TMI Blog2003 (4) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... t to stay the proceedings in a case where the dispute is required to be referred for arbitration. - CIVIL APPEAL NO. 1174 OF 2002 - - - Dated:- 14-4-2003 - M.B. SHAH AND ARUN KUMAR, JJ. Shekhar Naphade, E.C. Agrawala, Mahesh Agarwal, Rishi Agarwal, Alok Agarwal, Manu Krishnan and Vivek Yadav for the Appellant. R.F. Nariman, N.R. Choudhary, Jai Singhania and Somnath Mukherjee for the Respondent. JUDGMENT M.B. Shah, J. - This appeal by special leave is directed against the judgment and order dated 18-9-2001 passed by the High Court of Bombay in Arbitration Petition No. 500 of 2001. 2. Appellant and respondent Nos. 1 and 2 entered into a partnership agreement on 30th April, 1992 for carrying on business in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Nos. 401 to 701 to different purchasers. On 23-6-1999, the partnership firm executed a Deed of Conveyance subject to rights of other parties in favour of M/s. West End Gymkhana Ltd. in respect of disposed of flats. On 1-1-1999, respondent No. 1 wrote to the Income-tax Officer to complete the assessment of the partnership firm. Accordingly, assessment order was passed on 30-3-2000. 3. Thereafter, respondent No. 1 filed suit No. 1991 of 2000 in the High Court of Bombay for dissolution of partnership firm and accounts and inter alia challenging the conveyance deed executed by partnership firm in favour of M/s. West End Gymkhana Ltd. Respondent No. 1 also took out a notice of motion No. 1576 of 2000 for various interim reliefs. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred on the Court to add parties who are not parties to the agreement in the arbitration proceedings. The Court also negatived the alternative prayer for referring part of the subject-matter in respect of those parties who are parties to the partnership agreement which contains arbitral clause. The Court arrived at the conclusion that such procedure is not contemplated under the Act. The object and purpose of the Act is to avoid multiplicity of the proceedings and not to allow two forums simultaneously to proceed with the matter. That judgment and order is challenged in this appeal. 8. Learned senior counsel Mr. Shekhar Naphade appearing for the appellant submitted that under section 8 of the Act, the Court was required to refer the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the contentions raised by the learned counsel for the parties, we would refer to the relevant provisions namely sections 5 and 8 of the Act, which are as under : " 5. Extent of the judicial intervention. Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. 8. Power to refer parties to arbitration where there is an arbitration agreement. (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 arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no provision in the Act that when the subject matter of the suit includes subject-matter of the arbitration agreement as well as other disputes, the matter is required to be referred to arbitration. There is also no provision for splitting the cause or parties and referring the subject-matter of the suit to the arbitrators. 13. Thirdly, there is no provision - as to what is required to be done in a case where some parties to the suit are not parties to the arbitration agreement. As against this, under section 24 of the Arbitration Act, 1940, some of the parties to a suit could apply that the matters in difference between them be referred to arbitration and the Court may refer the same to arbitration provided that the same can be se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Legislature would have used appropriate language to permit such a course. Since there is no such indication in the language, it follows that bifurcation of the subject-matter of an action brought before a judicial authority is not allowed. 16. Secondly, such bifurcation of suit in two parts, one to be decided by the arbitral Tribunal and other to be decided by the civil court would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such procedure. It would also increase the cost of litigation and harassment to the parties and on occasions there is possibility of conflicting judgments and orders by two different forums. 17. Reliance was pla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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