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2009 Supreme(SC) 586

AIR2009SC3284, 2009 2 AWC(Supp)1931SC, 2009BusLR409(SC), JT2009(4)SC537, 2009(5)SCALE273, (2009)14SCC24, 2009(4)UJ1927(SC)
IN THE SUPREME COURT OF INDIA
R. V. Raveendran and Markandey Katju , JJ.
Shin-Etsu Chemical Co. Ltd. Appellant
Vs.
Vindhya Telelinks Ltd. and Ors. Respondent
Civil Appeal No. 4998 of 2007
Decided On: 27.03.2009

Advocates Appeared
C.A. Sundarm, Yashraj Singh, T.S. Sabasish, Surendra Mann, Advs. forK.L. Mehta & Co
Mukul Rohtagi and Dushyant Dave, Sr. Advs., R.K. Sanghi, Narendra M. Sharma, Anirudh Rajput, Santosh Krishna and Rajesh Prasad Singh, Advs.

Headnote:

Constitution of India - Article 227 - Code of Civil Procedure, 1908 - Order 7 Rule 11 - Arbitration and Conciliation Act, 1996 - Section 45 - Arbitration - Long Term Sale and Purchase Agreement - Permanent injunction - Appeals by special leave are filed against the order aggrieved by the remand, while allowing in part Civil Appeals filed by the appellant, with a direction to reconsider the applications of the appellant - Held, If an exception is to be made in this case on the ground that the leave has been granted, there is a risk of its becoming an erroneous precedent - Further on the examination of the facts we are of the considered view that the case does not involve any special and exceptional circumstance that warrants direct interference with an order of a district court bypassing the remedy available before the High Court - Therefore the mere fact of leave having been granted will not come in the way of the appellant being relegated to the available alternative efficacious remedy - Appeals dismissed

JUDGMENT

R.V. Raveendran J.

1. These appeals by special leave are filed against the order dated 30.11.2006 passed by the IV Additional District Judge, Rewa, Madhya Pradesh, aggrieved by the remand, while allowing in part Civil Appeal Nos. 24 and 25 of 2006 filed by the appellant, with a direction to reconsider the applications of the appellant under Section 45 of the Arbitration and Conciliation Act, 1996 (`Act' for short) in terms of the Judgment of this Court in Shin-Etsu Chemical Co.Ltd. v. Aksh Optifibre Ltd. and Anr.: AIR2005SC3766 .

2. Vindhya Telelinks Ltd. and Optic Fibre Goa Ltd. - respondents 1 & 2 in the first of the two appeals filed Civil Suit Nos. 31-A of 2002 (renumbered as Civil Suit No. 38A of 2004) on the file of the Civil Judge, Class-I, Rewa, Madhya Pradesh for a declaration that the Long Term Sale and Purchase Agreement entered between appellants and them, was null and void and for a permanent injunction restraining the appellant (first defendant in the suit) from relying upon/invoking/giving effect to any term of the said agreement. Similarly, Birla Ericsson Optical Ltd. and Optic Fibre Goa Ltd - respondents 1 & 2 in the second of these appeals, filed Civil Suit No. 30A of 2002 (renumbered as Civil Suit No. 39A of 2004) in the said court for similar reliefs.

3. On entering appearance, the appellant filed applications under Order 7 Rule 11 of Code of Civil Procedure read with Sections 5 and 8 of the Act seeking dismissal of the suits and a direction for referring the parties to arbitration (in terms of the arbitration agreement contained in the Long Term Sale & Purchase Agreements dated 23rd and 24th January, 2001). The said applications were dismissed by the trial court on 14.07.2003. The revision petitions filed by the appellants were dismissed by the Madhya Pradesh High Court on 26.08.2003. On further appeals, this Court in Civil Appeal Nos. 6210-6211 of 2004, by order dated 7.12.2005, set aside the orders of the trial court and High Court and remanded the matters to the trial court to decide the matters afresh treating the applications filed by the appellant herein (under Order 7 Rule 11 CPC read with Sections 5 and 8 of the Act) as applications under Section 45 of the Act and dispose them in terms of the decision in Aksh Optifibre Ltd. (supra). In pursuance of it, the trial court considered the applications filed by the appellant as applications under Section 45 of the Act and passed a common order dated 31.3.2006 thereon, holding that the arbitration clause on the basis of which the appellant had filed an application under Section 45 of the Act was prima facie inoperative and in such a situation, the parties cannot be referred to arbitration and the matter should be proceeded with and decided on merits by the court.

4. The said order of the trial court was challenged by the appellant before the IV Additional District Judge, Rewa who by the impugned orders dated 30.11.2006 allowed the appeals, set aside the order of the trial court, and remitted the matters to the trial court with a direction to consider the applications of the appellant under Section 45 of the Act, in accordance with the procedure and principles laid down in Para 111 of the decision in Aksh Optifibre Ltd. (supra). The said orders of the Additional District Judge are challenged in these appeals by special leave under Article 136 of the Constitution of India. The appellant contends that as neither the trial court nor the appellate court recorded a finding that the arbitration agreement was null, void, inoperative or incapable of being performed, the appellate court ought to have merely allowed the appeals, and ought not to have remanded the matters to the trial court for fresh consideration.

5. The respondents raised a preliminary objection that these appeals are not maintainable and if the appellant was aggrieved by the orders of the learned District Judge in the appeals, the appropriate remedy was to challenge the same before the High Cour




















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