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2021 Supreme(Bom) 948

IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD
N.J. Jamadar, J.
Tanzeem Shakil Ahmed Siddiqui - Appellant
Versus
Shailesh Nemichand Kasliwal - Respondent
Writ Petition No. 1977 of 2019, 1980 of 2019
Decided On : 23-03-2021

Advocates appeared:
A.D. Kasliwal, Advocate, P.F. Patni, Advocate

Disputes capable of being adjudicated by the Civil Court are generally amenable to arbitration, unless expressly excluded. The importance of appointing an eligible arbitrator was also emphasized.

Headnote:

Arbitration - Special Civil Suit - Arbitration and Conciliation Act, 1996, Section 8 - Summary

Fact of the Case:

The plaintiff sought possession of a property based on an agreement, while the defendant invoked arbitration clause in the agreement.

Finding of the Court:

The Court found that the dispute fell within the scope of the arbitration clause and referred the parties to arbitration. However, the named arbitrator was found to be ineligible, and a retired judge was appointed as the arbitrator.

Issues: Interpretation of the arbitration clause, arbitrability of the dispute, and appointment of an arbitrator.

Ratio Decidendi: The Court emphasized that disputes capable of being adjudicated by the Civil Court are generally amenable to arbitration, unless expressly excluded. It also highlighted the importance of appointing an eligible arbitrator.

Final Decision: The order referring the parties to arbitration was confirmed, but the order of referral to arbitration by the named arbitrator was set aside, and a retired judge was appointed as the arbitrator.

JUDGMENT

N J Jamadar, J. - The petitioners/original plaintiffs assail the orders passed by the learned 8th Joint Civil Judge, Senior Division, Aurangabad dated 8th January, 2019, in Special Civil Suit Nos.286 of 2017 and 287 of 2017, whereby the parties to the suits were referred to arbitration by invoking the provisions contained in Section 8 of the Arbitration and Conciliation Act, 1996 [hereinafter referred to as "the Act, 1996" for short].

2. As an identical issue arises for consideration in both the petitions in the light of almost identical facts, these petitions are decided by this common judgment. The facts in Writ Petition No.1977 of 2019 are noted as the facts in the lead petition.

3. The petitioner/plaintiff instituted Special Civil Suit No.286 of 2017 seeking possession of Row House No.16, admeasuring 112.04 sq.mtr. in Hare Rama Hare Krishna Co-operative Housing Society Ltd., Scheme "Blue Bells", situated at Chikalthana Industrial Area, Aurangabad [suit premises] on the premise that the defendant had assigned the suit premises by executing registered "agreement to assign/transfer" dated 14th March, 2016 for a valuable consideration of Rs.38,89,501/-. The plaintiff averred that under the terms of the said agreement, the defendant was under an obligation to put the plaintiff in vacant and peaceful possession of the suit premises. However, the defendant, failed to put the plaintiff in possession of the suit premises on one or other pretext. Since the defendant was not having alternate residential accommodation, when the suit agreement came to be executed, the plaintiff allowed the defendant to occupy the suit premises temporarily. The defendant, taking undue advantage of the said gesture on the part of the plaintiff, refused to deliver possession of the suit premises, despite having received the entire consideration. Hence, the suit for possession.

4. The defendant appeared in response to the suit summons. The defendant preferred application [Exh.17] purported to be under sections 5 and 8 of the Act, 1996 and, inter alia, prayed that the parties be referred to arbitration in terms of clause 21 of the suit agreement.

5. The plaintiff resisted the prayer for referral to the arbitration on the ground that the cause of action and prayer in the suit are beyond the scope of arbitration clause, contained in the suit agreement. The dispute is not arbitrable.

6. The learned Civil Judge, after considering the rival submissions, was persuaded to allow the application. The Court was of the view that all the prerequisites for referring the parties to arbitration envisaged by section 8 of the Act, 1996 were made out, namely, there was an arbitration clause in the agreement; one party to the agreement had brought an action against the other; the subject matter of the action is the same as the subject matter of the said agreement and the defendant had moved the Court for referring the parties to arbitration before he submitted his first statement on the substance of the dispute.

7. Being aggrieved by the impugned order referring the parties to arbitration, the petitioners/plaintiffs have invoked the writ jurisdiction of this Court.

8. I have heard Mr.A.D. Kasliwal, learned Counsel for the petitioners, and Mr.P.F. Patni, learned Counsel for the respondents.

9. Mr. Kasliwal, learned Counsel for the petitioners mounted a multi-fold challenge to the impugned order. Firstly, according to Mr. Kasliwal, the Trial Court clearly mis-directed itself in construing the nature of the agreement. The suit agreement is a concluded contract. The entire consideration was parted with by the plaintiff. The plaintiff was, in-fact, put in possession of the suit premises under the suit agreement. Thus, nothing remained to be performed under the terms of the suit agreement. What the plaintiff claims is the recovery of possession of the suit premises, which the plaintiff allowed the defendant to temporarily occupy gratuitously. The said dispute thus does not arise ou

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