Smt.Krishna Premmai Devidasi vs International Society For ...
2012 Latest Caselaw 3884 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

A     F    R
 

 
[Reserved]
 
  Case :- CIVIL REVISION No. - 388 of 2012
 

 
Petitioner :- Smt.Krishna Premmai Devidasi
 
Respondent :- International Society For Krishna Conscieusness And Others
 
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
 
Respondent Counsel :- Vivek Saran
 

 
Connected with:-
 

 
Case :- CIVIL REVISION No. - 389 of 2012
 

 
Petitioner :- Smt. Krishna Premmai Devidasi
 
Respondent :- International Society For Krishna Consciousness & Others
 
Petitioner Counsel :- Udayan Nandan,Shashi Nandan
 
Respondent Counsel :- Vivek Saran
 

 

 
Hon'ble Pankaj Mithal,J.

The two revisions under Section 25 of the Provincial Small Causes court Act, 1887 are based upon the identical facts involving the same controversy.

The controversy is with regard to tenancy between the plaintiff respondent and the defendant revisionist.

The shops in question which are under tenancy of the defendant revisionists are owned by the plaintiff respondent ISKCON a registered society. The relationship of landlord and tenant between them is not disputed.

The plaintiff respondent instituted two separate suits before the Small Causes Court for arrears of rent and eviction against the defendant/revisionist in connection with both the shops separately. In the said suits on account of default of the tenant defendant revisionist in depositing the entire admitted amount along with 9% interest and the monthly rent thereof her defence was struck off under Order 15 Rule 5 CPC as applicable to the State of U.P. Thereafter, defendant revisionist in the suits moved applications under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act") contending that the Rules and Regulations of the plaintiff respondent society contains an arbitration clause and in view of it, the dispute in both the cases is referable to Arbitration.

The above applications of the defendant revisionist have been rejected by the court below by separate but identical orders passed on 5.5.2012.

It is against the above two orders of identical nature based upon the similar sets of facts and circumstances that the defendant revisionist has preferred these revisions.

I have heard Sri Shashi Nandan, Senior Advocate assisted by Sri Udyan Nandan, learned counsel for the defendant revisionists and Sri Vivek Saran, learned counsel for the defendant respondents.

Both the parties who alone are the contesting parties agree for final disposal of the revision at this very stage as the facts are not disputed and the question involved is purely legal in nature.

The other respondents are only proforma respondents and it was not felt necessary to either serve or hear them.

The sole question which crops up for consideration is whether in view of arbitration clause in the Rules and Regulations of the society, the instant dispute between the landlord and tenant is referable to arbitration under Section 8 of the Act.

Principally, all civil disputes whether contractual or non-contractual or otherwise are capable of being adjudicated by the civil court unless the jurisdiction of the civil court is expressly or impliedly barred. Arbitration is an alternative dispute redressal system which is of a voluntary nature. Therefore, parties at litigation can be relegated to the aforesaid alternative dispute redressal system only if they volunteer to do so or had agreed to get the disputes between them resolved through arbitration excluding the jurisdiction of the civil court.

Section 8 of the Act is a step for reference of disputes between the parties to arbitration provided such disputes are "subject matter of arbitration agreement" and instead of availing the remedy of arbitration, they are brought before the Court.

The relevant provision of Section 8 of the Act reads as under:-

1. "A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.

2. ....................

3. ....................."

The aforesaid provision in unequivocal terms envisages that where an action is brought before the judicial authority in a matter which is "subject matter of arbitration agreement" and if any of the parties applies for referring the matter to arbitration instead of getting it adjudicated by the court, such judicial authority is obliged to refer the parties to arbitration.

In the above provision the words "subject matter of arbitration agreement" are of prime importance. It is only those matters which are "subject matter of arbitration agreement" which can be referred to arbitration under Section 8 of the Act.

'Arbitration agreement' has been defined under Section 7 of the Act to mean an agreement by the parties to submit to arbitration all or certain disputes arising between them. It also provides that the arbitration agreement shall be in writing.

For the sake of convenience the relevant part of Section 7 of the Act is quoted below:-

(1) "In this part,"arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2)..................

(3) An arbitration agreement shall be in writing.

(4).................

(a)............

(b)............

(c)............

(5)....................."

In view of the above provision ignoring the manner in which the arbitration agreement in writing may be expressed, the most important element in constituting an arbitration agreement is an "agreement by the parties" in writing.

The agreement by the parties conceives of consent of both the parties in contrast to an unilateral agreement. Therefore, for making a reference under Section 8 of the Act, two things are of prime importance, namely, arbitration agreement which has to be an agreement between the parties to the dispute; and that it should be touching the "subject matter of the dispute". Thus, before making a reference under Section 8 of the Act, it is obligatory upon the court or the judicial authority to decide whether there exists an agreement between/amongst the parties regarding arbitration, apart from other things.

In the present context, it is admitted to the parties that there is no agreement or contract of tenancy between them in writing which may contain an arbitration agreement. The entire emphasis of the defendant revisionist is upon the Rules and Regulations of the Society which contains the following clause concerning arbitration:-

C. Arbitration:

"All disputes, differences and questions of any nature which at any time arise between ISKCON and any of its members, officers, representatives, volunteer workers, persons working for the Society and persons having any agreement or transaction with ISKCON subject to the provisions contained within these Rules and Regulations, or any of them, out of construction or or concerning anything contained in or arising out of Rules and/or Bye-Laws of ISKCON, or as to the rights, duties or liabilities under the said Rules and/or Bye-Laws or out of the affairs of the Society, shall be referred to any arbitrator"

The aforesaid arbitration clause is contained in the Rules and Regulations of the Society. It is not a part of any agreement which may have been entered into between the parties. It is therefore not an agreement by the parties so as to make it an arbitration agreement under Section 7 read with Section 8 of the Act.

The defendant revisionist while making an application for reference under Section 8 of the Act dated 12.3.2012, which has been filed as one of the annexures to the stay application, simply states that according to Rules and Regulations of the Society, a copy of which has been brought on record, the dispute between the parties falls within the purview of arbitration and is referable to an arbitrator. The above application nowhere in clear terms states that there exists an arbitration agreement between the parties or that there is an agreement between them to submit disputes to arbitration.

In this view of the matter, the arbitration clause that exists in the Rules and Regulations of the Society is of a general nature but is not an agreement between the parties so as to constitute it to be an arbitration agreement for making a reference to arbitration under Section 8 of the Act.

In Yogi Agrawal Vs. Inspiration Clothes & U and Others (2009)1 SCC 372 the Apex Court was seized with a similar controversy relating to Section 7 and 8 of the Act. Their Lordships of the Supreme Court held that when a party invokes Section 8 of the Act by alleging existence of an arbitration agreement, it is incumbent upon him to establish such an arbitration agreement and that it is applicable to the transaction concerned. It is fundamental that to constitute an arbitration agreement for the purpose of Section 7 and 8 of the Act, two conditions must be satisfied namely it should be between the parties to the dispute and secondly it should relate to or be applicable to the dispute.

In view of the above decision also satisfaction of the twin conditions laid down therein including the one that the arbitration agreement should be between the parties to the dispute is mandatory.

In the instance case, as pointed out above, the arbitration clause contained in the Rules and Regulation of the Society is an unilateral document to which defendant revisionist is not a party and, as such, it is not an agreement between the parties to the dispute so as to constitute an arbitration agreement for the purposes of Section 8 of the Act.

In view of the aforesaid facts and circumstances, I am of the opinion that the dispute in the two suits which is essentially one between the landlord and the tenant is not referable to arbitration under Section 8 of the Act and therefore the court below has not committed any illegality in rejecting the applications of both the defendant respondents.

Revisions are therefore merit-less and are dismissed.

Date: August 31, 2012.

SKS

A F R

[Reserved]

Case :- CIVIL REVISION No. - 388 of 2012

Petitioner :- Smt.Krishna Premmai Devidasi

Respondent :- International Society For Krishna Conscieusness And Others

Petitioner Counsel :- Udayan Nandan,Shashi Nandan

Respondent Counsel :- Vivek Saran

Connected with:-

Case :- CIVIL REVISION No. - 389 of 2012

Petitioner :- Smt. Krishna Premmai Devidasi

Respondent :- International Society For Krishna Consciousness & Others

Petitioner Counsel :- Udayan Nandan,Shashi Nandan

Respondent Counsel :- Vivek Saran

Hon'ble Pankaj Mithal,J.

The two revisions under Section 25 of the Provincial Small Causes court Act,

1887 are based upon the identical facts involving the same controversy.

The controversy is with regard to tenancy between the plaintiff respondent and

the defendant revisionist.

The shops in question which are under tenancy of the defendant revisionists

are owned by the plaintiff respondent ISKCON a registered society. The relationship

of landlord and tenant between them is not disputed.

The plaintiff respondent instituted two separate suits before the Small Causes

Court for arrears of rent and eviction against the defendant/revisionist in connection

with both the shops separately. In the said suits on account of default of the tenant

defendant revisionist in depositing the entire admitted amount along with 9% interest

and the monthly rent thereof her defence was struck off under Order 15 Rule 5 CPC as

applicable to the State of U.P. Thereafter, defendant revisionist in the suits moved

applications under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter

referred to as "Act") contending that the Rules and Regulations of the plaintiff

respondent society contains an arbitration clause and in view of it, the dispute in both

the cases is referable to Arbitration.

The above applications of the defendant revisionist have been rejected by the

court below by separate but identical orders passed on 5.5.2012.

It is against the above two orders of identical nature based upon the similar

sets of facts and circumstances that the defendant revisionist has preferred these

revisions.

I have heard Sri Shashi Nandan, Senior Advocate assisted by Sri Udyan

Nandan, learned counsel for the defendant revisionists and Sri Vivek Saran, learned

counsel for the defendant respondents.

Both the parties who alone are the contesting parties agree for final disposal

of the revision at this very stage as the facts are not disputed and the question

involved is purely legal in nature.

The other respondents are only proforma respondents and it was not felt

necessary to either serve or hear them.

The sole question which crops up for consideration is whether in view of

arbitration clause in the Rules and Regulations of the society, the instant dispute

between the landlord and tenant is referable to arbitration under Section 8 of the Act.

Principally, all civil disputes whether contractual or non-contractual or

otherwise are capable of being adjudicated by the civil court unless the jurisdiction

of the civil court is expressly or impliedly barred. Arbitration is an alternative

dispute redressal system which is of a voluntary nature. Therefore, parties at

litigation can be relegated to the aforesaid alternative dispute redressal system only

if they volunteer to do so or had agreed to get the disputes between them resolved

through arbitration excluding the jurisdiction of the civil court.

Section 8 of the Act is a step for reference of disputes between the parties to

arbitration provided such disputes are "subject matter of arbitration agreement" and

instead of availing the remedy of arbitration, they are brought before the Court.

The relevant provision of Section 8 of the Act reads as under:-

1. "A judicial authority before which an action is brought in a matter

which is the subject of an arbitration agreement shall, if a party so

applies not later than when submitting his first statement on the substance

of the dispute, refer the parties to arbitration.

2. ....................

3. ....................."

The aforesaid provision in unequivocal terms envisages that where an action

is brought before the judicial authority in a matter which is "subject matter of

arbitration agreement" and if any of the parties applies for referring the matter to

arbitration instead of getting it adjudicated by the court, such judicial authority is

obliged to refer the parties to arbitration.

In the above provision the words "subject matter of arbitration agreement"

are of prime importance. It is only those matters which are "subject matter of

arbitration agreement" which can be referred to arbitration under Section 8 of the

Act.

'Arbitration agreement' has been defined under Section 7 of the Act to mean

an agreement by the parties to submit to arbitration all or certain disputes arising

between them. It also provides that the arbitration agreement shall be in writing.

For the sake of convenience the relevant part of Section 7 of the Act is

quoted below:-

(1) "In this part,"arbitration agreement" means an agreement

by the parties to submit to arbitration all or certain disputes which

have arisen or which may arise between them in respect of a defined

legal relationship, whether contractual or not.

(2)..................

(3) An arbitration agreement shall be in writing.

(4).................

(a)............

(b)............

(c)............

(5)....................."

In view of the above provision ignoring the manner in which the arbitration

agreement in writing may be expressed, the most important element in constituting

an arbitration agreement is an "agreement by the parties" in writing.

The agreement by the parties conceives of consent of both the parties in

contrast to an unilateral agreement. Therefore, for making a reference under Section

8 of the Act, two things are of prime importance, namely, arbitration agreement

which has to be an agreement between the parties to the dispute; and that it should

be touching the "subject matter of the dispute". Thus, before making a reference

under Section 8 of the Act, it is obligatory upon the court or the judicial authority to

decide whether there exists an agreement between/amongst the parties regarding

arbitration, apart from other things.

In the present context, it is admitted to the parties that there is no agreement

or contract of tenancy between them in writing which may contain an arbitration

agreement. The entire emphasis of the defendant revisionist is upon the Rules and

Regulations of the Society which contains the following clause concerning

arbitration:-

C. Arbitration:

"All disputes, differences and questions of any nature which

at any time arise between ISKCON and any of its members,

officers, representatives, volunteer workers, persons working for the

Society and persons having any agreement or transaction with

ISKCON subject to the provisions contained within these Rules

and Regulations, or any of them, out of construction or or

concerning anything contained in or arising out of Rules

and/or Bye-Laws of ISKCON, or as to the rights, duties or liabilities

under the said Rules and/or Bye-Laws or out of the affairs of the

Society, shall be referred to any arbitrator"

The aforesaid arbitration clause is contained in the Rules and Regulations of

the Society. It is not a part of any agreement which may have been entered into

between the parties. It is therefore not an agreement by the parties so as to make it

an arbitration agreement under Section 7 read with Section 8 of the Act.

The defendant revisionist while making an application for reference under

Section 8 of the Act dated 12.3.2012, which has been filed as one of the annexures

to the stay application, simply states that according to Rules and Regulations of the

Society, a copy of which has been brought on record, the dispute between the parties

falls within the purview of arbitration and is referable to an arbitrator. The above

application nowhere in clear terms states that there exists an arbitration agreement

between the parties or that there is an agreement between them to submit disputes to

arbitration.

In this view of the matter, the arbitration clause that exists in the Rules and

Regulations of the Society is of a general nature but is not an agreement between the

parties so as to constitute it to be an arbitration agreement for making a reference to

arbitration under Section 8 of the Act.

In Yogi Agrawal Vs. Inspiration Clothes & U and Others (2009)1 SCC 372

the Apex Court was seized with a similar controversy relating to Section 7 and 8 of

the Act. Their Lordships of the Supreme Court held that when a party invokes

Section 8 of the Act by alleging existence of an arbitration agreement, it is

incumbent upon him to establish such an arbitration agreement and that it is

applicable to the transaction concerned. It is fundamental that to constitute an

arbitration agreement for the purpose of Section 7 and 8 of the Act, two conditions

must be satisfied namely it should be between the parties to the dispute and

secondly it should relate to or be applicable to the dispute.

In view of the above decision also satisfaction of the twin conditions laid

down therein including the one that the arbitration agreement should be between the

parties to the dispute is mandatory.

In the instance case, as pointed out above, the arbitration clause contained in

the Rules and Regulation of the Society is an unilateral document to which

defendant revisionist is not a party and, as such, it is not an agreement between the

parties to the dispute so as to constitute an arbitration agreement for the purposes of

Section 8 of the Act.

In view of the aforesaid facts and circumstances, I am of the opinion that the

dispute in the two suits which is essentially one between the landlord and the tenant

is not referable to arbitration under Section 8 of the Act and therefore the court

below has not committed any illegality in rejecting the applications of both the

defendant respondents.

Revisions are therefore merit-less and are dismissed.

Date: August 31, 2012.

SKS