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High Court Of Calcutta
SALIL KUMAR ROY CHOWDHURY
CHAMPA PICTURES - Appellant
Versus
MD.IBRAHIM CHAMOO - Respondent
Matter 156 Of 1980
Decided On : 05/21/1980
ARBITRATION - STAY OF SUIT - ARBITRATION CLAUSE - WIDE AND ALL-PERVASIVE - DISPUTES COVERED BY ARBITRATION CLAUSE - STAY GRANTED.
Fact of the Case:
The petitioner and respondent entered into an agreement on February 4, 1970, whereby the petitioner agreed to exclusively supply and exhibit sound motion pictures at the respondent's cinema house. The agreement contained a wide and all-pervasive arbitration clause. The respondent filed a suit against the petitioner, alleging undue influence, misrepresentation, and other grounds to avoid the agreement. The petitioner applied for a stay of the suit under Section 34 of the Arbitration Act, 1940.
Finding of the Court:
The court found that the entire subject-matter of the suit was covered by the arbitration agreement and that all the conditions under Section 34 of the Arbitration Act, 1940, were satisfied. The court also found that the respondent's conduct was lacking in commercial morality and that he was attempting to avoid the consequences of the arbitration clause by adding extraneous matters to the plaint.
Issues: Whether the entire subject-matter of the suit was covered by the arbitration agreement.
Ratio Decidendi: The court held that the entire subject-matter of the suit was covered by the arbitration agreement, as the allegations of undue influence and unconscionable bargain were immaterial for the purpose of deciding the main dispute between the parties and appeared to be added only to avoid the arbitration clause. The court also held that the arbitration clause was wide enough to decide the disputes which were the subject-matter of the suit.
Final Decision: The court granted a stay of the suit until the reference to arbitration under the arbitration clause in the contract was concluded.
( 1 ) THIS is an application under Section 34 of the Arbitration Act, 1940, for stay of a suit being Suit No. 1004 of 1979 (Md, Allias Chamoo v. M/s. Champa Pictures ).
( 2 ) THE admitted facts are that the respondent is a lessee of National Talkies situated at No. 12/3, Watgang Street, Kidderpore, Calcutta. The petitioner had transactions with the respondent by which it advanced loans to the respondent from time to time pursuant to an agreement dated the 1st of Feb. , 1966. It appears that up to 30th of Jan. , 1970, a sum of Rs 1,69,452. 26 p. became due and payable by the respondent to the petitioner. Thereafter, by an agreement dated the 4th of Feb. , 1970, the petitioner entered into an agreement with the respondent by which the respondent irrevocably agreed to give the petitioner exclusively business of supplying and exhibiting sound motion pictures at the said cinema house of the respondent with effect from 1st of Feb. , 1970, for and during the entire period of the lease between the respondent and his lesson. The said agreement between the petitioner and the respondent contained various terms and a copy of it is annexed to the petition being annexure "a". It appears that pursuant to the said agreement between the respondent and the petitioner dated 4th of Feb. , 1970, the petitioner paid the monthly amounts specified therein for the periods and the petitioner would be in sole charge of the box office collection of the said cinema house and shall have the exclusive right to receive the same with the assistance of such staff as be found necessary by the petitioner and collections and receipts from the said box office of the said cinema house from whatever source shall be received and taken by the petitioner. The said agreement was worked out for about last ten years and the petitioner also submitted the statements to the respondent, copies of which the respondent duly accepted without any objection by signing a copy of the same with the rubber stamp of his cinema house. It appears that such statement was submitted up to Sep. , 1978, and originals of the same were produced before the Court. It further appears that the said agreement dated the 4th of Feb. . 1. 970, under which the parties had dealings and transactions was duly signed by the respondent in English and attested by five persons and the document itself appears, to be drafted by lawyer and carefully drawn with all the conditions agreed to between the parties. Further it now appears that the respondent filed the said suit being Suit No. 1004 of 1979 on or about 24th of Dec. , 1979, and it appears that the respondent also filed an application under Section 20 of the Arbitration Act, 1940, on the 25th of Feb. , 1980 in the first sitting "of the Court and on the very same day, that is, 25th of Feb. , 1980, a notice of motion was served by the respondent on the petitioner at about 3. 30 p. in making an application in the said suit tiled by the respondent which was made returnable on the 26th of Feb. , 1980. Thereafter, on the 27th of Feb. , 1980, the present application was moved and an interim order was passed in the presence of the respondent and directions for filing affidavits were given.
( 3 ) FROM a copy of the plaint filed by the respondent which was handed over in court, it appears that the said suit is based on the agreement dated the 4th of Feb. , 1970, between the parties which contained a wide and all pervasive arbitration clause. I have carefully analysed the plaint from which it appears and in fact Mr. P. K. Das, appearing for the respondent, admitted that up to paragraphs 16 the disputes raised are in respect of the agreement dated 4th of Feb. , 1970, and it may be said to be covered by the arbitration clause in the agreement but the rest of the said plaint which alleges undue influence, misrepresentation etc. are dehors the said agreement dated the 4th of Feb. , 1970 and as such outside the scope of the said arbitration cl
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