Civil Revision No.130 of 2007(O&M) 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Civil Revision No.130 of 2007(O&M) Date of Decision 01.12.2009 Smt.Balbir Kaur and others ...... Petitioners VERSUS Manav Foundation and others ...... Respondents Civil Revision No.129 of 2007(O&M) Date of Decision 01.12.2009 Hira Singh Gandhi and others ...... Petitioners VERSUS Manav Foundation and others ...... Respondents CORAM:- HON'BLE MR. JUSTICE A.N.JINDAL Present: Mr.Rajesh Sethi, Advocate, for the petitioners. Mr.Kamlesh Kumar, Advocate, for respondents No.1 to 6. Mr.A.P.S.Rana, Advocate, for respondent No.7. ***** A.N.JINDAL, J: This judgment of mine shall dispose of two connected petitions i.e. Civil Revision Nos.129 & 130 of 2007 against the order dated 03.11.2006, passed by Additional Civil Judge (Senior Division), Sirsa, in two different suits. The trial Court vide order dated 03.11.2006, allowed the application of the defendants-respondents (Herein referred as 'the defendants') under Section 8 of the Arbitration Act, 1996 and referred the matter to the Arbitrator. Since the defendants-respondents in both the suits i.e. Civil Suit No.425-C of 14.08.2006 titled as “Hira Singh and others versus Manav Foundation and others” and Civil Suit No.457-C of 01.09.2006 titled as “Smt.Balbir Kaur and others versus Manav Foundation and others” are the same as well as the question in issue is the same, therefore, both the revision petitions are disposed of by this common judgment. However, for the convenience, the facts are taken from Civil Suit No.457-C of 2006 instituted Civil Revision No.130 of 2007(O&M) 2 on 01.09.2006 titled as “Smt.Balbir Kaur and others versus Manav Foundation and others”. Smt.Balbir Kaur and others petitioners-plaintiffs (herein refereed as 'the plaintiffs') filed Civil Suit No.457-C of 2006 before the Civil Court at Sirsa on 01.09.2006 to recover the amount of Rs.1,13,467/- alongwith interest. It was inter-alia averred by the plaintiffs that the amount deducted as TDS from the amount payable to the plaintiffs has not been deposited with the Income Tax Department and the same have been rather misappropriated by defendants No.1 to 6. It may here be reproduced that Manav Foundation was a Company projecting special programme for uplifting of poor and downtrodden sections of the society under which any person could join, enter into an agreement with the organization accepting the terms and conditions of the programme and shall get relief under Section 80-G of the Income Tax Act on the payments but defendants No.1 to 6 did not fulfill such assurance and were diverting funds for their personal use by creating false bills, entries, receipts in the books and were creating false record and thereby misappropriated huge amount and they had also got published/printed and distributed respectively similar booklets, brochures, pamphlets etc. to deceive the public. As per Clause 6 of the said agreement, all the matters/disputes relating to the membership under the programme, implementations of the programme, claims under the programme, interpretation of any terms and conditions incidental thereof shall be referred for arbitration to the sole arbitrator to be appointed by the organization and, if needed only, Delhi Courts will have the territorial jurisdiction. Upon notice, the defendants Manav Foundation instead of filing the written statement, filed an application under Section 8 of the Arbitration and Conciliation Act, 1966 read with Section 151 C.P.C. with a prayer to refer the matter to the Arbitrator as agreed between the parties for adjudication after staying the suit. The detailed reply of the application was submitted. Ultimately, the application was accepted. Arguments heard. Record perused. It has been urged by the learned counsel for the petitioners that there is no regular agreement Civil Revision No.130 of 2007(O&M) 3 containing unconscionable Arbitration clause ever executed between the parties and an application on the printed form containing a vague and unconscionable arbitration clause could not be treated as valid arbitration agreement warranting reference of the dispute to the Arbitrator. Mere signing of the document cannot be substituted by an agreement duly executed between the parties. It has been further contended that the suit could not be stayed at the instance of only defendants No.1 to 3. The agreement, being illegal and void is unenforceable and arbitration clause has been inserted with a view to prevent and dissuade the aggrieved party from invoking legal remedies. Since the company has been indulging in an illegal act of Prize Chits and Money Circulation Act, 1978, so the Arbitrator could not be deputed to adjudicate such illegal and unlawful acts of defendants No.2 to 6. Rather the Court was to stop illegal and unlawful acts of defendantsNo.1 to 6. Mere arbitration clause does not debar the plaintiffs from seeking remedy before the civil Court. To the contrary, counsel for the respondents-defendants contended that the plaintiffs had become the members of the scheme under Special Welfare Programme and the company was never declared as Company indulging in the illegal acts. As a matter of fact, the defendants never paid the amount as revealed from the receipt attached because number of the demand draft mentioned is repeated in the slips issued for various dates. In some of the slips, the amount is shown as donations, and in some as the payment of Special Welfare Programme. Since the plaintiffs did not pay any amount, therefore, the question of recovery does not arise. It was further contended that in view of the specific clause 6 in the agreement, the matter was referable to the Arbitrator and the civil Court has no jurisdiction in this regard. He also placed reliance on the judgments delivered in cases Vinod Kumar Chopra Vs. M/s Sunshine Travel India Pvt. Ltd. 2001 (4) RCR 90; Hindustan Petroleum Corporation Limited versus Pinkcity Midway Petroleums 2003 (3) P.L.R. 746 and M/s Escorts Finance Limited vs. Dharambir and another 2005 (2) PLR (P&H) Having heard the rival contentions and gone through the impugned order, the same sans any such illegality, much less irregularity warranting interference by this Court. The scope of interference at the revisional stage is very limited in nature. The trial Court has elaborately Civil Revision No.130 of 2007(O&M) 4 discussed the agreement as well as the pleadings as set up by the parties and appears to have reached the right conclusion that in view of Clause 6 of the agreement signed by both the parties, the case was referable to the Arbitrator and could not be decided by the Civil Court. As regards the nature of the organization, the matter went to the Delhi High Court and the High Court did not find any such defect as to stamp the acts of the Company as illegal, subject to the penal action. It may further be mentioned that the argument, as raised by learned counsel for the respondents that even in pursuance of the order passed by the trial Court, the award has already been passed. Karamvir Singh, President of the Manav Foundation, has filed an affidavit stating that pursuant to the order, passed by the Civil Court under Section 8 of the Arbitration & Conciliation Act, 1996, the respondents filed the claim petition whereas the revisionist despite the opportunity did not file any claim petition before the learned Arbitrator and the Arbitrator after adjudication of the claim, passed an award in the matter which has been challenged by the petitioner under Section 34 of the Arbitration & Conciliation Act, 1996 before Sh.Vijay Kumar Dahiya, Additional District Judge, Rohini Courts, Delhi and the next date of hearing in the said matter is 24.07.2009. He has also attached the copy of the award and the objection petition alongwith his affidavit. As regards, the locus standi to file the application under Section 8 of the Arbitration & Conciliation Act, it may be observed that it is the Manav Foundation, who is represented by defendants No.2 to 6, therefore, any of the Director of the Company could move the application which would be treated as filed by all the defendants. In the counter affidavit, filed by Balbir Kaur passing of the award has not been denied rather they are alleging that the same being null and void. It may further be observed that the dispute as raised by the plaintiffs in the suit is certainly subject matter of the agreement and could certainly be referred to the Arbitrator. Resultantly, finding no defect in the impugned order, no interference could be called for. As such, both the petitions are dismissed. (A.N.Jindal) Judge 01.12.2009 mamta-II