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2018 Supreme(Mad) 3086
IN THE HIGH COURT OF JUDICATURE AT MADRAS
M.S. RAMESH, J.
GALAXY AMAZE KINGDOM LTD REP BY ITS EXECUTIVE DIRECTOR — Appellant
Vs.
S. KOWSALYA — Respondent
Civil Revision Petition No. 2802 of 2018, Civil Miscellaneous Petition No. 16398 of 2018
Decided on : 30-10-2018
Advocate Appeared:
For the Appellant : Prakash Goklaney, S. Ambigapathi, Adv.
Headnote:
Arbitration and Conciliation Act, 1996 - Section 8 - One Time Settlement - Claim Amount - Heard learned counsel for petitioner and learned counsel appearing on behalf of respondent - Petitioner herein is defendant in suit for recovery of money - Petitioner herein had filed an interlocutory application seeking for reference of dispute to arbitration on ground that cause of action in suit revolves around an Arbitration Agreement and in view of Arbitration envisaged therein trial Court is obliged to refer parties to arbitration - Plaintiff had resisted said application stating that claim amount was not based on agreement and that it was on basis of terms of one time settlement arrived at between parties and as such arbitration clause is not applicable - Trial Court on consideration of rival submissions had held that suit was not filed either disputing or touching upon terms of Agreement but it was on basis of compromise proposal entered into between parties and upon cheques stated to have been issued thereafter – Held, There is no dispute with regard to aforesaid proposition - What requires to be established in order to rely upon aforesaid two judgments is that there was in existence an arbitration agreement and that cause of action brought in suit is subject matter of arbitration agreement - When present cause of action for money suit does not arise from terms of arbitration agreement it goes without saying that there is no arbitral issue before Civil Court and that money suit has been laid on default allegedly committed by defendant in honoring terms of Memorandum of One Time Settlement - Hence these judgments would also not help defendant in any way - In result findings can be summed up to effect that money suit by respondent herein was not based on Super Stockiest Agreements and that it was laid based on cause of action that arose in alleged dishonour of cheques issued pursuant to terms of One Time Settlement arrived between parties - In fine present suit can only be termed as a simple money suit for recovery of money due on cheques issued pursuant to recitals in One Time Settlement arrived between parties - Petition stands dismissed.
M.S. Ramesh, J.
Aggrieved against the order passed by the learned III Additional District Judge, Tiruvallur at Poonamallee in I.A.No.86 of 2018 in O.S.No.262 of 2017 dated 01.08.2018, the present Revision has been preferred.
2. Heard Mr.Prakash Goklaney, learned counsel for the petitioner and Mr.S.Ambigapathi, learned counsel appearing on behalf of the respondent.
3. The petitioner herein is the defendant in the suit for recovery of money. The petitioner herein had filed an interlocutory application under Section 8 of the Arbitration and Conciliation Act, 1996 (herein after referred to as the Act) seeking for reference of the dispute to arbitration on the ground that the cause of action in the suit revolves around an Arbitration Agreement dated 06.02.2013 and in view of the Arbitration Clause 31 envisaged therein, the trial Court is obliged to refer the parties to arbitration. The plaintiff had resisted the said application stating that the claim amount was not based on the agreement dated 06.02.2013 and that it was on the basis of the terms of the one time settlement arrived at between the parties and as such, the arbitration clause is not applicable. The trial Court on consideration of the rival submissions, had held that the suit was not filed either disputing or touching upon the terms of the Agreement dated 06.02.2013 but it was on the basis of the compromise proposal entered into between the parties and upon the cheques stated to have been issued thereafter. As such, the petitioner's application filed under Section 8 of the said Act came to be dismissed on 01.08.2018. The challenge in the present revision is as against the dismissal order dated 01.08.2018.
4. Mr.Prakash Goklaney, learned counsel for the petitioner submitted that the very basis of the suit was on the Super Stockist Agreement entered into between them and in view of clause 31 of the said Agreement dated 06.02.2013, the dispute requires reference to arbitration. According to the learned counsel, the very plaint speaks of the agreement as the initial cause of action and as such, the finding of the trial Court that the claim was not on the basis of the Agreement dated 06.02.2013 cannot be countenanced. In support of his submissions, the learned counsel for the petitioner relied upon three judgments of the Hon'ble Apex Court reported in (1) C.A.Nos.8245 & 8246 of 2016 (A.Ayyasamy V. A.Paramasivam & Others), (2)Appeal (Civil) Case No.326 of 2007 [M/s.Agri Gold Exims Ltd., V. Shri Lakshmi Knits & Wovens & Others] and (3) [Branch Manager, Magna Leasing & Finance Ltd., and another V. Potluri Madhavilata & another, (2009) 10 SCC 103].
5. Mr.S.Ambigapathi, learned counsel for the respondent on the other hand reiterated the justification rendered by the trial Court while dismissing the application filed under Section 8 of the Act and submitted that the entire suit for recovery of money was based on the one time settlement arrived at between the parties and in view of the default on the part of the petitioner herein to honour the one time settlement, the suit has been laid. As such, he urged this Court to dismiss the revision.
6. I have given careful considerations to the submissions made by the respective counsels.
7. The basic facts evidenced from the pleadings are that the plaintiff and the defendant company had entered into Super Stockist Agreements dated 06.02.2013 and 04.04.2013 for distribution of certain products in the city of Chennai for a period of five years. In terms of the aforesaid Agreements, the plaintiff and her husband had paid a total sum of Rs. 20 lakhs to the defendant company, towards caution deposit. Thereafter, the business could not be commenced and in response to the demand of the plaintiff to return the amount paid under the terms of the aforesaid Agreements, the defendant had proposed for a One Time Settlement on 14.09.2013 and on the plaintiff's acceptance, he had issued two cheques towards the amount agreed to be settled under the Memor
