IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MRS. JUSTICE K.HEMA WEDNESDAY, THE 24TH AUGUST 2011 / 2ND BHADRA 1933 OP(C).No. 1476 of 2011(O) ------------------------- MP.3123/2010 of J.M.F.C.-I,KOCHI .................... PETITIONER: ----------------------- PRABHU DAYAL YADAV, 65 YEARS, S/O.SH SHAN SINGH YADAV, H-422-D, PALM VIHAR, HURGAON-122017, HARYANA. BY ADV. SRI.T.R.ASWAS RESPONDENT: --------------- 1. M/S.KINSHIP SERVICE INIDA (P) LTD., KINSHIP HOUSE, PLOT NO.1& 6, CAT IV,MARAR ROAD, WELLINGTON ISLAND, KOCHI-682003 REP.BY ITS DIRECTOR PRABHAKAR KINI. 2. S.M.IFTHIKARUDHIN,58 YEARS,S/O.SYED KHAN DIRECTOR,M/S.KINSHIP SERVICE INIDA (P) LTD., KINSHIP HOUSE,PLOT NO.1&6,CAT IV,MARAR ROAD, WELLINGTON ISLAND,KOCHI-682003 RESIDING AT 317, MERIDIAN HOUSE, PANAMPILLY NAGAR, KOCHI 682036. ADV. SRI.D.ANIL KUMAR FOR R1 & 2 THIS OP (CIVIL) HAVING BEEN FINALLY HEARD ON 24/08/2011, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: O.P(CIVIL) NO. 1476/2011 APPENDIX PETITIONER'S EXHIBITS: EXT.P1: DECISION REPORTED IN 2010(3) KHC 279 EXT.P2: SEC.8 PETITION-MPNO.3123/2010 FILED BY RESPONDENTS. EXT.P3: OBJECTION FILED BY THE PETITION TO EXT.P2 EXT.P4: IMPUGNED ORDER DATED 28.2.2011 IN MP.3123/10 IN MP.2556/10 OF JFMC-I, KOCHI. // TRUE COPY// P.S. TO JUDGE. K.HEMA, J. ----------------------------------------------- O.P.(Civil) Nos. 1476 of 2011 ----------------------------------------------- Dated this 24th day of August, 2011 . JUDGMENT Petitioner was employed as Captain/Master in an Indian Flag Ship. The 1st respondent is the ship, represented by its Master. The 2nd respondent is the Company which owns the ship. The 3rd respondent is the director of the above company. A petition was filed by petitioner before the Magistrate Court, under Sections 145 and 149 of the Merchant Shipping Act, 1958 for recovery of his wages and for rescinding the arbitration clause in the service etc. 2. In the above proceedings, respondents filed a petition under Section 8 of the Arbitration and Conciliation Act, 1996 ('the Act', for short), as C.M.P. 3123/2010 stating that the dispute between the parties arises out of a service contract; it can be settled only by way of arbitration, in accordance with Arbitration and conciliation Act (the Arbitration Act', for short), since there is an arbitration clause in the agreement. Detailed written objection OP(C) No.1476/11] 2 was filed by petitioner, raising various grounds. Learned Magistrate, after considering the rival contentions, held thus: “since this court cannot decide the dispute due to the existence of an arbitration clause in the employment contract, this court has no other option but refer the parties to the arbitration as per Section 8 of the Arbitration and Conciliation Act, 1996”. 3. It was also observed by learned Magistrate that parties are at liberty to apply for arbitration to decide the claim for wages. C.M.P. 3123/2010 was thus, allowed and petitioner challenges the order in the said petition. 4. Heard both sides. The main contention raised is on the maintainability of petition under Section 8 of the Arbitration Act. According to petitioner, respondents did not file petition for arbitration at the first opportunity to file it. Another O.P. was filed before this court and another interlocutory application was also filed for interim attachment etc. But, respondents did not file any petition for reference under Section 8 of the Act at the time of raising dispute. Hence, petition under Section 8 is not maintainable, it is submitted. 5. Learned counsel for petitioner also pointed out that learned Magistrate Court failed to note that he has power to rescind the arbitration clause in the service contract, by virtue OP(C) No.1476/11] 3 of Section 149 of Merchant Shipping Act and petitioner has made a specific prayer in the main petition to rescind the arbitration clause. If the said prayer is allowed, petition filed by respondent will have to be dismissed, it is submitted. 6. It is also submitted by learned counsel for petitioner that in the light of the decision reported in Booz Allen and Hamilton Inc. v. SBI Home Finance Limited (2011) 5 SCC 532] even if there is an arbitration clause, the court may refuse to refer the matter for arbitration, since remedy is provided under the statute itself and object of the statute is to give quick relief to the parties aggrieved. 7. It was argued by learned counsel for respondents that there are no averments in the counter statement filed by petitioner about rescinding the contract etc. The court below had hence no occasion to consider the same. Petitioner cannot be heard to say anything on any contention which is not raised in the counter statement, it is argued. It is also argued that it is enough if the petition under Section 8 of Arbitration Act is filed before filing a statement in the main petition, as rightly held by learned Magistrate. The failure to file the petition prior to filing of statement in the main petition will not be a ground to refuse the OP(C) No.1476/11] 4 prayer for arbitration, it is argued. It is submitted that decision cited by learned counsel for petitioner is reported only after disposal of the petition. Hence, the impugned order may not be set aside on the grounds urged, it is argued. 8. On hearing both sides, I find that petitioner has not stated anything in the counter statement about court's power to rescind the arbitration clause etc. At the same time, petitioner made a specific prayer in the main petition to rescind arbitration clause under Section 149. There can no doubt that any decision to be taken on the question of rescinding the contract will have a vital bearing on the decision to be taken in the petition filed under section 8 of the Act. If a relief under Section 149 can be granted, the question of referring the matter for arbitration may not arise at all. 9. Hence, in the peculiar facts and circumstances of the case, I find that the question relating to rescinding contract has also to be decided for taking a right decision in the petition filed under Section 8 of the Act. I also find that an opportunity has to be given to petitioner to raise such question also by filing an additional counter statement. If such statement is filed, necessarily, respondents shall also be given an opportunity to OP(C) No.1476/11] 5 controvert the contentions taken up by filing a statement, if respondents are so advised. 10. At any rate, the issue arising in the petition has to be re-considered by the Magistrate on merit, in the light of what is stated above. Therefore, I am not going into the merits of the contentions raised in this petition, since it is likely to prejudice the decision to be taken by the trial court. Since the matter requires a reconsideration, in the light of the above observations made in this order, the order under challenge is to be set aside and the following order is passed: 1. The order under challenge is set aside. 2. The matter is remanded to the Magistrate Court, for fresh consideration and disposal in accordance with law, in the light of the observations made in this order. 3. The parties shall appear before Magistrate Court on 20.09.2011. This petition is allowed. Sd/- K.HEMA, JUDGE. krs.