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2017 Supreme(Online)(KER) 29837

HIGH COURT OF KERALA
P.SOMARAJAN, J
SHRIRAM TRANSPORT FINANCE CO LTD – Appellant
Versus
KHALID K P – Respondent
CIVIL REVISION PETITION 560/2013



Arbitration cannot be used for matters requiring injunctions or declarations of title, which fall under civil court jurisdiction.

Headnote:

Arbitration - Injunction - Arbitration and Conciliation Act, 1996 (Sections 8); Specific Relief Act (Sections 38, 39, 41) - Court found that arbitration cannot adjudicate issues requiring decrees in rem or judgment in rem, specifically those for mandatory or prohibitory injunctions.

Fact of the Case:

The third defendant sought revision against a lower court's refusal to refer the parties to arbitration under the Arbitration and Conciliation Act, citing the absence of a binding arbitration agreement for all defendants.

Finding of the Court:

The court noted that a decree for mandatory injunction to compel payment or for prohibitory injunction barring collection of debts was outside the jurisdiction of arbitration and required civil court adjudication.

Issues: Whether disputes requiring mandatory or prohibitory injunctions can be referred to arbitration under Section 8 of the Arbitration and Conciliation Act.

Ratio Decidendi: The Arbitral Tribunal lacks the authority to pass decrees granting injunctions or declaring rights over immovable property, as these require jurisdiction exclusive to civil courts.

Final Decision: Civil Revision Petition is dismissed.

O R D E R

The third defendant came up with this Revision, aggrieved by the order dated 6.12.2012 in I.A.No.2598 of 2012 in I.A.No.1631 of 2012 in O.S.No.256 of 2012 on the file of the Munsiff's Court, Thalassery.

2. The said application was filed under Section 8 of the Arbitration and Conciliation Act, 1996, (for short 'the Act') for referring the parties to arbitration, based on an arbitration clause in an agreement. It was admittedly filed within the time available for submitting the first statement by the respective defendants. Along with the application, the arbitration agreement was also produced. The lower court has rejected the application mainly on the reason that the first defendant is not a party to the arbitration agreement and hence it is not binding on him. The petitioner relied on the decision in Aerents Goldsouk International Ltd. v. Parthas Textiles (2012 (1) KLT 515) in support of the argument that even in the absence of an arbitration clause operating between all parties to the suit, a reference under Section 8 of the Arbitration and Conciliation Act is possible to the extent of arbitration clause which is binding on some of the parties to the suit and for that purpose, it can be referred and the adjudication of the dispute between the other parties can be done after answering the arbitration and that the lower court has not exercised its jurisdiction based on the legal position settled by the said decision.

3. Before going into the said question, it is relevant to consider whether the reliefs sought would come under the purview of perpetual injunction and mandatory injunction dealt with under Sections 38 and 39 of the Specific Relief Act and whether the hit under Section 41 of the said Act would come into play.

4. The reliefs sought in the plaint are extracted below for reference:

“a) To issue Mandatory injunction directing the 1st defendant to clear the finance amount due to 2nd defendant which 1st defendant has taken in plaintiff's name and also direct the 2nd defendant to collect the finance amount from 1st defendant, which 2nd defendant issued in plaintiffs name by a Mandatory injunction.

b) To issue permanent Prohibitory injunction restraining the 2 to 4 defendants from realizing the finance amount from plaintiffs.

c) Directing the defendants to pay the plaintiffs all the cost of the suit and d) Such other reliefs as the court deem fit to grant under the circumstances of the case.”

5. The first prayer is to issue a mandatory injunction directing the first defendant to clear the amount due to the second defendant. It amounts to seeking a decree by the plaintiffs in favour of the second defendant against the first defendant for recovery of money. It would prima facie show the manner in which the plaintiffs have moulded the reliefs sought for in the plaint. In other words, the plaintiffs are seeking a decree for the second defendant for recovery of the amount due from the first defendant under the guise of a mandatory injunction. The relief sought by way of mandatory injunction further shows that the plaintiffs are also seeking another relief for a declaration that the said amount was taken in the name of the plaintiffs. It is not permissible to mould a relief incorporating several reliefs governed by different fields, though based on same cause of action. A conjoint reading of Rules 7 and 8 of Order VII of the Code of Civil Procedure would show that the reliefs resting on distinct claims or cause of actions founded up on separate and distinct grounds should be claimed separately and distinctly, as far as possible, and it is not permissible to mix up the same so as to bring together in one or two reliefs. The reliefs sought should be specific, clear and unambiguous and should be capable of ascertaining on what claim and grounds raised in the plaint, it really rests.

6. Needless to say, the scope of arbitration is to have a speedy disposal of the matter in dispute. The relief sought for in the plaint is for a per

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