22 July 2019


Judgments

High Court of Himachal Pradesh

Pavel Garg Vs. Sunil Sood

MANU/HP/1072/2017

28.12.2017

Arbitration

Once an application under Section 8 of Arbitration and Conciliation Act, 1996 has been filed, Civil Court has no jurisdiction to continue with the suit

Plaintiff has filed a suit for recovery of Rs. 2,31,34,553/- for payment made to Defendant in pursuance to the Commercial Buyers Agreement (Buyer's Agreement) dated 23rd November, 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. On receiving notice, Defendant, before filing written statement, has moved present application for referring the parties to arbitration.

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.

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 the present case, arbitration agreement does not exist between the parties and therefore, for want of pre-requisite conditions for invoking Section 8 of the Arbitration and Conciliation Act, 1996, application of Defendant must fail. Section 7 of the Arbitration And Conciliation Act, 1996 says that, arbitration agreement means an agreement by the parties to submit all or certain dispute to arbitration which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not and the said agreement shall be in writing and may be in the form of arbitration clause in a contract or in the form of a separate agreement signed by the parties.

There is no quarrel on the settled position of law that, where arbitration clause exists in the agreement, therefore, Court has a mandatory duty to refer dispute arising between the contacting parties to arbitration and Civil Court has no jurisdiction to continue with the suit, once an application under Section 8 of the Act, 1996 has been filed.

In Buyer's Agreement, it is specifically stated that, proper agreement of sale on standard format of Promoter is being executed now incorporating all the details embodied in the application and terms and conditions for allotment and sale which shall form part and parcel of this Commercial Premises Buyer's Agreement and thereafter terms and conditions agreed by and between the parties have been embodied. Contention of Defendant that, by virtue of this operative clause, all terms and conditions for allotment and sale have automatically become the part of the Buyer's Agreement, even without having specific reference a formal incorporation is not sustainable as language of relevant operative part of Buyer's agreement is unambiguously making it clear that only those details, embodied in the application and terms and conditions of sale, shall form part and parcel of the Buyer's Agreement, which are now being incorporated by executing this proper agreement of sale on standard format of promoter.

In the facts and circumstances of the case, terms and conditions for allotment and sale were alive and applicable till the allotment made by the promoter/Defendant and execution of Buyer's Agreement between the parties, thereafter it is the Buyer's Agreement which is in existence after merging the terms and conditions for allotment and sale in it, as agreed upon between the parties in the Buyer's Agreement. Therefore, arbitration clause of terms and conditions for allotment and sale shall not become part and parcel of the Buyer's Agreement automatically. Therefore, in the Buyer's Agreement, arbitration clause, which is pre-requisite condition for invoking the provisions of Section 8 of the Act, does not exist, therefore, present application filed by Defendant is devoid of merit. Application dismissed.

Tags : Dispute Arbitrator Reference

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