Sri N B Babu vs The Branch Manager
2024 Latest Caselaw 26407 Kant

Karnataka High Court

Sri N B Babu vs The Branch Manager on 6 November, 2024

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                                                    COMAP No. 80 of 2022
                                                C/W COMAP No. 81 of 2022



                  IN THE HIGH COURT OF KARNATAKA AT BENGALURU

                       DATED THIS THE 6TH DAY OF NOVEMBER, 2024

                                       PRESENT
                       THE HON'BLE MR JUSTICE V KAMESWAR RAO
                                          AND
                          THE HON'BLE MR JUSTICE S RACHAIAH
                          COMMERCIAL APPEAL NO. 80 OF 2022
                                          C/W
                          COMMERCIAL APPEAL NO. 81 OF 2022


                IN COMAP No. 80/2022

                BETWEEN:

                   SRI.N.BABU,
                   S/O HASHAM SAB.N.,
                   AGED ABOUT 55 YEARS,
                   TRANSPORT BUSINESS,
                   R/AT 13TH CROSS,
                   AZADNAGAR,
                   DAVANGERE - 577 001.
Digitally                                                    ...APPELLANT
signed by K G   (BY SMT. K.TEJASHWINI, ADVOCATE FOR
RENUKAMBA
                     SRI. B.M.SIDDAPPA, ADVOCATE)
Location:
High Court of
Karnataka       AND:

                   THE BRANCH MANAGER,
                   MAHINDRA AND MAHINDRA
                   FINANCE SERVICE LIMITED,
                   MCC 'B' BLOCK,
                   MAMA'S JOINT ROAD,
                   DAVANAGERE - 577 001.
                                                           ...RESPONDENT
                (BY SRI. SIDDHARTH B.MUCHANDI, ADVOCATE)
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                                    NC: 2024:KHC:44778-DB
                                    COMAP No. 80 of 2022
                                C/W COMAP No. 81 of 2022



    THIS COMAP IS FILED UNDER SECTION 13(1)(a) R/W
ORDER XLIII OF CPC, PRAYING TO SET ASIDE THE ORDER
PASSED BY THE LEARNED PRL. DISTRICT AND SESSIONS
JUDGE, DAVANAGERE ON I.A.NO. III IN COM.O.S.NO. 8/2021
DATED 26/11/2021, ETC.

IN COMAP NO. 81/2022

BETWEEN:

   SRI.N.BABU,
   S/O HASHAM SAB.N.,
   AGED ABOUT 55 YEARS,
   TRANSPORT BUSINESS,
   R/AT 13TH CROSS,
   AZADNAGAR,
   DAVANGERE - 577 001.
                                         ...APPELLANT

(BY SMT. K.TEJASHWINI, ADVOCATE FOR
     SRI. B.M.SIDDAPPA, ADVOCATE)

AND:

   THE BRANCH MANAGER,
   MAHINDRA AND MAHINDRA
   FINANCE SERVICE LIMITED,
   MCC 'B' BLOCK,
   MAMA'S JOINT ROAD,
   DAVANAGERE - 577 001.
                                       ...RESPONDENT

(BY SRI. SIDDHARTH B.MUCHANDI, ADVOCATE)

   THIS COMAP IS FILED UNDER SECTION 13(1)(a) R/W
ORDER XLIII OF CPC, PRAYING TO SET ASIDE THE ORDER
PASSED BY THE LEARNED PRL. DISTRICT AND SESSIONS
JUDGE,    DAVANAGERE      ON     I.A.NO.   II   IN
COM.O.S.NO.8/2021 DATED 26/11/2021, ETC.
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                                       COMAP No. 80 of 2022
                                   C/W COMAP No. 81 of 2022



    THESE APPEALS COMING ON FOR ADMISSION THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:


CORAM:    HON'BLE MR JUSTICE V KAMESWAR RAO
          AND
          HON'BLE MR JUSTICE S RACHAIAH


                     ORAL JUDGMENT

(PER: HON'BLE MR JUSTICE V KAMESWAR RAO)

The challenge in these appeals is to a common order

dated 26.11.2021, whereby the learned Principal District

and Sessions Judge at Davangere, has decided two

applications in IA No.II and IA No.III in Com. O.S.

No.8/2021.

2. The appeal No.80/2022 has been filed

challenging the order passed in IA No.II, whereas the

appeal No.81/2022 is filed challenging order in IA No.III.

3. IA No.II was filed by the appellant herein under

Order 39 Rules 1 & 2 of CPC, seeking an ad-interim order

of temporary injunction restraining the respondent herein

from seizing the suit schedule vehicles from the custody of

the appellant except under due process of law, till the

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pendency of the suit. Whereas, IA No. III was filed by the

respondent herein under Section 8 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as 'Act

1996') seeking an order in view of Article 15 of the Loan

Agreement dated 22.10.2018, that the parties to the suit

be referred to Arbitration.

4. The learned District Judge has allowed IA

No.III filed by the respondent herein by holding that, the

suit is not maintainable and ordered the return of the

plaint for referring the matter to Arbitration.

Consequently, the learned District Judge dismissed IA

No.II filed by the appellant herein.

5. On the application filed under Section 8 of Act

1996, the stand of the appellant was that the same is not

maintainable. All the agreements relied upon by the

respondent herein were created, including the clause of

the Arbitration and under such circumstances, the dispute

cannot be referred to Arbitration. It was further contended

that the suit is only for Permanent Injunction against the

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respondent and the respondent has not filed the written

statement, despite taking several opportunities to file the

same and hence, the filing of application is highly belated.

6. Further, it was contended that, the suit was

filed by the appellant as a Commercial Original Suit as per

the Commercial Courts Act, 2015 and hence, the learned

District Judge has the jurisdiction to entertain the suit. In

support of his contention, the learned counsel has relied

upon Section 10 of the Commercial Courts Act, 2015.

7. The learned District Judge, on the application

filed under Section 8 of the Act 1996, has in Paragraphs-

18, 19 & 20 of the order held as under:-

"18. Sec.8 of Arbitration and Conciliation Act provides that; Power to refer parties to arbitration where there is an arbitration agreement. Sec.8 mandates a judicial authority, before whom an action is brought in a matter which is the subject of an arbitration agreement then the matter shall be referred to the arbitration and therefore, this Court is of the opinion

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that unless the matter is referred to arbitration, this Court has no jurisdiction to entertain the suit.

19. In this case though the plaintiff has contended that the arbitration clause mentioned in the suit documents are created, that has to be considered only during the course of trial. Now it is not in dispute that there is arbitration clause. The plaintiff without invoking arbitration clause approached this Court. As rightly contended by the defendants as there is an agreement with arbitration clause, as per Sec.8 of Arbitration Act, parties shall resolve their dispute before the Arbitrator and as per Sec.9 of CPC the suit is barred and further as per Sec.11 of Commercial Courts Act also it is specifically stated that any Commercial dispute in respect of which the jurisdiction of the Civil Court is either expressly or impliedly barred under any other law for the time being in force and Commercial Court shall not entertain such dispute. Therefore, this Court is of the opinion that the present suit is not maintainable before this Court and hence, I.A.No.III deserves to be allowed. When the very suit itself is not maintainable as

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barred under Sec.8 of Arbitration Act, r/w Sec.9 of CPC and Sec. 11 of Commercial Courts Act, the plaintiff is not entitled for the relief prayed in I.A.No.II, thereby, I.A.No.II deserves to be rejected. Accordingly, point No.1 is answered in negative and point No.2 is answered in affirmative.

20. Point No.3: In view of findings on points No.1 & 2, proceed to pass the following:

ORDER

IA-III is allowed and thereby the present suit is not maintainable. As the suit itself is not maintainable the application filed by the plaintiff seeking injunction against the defendant which is pleaded in I.A.No.II, the I.A.No.II is deserves to be rejected. Accordingly, I.A.No.II is dismissed and I.A.No.III is allowed.

The suit of the plaintiff is not maintainable before this Court and ordered to return the plaint to the plaintiff for referring the matter to Arbitration.

No order as to costs".

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8. The counsel appearing for the appellant has

conceded to the fact that there is an Arbitration Clause in

the agreement. His submission is, the appellant was

made to sign blank papers and in that sense, the

agreements have not been executed by the appellants, as

such the Arbitration Clause shall not be binding.

9. We find from the order of the learned District

Judge that, no such plea was recorded by the learned

District Judge. The contention was primarily that, all the

agreements relied upon by the respondent were created

including the clause of Arbitration. Surely the plea as

advanced before the learned District Judge is at variance

with the plea advanced by the learned counsel for the

appellant before us, today. Having said that and the fact

that, the learned counsel for the appellant has not

disputed the existence of an Arbitration Clause in the

agreement, the necessary consequence must be that the

subject matter of the suit need to be adjudicated through

arbitral process and in that regard, the respondent had

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rightly filed the application under Section 8 of the Act,

1996.

10. So it follows, the learned District Judge had

rightly disposed of IA No.III by directing return of the

plaint to the appellant for referring the matter to

Arbitration. Consequently, the rejection of IA No.II being

an application under Order 39 Rules 1 & 2 of CPC, was

rightly dismissed, as the suit itself was not maintainable.

11. Accordingly, we are of the view that the present

appeals are devoid of merit and the same are dismissed.

Sd/-

(V KAMESWAR RAO) JUDGE

Sd/-

(S RACHAIAH) JUDGE

KGR*