IMPORTANT POINT
When the trial court held that it has jurisdiction to try the suit despite objection regarding the existence of a clause for arbitration and the order became final, neither party could invoke section 11(6) of Arbitration and Conciliation Act, 1996. It would be hit by principles of issue estoppels as well as res judicata.

Headnote:(a) Administration of Justice – Issue estoppels – Suit for resolving dispute between parties – In final stage – Respondents opposing reference to arbitration u/s 8(1) – Decision of trial court becoming final – Seeking appointment of arbitrator u/s 11(6) of Arbitration and Conciliation Act, 1996 – Hit by principle of issue estoppel. (Para 11)
       (b) Administration of Justice – Res judicata – Trial court holding to have jurisdiction to try the suit despite objection regarding the existence of a clause for arbitration – Becoming final – Neither party can invoke section 11(6) of Arbitration and Conciliation Act, 1996 – Hit by res judicata. (Para 14)
       AIR 1960 SC 941; (1999) 5 SCC 590; (2014) 5 SCC 75; 2014 (9) SCALE 768 – Relied upon
       Facts of the case:
       Once a judicial authority takes a decision under Section 8(1) of The Arbitration and Conciliation Act, 1996 declining to refer the dispute pending before it to arbitration and the said decision having become final, whether either party to the proceedings can thereafter invoke the jurisdiction of the Chief Justice under Section 11(6) of the Act, is the question arising for consideration in this case. The scope of Section 8(3) of the Act is also an ancillary issue.
       Appellants are defendant nos. 1, 2, 3 in Special Suit No. 211 of 2009 on the file of Civil Judge Senior Division at Aurangabad, Maharashtra. The suit is filed by a partnership firm, viz., M/s. Rana Sahebram Mannulal and three others. The dispute mainly pertains to the partnership business.
       The defendants/appellants had filed an application to dismiss the suit for want of jurisdiction since the partnership deed contained a provision for arbitration and hence the disputes were liable to be resolved in terms of the Act.
       The same was opposed by the plaintiff.
       The trial court upheld the objection and held that it was within the jurisdiction of the court to try the dispute and, therefore, it was not required under law to refer the same to arbitration.
       The suit proceeded. The parties have examined all their witnesses.
       While so, the respondents herein approached the Chief Justice of the High Court seeking appointment of an arbitrator as per the terms of the partnership deed.
       High Court held that it would be expedient that pursuant to clause 6 of the partnership deed, a proper person be appointed as arbitrator to entertain dispute between the parties.
       Finding of the Court:
       The High Court gone wholly wrong in passing the order under Section 11 of the Act when the civil court is in seisin of the dispute and where arbitration has already been declined by the said court.
       Result: Appeal allowed with cost.

JUDGMENT

KURIAN, J.:

Leave granted.

2. Once a judicial authority takes a decision under Section 8(1) of The Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) declining to refer the dispute pending before it to arbitration and the said decision having become final, whether either party to the proceedings can thereafter invoke the jurisdiction of the Chief Justice under Section 11(6) of the Act, is the question arising for consideration in this case. The scope of Section 8(3) of the Act is also an ancillary issue.

3. Appellants are defendant nos. 1, 2, 3 in Special Suit No. 211 of 2009 on the file of Civil Judge Senior Division at Aurangabad, Maharashtra. The suit is filed by a partnership firm, viz., M/s. Rana Sahebram Mannulal and three others. The dispute mainly pertains to the partnership business. Following are the reliefs claimed:

“A) The special civil suit of the plaintiffs may kindly be decreed with costs;

B) The plaintiffs may kindly be declared as valid partners of the registered partnership firm under the name and style M/s S.M. Rana (Rana Sahebram Mannulal) and further it also may kindly be declared that, the plaintiffs are the owners and possessors of the land gut no. 240 situated at Dahegaon Tq. Gangapur to the extent of 81R and the land gut No. 237 to the extent of 5H. 85R. situated at Dahegaon Tq. Gangapur dist. Aurangabad and the land gut no. 97/2admeasuring 1 Acre 34R. situated at Shranapur Tq. and Dist. Aurangabad and Gut No. 121 admeasuring 1H. 14R. situated at village Tisgaon Tq. and Dist. Aurangabad and the Plot No. 12 out of the land Gut No. 17/2 admeasuring 5.30R. situated at Garkheda Tq. and Dist. Aurangabad and it may also be further declared the said property belongs to the partnership firm and the plaintiffs are the owners and possessors of the said property being the valid partners of the registered firm and it may also be declared that the plaintiffs are the owners of their respective shares in the said properties.

C) It may kindly be declared that the registered sale deeds dated 1.8.2007 executed by defendant no.1 in favour of defendant no.2 in respect of land gut no.240 to the extent of 81R. situated at village Dahegaon Tq. Gangapur Dist. Aurangabad bearing registration Nos.3942/2007 and the registered sale deed dated 6.9.2007 bearing registration No.4506/2007 in respect of land gut no.237 to the extent of 2H. 82R, situated at village Dahegaon Tq. Gangapur Dist. Aurangabad executed by defendant no.1 in favour of defendant no.7 and the registered sale deed dated 30.7.2007 bearing registration no.4318/2007 executed by defendant no.2 in favour of defendant no.1 in respect of land gut no.97/2 to the extent of 20R. situated at Sharanapur Tq. and Dist. Aurangabad, are null void, ab-initio and not binding upon the plaintiffs.

D) It may kindly be declared that the property purchased by the defendant no.4 bearing land gut no.17/2 out of it plot no.1 admeasuring 584.36 sq.mtrs. Situated at Garkheda, Tq. and Dist. Aurangabad and the land gut no.186 admeasuring 12A. 7G. purchased in the name of defendant no.4 by defendant no.1 situated at Dahegaon Tq. Gangapur Dist. Aurangabad and the land Gut No.56 in the name of defendant no.3 to the extent of 25R and defendant no.5 to the extent of 25R. situated at Sharanapur Tq. and Dist. Aurangabad and the land gut no.213 admeasuring 35R purchased in the name of defendant no.3, under registered sale deed no.1781 dated 25.4.2007 situated at Dahegaon Tq. Gangapur Dist. Aurangabad and the land gut no.185 to the extent of 4A, 15G purchased in the name of plaintiff no.1 and defendant no.1 to the extent of 4A, 15G, situated at Dahegaon Tq. Gangapur Dist. Aurangabad and the land gut no.167/2 purchased in the name of defendant no.167/2 purchased in the name of defendant no.5 admeasuring 8A. 22G, situated at Daheaon Tq. Gangapur Dist. Aurangabad, and the land Gut No. 6 purchased in the name of defendant no.5 admeasuring 6A, situated at Rahimpur Tq. and Dis

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2014 Supreme(SC) 908

SUPREME COURT OF INDIAANIL R. DAVE, KURIAN JOSEPH, JJ.Anil s/o Jagannath Rana and others - Appellant(s)VersusRajendra s/o Radhakishan Rana and others - Respondent(s)CIVIL APPEAL NO. 11604 /2014 [Arising out of S.L.P. (Civil) No. 15314 of 2014]Decided On: 18-12-2014

Cases Referred (4)

SUPREME COURT OF INDIA
ANIL R. DAVE, KURIAN JOSEPH, JJ.
Anil s/o Jagannath Rana and others - Appellant(s)
Versus
Rajendra s/o Radhakishan Rana and others - Respondent(s)
CIVIL APPEAL NO. 11604 /2014 [Arising out of S.L.P. (Civil) No. 15314 of 2014]
Decided On: 18-12-2014