The main legal point established in the judgment is that for an arbitration agreement to be invoked under Section 8 of the Arbitration and Conciliation Act, 1996, it must exist between the parties, and the court must refer the parties to arbitration if the prerequisite conditions are satisfied.

Vivek Singh Thakur, J.

Plaintiff has filed a suit for recovery of Rs.2,68,99,050/- for payment made to defendant in pursuance to the Commercial Buyers Agreement (herein after referred to as Buyer’s Agreement) dated 23.11.2007 on account of failure of defendant to handover the possession of shop in question booked by the plaintiff and execution of the title deed thereof.

2. On receiving notice, defendant, before filing written statement, has moved present application for referring the parties to arbitration on the basis of arbitration clause in terms and conditions for allotment and sale of a shop/showroom/anchor store/multiplex/food court/hotel/restaurant etc. in the proposed shopping-cum-multiplex named as ‘Home Land City Mall’ at village Kalyanpur, Sai Chakkan Road, Baddi (Himachal Pradesh) (herein after referred as terms and conditions for allotment and sale), annexed to the application form submitted by the applicant at the time of applying for allotment of shop on 10.11.2006, claiming that the said terms and conditions stand incorporated in buyers agreement, as agreed by the parties in the said agreement.

3. Plaintiff has objected referring the dispute to the arbitrator on the ground that Buyer’s Agreement is independent of terms and conditions for allotment and sale and there is no arbitration agreement existing between the parties after execution of Buyer’s Agreement, as the terms and conditions for allotment and sale has lost their force after allotment of shop, more particularly after execution of Buyer’s Agreement, comprehensively dealing with all issues between the parties.

4. I have heard learned counsel for the parties and have also gone through the terms and conditions for allotment and sale and contents of Buyer’s Agreement.

5. It is undisputed in present case that the space has been allotted to the applicant and Buyer’s Agreement has been executed between the parties on making of payment of earnest money as required according to terms and conditions for allotment and sale. In operative portion of Buyer’s Agreement before terms and conditions agreed by and between the parties, it has been agreed as under:-

“And Whereas a Proper Agreement of Sale on standard format of the Promoter, is being executed now incorporating all the details embodied in the application and terms and conditions of sale, which shall form part and parcel of this Commercial Premises Buyer’s Agreement.”

6. Contention of plaintiff is that the terms and conditions which have been incorporated in Buyer’s Agreement are only to be considered as part and parcel of this agreement and it was never intention of the parties to have arbitration clause in this agreement and therefore, deliberately arbitration clause was not incorporated in this agreement and only clause 53 providing the jurisdiction of Himachal Pradesh High Court at Shimla and its subordinate Courts in Himachal Pradesh to resolve the dispute arising out of concerning this transaction and/or touching such transaction, has been incorporated, which reads as under:-

“53. That the Himachal Pradesh High Court at Shimla and Courts in Himachal Pradesh subordinate to it, alone shall have jurisdiction in all matters arising out of, touching and/or concerning this transaction.”

7. It is stand of defendant that by virtue of operative part referred herein above, all the details embodied in the application and terms and conditions of allotment and sale are part and parcel of the Buyer’s Agreement. Defendant has also relied upon clause 27 of the terms and conditions for allotment and sale, which provides merger of the terms and conditions into the Buyer’s Agreement upon the execution of the same.

8. In alternative, it is contended on behalf of plaintiff that even if terms and conditions for allotment and sale are considered to be part and parcel of Buyer’s Agreement, then also it was never intention of parties to refer the dispute solely to the arbitration for its resolution, but there was an option ava