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Marketing Services vs M/S. Indian Farmers Fertilizers ...
2001 Latest Caselaw 436 Del

Citation : 2001 Latest Caselaw 436 Del
Judgement Date : 23 March, 2001

Delhi High Court
Marketing Services vs M/S. Indian Farmers Fertilizers ... on 23 March, 2001
Equivalent citations: 2001 IVAD Delhi 201, 92 (2001) DLT 411, 2002 (1) RAJ 393
Author: J Kapoor
Bench: J Kapoor

ORDER

J.D. Kapoor, J.

IA No. 12324/1999

1. The plaintiff has filed this suit under Order 37 CPC for recovery of Rs.69,51,000/- as agency commission. The defendant, upon service of summons entered into an appearance within the period of ten days as prescribed by Rule 3 Order 37 CPC.

2. Pursuant to the service of summons for judgment the defendant has filed an application under Order 37 Rule 3 CPC seeking leave to contest. In the leave application defendant has challenged the maintainability of the suit by referring to clauses 27.4 and 27.5 of the Contract that provide for settlement of the disputes through arbitration. Clause 27.4 reads as under :-

"All disputes which cannot be settled by mutual negotiations. the matter shall be referred to and determined by arbitration as per Indian Arbitration Act, 1940 or Rules or Conciliation of International Chamber of Commerce, venue for which shall be New Delhi, India.

Clause 27.5 provides :

Any dispute or difference between the parties in connection with this agreement shall be referred to and determined by arbitration in New Delhi, India.

3. Apart from this, the defendant has also raised the following pleas in support of leave to contest :-

(1) The suit is not maintainable on account of non-compliance of the statutory provisions of law inasmuch as notice under Section 101 of the Multi-State Cooperative Societies Act, 1984 was not served. Such a notice is statutory requirement.

(2) The suit is bad for non-joinder of a necessary party inasmuch as that the claim of the plaintiff emanates from purchase order dated 12.7.94 placed by the defendant on one FBM which had undertaken to supply two Urea Strippers to the defendant and as such the FBM is a necessary party to the suit.

(3) Assuming without admitting that the plaintiff derived some right from the aforementioned clauses of the agreement, in that event the said right cannot be a better right than what FBM under the said agreement had.

Since the plaintiff was not aware of any such arbitration clauses, it immediately moved an application for reference of disputes to the Arbitrator.

4. It is pertinent to mention at the outset that on 11th August, 2000, learned counsel for the plaintiff pointed out that in view of the admission of the defendant to the effect that "the plaintiff shall only be entitled to services charges at the rate of one per cent and not five percent" the defendant became ready to immediately make the payment of commission at the rate of one per cent and it was subject to this offer that the plaintiff agreed to grant the defendant to leave to defend. Learned counsel for the defendant gave undertaking on instructions received from Law Officer of the defendant that this payment will be made within three weeks. The undertaking was accepted and application for leave to contest was allowed. It was followed by written statement by the defendant.

5. As is apparent from admitted and accepted liability of the defendant, the pleas raised by the defendant in the written statement as to the non-maintainability of the suit as well as the suit being had for non-joinder of the necessary party as it was on the purchase order of FBM that the goods in question was supplied are such that come within the compass of arbitration clause. The arbitration clause is of widest possible amplitude as it postulates that 'any' dispute or difference between the parties in connection with this agreement shall be referred to and determined by arbitration in New Delhi, India as per Arbitration Act, 1940 or Rules or Conciliation of International Chamber of Commerce. To say that the Arbitrator has no jurisdiction to interpret any clause of the agreement is erroneous as it is settled that the Arbitrator has powers even to decide its jurisdiction.

6. The defendant has also raised a plea in the written statement that only limited dispute can be adjudicated upon by the arbitrator in view of the undertaking given by the defendant that he is only liable to pay service charges at the rate of one per cent as the leave to defendant was granted on the undertaking to pay the same within three weeks.

7. Now to back out from such undertaking and to create legal impediment as to the enforcement of arbitration clause is of no consequence as the plaintiff was acting as a Commission Agent of the FBM Hudson Italiana (hereinafter referred as FBM) upon whom the defendant placed purchase order. The goods were duly received and 95% of the total payment has already been made and now the balance payment remains to be made to the plaintiff. In view of the nature of transactions, disputes cannot be split up. The plaintiff has been referred as Commission Agent in the agreement through whom the defendant was to receive the goods though supplied by FBM. To say FBM is a necessary party is not correct as there is no dispute between FBM and the defendant. Only balance payment remains to be paid by the defendant which may be due to the plaintiff.

8. Next, the contention that the suit is not maintainable for want of service of statutory notice under Section 101 of the Multi-State Cooperative Society Act can be looked after by the Arbitrator once the disputes are referred as the Arbitrator has wide powers to not only to interpret any provisions of the Agreement but also to adjudicate upon its jurisdiction.

9. In view of the foregoing reasons, I feel pursuaded to allow the application for reference of the disputes to the Arbitrator.

10. Mr. Justice R.P. Gupta, Retired Judge of the High Court is appointed as sole Arbitrator. Learned Arbitrator will fix his own fees.

11. With this order, the suit and all the IAs stand disposed of.

 
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