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1996 (8) TMI 510 - SUPREME COURTWhether there is an arbitration agreement between the parties? Whether the proceedings of the forums created under the Act are legal proceedings and the authorities have the trappings of judicial authorities of a court within the meaning of Section 34 of the Arbitration Act? Whether the case shall be stayed by operation of Section 34 of the Arbitration Act? Held that:- As the State Commission expressly has gone into the question and held that by operation of Clause (12) of the quotation there is an arbitration agreement brought into vogue between the parties. Thereby, Clause (12) of the agreement became as integral part of the contract. Thus, there is an arbitration agreement between the parties. The word "court" must be read in the context in which it is used in the statute. In the context in which the word "court" is used in Section 9A of the Special Courts Act, it is intended to encompass all curial or judicial bodies which have the jurisdiction to decide matters or claims, inter alia, arising out of transactions in securities entered into between the stated dates in which a person notified was involved. Therein, the Company Law Board has been held to be a court exercising the functions of the court; therefore, it is possessed of the trappings of a Court. Thus, we have no hesitation to hold that the proceedings before the District Forum, State Commission and the National Commission are legal proceedings. The District Forum, National Commission and the State Commission are judicial authorities falling under Section 34 of the Arbitration Act. As seen, Section 34 of the Act does not confer and automatic right nor create an automatic embargo on the exercise of the power by the judicial authority under the Act. It is a matter of discretion. Considered from this perspective, we hold that though the District Forum, State Commission and National Commission are judicial authorities, for the purpose of Section 34 of the Arbitration Act, in view of the object of the Act and by operation of Section 3 thereof, we are of the considered view that it would be appropriate that these forums created under the Act are at liberty to proceed with the matters in accordance with the provisions of the Act rather than relegating the parties to an arbitration proceedings pursuant to a contract entered into between the parties. Thus this dispute need not be referred to arbitration under Clause (12) of the agreement and the matter could be decided on merits by the State Commission itself. Appeal allowed.
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