TMI Blog2010 (6) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... uit, seeking injunction also, was maintainable before it. 4. It emerges from the record that an agreement was executed between the revisionist-Company and respondent No. 1, Messrs. Raj Kumar Lohia, representing the Lohia Family of Kanpur on 10.11.1992. A copy of the agreement has been placed as Annexure-3 to the affidavit submitted in this case. This agreement contains 18 terms and conditions, which were binding on the contracting parties. 5. Learned Counsel for the revisionist has laid much stress that as per Clause 17 of the said agreement, the dispute, if any, between the parties would have to be resolved by taking recourse to arbitration. 6. Later on , some dispute regarding sale and transfer of 17,60,000/- shares arose between the parties. The respondent No. s 1 and 2, that is, Raj Kumar Lohia, representing Lohia Family and Messrs Shruti Finsec Private Limited, having its registered office at D-3/A, Panki Industrial Area, Kanpur, have filed a Civil Suit No. 788 of 2006, Raj Kumar Lohia and Anr. v. Lohia Starlinger Company (revisionist). In the aforesaid Civil Suit, following reliefs were sought: (a) A decree of declaration that a void, concluded, subsisting and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... language. The applicable laws shall be Indian laws. 8. Further, reliance was placed on Section 8 of the Arbitration and Conciliation Act, 1996, which is being quoted below: 8(1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement, shall if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in Sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. 9. Other submissions were also made, which are contained in the application submitted by the revisionist before the Trial court. Objections were filed by the respondents herein to the application submitting that the subject matter in dispute could not be dealt with by the arbitrator and the Civil Court would be the appropriate forum for resolving the dispute. In fact, Messrs. Shruti Finsec Private Limited was not a party to the agreement dated 10.11.1992 and as such it was not bound by the terms and conditions spelt out in the said agreement. 10. Learned Additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the aforementioned agreement. The learned Trial court had failed to appreciate that it was right of the parties under the agreement which was under challenge and, thus, the dispute could have been resolved by the Arbitration Tribunal. Thus, the declaratory Suit was not maintainable in these circumstances. The order impugned is a non-speaking and non- reasoned order. Learned Counsel for the revisionist has placed reliance on following judgments in support of his submissions: 1. 2007 (3) SCC 686, Agri Gold Exims Ltd. v. Sri Lakshmi Knits Wovens and Ors. 2. AIR 2003 SC 2252, Sukanya Holdings (P) Ltd. v. Jayesh P. Pandya and Anr.. 3. 2009(10) SCC 103, 4. (2006) 1 SCC 417, Ardy International (P) Ltd. v. Inspiration Clothes U and Anr.. 5. (2003) 6 SCC 503, Hindustan Petroleum Corp. Ltd. v. Pincity Midway Petroleums. 6. AIR 1999 SC 2102, Olympus Superstructures Pvt. Ltd. v. Meena Vijay Khetan and Ors.. 7. (2007) 7 SCC 737, Bharat Sewa Sansthan v. U.P. Electronics Corpn. Ltd. 8. (2008) 2 SCC 602, Atul Singh and Ors. v. Sunil Kumar Singh and Ors. 9. (2009) 8 SCC 779, Shree Baidyanath Ayurved Bhawan Private Limited v. Praveen Bhatia and Ors. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been held that unless the matter in the Suit is wholly covered by the agreement, the parties cannot be asked to go to the arbitrator. In the said case, it has also been clearly held that even in the case of partial coverage of dispute by the arbitration agreement, the parties cannot be referred to arbitration. 19. Emphasis has been laid by Sri Sinha, learned Senior Advocate, appearing for the respondents, that the reliefs sought for cannot be granted by the Arbitral Tribunal and could be granted by the Civil court only for the reason that the existence of a valid, subsisting and binding agreement between the parties was not the shareholders' agreement dated 10.11.1992. The said agreement had worked itself out. The specific performance of the contract was sought in respect of the subsequent contract which came into existence and conferred rights on the respondent No. 2 which was not a party to any arbitration agreement. 20. Sri Naveen Sinha, learned Counsel for the respondents, has further submitted that the Suit for specific performance arises and stems out of the independent contract arrived at between the parties as contained in their letters dated 11.5.2001, 7.5.2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in Section 8(2) of the Arbitration and Conciliation Act, 1996, such application was liable to be dismissed as the said application did not meet the statutory requirement. 23. Sri Naveen Sinha, learned Senior Advocate appearing for the respondents, has placed reliance on following judgments in support of his case: 1. AIR 1959 SC 1362, The Union of India v. Kishore Lal Gupta and Brothers 2. AIR 1969 SC 488, Union of India (UOI) v. Salweel Timber Construction (India) and Ors. 3. 1984 (2) SCC 680, Tarapore and Company v. Cochin Shipyard Ltd. 4. AIR 1996 Karnataka 69, Aktiengesellschaft v. Insotex (India) Limited and Anr.. 5. 2003 (5) SCC 531, Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya and Anr.. 6. AIR 1974 Delhi 223, Dadri Cement Company and Anr. v. Bird Co.(P) Ltd. 7. AIR 1953 Calcutta 642, Union of India (UOI) v. Kishorilal Gupta Sons. 8. 2008(1) ARBLR 552 Delhi, Seema Bhatia v. Yamaha Motor India Pvt. Ltd. 9. 2009(1) SCC 372, Yogi Agarwal v. Inspiration Clothes and U and Ors. 10. AIR 2003 Karnataka 502, Ramakrishna Theatre Limited v. Investments and Commercial Corporation Limited. 11. 2003(3) ARBLR 14 (P H), Smt. Sudershan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgments reported in 2003 (5) SCC 531, Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya and Anr. AIR 1974 Delhi 223, Dadri Cement Company and Anr. v. Bird Co.(P) Ltd. and AIR 1996 Karnataka 69, Aktiengesellschaft v. Insotex (India) Limited and Anr., have categorically held that unless all the parties to the Suit are the parties to the arbitration agreement, the parties cannot be directed to approach Arbitral Tribunal. Such matters cannot be referred to the arbitration. Thus, it has been provided that unless the dispute is wholly covered by the agreement, the parties cannot be referred to the arbitration. It has also been held that even in the case of partial coverage of dispute by the agreement, the parties cannot be asked to go for arbitration. 28. A perusal of the reliefs sought for in the Suit pending before the Trial court and the contents of the plaint reveal that the reliefs sought for cannot be granted by the Arbitral Tribunal. The dispute raised in the Suit could be resolved by the Civil Court only. The specific performance of the contract has been sought in respect of a subsequent contract which came into being later on . The subsequent events conferred rights on the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a person who is not a signatory to the agreement? (ii) Whether a company could be said to be a party to a contract containing an arbitration agreement, even though it did not sign the agreement containing an arbitration clause, with reference to its subsequent conduct? 32. The Hon'ble Court has dealt with the dispute in detail and had held that the agreement in dispute dated 24.2.2006 was signed by Wescare and Subuthi Company and not by the Indowind Energy Company. After dealing with the dispute in detail, the Hon'ble Apex Court has held as under: 13. Wescare puts forth the agreement dated 24.2.2006 as an agreement signed by the parties containing an arbitration agreement but the said agreement is signed by Wescare and Subuthi and not by Indowind. It is not in dispute that there can be appointment of an arbitrator if there was any dispute between Wescare and Subuthi. The question is when Indowind is not a signatory to the agreement dated 24.2.2006, whether it can be considered to be a `party' to the arbitration agreement. In the absence of any document signed by the parties as contemplated under Clause (a) of Sub-section (4) of Section 7, and in the absence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , was careful not to sign the agreement as on behalf of Indowind, shows that the parties did not intend that Indowind should be a party to the agreement. Therefore the mere fact that Subuthi described Indowind as its nominee or as a company promoted by it or that the agreement was purportedly entered by Subuthi on behalf of Indowind, will not make Indowind a party in the absence of a ratification, approval, adoption or confirmation of the agreement dated 24.2.2006 by Indowind. 33. In the aforesaid judgment, the Hon'ble Apex Court had allowed the Appeal of Indowind Energy Limited reversing the judgment of Hon'ble Madras High Court by which an Arbitrator was appointed directing the Indowind Energy Limited, the appellant, to be associated with the arbitration proceedings. 34. In the present case also, the similar circumstances exist and this Court cannot rely on the hypothesis as put-forth by Sri M.K. Gupta, learned Counsel for the revisionist-company, that Messrs. Shruti Finsec Private Limited was a nominee or assignee of Messrs. Raj Kumar Lohia, which is a party to the agreement, and as such it is also a party to the arbitration agreement. 35. The Trial court and th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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