Important Point
To constitute an arbitration agreement, it is not necessary that it should bear the signatures of the parties. Requirement of law is that it should be in writing.

Headnote:Arbitration Act, 1940-Section 20-Reference of dispute to arbitrator-Agreement to sell property-Property alleged to be HUF property-HUF consisted of three persons, further and two sons-Appellant one of sons not signed sale agreement-Agreement stated it was entered into with consent of appellant-Appellant’s case that he could not be made party to arbitration as he did not entered into any arbitration agreement - Lower Court’s finding that parties did enter into arbitration agreement-Lower Courts conclusion appellant could raise contention before arbitrator-Lower Courts decision warrants no interference-To constitute arbitration agreement, it is not necessary it should bear signature of parties-Death of any party would not discharge arbitration agreement.
       Held : To constitute an arbitration agreement, it is not necessary that it should bear the signatures of the parties. Requirement of law is that it should be in writing. In the present case, a particular clause in the agreement to sell, which is in writing, constitutes the arbitration agreement. After examining the rival contentions, both the District Judge and the High Court came to the conclusion that parties did enter into an arbitration agreement which is in writing and that disputes have arisen. With these finding that there was an arbitration agreement between the parties it is not possible for us to examine the facts all over again and take a different view. (Para 7)
       For petition under Section 20 of the Act, two requirements are : (1) that there is an arbitration agreement and (2) the arbitration agreement applies to the differences which have arisen between the parties. After these requirements are met, then the Court proceeds to file the arbitration agreement and direct the disputes to be referred to arbitration. (Para 8)
       Now, second respondent, father of the appellant and third respondent has died. Under Section 6 of the Act, an arbitration agreement shall not be discharged by the death of any party thereof. Appellant and the third respondent and their two sisters are the legal representatives of the deceased second respondent. They will necessarily step into the shoes of their father, the second respondent. It is not the case of any respondent that on the death of the second respondent any right of action under the agreement to sell is extinguished. Reference to arbitration, therefore, remains valid. (Para 9)

Judgment

D.P. Wadhwa, J.-This appeal is directed against the judgment dated February 26, 1991 of a learned single Judge of the Rajasthan High Court dismissing the appeal of the appellant filed under Section 39 of the Arbitration Act, 1940 (for short the ‘Act’). District Judge, Jaipur, by his judgment on a petition filed by the first respondent against the appellant herein and respondents 2 and 3, under Section 20 of the Act, had directed that disputes arising out of the sale agreement dated February 28, 1992, which contained an arbitration clause, be referred to arbitration. Appellant had opposed the petition saying that he was not a party to the sale agreement and as such he could not have been entered into any arbitration agreement to submit any dispute under the sale agreement to arbitration. His contention was not accepted by the District Judge. High Court by the impugned judgment also refused to interfere. Aggrieved the appellant has come to this Court.

2. To understand the controversy between the parties it is necessary to refer to a few facts.

An agreement to sell certain property was entered into between the first respondent as purchaser and respondents 2 and 3 as vendors. In the agreement it was mentioned that the property to be sold is a property belonging to a Hindu Undivided Family consisting of the second respondent as Karta and the appellant and the third respondent being the two sons of the second respondent, in all three constituting the Hindu Undivided Family. It is not necessary for us to refer to various terms of the agreement of sale which is dated February 28, 1982 except to note that it was signed by the second and third respondents only. The agreement ends with paragraph 25 which we quote hereunder :

“25. That all payments made by the purchaser to the Vendors under this Agreement shall be entered on a separate sheet to be retained by the purchaser and each such payment which may be received by any one of the aforesaid Vendors shall be entered in the said sheet and signed by the said Receiver of payment. However, the said payment made by the purchaser to anyone of the aforesaid vendors shall be deemed to have been paid to all the Vendors jointly though such receipt of payment had been signed by only one Vendor. It is further clarified that signatures on behalf of all the Vendors have been made for having the authority of all the vendors. No vendor shall be entitled to raise any objection for the receipt of such payments on the ground that the same has been signed by one Vendor only. This is with Chandranath’s consent who is not here to-day.

(Reference to Chandranath’s to the appellant)

Clause 24 of the agreement contained the arbitration clause, which is as under :-

“24. That in case if any dispute may arise between the parties to this document or anybody coming through them the same shall be referred to the arbitration of Justice D.M. Bhandari or in his absence Shri Devi Shanker Tiwari whose decision shall be final and binding on both the parties.”

3. When disputes arose under the agreement to sell the first respondent being the purchaser filed petition under Section 20 of the Arbitration Act impleading even the appellant as a respondent. It was the case of the respondent that since there was no arbitration agreement as far as he is concerned petition under Section 20 of the Act was not maintainable against him. Arbitration agreement is defined in clause (a) of Section 2 of the Act which means a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not. Appellant says that immediately he came to know about the agreement to sell had been entered into between the first respondent and his father and brother respectively respondents 2 and 3, he wrote a letter to the first respondent informing him that he was not a party to the agreement to sell and further that the property, subject-matter of the agreement to sell, was not a Hindu Undivided Family.

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Judicial Analysis

SupremeToday

1999 Supreme(SC) 1150

Important PointTo constitute an arbitration agreement, it is not necessary that it should bear the signatures of the parties. Requirement of law is that it should be in writing.

Judicial Analysis

Important Point
To constitute an arbitration agreement, it is not necessary that it should bear the signatures of the parties. Requirement of law is that it should be in writing.