IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE S.S.SATHEESACHANDRAN FRIDAY, THE 20TH NOVEMBER 2009 / 29TH KARTHIKA 1931 WP(C).No. 26557 of 2009(O) -------------------------- AGAINST THE ORDER DATED 06/10/2008 IN IA 1134/08 IN OS.608/2006 of II ADDL.SUB COURT,ERNAKULAM .................... PETITIONER: --------------- SILPI REALTORS AND CONTRACTORS PRIVATE LIMITED, G-412A, IST FLOOR, 13TH CROSS ROAD, PANAMPILLY NAGAR, COCHIN-682 036 REPRESENTED BY ITS MANAGING DIRECTOR F.EDISON. BY ADV. SRI.RAJIV ABRAHAM GEORGE SRI.EAPEN ABRAHAM GEORGE RESPONDENTS: --------------- 1. M/S.ENGINEERING PROJECTS (INDIA) LTD., SOUTHERN REGIONAL OFFICE, 3-D, EAST COAST CHAMBERS, 92, G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017 REPRESENTED BY ITS GENERAL MANAGER. 2. THE CHAIRMAN-CUM-MANAGING DIRECTOR, ENGINEERING PROJECTS (INDIA) LTD., CORE-3, SCOPE COMPLEX, 7, INSTITUTIONAL AREA, LODHI ROAD, NEW DELHI-110 003. 3. S.RAJIV, GENERAL MANAGER, ENGINEERING PROJECTS (INDIA) LTD., NO.262, 17TH CROSS, 7TH MAIN ROAD, SADASHIV NAGAR, BANGALORE-560 080,NOW SUBSTITUTED BY S.SUTRADHAR, GENERAL MANAGER, M/S. ENGINEERING PROJECTS(INDIA)LTD.,SOUTHERN REGIONAL OFFICE,3-D,EAST COAST CHAMBERS,92,G.N.CHETTY ROAD, T.NAGAR, CHENNAI-600 017. ADV. SRI.V.RAMKUMAR NAMBIAR FOR R1-R2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 18/11/2009, THE COURT ON 20/11/2009 DELIVERED THE FOLLOWING: S.S. SATHEESACHANDRAN, J. - - - - - - - - - - - - - - - - - - - - - - - - - W.P.(C) No.26557 of 2009 - - - - - - - - - - - - - - - - - - - - - - - - - Dated: 20th November, 2009 JUDGMENT The Writ Petition is filed seeking mainly the following reliefs: 1. To call for the records leading to Exhibit P7 order dated 6.10.2008 in I.A.No.1134 of 2008 in O.S.No.608 of 2006 on the files of the II Additional Subordinate Judge, Ernakulam and issue a writ, order or direction quashing the same. 2. To call for the records leading to Exhibit P6 order dated 29.9.2007 in I.A.No.3323 of 2007 in O.S.No.608 of 2006 on the files of the II Additional Subordinate Judge, Ernakulam and issue a writ, order or direction quashing the same. 3. To declare that no concluded contract exists between the petitioner and the 1st respondent by virtue of Exhibit P1 minutes of meeting dated 29.9.2002. 2. Petitioner is the plaintiff in O.S.No.608 of 2006 on the file of the II Additional Sub Court, Ernakulam. Suit was for perpetual prohibitory injunction and the respondents are the defendants. Petitioner/plaintiff, a company engaged in the business of executing civil engineering works canvassed for a decree of perpetual W.P.C.No.26557/09 - 2 - prohibitory injunction to restrain the third defendant for proceeding with arbitration in respect of the disputes between the plaintiff and the first defendant contending that there was no concluded contract between the parties. The defendants challenged the maintainability of the suit contending the parties are governed by an arbitration agreement, and so much so, the disputes can be considered only by way of arbitration and not by a suit before a civil court. An application was moved by the defendants to consider the maintainability of the suit as a preliminary issue to which the petitioner/plaintiff filed a counter affidavit. The learned Sub Judge, after hearing both sides, passed P6 order concluding that the suit is not maintainable. On such finding, the parties were referred to arbitration. Plaintiff filed a review petition challenging the correctness of P6 order. That review petition was dismissed vide P7 order. Propriety and correctness of P6 and P7 orders are challenged in the writ petition invoking the supervisory jurisdiction vested with this court under Article 227 of the Constitution of India. 3. I heard the counsel on both sides. There was no concluded contract between the parties, and the minutes of the meeting recorded over the discussion between the parties as to the contract containing an arbitration clause which was signed by all parties is not W.P.C.No.26557/09 - 3 - sufficient nor capable to give rise to a binding arbitration agreement between the parties to oust the jurisdiction of the civil court is the submission of the counsel for the petitioner assailing P6 and P7 orders passed by the court below holding that the suit is not maintainable. Petitioner has not signed the work order issued pursuant to the meeting held, and in fact, there was no completion of the contract is the further submission of the counsel to contend that what is recorded in the minutes of meeting relating to arbitration is not binding on the parties. Nonproduction of the original arbitration agreement or a duly certified copy thereof with the application moved challenging the maintainability of the suit, as warranted by Section 8 of the Arbitration and Conciliation Act, 1996, by the defendants is also highlighted by the counsel to contend that the question of maintainability canvassed on the ground that the parties have to be referred to arbitration was not entertainable. My attention has been invited to a number of judicial pronouncements rendered by the apex court and also this court by the learned counsel to contend that the existence or validity of an arbitration agreement and also whether there is a concluded contract can be decided only by the court and since the very foundation of the suit laid by the petitioner is based on the case that there was no concluded contract between the parties. W.P.C.No.26557/09 - 4 - P6 order holding that the suit is not maintainable on the ground that there is an arbitration agreement between the parties, according to the counsel, is unsustainable. On the other hand, learned counsel for the respondents/defendants contended that minutes of the meeting which provided for the arbitration in the event of disputes between the parties has been produced with the plaint, and so much so, when an application was filed challenging the maintainability of the suit, there was no need by the respondent to produce another copy to show that there was an arbitration agreement between the parties and the disputes have to be resolved by way of arbitration. The minutes of the meeting, according to the counsel, clearly spell out there is a binding arbitration agreement between the parties. Further more, any dispute as to the existence or nonexistence of the arbitration agreement can be canvassed before the arbitral tribunal by the plaintiff as provided under Section 16 of the Arbitration and Conciliation Act, 1996, submits the counsel. 4. Perusing P6 and P7 orders with reference to the submissions made by the counsel on both sides, I find, no interference is called for in exercise of the visitorial jurisdiction vested with this court. Clause 10 of the minutes of the meeting which has been reproduced in P6 order prima facie spell out there is an arbitration agreement between W.P.C.No.26557/09 - 5 - the parties. The question whether there was a former contract between the parties and the enforceability of clause 10 providing for arbitration in the event of disputes between the parties is a matter that can be looked into and examined by the arbitral tribunal which has the authority to examine its jurisdiction under Section 16 of the Arbitration and Conciliation Act. Once it is brought to the notice of the court that there is an arbitration agreement for resolving the disputes between the parties, the civil court has no jurisdiction to enter into any adjudication on the disputes and it has to refer the parties to arbitration. No doubt, the party challenging the maintainability of the suit has to canvass the defence on the plea of arbitration agreement, producing copy of such agreement on his appearance at the first hearing of the suit. The respondents in the present case has not produced the arbitration agreement while raising the challenge on maintainability in the present case has no significance as the copy of the minutes containing the arbitration clause had been produced by the plaintiff with the suit. In Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums [ (2003) 6 S.C.C. 503] the apex court has held that in cases where there is an arbitration clause in the agreement, the court has to refer the parties to arbitration, and it is mandatory for the civil court to do so. It has been further held that W.P.C.No.26557/09 - 6 - the binding nature as to the arbitration clause even if it is disputed is a matter to be considered by the arbitral tribunal as it has the authority to rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement. When that be the law, I find that the challenges raised against P6 and P7 orders have no merit at all. Writ Petition is, therefore, dismissed. srd S.S. SATHEESACHANDRAN, JUDGE