2008 Supreme(SC) 14

2008(1) Supreme 268
Supreme Court of india
G.P. Mathur & Aftab Alam, JJ.
Atul Singh & Ors. — Appellants
Versus
Sunil Kumar Singh & Ors. — Respondents
Appeal (civil) 10 of 2008
Decided on 04.01.2008

Important Point
1.For application of Section 8 of Arbitration and Conciliation Act 1996 Act, it is absolutely essential that there should be an arbitration agreement between parties.
2.Sub-section (2) of Section 8 of Arbitration and Conciliation Act 1996 Act lays down that application referred to in sub-section (1) shall not be entertained unless it is accompanied by original arbitration agreement or a duly certified copy thereof.

Headnote:Arbitration and Conciliation Act, 1996 — Section 8 — Suit for declaration filed by appellants against defendants for declaration that reconstituted partnership deed dated 17.2.1992 was illegal, void and without jurisdiction and was also without any intention or desire of “R,” one of partners to retire from partnership — Suit decided exparte- Application by defendants under Section 34 of Arbitration Act, for referring dispute for arbitration in view of arbitration clause in agreement dated 13.1.1989- Dismissed by Trial Court — Revision petition — Allowed by High Court — Appeal there against — For application of Section 8, it is absolutely essential that there should be an arbitration agreement between parties — Nothing to show that either “R” or plaintiffs were parties to partnership deed dated 17.2.1992 — No document on record as defined in Section 7 of 1996 Act which contained signature of either “R”or plaintiffs — Again no document on record as contemplated by clauses (b) or (c) of Sub-section (4) of Section 7 of 1996 Act from which it might be spelled out that either “R” or plaintiffs were parties to clause relating to arbitration contained in partnership deed dated 17.2.1992 — Hence held that on face of it Section 8 of 1996 Act would not apply to any dispute concerning said partnership deed dated 17.2.1992 and matter could not be referred to arbitration- In order to get their share of profits from partnership business, it was absolutely essential for plaintiff appellants to have partnership deed dated 17.2.1992 declared as illegal, void and inoperative — The relief for such a declaration could only be granted by the civil Court and not by an arbitrator as they or “R” through whom plaintiffs derived title, were not party to said deed — Trial Court hence, rightly held that matter could not be referred to arbitration and view to contrary taken by High Court was clearly illegal. (Paras 8, 9)

       Arbitration and Conciliation Act, 1996 — Section 8 — Sub-section (2) of Section 8 of 1996 Act says that application referred to in sub-section (1) shall not be entertained unless it is accompanied by original arbitration agreement or a duly certified copy thereof — In order to satisfy requirement of sub-section (2) of Section 8 of the Act, defendant no.3 should have filed original arbitration agreement or a duly certified copy thereof along with the petition filed by him on 28.2.2005, which he did not do — No whisper in petition dated 28.2.2005 that original arbitration agreement or a duly certified copy thereof is being filed along with application — Hence, held that there being a clear non-compliance of sub-section (2) of Section 8 of 1996 Act which was a mandatory provision dispute could not have been referred to arbitration.(Paras 10, 11)

       Facts of the case : -

       1.Suit for declaration was filed by appellants herein in the instant case against defendants for declaration that reconstituted partnership deed dated 17.2.1992 was illegal, void and without jurisdiction and was also without any intention or desire of “R,” one of partners to retire from partnership. Suit was decided exparte. An application was filed by defendants under Section 34 of Arbitration Act, for referring dispute for arbitration in view of arbitration clause in agreement dated 13.1.1989.Said application was dismissed by Trial Court on ground that as “R” predecessor-in-interest of plaintiffs was not a party to partnership deed which was executed on 17.2.1992, and as main relief sought in suit was that said partnership deed dated 17.2.1992 was illegal and void, which question could only be decided by the civil Court, dispute could not be referred to arbitration. Revision petition there against was allowed by High Court.

       2.Present appeal has been filed against said order of High Court.

       Findings of the Court

       In order to get their share of profits from partnership business, it was absolutely essential for plaintiff appellants to have partnership deed dated 17.2.1992 declared as illegal, void and inoperative. The relief for such a declaration could only be granted by the civil Court and not by an arbitrator as they or “R” through whom plaintiffs derived title, were not party to said deed. Trial Court hence, rightly held that matter could not be referred to arbitration and view to contrary taken by High Court was clearly illegal.

       Result : Appeal allowed.