O;fDr ds i{k esa eq[R;kjukek vke dk fo; i= dk iath;u djk nsaxsA blesa fdlh izdkj dh vkuk dkuh ugh djsaxs vkSj uk gh fdlh izdkj ds fch/ku dh ekaxuh djsaxsA vkSj ;fn ,slk d`R; fd;k tkrk gS rks vki f}rh;i{k ;g vf/kdkj jgsxk vki l{ke U;k;ky; esa dk;Zokgh dj vius i{k esa mDr dkEiysDl dk if'pe fn'kk okys vk/ks Hkkx ds fch i= dk iath;u djk ysos ftldk leLr gtkZ [kpkZ ge izFkei{k }kjk ogu fd;k tkosxkA The aforesaid clause also reveals that in case of dispute, the parties had agreed for approaching the court of competent jurisdiction.
The Supreme Court in the matter of Jagdish Chander Vs. Ramesh Chander and others reported in 2007 (5) SCC 719 while considering the scope of an arbitration agreement has held as under:-
8. This Court had occasion to refer to the attributes or essential elements of an arbitration agreement in K K Modi v. K N Modi [1998 (3) SCC 573], Bharat Bhushan Bansal vs. U.P. Small Industries Corporation Ltd.
[(1999) 1 SCR 181] and Bihar State Mineral Development Corporation v. Encon Builders (I)(P) Ltd. [AIR 2003 SC 3688]. In State of Orissa v. Damodar Das [ AIR 1996 SC 942], this Court held that a clause in a contract can be construed as an 'arbitration agreement' only if an agreement to refer disputes or differences to arbitration is expressly or impliedly spelt out from the clause. We may at this juncture set out the well settled principles in regard to what constitutes an arbitration agreement :
(i) The intention of the parties to enter into an arbitration agreement shall have to be gathered from the terms of the agreement. If the terms of the agreement clearly indicate an intention on the part of the parties to the agreement to refer their disputes to a private tribunal for adjudication and an willingness to be bound by the decision of such tribunal on such disputes, it is arbitration agreement. While there is no specific form of an arbitration agreement, the words used should disclose a determination and obligation to go to arbitration and not merely contemplate the possibility of going for arbitration. Where there is merely a possibility of the parties agreeing to arbitration in future, as contrasted from an obligation to refer disputes to arbitration, there is no valid and binding arbitration agreement.
(ii) Even if the words 'arbitration' and 'arbitral tribunal (or arbitrator)' are not used with reference to the process of settlement or with reference to the private tribunal which has to adjudicate upon the disputes, in a clause relating to settlement of disputes, it does not detract from the clause being an arbitration agreement if it has the attributes or elements of an arbitration agreement.
They are : (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them.
(iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to Arbitration, it is an arbitration agreement. Where there is a specific and direct expression of intent to have the disputes settled by arbitration, it is not necessary to set out the attributes of an arbitration agreement to make it an arbitration agreement. But where the clause relating to settlement of disputes, contains words which specifically excludes any of the attributes of an arbitration agreement or contains anything that detracts from an arbitration agreement, it will not be an arbitration agreement. For example, where an agreement requires or permits an authority to decide a claim or dispute without hearing, or requires the authority to act in the interests of only one of the parties, or provides that the decision of the Authority will not be final and binding on the parties, or that if either party is not satisfied with the decision of the Authority, he may file a civil suit seeking relief, it cannot be termed as an arbitration agreement.
(iv) But mere use of the word 'arbitration' or 'arbitrator' in a clause will not make it an arbitration agreement, if it requires or contemplates a further or fresh consent of the parties for reference to arbitration. For example, use of words such as "parties can, if they so desire, refer their disputes to arbitration" or "in the event of any dispute, the parties may also agree to refer the same to arbitration" or "if any disputes arise between the parties, they should consider settlement by arbitration" in a clause relating to settlement of disputes, indicate that the clause is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration agreement, but an agreement to enter into an arbitration agreement in future.
In terms of the aforesaid judgment also the intention of the parties to enter into an arbitration agreement is required to be gathered from the terms of the agreement. Para 8(iii) of the above judgment reveals that if the parties under the relevant clause had agreed to approach the civil court dissatisfied with the decision of the authority such a clause cannot be treated as arbitration clause.
Having regard to the aforesaid and considering the fact that the parties by the relevant clause of the agreement had agreed to approach the civil court in case of dispute or failure to settle the same through Panch, therefore, I am of the opinion that [SECTION] noted above is not an arbitration clause and no relief to the applicant in this application under [SECTION] of the Act can be granted.
The arbitration case is accordingly dismissed. C.C. as per rules.
([ENTITY]) Judge BDJ Date: 2018.02.22 16:30:52 -08'00'