IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE THOMAS P.JOSEPH MONDAY, THE 14TH NOVEMBER 2011 / 23RD KARTHIKA 1933 CRP.No. 494 of 2011() -------------------------------- AGAINST THE ORDER DATED 04/10/2011 IN IA.NO. 432/2008 IN OS.NO.1/2008 of DISTRICT COURT,THODUPUZHA .................... REVN. PETITIONER(S): PETITIONER/PETITIONER IN IA --------------------------------------------------------------------------------- IDUKKI DISTRICT CIRCKET ASSOCIATION, THODUPUZHA REPRESENTED BY ITS SECRETARY, SRI.B.VINOD, AGED 46 YEARS, S/O.BALAKRISHNAN NAIR, MADAPARAMBIL HOUSE, RIVER VIEW ROAD, THODUPUZHA, IDUKKI DISTRICT – 685 584. BY ADV. SRI.SHAJI P.CHALY SRI.S.GOPAKUMAR RESPONDENT(S): RESPONDENTS IN IA ----------------------------------------------------------- 1. ATHULYA CIRCKET CLUB NEDIYASALA, REPRESENTED BY THE SECRETARY, BIJU V.R., S/O.RAJAPPAN NAIR, AGED NOT KNOWN TO THE PETITIONER, VALIYAVEETTIL HOUSE, KOLANI P.O., THODUPUZHA, PIN - 685 584. 2. DEVDHAR CIRCKET CLUB, VADAKKUMURY REPRESENTED BY SECRETARY, P.A.VINOD, AGED NOT KNOWN TO THE PETITIONER, S/O.AYYAPPAN PILLAI, PUTHUKKOLIL HOUSE, THODUPUZHA, PIN - 685 586. BY ADV.SRI.K.C.CHARLES(CAVEATOR) THIS CIVIL REVISION PETITION HAVING COME UP FOR ADMISSION ON 14/11/2011, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: sts THOMAS P.JOSEPH, J. ==================================== C.R.P. No.494 of 2011 ==================================== Dated this the 14th day of November, 2011 O R D E R Respondents filed O.S. No.1 of 2008 in the court of learned District Judge, Thodupuzha under Section 25 of the Travancore Cochin Literary & Charitable Societies Act (for short, “the Act”) read with Rule 1 of Order VII of the Code of Civil Procedure (for short, “the Code”) against petitioner which is the Idukki District Cricket Association and 19 others. According to the respondents, petitioner and defendants 3 to 20 are unregistered Associations and hence they sought permission of the court to sue petitioner and defendants 3 to 20 under Rule 8 of Order I of the Code and a separate application for leave and publication as aforesaid was also made. Respondents prayed for a declaration that activities of petitioner (referred to in the plaint) are illegal, frame a new Scheme on curing defects, lacuna and vagueness in byelaw of the petitioner, direction for proper management and administration of the Association, a decree for prohibitory injunction restraining petitioner, its men and agents from acting as office bearers of the Executive Committee and General Body and sending any representative to defendants 2 and 3 or from making any new construction or conducting league matches, C.R.P. No.494 of 2011 -: 2 :- directing the third respondent to take administration of petitioner and choose eligible clubs out of 12 clubs under A division and to conduct fresh election as per byelaw. Petitioner-first defendant filed I.A. No.432 of 2008 under Section 8 of the Arbitration and Conciliation Act, 1996 (for short, “the Act of 1996”) claiming that since as per the byelaw framed by the Kerala Cricket Association (for short, “the KCA”) which is binding on all Cricket Associations in the State any dispute of the nature raised in the suit is to be referred to the Arbitral Tribunal as per clause 30 of the said byelaw and that the dispute involved in the case is arbitrable in view of sub-clause (3) of clause 30 referred above. Petitioner contended that in view of the said clause relating to arbitration, respondents are bound by it and hence learned District Judge has no jurisdiction to proceed with the matter. Petitioner wanted learned District Judge to refer the parties to the Arbitral Tribunal as provided under clause 30 of the byelaw above referred. 2. Respondents contested the application on various grounds including that the dispute involved in the suit is not arbitrable. Learned District Judge while rejecting other contentions raised found that the dispute is not arbitrable and consequently dismissed I.A. No.432 of 2008 which is under C.R.P. No.494 of 2011 -: 3 :- challenge in this Civil Revision. 3. Learned counsel for petitioner contends that though certain wild allegations are made against petitioner to attract jurisdiction of learned District Judge, this Court has to consider the nature of dispute really involved and decide whether the said dispute is arbitrable in view of clause 30 of the byelaw. Learned counsel contended that dispute involved in the case comes within sub-clause (3) of clause 30 of the byelaw where the meaning of 'disputable matter” is given. Learned counsel has placed reliance on the decision in Branch Manager, Magma Leasing & Finance Ltd. v. Potluri Madhavilata (AIR 2010 SC 488) to contend that once requirements of Sec.8(1) of the Act of 1996 are satisfied there is no other way for the court but to refer the parties to arbitration and nothing remains to be decided in the suit. According to the learned counsel the Arbitrarl Tribunal is invested with power under Sec.16 of the Act of 1996 to decide whether dispute referred to is arbitrable or not and any order passed thereunder is appelable under Sec.37 of the Act of 1996. In that view of the matter learned District Judge was not correct in deciding whether the dispute was arbitrable or not. It is contended that in the circumstances the order under challenge C.R.P. No.494 of 2011 -: 4 :- cannot be sustained and it is prayed that the parties may be referred to the Arbitral Tribunal. 4. Learned counsel for respondents-plaintiffs contended that having regard to the nature of dispute raised in the suit, the dispute is not arbitrable. It is contended that various allegations of mismanagement, maladministration and fraud have been made by the respondents and it is on the strength of the above allegations that respondents wanted a full proof Scheme to be framed curing the defects in the existing byelaw. That, according to the learned counsel is the function of the District Court under Sec.25 of the Act. When power is conferred on the court under a special statute to do certain things, question of that power being abdicated and being entrusted with the Arbitral Tribunal did not arise, it is contended. In that view of the matter learned District Judge is correct in disallowing the application. 5. To ascertain the rival contentions it is necessary to refer to the allegations in the plaint. It is the case of respondents that petitioner and defendants 3 to 20 are unregistered Associations and hence they require permission to sue them under Rule 8 of Order I of the Code. In paragraph 2 of the plaint it is stated that respondents are Cricket Clubs engaged in C.R.P. No.494 of 2011 -: 5 :- promotion of cricket associations registered under the Act and affiliated to the petitioner which in turn, is affiliated to the KCA, registered under the Act. It is stated that petitioner is one among the 14 Revenue District Cricket Associations in Kerala to function as a unit of the KCA to achieve the objects laid down in the byelaw of the KCA and implement decision of the KCA from time to time. In paragraphs 3A and 4, various provisions of the byelaw of second defendant-KCA are extracted. In paragraph 4A it is stated that petitioner is an unregistered Association and that office bearers of the petitioner, particularly, its President have played fraud on members of the Association to suit their convenience and produced them in various forums. Accordingly, petitioner and its office bearers have produced two versions of the byelaw in the present suit itself both of which are different. It is alleged that thus there is fraud even in the formation of the Memorandum and Articles of Associations of petitioner. Paragraph 5 of the plaint relates to one Vinod holding the post of Secretary of petitioner for a continuous two term period from 1998 onwards in violation of the relevant clauses in the byelaw and it is stated that in violation of the byelaw the said Vinod is continuing in the post of Secretary for the third term which is in C.R.P. No.494 of 2011 -: 6 :- violation of clause 32 of the byelaw. Paragraph 7 of the plaint refers to various types of memberships under the District Cricket Association as per clause 10 of the byelaw. Paragraph 8 of the plaint deals with basic qualifications for being a member of the General Body or Executive Committee as per clauses 10 and 15 of the byelaw. It is alleged that it is in violation of the said clauses that office bearers of petitioner continued as such for such long term. Paragraph 10 of the plaint deals with registration of members of the Clubs, Umpirer Classes, Umprier Tests. Scorer Classes, Scorer Tests, etc., and states about the purpose of providing such tests. Paragraph 11 of the plaint states about operation of bank account of petitioner and that administration of day to day affairs is impossible in the absence of a Treasurer at Thodupuzha as per clauses 20, 25 and 27 of the byelaw. In paragraph 12 there is reference to convening of Annual General Body meeting of petitioner as contemplated in clause 29(iii) and (v) of the byelaw after serving 15 days' clear notice in writing to the Secretaries of member Clubs under certificate of posting or through messenger. After referring to the manner in which meeting was allegedly held, it is averred that even the respondents did not know which club the signatories represent. C.R.P. No.494 of 2011 -: 7 :- Respondents noticed the illegality, irregularity and manipulation in the annual report, annual accounts, minutes and thereon they complained to the President and Secretary of the petitioner but there was no response. A copy of complaint dated 19.11.2007 is also produced along with the plaint. In paragraph 16 of the plaint reference is made to the preparation of annual accounts and other activities of petitioner including conduct of league matches for 2007-08. It is stated that it is mysterious how petitioner dared to spent money for the league matches during 2007-08, petitioner is not transparent, has no accountability and credibility though it is a public office and public money is entrusted to it. It is further stated that it is against the principles of natural justice that activities referred to in paragraph 16 are done by the petitioner. Paragraph 17 states that though petitioner has been acquiring lakhs of rupees for the last six years it remains an Association having no Turf Wicket in the State of Kerala. It is stated that there is no infrastructural activities for development of cricket in the (Idukki) District. Paragraph 18 states that first respondent obtained a photocopy of the audited accounts of petitioner for 2005-06 from Central Council members of KCA which stated that petitioner has its C.R.P. No.494 of 2011 -: 8 :- office at Matha Shopping Arcade, Thodupzuha but really there was no such office for petitioner in the said building and that at any rate it is against the byelaw as per clause 5(g). It is further alleged that petitioner has no nexus with Matha Shopping Arcade. On going through the income and expenditure account it is seen that the income and expenditure are the same which is quite impossible. It is stated that aggrieved by such illegalities, malpractice, manipulation and corruption by the office bearers of petitioner, respondents preferred complaint dated 01.03.2008 to the Central Council of the second defendant-KCA and the Kerala State Sports Council (copy of the complaint is produced). In the meantime, Secretary of petitioner is stated to have sent an undated letter to the first respondent in wrong address stating that an ordinary meeting of the Executive Committee for the first time during 2007-2008 was to be held on 10.03.2008. The letter and envelope dated 05.03.2008 are produced along with the plaint. It is stated that it was mandatory to give 7 days' clear notice of the Executive Committee meeting under certificate of posting or personally as provided under clause 29(iv) and (v) of the byelaw. According to the respondents, notice is vitiated, illegal and purposefully sent in the wrong address of C.R.P. No.494 of 2011 -: 9 :- respondents so as to misuse the power of expulsion under clause 15 of the byelaw for absence in three consecutive meetings. In paragraph 19 it is stated that activities of petitioner referred there is in violation of clause 12, 17(d) and 19 of the byelaw and ultravires. It is alleged that the meeting held on 10.3.2008 is illegal. Paragraph 23 of the plaint states that apart from the 12 Clubs (impleaded in the suit as defendants), there existed 7 Paper Clubs which respondents did not know. In paragraph 28 it is stated that activities of petitioner is tainted with illegality, corruption, misuse of power, manipulation, family rule and autocracy and that its office bearers have no right to continue in office or to represent the petitioner in the KCA or Kerala State Sports Council. It is further alleged that petitioner is functioning in gross violation of the rules laid down in the District Cricket Association and State Cricket Association. Paragraph 28A states about fraud, misfeasance, mismanagement and misappropriation of funds and the Association has reached such a state that vigilance enquiry has been initiated against office bearers of petitioner and the second defendant pursuant to the directions given by the court of Enquiry Commissioner and Special Judge in respect of 47 instances of fraud and misappropriation C.R.P. No.494 of 2011 -: 10 :- committed by them during the last three years, namely 2005 to 2007. It is stated in paragraph 29 that respondents are entitled to obtain a decree declaring activities of petitioner as illegal, get a Scheme duly framed for proper management and also obtain a decree for mandatory injunction as first above stated. 6. The question is whether in the nature of the above allegations and reliefs prayed for, the dispute between parties could be said to be one coming under sub-clause (3) of clause 30 of the byelaw and at any rate arbitrable so that parties are referred to the Tribunal for arbitration. 7. No doubt, unlike Sec.34 of the Act 1940 which gives discretionary power to the court to refer parties to arbitration, Sec.8(1) of the Act states that once the requirement of the said provision is satisfied, the court is bound to stop all proceedings and refer the parties to arbitration. Certainly, the said provision is made in accordance with the mandate of Sec.5 of the Act which minimized intervention of the court in matters which are arbitrable under the Act of 1996. But prima facie the court has to see whether the dispute is arbitrable or not. When the matter is brought before court and a request is made under Sec.8(1) of the Act that parties may be referred to arbitration, the court C.R.P. No.494 of 2011 -: 11 :- necessarily has to look into whether the dispute is arbitrable or not. The decision in Branch Manager, Magma Leasing & Finance Ltd. v. Potluri Madhavilata (supra) does not take away that power of the court. In paragraph 22 it is held that an analysis of Sec.8 of the Act of 1996 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof. 8. Though learned counsel for respondents has a contention that petitioner has not produced the original or certified copy of the byelaw containing the arbitration clause learned District Judge has not upheld that contention and it is not necessary to go into that question in this proceeding. In paragraph 23 of the above referred decision the Supreme Court C.R.P. No.494 of 2011 -: 12 :- has stated that Sec.8 of the Act of 1996 is in the form of legislative command to the court and once the pre-requisite conditions as aforesaid are satisfied that the court must refer the parties to arbitration and that as a matter of fact on fulfillment of conditions of Sec.8 no option is left to the court and the court has to refer the parties to arbitration. 9. It is useful to refer to the decision in Booz Allen & Hamilton Inc v. SBI Home Finance Ltd. ([2011] 5 SCC 532). There, referring to Secs.8, 11, 16, 34(2)(b) and 48(2) of the Act of 1996 the Supreme Court has held that what is “arbitrability” of a dispute. It is held that disputes which are not amenable to be decided through arbitration are not required to be referred to arbitration. In paragraph 34, meaning of the expression “arbitrability” is discussed. It is stated that whether disputes having regard to their nature could be resolved by a private forum chosen by the parties (Arbitral Tribunal) or whether they would exclusively fall within the domain of public fora (courts) is to be decided by the court. A dispute even if it is capable of being decided by arbitration and falling within the scope of arbitration agreement, will not be arbitrable if it is not enumerated in the joint list of disputes referred to arbitration. C.R.P. No.494 of 2011 -: 13 :- In paragraph 36 it is held that well recognised examples of non- arbitrable disputes are disputes relating to the rights and liabilities which give rise to or arise out of criminal offences; matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody, guardianship matters; insolvency and winding up matters; testamentary matters and eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. 10. The Supreme Court in N. Radhakrishnan v. M/s.Maestro Engineers & Others (2009 [7] Supreme 80) held that allegations of fraud and serious malpractices are to be decided in court through evidence and that it is beyond the scope of arbitration. In the case on hand I have referred to the various allegations contained in the plaint and raised by respondents 1 and 2 as to the alleged malpractices, maladministration and corruption allegedly indulged in by the office bearers of petitioner. I also referred to the allegations which respondents have made as to the right of the present office bearers of petitioner to continue in office which according to the respondents C.R.P. No.494 of 2011 -: 14 :- is in violation of the byelaw. In the above circumstances respondents prayed for a declaration that the activities of the petitioner are illegal and also wanted a new Scheme to be framed after curing the defects, lacuna and vagueness in the existing byelaw of the petitioner. Other reliefs such as prohibitory and mandatory injunction are also sought. 11. I am not inclined to think that these are matters coming within the purview of the private fora - Arbitral Tribunal specified in clause 30 of the byelaw. The suit is filed under Sec.25 of the Act which confers power on the District Court within the jurisdiction of which the Society is registered to remove the existing Managing Committee and appoint a fresh Governing Body for framing a Scheme for the better and efficient management or dissolve the Society. That power is conferred on the District Court as per a special statute. That power cannot be given to the Arbitrator. 12. It is seen that respondents have sought invocation of power of District Court under Sec.25 of the Act for framing a Scheme after curing the defects, lacuna and vagueness in the byelaw of the petitioner. I also referred to the other reliefs prayed for in the suit. Assuming that learned District Judge found the suit C.R.P. No.494 of 2011 -: 15 :- to be maintainable and ultimately decided to frame a Scheme under Sec.25 of the Act, further follow up action may also become necessary having regard to the various issues involved in the matter. I am not inclined to think that these are matters which are arbitrable in nature even going by the meaning given in sub- clause (3) of clause 30 of the byelaw to “disputable matter”. Viewed in that line I am inclined to agree with the view expressed by the learned District Judge that the dispute involved in this case and raised in the plaint are not referable to arbitration. 13. Petitioner has a contention that the suit is not maintainable under Sec.25 of the Act and a petition challenging maintainability is pending in the court of learned District Judge. I make it clear that I have not made an observation as to the question whether the suit is maintainable before the learned District Judge or not. That is a matter which the learned District Judge has to decide. Civil Revision fails. It is dismissed. All pending Interlocutory Applications will stand dismissed. THOMAS P. JOSEPH, JUDGE. vsv