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2014 Supreme(All) 735

ALLAHABAD HIGH COURT
BEFORE : PANKAJ MITHAL, J.
BHARAT SANCHAR NIGAM LIMITED AND OTHERS ...Petitioners
Versus
ASHOK KUMAR .....Respondents
(Civil Misc. Writ Petition No. 53261 of 2012, decided on 11th April, 2014)

Advocates:
Counsel :
Suneet Kumar and Devi Shankar Shukla for the Petitioners; Ashok Kumar Pandey for the Respondents.

Headnote:Arbitration and Conciliation Act, 1996—Sections 8 and 16(1)—Contract Act, 1882—Section 62—Arbitration—Reference—Application for—Rejection of—Whether there is arbitration clause in agreement—Dispute in relation thereto arises between parties—An action in connection thereto is brought in a Civil Court—Court has to refer dispute to arbitration under Section 8—When agreement comes to an end—Whether arbitration clause contained therein perishes—Held no arbitration clause contained there continues to remain inforce—When cause of action in suit does not relate to said agreement—Therefore, not referable under Section 8.

        [Paras 12, 15 and 16]

JUDGMENT

Hon’ble Pankaj Mithal, J.—Petitioners (hereinafter in short ‘BSNL’) through its Regional Manager have challenged the order of the Civil Judge dated 3.3.2012 passed in Original Suit No. 206 of 2011 by which the application of the BSNL under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”) has been rejected and the order dated 29.8.2012 passed by the Additional District Judge dismissing the revision arising therefrom.

2. The BSNL entered into an agreement on 14.6.2005 with the respondent Ashok Kumar (hereinafter “Ashok Kumar) who is the owner and landlord of a plot of land of 100 sq. meters of Kharsra No. 166 situate in Ukhlarsi, Muradnagar, Pargana Jalalabad, Tehsil Modi Nagar, district Ghaziabad for the use of the aforesaid land for a period of five years w.e.f. 14.5.2005 till 13.5.2010 on a rent of Rs. 2,400/- per month for installation of a telecommunication tower. On the expiry of the above period BSNL was supposed to hand over the possession of the land to Ashok Kumar.

3. The aforesaid agreement, inter alia, vide clause 17 provides that if at any time any dispute or difference in respect of right, duties and liabilities of parties arise between them the same shall be referred to the sole arbitration of the Chief General Manager, Telecom, U.P. (West) Meerut.

4. The agreement expired on 13.5.2010. It was not extended or renewed. On the expiry of the agreement period, BSNL failed to vacate the said plot and handover its possession to Ashok Kumar. Thus, Ashok Kumar instituted Original Suit No. 206 of 2011 for a decree of possession after evicting BSNL from the said land and for damages at the rate of Rs. 1000/- per day for the use and occupation of the said land w.e.f. 14.5.2010.

5. In the said suit, BSNL moved application under Section 8 of the Act contending that in view of arbitration clause contained in the agreement the dispute be referred to arbitration. The said application was rejected by the Court below holding that the agreement containing arbitration clause has come to an end and, therefore, the dispute is not liable to be referred to arbitration. The order has also been affirmed in revision.

6. I have heard Sri Devi Shankar Shukla, learned counsel for the BSNL and Sri Ashok Kumar Pandey, learned counsel appearing for Ashok Kumar both of whom agreed for final decision of the petition for the reason that no factual dispute is involved in it and the pleadings exchanged between the parties are sufficient.

There are no two opinions that where there is an arbitration clause in an agreement and a dispute in relation thereto arises between the parties in and an action in connection thereto is brought in a Civil Court, the Court has no option but to refer the dispute to the arbitration under Section 8 of the Act.

7. A reference in this regard may be had to Agri Gold Exims Ltd. Sri Lakshmi Knits & Wovens and others, 2007 (3) SCC 686 and Hindustan Petroleum Corporation Ltd. Pinkcity Midway Petroleums, (2003) 6 SCC 503, wherein it was laid down that Section 8 of the Act is peremptory in nature and where an arbitration clause exists, the Court is obliged to refer the parties to arbitration in terms of the said agreement and once an application under Section 8 of the Act is filed the Civil Court has no jurisdiction to continue with the suit.

8. On the submission of counsel for the parties, only two points arise for consideration in this writ petition; namely:

(i) whether with the agreement coming to an end, the arbitration clause contained therein perishes with it; and

(ii) whether the dispute raised by Ashok Kumar in the suit is covered by the aforesaid arbitration clause so as to necessitate its reference to the arbitration under Section 8 of the Act.

The first point which falls for consideration is whether on the agreement having lapsed or to come to an end, the arbitration clause therein survives or not.

9. The above point is no longer res intigra as His Lordship of the S












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