Prahlad Nath vs Sunder Nath Samundra Nath
2021 Latest Caselaw 5373 Raj

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Civil Second Appeal No. 150/2019

Prahlad Nath S/o Shri Hamami Nath, Aged About 43 Years, R/o Ward No. 7, Baghjana, Tehsil Kareda, District Bhilwara, Partner M/s Hinglaj Granites

----Appellant

Versus

1. Sunder Nath @ Samundra Nath S/o Hamami Nath, R/o Baghjana, Tehsil Kareda, District Bhilwara, Partner M/s Hinglaj Granites

2. Banshi Nath S/o Hamami Nath, R/o Baghjana, Tehsil Kareda, District Bhilwara, Partner M/s Hinglaj Granites

3. State of Rajasthan, Through The Superintending Engineer, Mines And Geology Department, Panna Dhay Circle, Azad Nagar, Khanji Bhawan, Bhilwara.

                                                                ----Respondents


For Appellant(s)         :     Mr. B.S. Charan
For Respondent(s)        :



           HON'BLE MR. JUSTICE ARUN BHANSALI

                                    Order

24/02/2021

This appeal is directed against judgment and decree dated

01.06.2019 passed by the Additional District Judge No.2,

Bhilwara, whereby, the appeal filed by the appellant against

judgment and decree dated 01.03.2019 passed by Civil Judge

Mandal, District-Bhilwara, has been dismissed.

The plaintiff filed the suit for injunction against respondents

Sunder Nath and Banshi Nath alongwith the Mining Department.

(2 of 4) [CSA-150/2019]

On filing of the suit, an application under Order VII Rule 11 CPC

was filed inter alia indicating that as there is arbitration agreement

between the parties in the partnership deed, the suit was barred

and plaint was liable to be rejected under Order VII Rule 11 (d)

CPC.

The application was contested by the appellant, however, the

trial court while referring to the provisions of Section 8 of the

Arbitration & Conciliation Act, 1996, ('the Act') came to the

conclusion that as there was arbitration agreement between the

parties, the plaint was liable to be rejected under Order VII Rule

11 (d) CPC.

Feeling aggrieved the appellant filed first appeal.

The first appellate court, reiterating the findings recorded by

the trial court, rejected the appeal.

Learned counsel for the appellant made submissions that

both the courts below were not justified in rejecting the plaint

under provisions of Order VII Rule 11 CPC as barred by law based

on the provisions of Section 8 of the Act.

Submissions were made that as in the suit Mining

Department was also a party, which was not a party to the

arbitration agreement, the provisions of Section 8 had no

application.

Further submissions were made that the application was not

filed under Section 8 of the Act and was filed under Order VII Rule

11 CPC and, therefore, also the same was liable to be rejected.

Submissions were also made that as there were allegations

of fraud and malpractices, only the civil court could have dealt

with the said aspect and matter could not have been referred to

(3 of 4) [CSA-150/2019]

arbitration and on that count also the judgments impugned

deserves interference / give rise to substantial questions of law.

I have considered the submissions made by learned counsel

for the appellant and have perused the material available on

record. Both the courts have, concurrently, came to the conclusion

that there was arbitration agreement between the appellant and

Sunder Nath and Banshi Nath contained in the partnership deed.

It is true that the application was filed under Order VII Rule

11 CPC instead of Section 8 of the Act, however, the court with

reference to provisions of Section 8 of the act has passed the

order.

Hon'ble Supreme Court in P. Anand Gajapathi Raju v. P.V.G.

Raju : (2000) 4 SCC 539, has laid down that once the provisions

of Section 8 are applied, the suit is liable to be dismissed and,

therefore, merely because the application was filed under Order

VII Rule 11 CPC, by itself cannot give rise to a substantial

question of law.

So far as the submissions made regarding the allegations

being that of fraud in the plaint are concerned, a larger Bench of

Hon'ble Supreme Court in Vidya Drolia & Ors. v. Durga Trading

Corporation : (2020) 4 DNJ (SC) 1368 has, exhaustively, dealt

with the said aspect and has came to the following conclusion:

"In view of the aforesaid discussions, we overrule the ratio in N. Radhakrishnan inter alia observing that allegations of fraud can be made a subject matter of arbitration when they relate to a civil dispute. This is subject to the caveat that fraud, which would vitiate and invalidate the arbitration clause, is an aspect relating to non-arbitrability."

(4 of 4) [CSA-150/2019]

So far as the submissions made regarding the Mining

Department being not a party to the arbitration agreement is

concerned, a perusal of the plaint allegations indicates that the

dispute is inter se the partners of the Firm and essentially for

implementing the resolution by way of the suit the department

was made party. As such the department has no role in the

dispute itself as such the presence of the department as a party to

the suit was of no consequence.

In view thereof, the appeal does not give rise to any

substantial question of law. The same is, therefore, dismissed.

(ARUN BHANSALI),J 6-Sachin/-

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