Back
2007(6) Kar. L.J. 554
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
N. KUMAR, J.
DILIP BAFNA -Appellant
versus
K.S. VASUDEVA -Respondent
Civil Miscellaneous Petition No. 83 of 2005
Decided on : 16th April, 2007
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Specific Relief Act, 1963 - Section 20 - Specific performance - Granting relief of - Discretion of court - How to be exercised. [Kumar, J]: The relief being discretionary, if the parties approach a Civil Court that discretion has to be exercised by the court. The said discretion cannot be arbitrary. It should be sound and reasonable, guided by judicial principles.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Interpretation of Documents - Arbitration clause - Intention of parties - Whether they intend arbitration to be the sole remedy and what are the disputes which they want to be resolved by arbitration, whether all disputes arising under agreement are to be decided by arbitration. [N. Kumar, J]: Further it has to be found out whether they intended to oust the jurisdiction of the Civil Court completely or whether they reserved their right or liberty to approach the Civil Court also in respect of the disputes arising under the agreement. it is only if the arbitration agreement makes it clear that the parties agree to cost the jurisdiction of the Civil Court and for all the disputes referred to arbitration and they did not want any of the disputes adjudicated by the civil court, the parties agree for resolution of the disputes through arbitration mandatorily or necessarily. It is settled law that while construing the provisions which oust the jurisdiction of the Civil Court, those provisions have to be construed strictly. The exclusion of the civil court s jurisdiction should not be readily inferred.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Agreements - Agreement of sale - If can be referred to arbitration..
Agreements - Agreement of sale - Specific performance - Jurisdiction of arbitrator to pass award by exercising his discretionary powers. See, Arbitration and Concilation Act, 1996 - Sections 11 and 34.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Arbitration and Conciliation Act, 1996 - Section 28(1)(a) - Dispute - Resolution of - Arbitrator shall decide dispute submitted to him in accordance with substantive law for the time being in force - He can exercise discresion - It should be sound and reasonable and guided by judicial principles.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Arbitration and Conciliation Act, 1996 - Section 7 and 11 - Interpretation of arbitration clause - Intention of parties - Whether they intend arbitration to be the sole remedy and what are the disputes which they want to be resolved by arbitration, whether all disputes arising undder agreement are to be decided by arbitration. [N. Kumar, J]: Clause 5 and clause 6.2, clause 5 makes it clear that all questions and claims what-so-ever shall be referred to arbitration in accordance with the provisions of Arbitration Act. In the very same clause, it is mentioned that subject to the preceding paragraph, the Court in Bangalore shall have exclusive jurisdiction over any disputes, differences or claims arising out of this deed. Though the word used is "shall", the same word "shall" is used in conferring jurisdiction on Bangalore Courts to resolve the dispute between the parties. Clause 6.2 exclusively deals with the relief of a specific performance of a contract. A right is conferred on both the parties to approach the Civil Court by filing a suit for specific performance if the other party refused to perform his part of the contract. Here also the word used is "Shall". In those circumstances, in the absence of the word "only in clause-5 of the agreement and clause 6.2 of the agreement specifically providing an opportunity to both the parties to file suit for specific providing an opportunity to both the parties to file suit for specific performance, it cannot be said because of the arbitration clause, the dispute cannot be agitated before a competent Civil Court. At any rate, parties agree that insofar as the relief of specific performance is concerned, they shall have the liberty to approach the civil court and to that extent the jurisdiction of the arbitrator to decide cases of specific performance of the contract is not exclusive. A cumulative reading of all these clauses, makes it clear that the parties never intended that insofar as the relief of specific performance of the contract is concerned, the parties are necessarily or rather mandatorily require to approach the arbitrator for resolution of the dispute. It is not the intention of the parties that arbitration is to be the sole remedy. A harmonious interpretation of the said clauses would only mean the parties have kept their option open either to approach the civil court or arbitration as they any choose to do so.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
Arbitration and Conciliation Act, 1996 - Sections 7 & 8 - Dispute - Nature of. [N. Kumar, J]: Dilatory Settled Principles : The dispute or difference which the parties to an arbitration agreement agree to refer must consist of a justiciable issue triable civilly. A fair test of this is whether the differences can be compromised lawfully by way of accord and satisfaction [Halsbury s Laws of England, 4th Edition, Vol. 2, Para 503].
Indian Contract Act, 1872 - Sections 23 and 24 - Contract of sale - Whether it is permissible to any arbitrator to give an award directing specific performance. [Kumar, J]: Even discretionary reliefs which are to be granted by the courts could be the subject matter of arbitration and the arbitrator also has the same powers as that of the Court in the matter of exercising discretion, the contention that jurisdiction to decree specific performance being discretionary and has to be exercised by a court alone and such matters cannot be referred to arbitration is without any substance.
Cases Referred: AIR 1991 Delhi 138; (1998) APO No. 498 of 1997; AIR 1999 SC 2010; AIR 2000 SC 1379.
The petitioner has filed this petition under Section 11 of the Arbitration and Conciliation Act, 1996 (for short hereinafter referred to as the “Arbitration Act”), for appointment of an Arbitrator to resolve the dispute between the parties.
2. The case of the petitioner is that the respondent is the owner of the sites bearing Nos. 228 and 228-A located at 8th cross, SBM Housing Colony, formed out of lands in Sy. Nos. 12/1, 21/2, 21/3, 21/4, 21/5, 21/6, 22/2 and 15 situated at Gerehalli Village, Bangalore North Taluk, Bangalore, measuring in all 4014 sq. feet. The petitioner has entered into an agreement with the respondent to purchase the aforesaid sites on 25th March, 2005, for a consideration of Rs. 53,00,000/-. The petitioner has paid Rs. 15,00,000/- as advance. Three' months is stipulated for completion of the transaction. The petitioner is ready and willing to perform his part of the contract. When the respondent did not perform his part of the contract, the petitioner was constrained to issue a legal notice dated 5th July, 2005 calling upon him to, receive the• balance consideration and execute the sale deed. The said notice was duly acknowledged by the respondent and he has sent a reply on 10th July, 2005 accusing the petitioner for not performing his part of the agreement and asking him to take refund of the advance with deduction of Rs. 3,00,000/-. Thereafter, the petitioner got issued another legal notice dated 23rd July, 2005 calling upon the respondent to give his consent for referring the matter to arbitration and for adjudication. When the respondent did not comply with the demand made therein he was constrained to file an application A.A. No. 57 of 2005 on the file of Additional City Civil Judge, Bangalore, under Section 9 of the Arbitration Act and he obtained a temporary injunction restraining the respondent from alienating the suit schedule property. In those circumstances the petitioner was constrained to prefer this petition for appointment of an Arbitrator.
3. The respondent entered appearance and filed his statement of objections contending, as the relief sought for by the petitioner is in the nature of specific performance the arbitration clause in the agreement is not attracted. The parties have specifically agreed to have the said dispute agitated in a Civil Court. He further contends that it is the petitioner who committed breach of the terms of the agreement and consequently the agreement stands terminated. There is no live dispute between the parties and therefore it is stated that the petition is misconceived and not maintainable and liable to be dismissed.
4. Learned Counsel for the petitioner Sri C.G. Gopalaswamy submitted that when the respondent has not disputed the agreement entered into between the parties and when the said agreement at Clause 5 provides for arbitration and when a dispute has arisen between the parties. in respect of the subject-matter of the agreement all the ingredients which are required to be fulfilled before an Arbitrator is appointed are satisfied and therefore he submits that the petition is to be allowed.
5. Per contra, Sri H.S. Dwarkanath, learned Counsel appearing for the respondent contended, when the relief sought for is in the nature of specific performance of contract, as per Clause 6.2 they agreed to file a suit and therefore that is not a matter which is arbitrable. Secondly, he contended Section 20 of the Specific Relief Act, 1963 (for short hereinafter referred to as “the Act”) mandates that the jurisdiction to seek specific performance is a discretionary relief and such discretion has to be exercised by a Court which is guided by jurisdictional Courts and Court of appeal. Therefore, a valuable right of appeal is statutorily provided and if the matter is referred to arbitration the respondent is deprived of such a valuable right of appeal. Admittedly, against an Arbitral award no appeal lies and jurisdiction to interfere with the said Arbitral award is circ
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
