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2009 Supreme(SC) 1381
Supreme Court of India
S.B. SINHA & CYRIAC JOSEPH
Shree Baidyanath Ayurved Bhawan Pvt. Ltd.
Versus
Praveen Bhatia & Others
TRANSFER PETITION (CIVIL) NO.61 OF 2007
Decided on: 04-08-2009
For the Appearing Parties:Sunil Gupta, T.S. Doabia, Sr. Advocates, Rishi Maheshwari, Ms. Shally Bhasin Maheswari, Vikramjeet Banerjee, Ms. Anne Mathew, B. Rangnathan, Atul Shankar Mathur, Ms. Shruti Verma (for M/s. Khaitan & Co.), Anil Grover, Manish Kumar, Pramod Swarup, V.P. Singh, Anil Kumar Jha, Ms. Sunita Sharma, Subhash Kaushik, Mrs. Anil Katiyar (for D.S. Mahra), J.S. Bhatti, Shree Pal Singh, Ajay Pal, Kuldip Singh, Javed Mahmud Rao, Advocates.
Headnote:
Constitution of India,1950 - Article 32 - Arbitration Act - Section 36 – Appointment Shri M.P. Dixit - Manufactures Ayurvedic medicines - company appointed Enterprises Ludhiana of which Praveen Bhatia Bhatia Ashwani Bhatia and Promila Bhatia are partners. The agreement between parties incorporating terms conditions of said contract of carrying and forwarding agency contained an arbitration clause. Allegedly jurisdiction Court determine dispute between parties was fixed Jhansi - Respondents are said have committed misappropriation of a huge amount which was pointed out audit reports - Furthermore are said have created several other forged and fraudulent credits favour some entities which they had substantial interest which was allegedly detected by Companies Account Manager - Parties hereto invoked arbitration clause contained said agreement - Company appointed one - Dixit as an Arbitrator - Respondents are said to have appeared before the said Arbitrator and filed copies of pleadings applications etc and also collected copy of note-sheet but absented themselves from other and further proceedings before Arbitrator - Respondent however alleged purported agreement is forged one and agreement -Held, Company would not suffer any prejudice in event the civil suits filed by firm and/or its partners are permitted to be determined at different courts in State of Punjab, particularly when the company has an office Punjab and Haryana and thus balance of convenience lies allowing civil proceedings tried at their original courts filing - It was urged that in some of matters and explicit - Said position is binding on both parties who were contesting the present proceeding - Both the parties with their open eyes entered into aforesaid purchase order and agreements thereon which categorically provide all disputes arising between parties out of the agreements would be adjudicated upon and decided through process arbitration and no court other than court at Jaipur shall have jurisdiction to entertain or try the same - In both agreements in Clause General Conditions Contract was specifically mentioned that the contract shall for all purposes be construed according to the laws India and subject to jurisdiction of only at Jaipur in Rajasthan Courts only and in addition in one of the purchase order expression used was Court at Jaipur only would have jurisdiction to entertain or try the sameCourt and in no other court dispute that two awards have been made by two different arbitrators - Objections to said awards have been filed by both the parties. One of the questions which thus required to be taken into consideration is as to whether the appointment of respective arbitrators by the parties was valid and thus whether the arbitrators had acted within the four corners of the arbitration agreement - It true that respondent No.6 is not a party to the arbitration agreement but he claiming interest firm who had appointed him as its distributor pursuant to such an authority having been conferred upon the firm by company Court therefore are of opinion that although respondent not a party contract his case also should be transferred -Petition allowed
Judgment
S.B. Sinha, J.
1. Shree Baidyanath Ayurved Bhawan Pvt. Ltd. (hereinafter referred to as `the company' for the sake of brevity) is a company registered and incorporated under the Indian Companies Act, 1956. It manufactures Ayurvedic medicines. For the purpose of distribution of its products, it engages Carrying and Forwarding Agents to receive goods from it, store them and sell them to stockiests.
2. The company appointed M/s. S. Bhatia Enterprises, Ludhiana (Respondent No.5 herein) (for short, `the firm') of which Praveen Bhatia, Ramkishan Bhatia, Ashwani Bhatia and Promila Bhatia are partners. The agreement between the parties incorporating the terms of conditions of the said contract of carrying and forwarding agency contained an arbitration clause. Allegedly, the jurisdiction of the Court to determine the dispute between the parties was fixed at Jhansi. Respondents are said to have committed misappropriation of a huge amount which was pointed out in the audit reports of 2000 and 2001. Furthermore, they are said to have created several other forged and fraudulent credits in favour of some entities in which they had substantial interest which was allegedly detected by the Company's Account Manager.
3. Parties hereto invoked the arbitration clause contained in the said agreement. The company appointed one Shri M.P. Dixit as an Arbitrator. The respondents are said to have appeared before the said Arbitrator and filed copies of the pleadings, applications etc. and also collected a copy of the note-sheet but absented themselves from other and further proceedings before the Arbitrator. Respondent, however, alleged that the purported agreement dated 1.10.1999 is a forged one and, in fact, an agreement had been entered into by and between the company and the firm on 1.4.1999.
4. The firm, however, appointed one Mr. Sudesh Kukreja who is said to have made an award against the appellant for a sum of Rs.4,70,000/-on or about 23.1.2004. The said award has been received by the Company at Jhansi on 31.3.2004 whereafter an objection under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, `the Act') is said to have been filed in the Court of District Judge, Jhansi.
5. The Firm filed five applications under Section 9 of the Act which were marked as Application No.68, 69, 72, 73 and 74 of 2004 through its partners against the company in the Court of District Judge, Ludhiana.
6. Mr. Dixit is said to have made an award in favour of the company awarding a sum of Rs.3,56,54,487.37 at Jhansi upon adjusting the amount of security amounting to Rs.20 lakh as well as the amount of commission etc.
7. One Atul Saggar on behalf of Kay Pee Agencies, Ludhiana, who is said to have been appointed as a distributor at Ludhiana on or about 30.8.2004 filed a civil suit praying for a declaration that the cheque given by him for supply of goods to the company by M/s. Bhatia as null and void.
8. The respondents filed an application for setting aside the award pronounced by Shri Dixit in the Court of District Judge, Ludhiana on or about 23.12.2004. The Firm also filed three Civil Suits in the Court of Civil Judge, Ludhiana alleging defamation against them. The appellant filed objections to the Execution Petition filed by the respondents and during the period 2006 - 2008 appeared to have filed 14 civil suits in different courts, the details whereof are as under :
S.No. CASE NO. FILED ON COURT AUTHORITY SUBJECT MATTER
1. Arbt. S.No.12 2004 Distt. Judge, Jhansi Petition U/s. 34 Arbitration Act for setting
aside arbitration award pronounced by Sudesh Kukreja in favour of Praveen Bhatia
2. C.S.No.227 2005 Distt. Judge, Jhansi Petition U/s 9 of Arbitration Act for
securing award of M.P. Dixit by restraining Bhatias from selling his property etc.
3. C.S.No.390 2005 - do - Suit for declaration/recovery of damages
against opposite parties due to making of forged agreement dt.1.4.99 by Bhatias.
4. C.S.No.28 2005 - do - Declaration and recov
