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2006 Supreme(Ker) 646

Judges : R.BASANT
Afcons Infrastructure Limited - Appellant
Versus
Cherian Varkey Construction Co.(P) - Respondent
Case No : CRP No. 1219 of 2005
Decided On : 10/11/2006
Advocates Appeared :
For the Petitioners: M. Ramesh Chander, Advocate. For the Respondents: L. Varghese, Advocate.

Headnote:

Code of Civil Procedure, 1908 - Sections 9 and 89 - Arbitration and Conciliation Act, 1996- Sections 7 and 8 - Suit filed for realisation of money filed by the plaintiff, the first respondent herein - Defendants 1 and 2 in the suit are the petitioners - They had entered into an agreement with defendants 3 and 4 relating to the work of construction of Bridges - Defendants had entered into an agreement with the plaintiff, under which the plaintiff was to perform some part of that work as sub-contractors under defendants, the work was performed - There was a dispute about the amounts payable to the plaintiff by defendants - The plaintiff came to court with the plea that further amounts were due - Amounts were about to be paid by defendants 3 and 4 to defendants 1 and 2 - Before such amounts were actually released, the plaintiff came to court with the suit - The plaintiff prayed that defendants may be directed to pay amounts to him - He prayed that there may be an attachment prior to judgment pending the suit under O.38 R. 5. Interim ex parte order of attachment was granted - Defendants 1 and 2 entered appearance - Their prayer to vacate the interim order of attachment was rejected - Held, Except by holding S.89 to be constitutionally unsustainable by judicial review -distinguishing arbitration from other methods by interpretation does not appear to be permissible or possible - It would not be proper to introduce the requirement of separating arbitration from the other three modes because of the traditional understanding of the concept of arbitration - Revision Petition dismissed.

Judgment :-

Does the law, even after the introduction of amended Section 89 into the Code of Civil Procedure, permit, tolerate or enable the court to compulsorily refer the parties to arbitration even without their consent and against their volition? This is the question that is mooted for consideration in this Revision.

2. When the question was raised initially by the learned counsel, Sri.K.L.Varghese, it was considered ridiculous and blasphemous that the court can even think of having such a power. Having heard the counsel in detail, I am satisfied that the question deserves to be considered in depth.

3. To the vital facts first. The suit is one for realisation of money filed by the plaintiff, the first respondent herein. Defendants 1 and 2 in the suit are the petitioners before me. They had entered into an agreement with defendants 3 and 4 relating to the work of construction of Goshree Bridges to link Cochin City with the Vypeen Islands. They, i.e. defendants 1 and 2, had entered into an agreement with the plaintiff, under which the plaintiff was to perform some part of that work as sub contractors under defendants 1 and 2. The work was performed. Certain amounts were paid to defendants 1 and 2 by defendants 3 and 4. Some amounts were paid to the plaintiff by defendants 1 and 2 for the work done. There was a dispute about the amounts payable to the plaintiff by defendants 1 and 2. The plaintiff came to court with the plea that further amounts were due. Amounts were about to be paid by defendants 3 and 4 to defendants 1 and 2. Before such amounts were actually released, the plaintiff came to court with the suit. The plaintiff prayed that defendants 1 and 2 may be directed to pay amounts to him. He prayed that there may be an attachment prior to judgment pending the suit under Order 38 Rule 5. Interim ex parte order of attachment was granted. Defendants 1 and 2 entered appearance. Their prayer to vacate the interim order of attachment was rejected.

4. At that stage, defendants 1 and 2 came to this court and contended, inter alia, that the suit is not maintainable at all. They contended that the suit was liable to be referred for arbitration under Section 8 of the Arbitration and Conciliation Act, hereinafter referred to as `the '1996 Act'. The plaintiff must get the dispute resolved by arbitration. If at all any interim relief can be claimed, it can be claimed only under Section 9 of the 1996 Act, it was contended. The interim attachment was liable to be vacated, it was pleaded.

5. A Division Bench of this court considered the challenge. The challenge was turned down and the F.A.O. was disposed of with directions. But certain observations were made. By then a fresh application had been filed by the plaintiff before the learned Subordinate Judge, under Section 89 of the C.P.C. for referring the parties for arbitration. The Division Bench disposed of the F.A.O. with certain observations. The order of attachment was modified, subject to conditions. That modification is not relevant for the purpose of this C.R.P. The Division Bench proceeded to make the following observations in paragraphs 4 to 6, which I extract below.

"4. Then it is submitted that an application under Section 89 of the Code of Civil Procedure has been filed before the trial court. As per the amended C.P.C. importance is given in civil cases for settlement outside the court. As per the said section after hearing both sides, if the trial court feels that the matter can be settled or can be referred to arbitration, conciliation etc. it may order so. We are told that an application under Sec.89 is filed for referring the matter to the Arbitrator for adjudication.

5. Considering the fact that the case had arisen out of a work contract it is only just that such matters are decided by an Arbitrator. Therefore we feel that the court below shall consider the application filed under Sec.89 in the true spirit so that it can give effect to the intention of the legislature unde































































































































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