1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH, NAGPUR Civil Revision Application No.1 of 2009 Adhar Trading Company Pvt. Ltd., Mumbai. ... Applicant Versus P.H. Sales and Services Limited, Akola. ... Non-Applicant Shri A.P. Wachasunder, Advocate for Applicant. Shri M.G. Sarda, Advocate for Non-Applicant. CORAM : R.C. Chavan, J. DATE : 23rd April, 2009 1. This revision is directed against the order passed by the learned Civil Judge, Senior Division, Akola, rejecting the defendant’s application Exhibit 6 for referring the dispute to arbitration, or, in the alternative, to frame a preliminary issue regarding jurisdiction. 2. The respondent/plaintiff had filed a suit for recovery of a sum of Rs.23,55,000/- due from the defendant towards outstanding balance as per plaintiff’s account books as on 1-4-2003 towards transactions from 13-4-2000 to 1-4-2003. The 2 plaintiff used to pay defendant by cheques, etc. in advance for supply of imported degummed Soyabean oil for a period from 13-4-2000 to 1-4-2003. As on 1-4-2003, a sum of Rs.18,87,074.46 was stated to be outstanding, which was claimed under the suit with interest of Rs.4,57,051/-, totalling to rounded-off sum of Rs.23,55,000/-. 3. The applicant/defendant filed application Exhibit 6 under Section 8 of the Arbitration and Conciliation Act, 1996 for referring the dispute to arbitration in terms of arbitration clause under agreements dated 26-4-2001 and 19-12-2002, or, in the alternative, to frame an issue as to the jurisdiction of the Court. 4. The plaintiff replied this application stating that the agreement on which the defendant relied was not pertaining to the suit transaction. It was pointed out that the agreement dated 26-4-2001 relied upon by the defendant pertained to appointment of defendant as an agent for import of oil by defendant during 2-5-2001 and 31-3-2002. Second agreement dated 19-12-2002 pertained to purchase by the plaintiff from the defendant of single and specific consignment of 500 Metric Tonnes of degummed Soyabean oil, shipped under bill of lading dated 3 18-11-2002 on vessel M.T. Team Anemonia. According to the plaintiff, the amount claimed under the suit did not pertain to transactions under the two agreements, but pertained to purchases of oil from defendant against advance payments made. Therefore, arbitration clauses under the two agreements were not attracted and as no interim relief was claimed, there was no question of framing preliminary issue under Section 9A of CPC. 5. The defendant filed a rejoinder stating that the suit also included transaction pertaining to the period from 2-5-2001 and, therefore, was covered under the agreements dated 26-4-2001 and 19-12-2002. 6. After hearing the parties, the learned Civil Judge passed the impugned order. The applicant/defendant initially filed a writ petition, which was allowed to be withdrawn with liberty to file a revision application. The defendant has accordingly filed this revision application. 7. I have heard both the learned counsel for the applicant and the non-applicant. 8. The agency agreement dated 26-4-2001 4 pertained to period from 2-5-2001 to 31-3-2002. Under this agreement, the plaintiff was to be the importer and the defendant, who was to be the agent, was to receive a sum of Rs.200/- per metric tonne as consideration for arranging the imports of the goods for the importers. The agreement was for a specific period, whereas the suit is for dues for a period commencing well before the agreement was entered into and expiring thereafter. 9. The learned counsel for the applicant submitted that in terms of Clause 23 of the agreement, all disputes arising between the parties in regard to any claim or in regard to rights and obligations of the parties under the agreement “or otherwise” were also subject to arbitration and, therefore, even if the transactions in respect of which amounts were claimed by the plaintiff were beyond the transactions covered by the agreements, they attracted the arbitration clause. He submitted that in any case, it would have been open for the plaintiff to raise an objection before an Arbitrator that the transaction in question was not subject to arbitration clause. In para 4 of rejoinder dated 3-3-2009, the defendant submitted that transactions covered by the agreement dated 26-4-2001 had already commenced with effect from 13-4-2000, which would be heard to 5 digest considering specific period from 2-5-2001 to 31-3-2002 mentioned in the agreement. 10. Relying on a judgment of the Supreme Court in Shree Subhlaxmi Fabrics (P) Ltd. v. Chand Mal Baradia and others, reported at (2005) 10 SCC 704, the learned counsel for the applicant submitted that at the stage of appointment of an Arbitrator, the Court should not go into the contentious issues and if there is any objection, it should be raised before the Arbitral Tribunal, which is empowered to rule about its own jurisdiction. He, therefore, submitted that the learned Civil Judge should have referred the dispute for arbitration on an arbitration clause being pointed out to the Court. 11. In Agri Gold Exims Ltd. v. Sri Lakshmi Knits and Wovens and others, reported at (2007) 3 SCC 686, on which the learned counsel for the applicant placed reliance, it was held that if there existed a dispute between the parties within the meaning of arbitration clause, it was required to be referred to the Arbitrator. The Court held that if existence of arbitration agreement is not disputed, the dispute had to be referred to arbitration. 12. In India Household and Healthcare Ltd. v. LG 6 Household and Healthcare Ltd., reported at (2007) 5 SCC 510, the Supreme Court held that where an arbitration agreement exists, the courts would construe the agreement in such a manner so as to uphold the arbitration agreement. However, when a question of fraud is raised, the same has to be considered differently. The learned counsel for the applicant has pointed out that in the present case, there is no question of fraud. 13. In Gas Authority of India Ltd. and another v. Keti Construction (I) Ltd. and others, reported at (2007) 5 SCC 38, also it was held that an Arbitral Tribunal could rule upon its jurisdiction and, therefore, the remedy of the plaintiff was to raise the objection before the Arbitral Tribunal rather than file a suit. 14. In Yogi Agarwal v. Inspiration Clothes & U and others, reported at (2009) 1 SCC 372, the Supreme Court was considering a SLP by defendants in a money suit whose application under Section 8 of the Arbitration Act was rejected by the Trial Court and affirmed by the High Court, holding that there was no arbitration agreement in respect of suit transactions. The Supreme Court held as under in paras 7 and 9 : “7. The fundamental lacuna in the claim 7 of the defendants for reference to arbitration is the absence of an arbitration agreement between the parties, in regard to the suit transactions. The three invoices containing a provision for arbitration relied upon by the petitioner (the second defendant), do not relate to the suit transactions at all. The plaintiff, as noticed above, filed a suit for recovery of the amounts allegedly due in regard to some samples supplied by him to the defendants and certain supplies made to the nominees of the first defendant company.” “9. When a defendant invokes Section 8 of the Act by alleging existence of an arbitration agreement, he should establish that such arbitration agreement related to, or is applicable to, the suit transaction/contract. The parties may enter into different contracts at different points of time or may enter into a series of unrelated transactions. It is possible that in regard to some, they may provide for arbitration and in regard to others, may not provide for arbitration. Obviously, the existence of an arbitration agreement with reference to some other transaction/contract 8 to which the plaintiff was or is a party, unconnected with the transactions or contracts to which a suit relates, cannot be considered as existence of an “arbitration agreement” in regard to the suit transactions/contracts.” 15. In the present case too, there is an arbitration clause in agreement dated 26-4-2001 constituting the applicant/defendant as agent of the importer, but the dispute, which is raised in the suit, is not restricted to the transactions during the period of the agreement and is decidedly wider. Further, the agreement dated 19-12-2002 is in respect of only one transaction of purchase of 500 metric tonnes of degummed Soyabean oil. Therefore, had the dispute raised in the plaint been restricted to the transactions covered by the two agreements, the applicant would have been justified in seeking reference of the matter to arbitration and to have the suit of the plaintiff disposed of. However, since such is not the case, the learned Trial Judge rightly rejected the application. 16. In view of this, the revision application is rejected, leaving the liberty to the applicant to approach the Trial Court by appropriate application for excluding any items in the amounts claimed by the 9 plaintiff, which may be covered by the agreements in question, as also for raising, by appropriate pleadings, jurisdictional issue (but not under Section 9A of CPC, since an interim relief was not claimed). Such pleading would not amount to waiver of objection to jurisdiction, since the applicant-defendant had already raised the objection at threshold. Judge. Pdl