Back
2018 Supreme(Cal) 859
IN THE HIGH COURT OF CALCUTTA
NADIRA PATHERYA, J.
Rajda Industries and Exports Private Limited and Others - Appellant
Vs.
Mahesh Kumar Prahladka and Others - Respondent
General Application No. 3059 of 2011; Civil Suit No. 214 of 2011
Decided on : 14-11-2018
Advocate Appeared:
S.N. Mookherjee, Adv., Ratnanko Banerjee, Adv., A.K. Gandhi, Adv., Sounak Sengupta, Adv., Jayanta Kr Mitra, Adv., Ashis Chakraborty, Adv., Tilok Bose, Adv., Rajesh Upadhyay, Adv., Abhrajit Mitra, Adv., Jishnu Chowdhury, Adv., Sarvapriya Mukhrjee, Adv., A.K. Roy, Adv., Shatadeep Bhattacharya, Adv., Sabir Sanyal, Adv., Somnath Bose, Adv.
The main legal principle established is that disputes covered by an arbitration agreement should be referred to arbitration, and reliefs sought in a suit may be encompassed by the arbitration clause, leading to the suit being referred to arbitration.
Headnote:
Arbitration - Disputes in Society - Arbitration and Conciliation Act, 1996 - Section 8
Fact of the Case:
The defendant applicants sought referral of C.S. No. 214 of 2011 to arbitration under the Arbitration and Conciliation Act, 1996, based on an arbitration agreement in the Rules and Regulations of the Chatterjee International Centre (CIC) Society. The plaintiffs had filed the suit seeking a scheme for conducting free and fair elections of the society.
Finding of the Court:
The court found that the disputes raised in the suit were covered by the arbitration agreement, and therefore, should have been referred to arbitration. The reliefs sought in the suit, including management and administration issues, were encompassed by the arbitration clause.
Issues: The main issue was whether the disputes raised in C.S. No. 214 of 2011 should be referred to arbitration based on the arbitration agreement in the Rules and Regulations of the CIC Society.
Ratio Decidendi: The court held that the disputes between the society and its members, in connection with maintenance and administration, were governed by the arbitration clause. The reliefs sought in the suit were found to be covered by the arbitration agreement, and therefore, the suit should have been referred to arbitration.
Final Decision: The court allowed the application under Section 8 of the Arbitration and Conciliation Act, 1996, and directed the referral of C.S. No. 214 of 2011 to arbitration.
PATHERYA, J.
1. This application has been filed under Section 8 of the Arbitration and Conciliation Act, 1996, by the defendant nos.1 to 3 and 5 to 12 for the following reliefs:-
(a) “C.S. No. 214 of 2011 be referred to arbitration of the Arbitrator to be appointed in terms of the CIC Rules and Regulations;
(b) Disputes and claims made in C.S. No. 214 of 2011 be referred to arbitration in the manner as stated hereinbefore;
(c) Order of injunction restraining the plaintiffs from taking any steps or any further steps in C.S. No. 214 of 2011;
(d) Stay of all further proceedings in C.S. No. 214 of 2011;
(e) Ad-interim orders in terms of prayers above;
(f) Costs of this application by paid by the plaintiffs;
(g) Such further or other order or orders and/or direction or directions be given as to this Hon’ble Court may seem fit and proper.”
2. The defendant applicants are Executive Committee members of the Chatterjee International Centre. The Chatterjee International Committee society (Society) was formed under orders passed in C.S. 528 of 1980 by the Calcutta High Court. In September 2011 the owners and occupiers of the said society filed C.S.214 of 2011 for the following reliefs:-
“(a) A Scheme be framed for convening and conduct of free and fair election of CIC Society after taking into consideration the following factor:-
(i) There should be specific Rule for issuance of notice of election in advance to each of the members/flat owners. The notice period should not be less than 21 days. Provision for nomination of new committee members through process of proposing and seconding.
(ii) Thereafter distribution of ballot papers list of members / owners / occupiers showing area proxy form along with notice of meeting.
(iii) Dates for withdrawal of nomination filed.
(iv) Conduct of election through secret ballot such that votes are cast in accordance with Rule 6.
(v) Provision for a neutral, independent Chairperson to conduct the election process.
(vi) Opportunity of free and fair attendance of each member and their right to freely express their views at the election meeting and recording of the same by way of minutes.
(vii) Counting of votes under independent scrutinizers immediately after the election, followed by declaration of result.
(viii) Rules for maintenance of a membership register reflecting the names of each and every flat owner who is paying maintenance charges. The membership register should also reflect the area owned by each flat owner and should be open during fixed hours every day for inspection by all members.
(b) An independent person be appointed to conduct free and fair election of CIC Society on or before 30th September, 2011 or such other date as this Hon’ble Court may deem fit and proper, which person will conduct election after taking into consideration all the factors set out in prayer (a) above;
(c) Perpetual injunction restraining the defendant Nos. 1 to 12 from conducting election of CIC Society or interfering with the election so conducted.
(d) Perpetual injunction restraining the defendant Nos. 1 to 12 from interfering with the affairs of the CIC Society as also dealing with the moneys lying in the bank account or CIC Society or otherwise holding themselves out as members of Executive Committee;
(e) Mandatory injunction directing the defendant No.15 CESC Ltd. to forthwith take over the common electrical installation at 33, Jawaharlal Nehru Road, Kolkata, including the high tension transformer, LT Panel, Air Circuit Braker, Oil Circuit breaker, H.T. Cables, L.T. Panels and Sub meters installed thereat and thereafter provide separate connection to each of the flat owners and distribute the security deposit amongst the flat owners in accordance with the area owned by each flat owner;
(f) Perpetual injunction restraining the defendant Nos. 1 to 12 from interfering with taking over of the common facilities and installation of CESC meters and providing separate electricity connection to all the flat owners;
(g) An enquir
