2018 Supreme(Pat) 1499
IN THE HIGH COURT OF JUDICATURE AT PATNA
Chakradhari Sharan Singh, J.
Om Astha Construction Pvt. Ltd. – Appellant
Versus
Axon Construction Pvt. Ltd. – Respondent
Civil Miscellaneous Jurisdiction No. 1156 of 2016
Decided On : 21-06-2018
For the Appellant :Mr. S.D. Sanjay, Sr. Advocate with Mr. Sheo Narayan Singh, Advocate
For the Respondent:Mr. P.K. Shahi, Sr. Advocate with Mr. Rajan Ghoshrave, Advocate, Mr. Manish Kumar and Mr. Ajay Kumar, Advocates
The accompaniment of a duly certified copy of the original arbitration agreement with the application under Section 8(1) of the Act satisfies the requirement of Section 8(2) of the Act, and the acceptance of the existence of the written arbitration agreement estops a party from questioning its existence.
Headnote:
Arbitration Agreement - Civil Miscellaneous Case - Arbitration and Conciliation Act, 1996 - Section 8(2)
Fact of the Case:
The petitioner sought to quash an order directing the parties to appear before an arbitrator in a title suit. The petitioner claimed there was no written arbitration agreement and the documents produced by the respondents were forged and fabricated. The respondents asserted the existence of an arbitration agreement and the appointment of an arbitrator, who had already made an award in their favor.
Finding of the Court:
The court found that the respondents had produced a duly certified copy of the arbitration agreement, satisfying the requirement of Section 8(2) of the Act. The petitioner's acceptance of the existence of the arbitration agreement and the deliberate suppression of facts led the court to dismiss the application with costs.
Issues: The main issue was the existence of a valid arbitration agreement and the compliance with Section 8(2) of the Arbitration and Conciliation Act, 1996.
Ratio Decidendi: The court held that the accompaniment of a duly certified copy of the original arbitration agreement with the application under Section 8(1) of the Act satisfies the requirement of Section 8(2) of the Act. The petitioner's acceptance of the existence of the written arbitration agreement estopped them from questioning its existence.
Final Decision: The application was dismissed with a cost of Rs. 20,000 to be paid by the petitioner to respondent no. 1.
Chakradhari Sharan Singh, J.
This Civil Miscellaneous case has been filed under Article 227 of the Constitution of India, seeking quashing of the order, dated 04.06.2016, passed by learned Sub-Judge-2, Patna, whereby he has asked the parties to the said title suit to appear before the sole Arbitrator at Chennai and place their case. The petitioner has also sought for a direction to the court below to determine first as to whether there is any arbitration agreement among the parties expressly accepting for resolution of a dispute by an Arbitrator or not. It is the case of the petitioner that in fact there is no arbitration agreement between the parties within the meaning of the provisions under the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act'), and, therefore, there would have been no occasion for the trial Court to have asked the parties to appear before the Arbitrator.
2. I have heard Mr. S. D. Sanjay, learned Senior Counsel, for the petitioner assisted by Mr. S.N.Singh, learned Counsel and Mr. P.K. Shahi, learned Senior Counsel appearing on behalf of the contesting respondents assisted by Mr. Ranjan Ghoshrave, learned Counsel.
Case of the petitioner
3. The petitioner is a Private Limited Company carrying on its Infra business & Construction works on contract basis at different sites within and outside the State of Bihar. One of its working sites was at Village-Uchhpinda, P.SKharasiya, District-Jajgir-Champa (Chhatisgarh). The Respondent No.1, Axon Construction Pvt. Limited and Respondent No.8, R.K.M. Powergen Pvt. Ltd are sister concern Companies. The Respondent No.8 had entered into a contract agreement with respondent No.1 for civil construction work for the packages which formed part of the Power Plant, viz, (i) Coal-Shed (ii) Road works which included canal road, Plant Internal Roads & PWD Road rectification works at the said Village-Uchhpinda in Chhatisgarh. The Respondent No.1 in order to execute the work, sublet the same to the petitioner and asked the petitioner to execute the work on their behalf. The understanding between Respondent No.1 and the petitioner to get the work executed through the petitioner was followed by work orders issued by the Respondent Nos. 1 and 2 for four works, which was communicated to the petitioner through email. The work orders have been brought on record by way of Annexure-1 series to this application. The work orders contained several general conditions including the following in Clause 28 of the General Conditions:-
"28. In the event of any difference or dispute out of or in connection with this work order, the same shall be first amicably settled by mutual dialogue, if the parties fall to settle their difference or dispute arising out of or in connection with this work order (including interpretation of the term thereof), the same shall be referred to arbitration. The Arbitration proceedings shall be conducted by a Sole Arbitrator appointed by the Managing Director of Axon and the award/decision of such arbitrator shall be final and binding upon both the parties. The 'venue of the arbitration shall be Chennai, Tamil Nadu. However, the Contractor will not stop the work during the tendency of the proceedings and shall ensure that work is proceeds uninterruptedly."
4. It is the case of the petitioner that there was no written agreement signed between the parties containing any specific terms and conditions including any arbitration agreement and in view of the oral understanding to do the work followed by the work orders describing the exact nature of the work, the petitioner installed its plant, machineries, equipments and aggregates. The petitioner is said to have requested Respondent No.1 for payment of mobilization advance of a sum of Rs. 1,35,00,000/-(One crore & thirty five lacs) when, in turn, Respondent No.1 requested the petitioner to furnish Bank Guarantee against the said amount, of Rs. 1,35,00,000/- as security for mobilization advance. The