Sproxil Brand Protection ... vs Rajesh Harinarayan Rai
2023 Latest Caselaw 8856 Bom

                                                                               907-cra-381-2023.doc


                   SA Pathan

                              IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                                      CIVIL APPELLATE JURISDICTION

                                 CIVIL REVISION APPLICATION NO.381 OF 2023

                                                   WITH
                                   INTERIM APPLICATION NO.13468 OF 2023
SHABNOOR
AYUB
PATHAN                                               IN
Digitally signed
by SHABNOOR
AYUB PATHAN
Date: 2023.08.29
17:55:57 +0530
                                 CIVIL REVISION APPLICATION NO.381 OF 2023

                   Sproxil Brand Protection Solutions Pvt.
                   & Ors.                                       ... Petitioners
                              V/s.
                   Rajesh Harinarayan Rai                       ... Respondent



                   Ms. Riddhi Dipakkumar Shah, for the Petitioner.



                                                  CORAM   : AMIT BORKAR, J.

DATED : AUGUST 29, 2023 P.C.:

1. By the impugned order the Trial Court has rejected application under Order 7, Rule 11 (d) of the Code of Civil Procedure, 1908 request for rejection of plaint on the ground that the suit is barred by Section 8 of Arbitration and Conciliation Act, 1996.

2. On perusal of the suit, it appears that the suit is filed by respondent No.1 seeking dues from his employer based on employment agreement dated 21 December 2017.

3. According to employer, the employment agreement dated 21

907-cra-381-2023.doc

December 2017 contains an arbitration clause and, therefore, employer filed an application under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 read with Order 7, Rule 11

(d) of the Code of Civil Procedure, 1908. The Trial Court rejected the application holding that the employment agreement contemplates dispute of settlement of dues after retirement of employees. However, issue raised in the suit is in relation to the question of theft which is beyond arbitration agreement.

4. Learned Advocate for the applicant relying on the judgment of the Apex Court in the case of M/s Patil Automation Private Limited & Ors. vs Rakheja Engineers Private Limited arising out of SLP (c) No.14697 of 2021, it is submitted that the Apex Court has accepted similar analogy in relation to Section 12A of the Commercial Courts Act, 2015, holding that the settlement of dispute has contemplated as Section 12A bars. Further the suit being proceeded with that despite issuance of summons. According to her, the same analogy needs to be applied to the present suit.

5. Section 8 of the Arbitration and Conciliation Act, 1996, reads as under:

Reading of Section 8 makes it clear that, it confers power of a judicial authority to refer parties to arbitration where there is an arbitration agreement. Sub-section 2, provides for ingredients which needs to be complied that such power is exercised. Section 8, therefore, confers power to adjudicate whether the dispute pending before the Civil Court is subject matter

907-cra-381-2023.doc

of arbitration agreement.

6. On ingredients of Section 8 being satisfied, it is within the power of Civil Court to refer parties to arbitration. Such exercise of power contemplates under Order 7, Rule 11, on being satisfied of bar contained under the provisions of constitute, the plaint needs to be rejected which has effected of passing a decree.

7. It is well settled bar on contemplated under sub-clause (d) of Order 7, Rule 11 is a specific bar. In my opinion, conferment and power under Section 8 of Arbitration Act, would not constitute a specific bar as contemplated under sub-rule 8 of Order 7, Rule 11

(b) of CPC.

8. To support the said conclusion can be derived based on judgment decided by the Division Bench of Andhra Pradesh High Court in the case of Syed Irfan Sulaiman vs M/s New Amma Hospitals, reported in 2016 SCC OnLine Hyd 377 : AIR 2017 Hyd 18 : (2017) 1 ALT 335 (DB) wherein the facts of the said case referred the matter to the arbitration based on facts of the case. However, while referring the issue, the Division Bench refused to accept the argument on the point of Order 7, Rule 11 (d).

9. In so far as the judgment in the case of M/s. Patil Automation (Supra) is concerned, the scheme of Commercial Courts Act is entirely different than the power under Section 8 of the Arbitration and Conciliation Act. In view of difference of the scheme, the said judgment has not applied to the scheme of Order 7, Rule 11 (d).

10. However, as regards application under Section 8 of Arbitration and Conciliation Act the applicant has made out a case

907-cra-381-2023.doc

for issuance of notice. Hence, issue notice for final disposal to respondent, returnable on 26 September 2023.

(AMIT BORKAR, J.)