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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
KAUSHIK GOSWAMI, J.
Kailash Prasad Jain S/o Late Madanlal Jain – Petitioner
Versus
Lalbiakzama S/o L.T. Zauva – Respondent
CRP No. 9 of 2023, IA (Civil) No. 101 of 2023
Decided On : 11-09-2024
Arbitration - Civil Suit - Code of Civil Procedure, 1908; Arbitration and Conciliation Act, 1996 - The court discussed the arbitration clause in the MoUs and the necessity of referring disputes to arbitration before pursuing civil litigation, emphasizing the binding nature of arbitration agreements.
Fact of the Case:
The respondent/plaintiff filed a civil suit against the petitioner/defendant despite an arbitration clause in the MoUs, which required disputes to be referred to arbitration before any legal proceedings could commence.
Finding of the Court:
The court found that the trial court's order maintaining the suit was erroneous as the petitioner/defendant had not filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 to enforce the arbitration clause.
Issues: Whether the civil suit was maintainable given the existence of an arbitration agreement in the MoUs.
Ratio Decidendi: The court held that parties must adhere to arbitration agreements and cannot initiate civil proceedings without first referring the matter to arbitration as stipulated in the MoUs.
Result: The civil revision petition was disposed of, allowing the petitioner to file an application under the Arbitration and Conciliation Act.
ORDER :
1. Heard Mr. Lalchhanliana Khiangte, learned counsel appearing for the petitioner/ defendant. Also heard Mr. B. Lalramenga, learned counsel appearing for the sole respondent/plaintiff.
2. This Civil Revision Petition has been filed under Section 115 of the Code of Civil Procedure, 1908 read with Article 227 of the Constitution of India assailing the Order dated 21.04.2023 passed by the Court of learned Senior Civil Judge-IV, Aizawl Judicial District, Aizawl in Civil Suit No. 7/2022, whereby the Trial Court was pleased to maintain the Civil Suit with a direction to the petitioner/defendant to file written statement.
3. The facts of the case is as follows:
However, the respondent/plaintiff filed Civil Suit No. 7 of 2022 at Aizawl against the petitioner/defendant without impleading JM Fiscal Services Ltd. and Rarity Agencies Ltd., Kolkata in gross violation of the Arbitration clause. The petitioner/defendant filed preliminary objection before the learned Court below and vehemently objected entertainment and further proceedings of the case as being barred by Arbitration clause in the MoUs. However, the learned Senior Civil Judge-IV was pleased to maintain the case vide Order dated 21.4.2023. Hence, this revision petition.
4. Mr. Lalchhanliana Khiangte, learned counsel for the petitioner/defendant submits that in view of the Arbitration Clause in the MoUs dated 11.02.2017 and 19.03.2018, the suit filed by the respondent/plaintiff is not maintainable and accordingly, upon receiving summons from the Trial Court, a written objection was filed before the Trial Court wherein the issue of maintainability of the suit was raised as a preliminary issue. He, accordingly, submits that the order of the Trial Court rejecting the said issue raised as regards the maintainability of the suit in view of the existence of an arbitration agreement is totally erroneous and the same is ought to be interfered with by this revisional Court.
5. Per contra, Mr. B. Lalramenga, learned counsel for the respondent/plaintiff submits that there is no jurisdictional error whatsoever in the order of the Trial Court dated 21.04.2023 holding the suit maintainable and therefore, the said order of the Trial Court warrants no interference whatsoever from this Court while exercising revisional jurisdiction under Section 115 of the Code of Civil Procedure.
6. He further submits that the petitioner/defendant has neither filed any appropriate application under Section 8 of the Arbitration and Conciliation Act, 1996 nor filed any application under Order VII Rule 11 of the Code of Civil Procedure for rejection of the plaint and therefore, cannot in this revision petition argue that the suit is not maintainable due to existence of the arbitration clause in the subject MoUs. He further submits that the dispute raised in the suit is not covered under the Arbitration agreement.
7. I have heard the learned counsels for the parties and I have perused the materials available on record.
8. Before proceeding with the arguments made by the contesting parties apt to refer to the plaint filed in Civil Suit No. 7/2022. It appears that the said suit has been fi
Parties must comply with arbitration agreements before pursuing civil litigation, as per the Arbitration and Conciliation Act, 1996.
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Rejection of plaint – When a statute prescribes to do certain thing in a certain manner, the thing has to be done in same manner or not at all – All other modes are expressly forbidden.
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