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2004 Supreme(Bom) 434

IN THE HIGH COURT OF BOMBAY
Rebello F.I., J.
Global Marketing Direct Limited .... Petitioner.
Versus
GTL Limited another.... Respondents.
Civil Revision Application No. 508 of 2003 in Special Civil Suit No. 50 of 2002, decided on 19-3-2004.
Advocates appeared :
Prashant S. Pratap with Harsha G. Pratap with Ajit Kumar C. Shah, for petitioner.
S.U. Kamdar with Pankaj Sawant Aditya Khandeparkar, for respondent No. 1.

Headnote:Arbitration and Conciliation Act, 1996 - Section 45 - unlike section 8, there is no time limit within which an application challenging validity of arbitration agreement can be made - further, despite invocation of Section 45, jurisdiction of civil court would continue until it decides validity of the arbitration agreement.

JUDGMENT - REBELLO F.I., J.: - The petitioner herein is the original defendant No. 2 in Special Civil Suit No. 50 of 2002 filed by the respondent No. 1. The respondent No. 2 is the original defendant No. 1. The suit by the respondent No. 1, principally seeks reliefs, that the agreements dated 9th November, 2000 and 18th January, 2001 and arbitration agreements contained therein are illegal, null and void ab initio or inoperative and/or incapable of being performed and other consequential reliefs. The agreements are between the respondent No. 1 and petitioner on the one hand and respondent No. 1 and respondent No. 2 on the other hand. An application for interim relief was moved by the respondent No. 1 to restrain the petitioner and respondent No. 2 from in any manner commencing and/or in proceeding with and/or participating in any proceeding in a Court of law and/or any arbitration under the agreements dated 9th November, 2000 and 18th January, 2001 and also restraining them from acting upon or in furtherance of the above mentioned agreements. The application for injunction was rejected by the trial Court by its order dated 13th August, 2002. Against that an appeal came to be filed being Appeal from Order No. 799 of 2002. That appeal came to be dismissed by order dated 30th November, 2002. At the time of hearing of the appeal the position was that arbitral proceedings between the petitioner and respondent No. 1 had commenced and an arbitrator had been appointed and in between respondent No. 1 and respondent No. 2 Arbitral Clause had been invoked. In the present matter we really are not concerned with the arbitral process between the respondent No. 1 and respondent No. 2. The appeal preferred came to be dismissed by order dated 30th November, 2002. This Court held that as the arbitral process had commenced, it will be appropriate to stay the arbitral proceedings but allow the parties to agitate their disputes before the chosen forum. The order in appeal was challenged by way of special leave petition in the Apex Court where a statement was recorded before the Apex Court that the arbitrator had passed an award and that respondent No. 1 would be advised to raise all such objections, as may be available to it to be raised, under section 48 of the Arbitration Conciliation Act, 1996. Consequently, the special leave petition was dismissed as withdrawn.

2. The petitioner and respondent No. 2 herein thereafter moved an application dated 30th August, 2003 before the learned Civil Judge, (Senior Division, Thane), where the suit was pending. In the said application it is set out as under :

"It is submitted by the defendant that disputes between the parties having been referred to arbitration, this Hon'ble Court has no jurisdiction to proceed with the suit and entertain any application for interim relief. Arbitration between plaintiff and defendant No. 2 has culminated in an award dated 1st April, 2003 and remedy of the plaintiff is to oppose enforcement of the award as and when it is sought to be enforced under section 48 of the Arbitration Act, 1996. In respect of disputes between plaintiff and defendant No. 1, arbitration has been invoked. The High Court has already held by judgment dated 30th November, 2002 that parties have agreed to arbitration and arbitration must be allowed to proceed. Thus remedy of the plaintiff is before the arbitrator and not this Hon. Court.

In the circumstances, this Hon'ble Court be pleased to hear this preliminary objection of the defendants regarding the jurisdiction of the Court to proceed with the suit or hear any interim application for injunction, restraining enforcement of the arbitration award or attachment before judgment."

The respondent No. 1 filed a reply opposing the grant of the relief as sought for by the petitioner herein and prayed that the application be rejected.

By the impugned order dated 15th September, 2003 the learned Civil Judge rejected the application. The principal contention rais


















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