Civil Revision No. 2907 of 2006 1 .. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No. 2907 of 2006 Date of Decision: December 22, 2011 M/s Aakarshan Estate Private Limited. .... Petitioner Versus Banshi Ram and another .... Respondents CORAM : HON'BLE MR. JUSTICE VIJENDER SINGH MALIK 1.Whether Reporters of local papers may be allowed to see the judgment? 2.Whether to be referred to the Reporters or not? 3.Whether the judgment should be reported in the Digest? Present Mr. Arun Palli, Senior Advocate, with Mr. Hari Om Attri, Advocate, for the petitioner. Mr. Sanjay Vij, Advocate, for respondent No.1. VIJENDER SINGH MALIK, J. This is a revision petition brought by defendant No.1 under the provisions of Article 227 of the Constitution of India for setting aside the order dated 13.4.2006 (Annexure P16) passed by learned Additional Civil Judge (Senior Division), Gurgaon. Banshi Ram, respondent no.1 brought a suit for declaration to the effect that the agreement of sale dated 15.7.2005, special power of attorney, general power of attorney, application to DTP as well as other documents prepared by defendant No.1 on the papers already thumb marked by the plaintiff, regarding the suit land are null and void and result of collusion between the defendants and are not binding on the Civil Revision No. 2907 of 2006 2 .. plaintiff. He had also prayed for the relief of permanent injunction restraining respondent No.1 from creating any charge over the said property. The case of the plaintiff in brief had been that he is a simple uneducated person and that 2/3 months back, Baljeet Singh, his real nephew, defendant No. 2, came to him representing that the suit land is to be got partitioned and obtained his thumb impressions on some papers. He has further claimed that for the last 5-6 months, he had been bed-ridden, having been of mature age of 75 years and having undergone eye surgery. According to him, 5-6 days back, he received a notice from respondent No.1 regarding execution of the sale deed which came to him as a shock and on enquiry, he came to know about the fraud committed on him by his nephew, Baljit Singh and so he filed the suit. Defendant No.1 - petitioner filed an application under section 8 of the Arbitration and Conciliation Act, 1996 (for short, the Act) for referring the parties to the arbitration of the sole arbitrator, Shri Sat Pal, J. (retired) in terms of the arbitration clause as contained in the agreement of sale dated 15.7.2005. It is claimed in the application that the plaintiff had admitted the existence of the agreement of sale dated 15.7.2005 which contains the arbitration clause and the plaintiff is bound by the same. The application was opposed by the plaintiff. It was claimed that the application was not maintainable. It was further claimed that it has been misuse of the process of law. It is claimed that the agreement is an outcome of fraud and the question of fraud could only be decided by civil court. Therefore, the application was prayed to be dismissed. Hearing learned counsel for the parties, learned Additional Civil Civil Revision No. 2907 of 2006 3 .. Judge (Senior Division) has dismissed the application vide order dated 13.4.2006. Aggrieved by the aforesaid order, defendant No.1 has brought this revision petition. I have heard Mr. Arun Palli, learned Senior Advocate assisted by Mr. Hari Om Attri, learned counsel for the petitioner and Mr. Sanjay Vij, learned counsel for respondent No.1 and have gone through the record carefully. After recapitulating the basic facts raising the controversy between the parties, learned senior counsel for the petitioner has submitted that the petitioner had sent a reply to the notice vide Annexure P6 dated 12.12.2005. He then drew my attention to the arbitration clause contained in the agreement of sale dated 15.7.2005, which is as under:- “ That in the event of any disputes or differences between the parties relating to this Agreement or any part hereof, the same shall be referred to the sole arbitrator to be appointed by the vendee whose decision shall be final and binding on the parties. The Arbitrator shall have full authority and power to award, or decree for specific performance, which shall be binding on the parties. The Arbitration proceedings shall be conducted at New Delhi in accordance with the provisions of Arbitration and Conciliation Act, 1996 as may be amended from time to time. The venue of Arbitration shall be at New Delhi.” According to him, the petitioner then served Banshi Ram with notice dated 12.12.2005 vide which Banshi Ram was told to withdraw the suit, which he had filed in respect of the agreement of sale, claiming that in view of the arbitration clause contained in the agreement of sale dated Civil Revision No. 2907 of 2006 4 .. 15.7.2005, the disputes between the parties were liable to be referred to the arbitration of the sole arbitrator. He has further submitted that vide this notice, the petitioner informed Banshi Ram of having appointed Shri Sat Pal, J., a retired Judge of this court, as sole arbitrator subject to his consent. He has submitted that the petitioner then made an application under section 8 of the Act praying to the court to refer the parties to the arbitration of the sole arbitrator vide application dated 20.12.2005 (Annexure P7). Learned senior counsel for the petitioner has further submitted that on Banshi Ram submitting his reply to the application, Annexure P9, learned trial court dismissed the application vide Annexure P16. According to him, the very foundation of the claim of Banshi Ram for repudiation of the contract of sale is that his nephew Baljeet Singh had committed fraud with him. According to him, he did not make any complaint regarding this to either police or other authorities. According to him, if there was any misrepresentation or fraud played upon Banshi Ram by Baljeet Singh, a complaint to the police or other authorities was a must and its absence shows that the plea raised in this regard by Banshi Ram is not true. Learned senior counsel for the petitioner has further submitted that even if the agreement is an outcome of misrepresentation or fraud, the very existence of the agreement stands admitted. According to him, once the existence of the agreement is admitted, which contains the arbitration clause, the court has no option but to refer the dispute to the arbitration. In this regard, he has placed reliance on a decision of Hon`ble Supreme Court of India in Hindustand Petroleum Corpn. Ltd. Civil Revision No. 2907 of 2006 5 .. Vs. M/s Pinkcity Midway Petroleums 2003 (3) PLR 746, where it is laid down that once it is admitted/established that there is an arbitration clause in the agreement, the court is bound to refer the dispute to arbitrator in view of the mandatory language of section 8 of the Act. It is further laid down that the question whether that agreement clause will apply to the facts of the dispute is to be raised and decided before the arbitrator, who has the jurisdiction to adjudicate upon his own jurisdiction and validity and existence of arbitration agreement as also the arbitrability of the subject matter of dispute under arbitration clause. Learned senior counsel has further submitted that in the case in hand, under the arbitration clause, the vendee i.e., the petitioner alone is to decide about referring the dispute to the arbitrator and the decision of the vendee is to be final and binding on the parties. He has further submitted that once the arbitration proceedings had commenced in the matter, having been referred to the arbitrator by the vendee in terms of the agreement the other party cannot seek declaration that the agreement was null and void being fraudulent. In this regard, he referred me to a decision of Hon`ble Delhi High Court in a case reported as Drishticon Properties (P) Ltd. Vs. Chopra Marketing (P) Ltd. 2010 (7) RCR (Civil) 449, where it is laid down as under :- “9. A perusal of above conclusions would show that once the matter has been referred to the Arbitral Tribunal, the High Court could not interfere with the proceedings or the orders passed by the Arbitral Tribunal and the parties can approach the High Court only in terms of section 37 of the Act or in terms of the Section 34 of the Act. It is also clear that the Tribunal Civil Revision No. 2907 of 2006 6 .. has jurisdiction to rule, not only about its own jurisdiction but also about the validity of the agreement and all the issues raised by the plaintiff before this Court can be raised by the plaintiff before the Tribunal. It is not a case under section 11(6) where a prayer for appointment of an Arbitrator has been made and the opposite side has challenged the validity of the arbitration agreement and Court, before referring or appointing the Arbitrator has to adjudicate about the validity of the agreement. It is also not a case where a suit has been filed before appointment of the Arbitrator and during pendency defendant has made an application that the matter be referred to the Arbitrator in terms of Section 8 of the Arbitration Act because there is an arbitration clause. It is a case where arbitration clause contained in the alleged forged agreement has already been invoked and the matter has been referred by the defendants to the Arbitrator. Once the matter is already referred to the Arbitrator, Section 5 of the Arbitration and Conciliation Act would come into operation which prohibits judicial authority from intervening in the proceedings unless it is otherwise provided in the Act. I do not find any provision under the Act where once the arbitration proceedings had started on the matter having been referred to the Arbitrator by a party in terms of the agreement, the other party can seek a declaration that the agreement or contract was null and void being a forgery.” He has also cited before me some other decisions reported as Civil Revision No. 2907 of 2006 7 .. Starlinger & Company Gas M.B.H. Vs. Shri Raj Kumar Lohia and others 2010 (4) All. LJ 585, M/s Rgent Automobilies Vs. Indian Oil Corporation Limited and others 2008 (3) R.C.R. (Civil) 752. Learned senior counsel for the petitioner has lastly submitted that respondent Banshi Ram has participated in the proceedings before the arbitrator and as the award has already been made, the respondent Banshi Ram has filed objections to the same. He has submitted that after conducting himself in this manner, the principle of estoppel applies to him. According to him, once the award has been made by the arbitrator, nothing remains to be decided in this petition. Learned counsel for the respondent - Banshi Ram, on the other hand, has submitted that Banshi Ram did not file complaint to the police or to any other authority because Baljeet Singh had been a nephew to him in relationship. According to him, mere non filing of the complaint would not be sufficient to infer that Banshi Ram had accepted the agreement. According to him, when application under section 8 of the Act was filed by the petitioner, Banshi Ram filed application under Order 11 Rule 14 read with section 151 CPC for production of the original agreement of sale dated 15.7.2005 as well as other documents. According to him, the petitioner was directed on the said application by the court to produce the original agreement of sale. He has further submitted that instead of producing the original agreement of sale, the petitioner had submitted that the agreement had been produced before the arbitrator and that the same would be produced after the same was received from the arbitrator. He has submitted that the agreement was not even produced before the arbitrator, a fact that becomes apparent Civil Revision No. 2907 of 2006 8 .. from the proceedings dated 29.5.2007 (Annexure P19) where the arbitrator has clearly mentioned that the counsel for the claimant (petitioner here) had submitted that she had got the original agreement of sale dated 15.7.2005 executed between the parties and others along with other documents. According to him, this shows that till 29.5.2007, even the original agreement had not been produced before the arbitrator. He has submitted that in these circumstances, the petitioner failed to satisfy the essential requirement of section 8 of the Act for referring the dispute to the arbitrator and thereafter the order of learned trial court could not be questioned by the petitioner. Learned counsel for the respondent has placed reliance in this regard upon a decision of Hon`ble Supreme Court of India in N. Radhakrishnan Vs. Maestro Engineers and others (2010) 1 Supreme Court Cases 72, where it has been laid down as under :- “29.......Since the original deed was not filed within the requirement of Section 8(2) of the Act, it must be held that the mandatory requirement under the Act had not been complied with. Accordingly, even if we accept the factum of a dispute relating to the retirement of the appellant under the original deed dated 7.4.2003, still the Court would not be empowered to refer the matter to an arbitrator due to the non-compliance with the provisions mentioned under Section 8(2) of the Act.” Coming to the aspect of participation in the arbitration proceedings by Banshi Ram, learned counsel for the respondent has submitted that this was not voluntary submission to the jurisdiction of the arbitrator. According to him, the respondent Banshi Ram had always Civil Revision No. 2907 of 2006 9 .. been applying to this court for stay of the proceedings before the arbitrator, which is evident from the orders passed by this court on various dates, e.g. order dated 4.10.2007 where his application in this regard was withdrawn, to be dismissed as such, as the revision petition was ordered to be listed for early hearing. He has further submitted that respondent No.1 participated in the proceedings just to see that nothing prejudicial to his interest takes place on account of his absence in the said proceedings. Learned counsel for the respondent, Banshi Ram, has further submitted that when forgery and fraud is alleged to have been committed in the execution of the agreement, it could be said that complicated questions have arisen for determination and the jurisdiction to adjudicate upon those questions would be with the civil court. He has drawn my attention in this regard to N. Radhakrishnan's case (supra), where it is so laid down. The submission that Banshi Ram did not make any complaint to the police or other authorities would be a submission on merits of his claim that the agreement dated 15.7.2005 is an outcome of misrepresentation and fraud played upon him by Baljeet Singh, his nephew. Such like submission would touch the merits of the claim and would fall outside the purview of the scope of determination in an application under section 8 of the Act. When learned senior counsel for the petitioner has submitted that while making the impugned order, the trial court has given opinion on merits of the claim, the submission aforesaid also amounts to a submission on the merits of the claim, which cannot be considered while deciding this revision petition. A perusal of the judgments cited before me would show that the final exposition of law Civil Revision No. 2907 of 2006 10 .. on the provisions of sections 8 and 16 of the Act comes in M/s Pinkcity Midway Petroleums's case (supra) where it is clearly laid down that the questions of applicability of arbitration clause to the facts in dispute would be raised and decided by arbitrator provided the agreement containing arbitration clause is admitted/established between the parties. The arbitrator has the jurisdiction to not only adjudicate and decide upon his own jurisdiction and validity and existence of arbitration clause but also the arbitrability of the subject matter of the dispute under the arbitration clause, provided the arbitration clause in the agreement is either admitted or established. Once a party questions the very agreement containing the arbitration clause on the ground of misrepresentation or fraud, there is no valid agreement between the parties and unless the question is adjudicated upon by the civil court and it is found that the agreement containing the arbitration clause is a valid agreement between the parties, the jurisdiction of the arbitrator does not step in. The ratio of Drishticon Properties (P) Ltd.'s case (supra) cannot be followed for the reasons that it is contrary to the ratio of the decision of Hon`ble Supreme Court of India in M/s Pinkcity Midway Petroleums's case (supra) and that the arbitration clause in the agreement was not disputed in that case. From the facts before me, it is evident that while moving the application under section 8 of the Act, the petitioner did not put on record the original agreement. The respondent, Banshi Ram then applied under the provisions of Order 11 Rule 14 read with section 151 CPC for production of the original agreement of sale but the petitioner failed to produce the same before the court claiming that the same had been Civil Revision No. 2907 of 2006 11 .. produced before the arbitrator. As is evident from Annexure P19, the original agreement had not even been produced before the arbitrator till 29.5.2007. In view of this fact, the law laid down by Hon`ble Supreme Court in N. Radhakrishnan's case (supra) on the point fully applies to the facts of this case and the court, consequently, was not required to refer the parties to arbitration on non-compliance of procedural requirements of section 8(2) of the Act. The participation of Banshi Ram in the arbitration proceedings, taken with the fact that he had been applying before this court for stay of the proceedings before arbitrator, would clearly show that it was not voluntary submission to the jurisdiction of the arbitrator in the matter of decision of the dispute between the parties. The respondent, Banshi Ram had been before the arbitrator and has even filed objections just to safe-guard his interest in the on going proceedings before the arbitrator and this would in no way prove that he has given up his opposition to the to the prayer made in the application under section 8 of the Act by the petitioner before the trial court. Therefore, he cannot be said to be estopped from opposing the said prayer of the petitioner. In these circumstances, I fail to find any illegality or material irregularity in the impugned order made by learned trial court. Consequently, the revision petition is found to have no force and is dismissed. (VIJENDER SINGH MALIK) JUDGE December 22, 2011 som