R.C. Aggarwal vs Delhi Tourism & Transportation ...
2002 Latest Caselaw 1817 Del

JUDGMENT

J.D. Kapoor, J.

1. Short question involved for determination in this application under Section 8 is whether the arbitration clause can be invoked after the expiry of the agreement or contract between the parties or in the absence of renewal of the expired agreement.

2. The facts are more or less broadly admitted and are as under:-

3. The applicant floated a tender notice on 16th April, 1982 inviting sealed tenders for offer of shop premises for opening of Indian made Foreign liquor (in short IMFL) shops in various areas of Delhi. Pursuant to this notice plaintiff submitted its tender offering the suit premises for sale of IMFL. As a consequence the parties entered into a license agreement dated 15th July, 1982. As per Clause 4 of the said agreement the license was granted for a period of one financial year beginning from April, 1982 and ending on 31st March, 1983. Clause 15 of the said agreement was an arbitration clause which is to the following effect:-

"If any dispute of differences arises between the parties here to or their representatives or in regards to any other matter under these presents, save as to any matter the decision whereof is herein before expressly provided for, the same shall be referred to the sole arbitration of the Chairman of Delhi Tourism Development Corporation Ltd., and if he is unable or unwilling to act, to the sole arbitration some other person appointed by him. It will be no objection to any such appointment that the person appointed is/was an employee of the Corporation or that he had to deal with the matters to which the contracts relates and that in the course of his duties as such employee of the Corporation. He had expressed views on all or any of the matter in dispute or difference. The reference to the Arbitration shall be deemed to be a submission within the meaning of the Arbitration Act, 1940, or any statutory modification or reenactment thereof, and the rules made there under for the time being in force shall apply to such reference and this deed shall be deemed to be submission to such arbitration."

4. The respondent requested the plaintiff vide communication dated 31st May, 1988 to enter into or renew the agreement and enclosed the draft agreement Along with it. In response the plaintiff reminded the respondent/applicant that he was no more interested in entering into or renewing any agreement on the same terms and conditions. He also made it clear in the said communication that he has written several letters to the defendant before terminating the agreement for vacating the premises and again called upon the defendant to vacate the premises at the earliest. The plaintiff did not pay any heed and was served a legal notice. It did not have any effect upon the respondent which gave rise to the instant suit.

6. There is no dispute as there is unvarying unanimous current of opinion that the arbitration clause in any agreement is incorporated with the sole intention of resolving the disputes that would arise during the currency of the agreement. Mr. Maninder Singh, learned counsel for the respondent, has referred to large number of authorities to convass the point that any dispute arising between the parties even after the agreement or contract has expired is liable to be determined and decided by way or arbitration if the parties in the original agreement had agreed to do so. I am afraid all the authorities relied upon by Mr. Singh are to the effect that the Arbitration clause operates till the agreement or a contract is in existence. If the agreement becomes non-existent or expires, the remedy not is to get the dispute decided or determined by way of arbitration clause.

7. In the same vein the contention of Mr. Singh that Section 16 of the Arbitration Act, 1996 empowers the Arbitrator to rule on its own jurisdiction as well as on objection with regard to the existence or validity of the arbitration agreement is of no consequence as this power is conferred upon the Arbitrator to rule upon the existence or validity of the arbitration agreement and nothing more and nothing less. Section 16 of the new Act only permits the Arbitrator to decide a question relating to the existence of an arbitration clause which does not mean that he is holding powers to decide the disputes between the parties as an Arbitrator after the extinction of the agreement itself. The genesis of the disputes arising between the parties out of agreement or contract between Arbitrator in the agreement itself does not become redundant or extincts whereupon the arbitration clause itself becomes non-existent. Has it not been so the respondent itself would not have written back to the petitioner for renewing the agreement which was for a period of one year. Nor would have the plaintiff written back by saying that he has no intention to remove it and is only interested in getting the premises vacated.

8. Section 7 of the Arbitration Act is the pedestal or edifice on which the remedy by way of determining the disputes through arbitration is provided. According to Section 7 the arbitration agreement means an agreement between the parties to submit for the arbitration or certain disputes which have arisen or which may arise between the them in respect of a definite legal relationship whether contractual or not and Sub-clause (3) of the Section provides unless and until the Arbitration agreement is in writing the arbitration agreement is meaningless. The arbitration agreement has to be in writing duly signed by the parties. In the instant case the arbitration agreement upon which the respondent is banking became dead almost 20 years back. Merely because the plaintiff has not taken the remedy for 10-15 long years and letters after letters were sent and ultimately he served the legal notice does not mean that he is left remediless. The only remedy available to the plaintiff is by way of suit and not through arbitration as claimed by the respondent/applicant. Thus the reliance upon the judgments of the Supreme Court by the learned counsel for the respondent is entirely misplaced. Provisions of Section 16 are mis-construed and the concept as propounded by the learned counsel is misconceived as such a clause of arbitration clause emanates only through a written agreement. For the aforesaid reasons I do not find any merit in the application. Same is hereby dismissed.

S.No. 1897/1996

Let the defendant file the written statement positively within two weeks. Replication be filed within two weeks thereafter. Be listed before the regular Bench on 22nd November, 2002.