J 2002 SCC OnLine Cal 484 2003 1 ICC 226

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2002 SCC OnLine Cal 484 : (2003) 1 ICC 226 (Cal)
Vivek Arya v. Economic Transport Organisation

Calcutta High Court
(BEFORE SENGUPTA, J.)
Vivek Arya … Plaintiff;

Versus
Economic Transport Organisation & Ors. … Respondents.
T 453 of 2002, T 448 of 2002 and G.A. 3180 of 2002, C.S. 83 of 2002
Decided on August 14, 2002
Page: 227
The Judgment of the Court was delivered by

SENGUPTA, J.:— By consent of the parties, all the applications are treated as on the
day's list as New Motion. Formal service of the notice of motion is waived.
2. Three applications have been taken out - two by the plaintiff being numbered T
453 of 2002 and T 448 of 2002 whereas defendants Nos. 18 and 19 have taken out an
application being G.A. No. 3180 of 2002 under Section 8 of the Arbitration &
Conciliation Act, 1996. Since Mr. Kapoor has moved this application in order of time
first, I shall deal with this application first. This application has been taken out on the
strength of an arbitration clause which has been incorporated in the Deed of
Partnership itself. The said clause reads as under:
“That any dispute or differences, which may arise between the partners or
their legal representatives with regard to the construction meaning and effects of
these presents or any part thereof or respecting the accounts profit and loss of
the Business or the rights and liabilities of the partners under this deed of
dissolution or winding up of the business or any matter relating to business of
the Firm shall be referred to arbitration in accordance with the provisions of the
Indian Arbitration Act, 1940 or any other modifications thereof for the time being
in force.”
3. Mr. Kapoor submits that the language of Section 8 is very clear which is
mandatory in nature. Once the Court finds that there exists an arbitration agreement,
the Court has no option but to refer the matter to arbitration unlike under the
provisions of the old Act of 1940. He has referred to disputes raised in the plaint itself.
He has shown me various documents particularly the plaint in support of his
contention that the disputes mentioned (mention?) therein are covered by the
arbitration agreement which is wide enough to take care of all kinds of disputes not
only amongst the signatory partners but also between the partners on the one hand
and legal representatives of deceased partners on the other. He contends that the
plaintiff claims to be a legal representative of one of the signatories of partnership
deed and therefore he is bound by the arbitration agreement. He further contends that
his clients have not submitted any statement on the substance of the dispute and it is
the other party who might have submitted but his clients are not bound by the
submissions of the statement of dispute made by the other party. Of course, he is
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candid enough as he says that he has not been able to file the original arbitration
agreement which is mandatory requirement under sub-section (2) of Section 8 of the
said Act. His contention is that in view of the decision of a learned single Judge of this
Court rendered in the case of I.T.C. Classic Finance Ltd. v. (sic) reported in AIR 1987
Cal. that once a copy of the arbitration agreements is submitted, this is good enough
to satisfy the requirements of the aforesaid sub-section. His further contention is that
the allegations and the contentions of the plaintiff that dispute in the suit having been
compromised and/or settled can also be decided and/or adjudicated in the arbitration
itself has no basis. In support of his contention he has relied on a decision of the
Supreme Court reported in (1982) 1 SCC 625. He has drawn my attention to a fairly
recent decision of the Supreme Court reported in (2000) 4 SCC 539 and contends that
the Court is bound to refer the dispute once it finds the arbitration agreement is there
and Court shall not proceed with hearing of the suit at all. Therefore, he concludes his
submission saying that the applications taken out by Mr. Mitra's client should not be
heard and should be kept in abeyance until this application is decided and he further
prays that no further proceedings shall be taken out by the plaintiff.
4. Mr. Das, Senior Counsel appearing on behalf of the respondents Nos. 6, 7, 8 and
10 contends that requirements of sub-section (2) to Section 8 is mandatory. In this
case, in any event any original document can subserve the purpose. The decision of
the learned single Judge is clearly distinguishable and not applicable in this case. Mr.
Das further contends that inasmuch as the plaintiff has already settled the dispute and
plaintiff does not want to continue with the hearing of the suit, it is no longer open for
Page: 228
the contesting respondents to pray for referring the dispute to arbitration in terms of
the arbitration agreement.
5. He further contends that even Mr. Kapoor's clients have denied and disputed the
claim and contention of the plaintiff as being partner and in fact it has been contended
in their letter when the arbitration was demanded, that the arbitration agreement is
not applicable in case of the dispute raised by the plaintiff.
6. Under such circumstances he submits that no interim order should be passed in
this application.
7. Mr. Anindya Kumar Mitra, learned Senior Counsel appearing for the plaintiff has
opposed this application and has supported the contention of Mr. Das. He submits that
when the disputes have been settled and such settlement has been accepted by his
client, his client is no longer interested to proceed with the suit, no dispute is required
to be decided by the arbitration. Under those circumstances, no interim order should
be passed and the applications taken out by his client should be decided on affidavits.
Of course, he has prayed for interim order in the third application wherein various
directions were asked for upon the Receivers.
8. Having heard the respective contentions and submissions of the learned counsels
made on the three applications, in my view, the decision on application under Section
8 of Arbitration & Conciliation Act, 1996 at the ad interim stage will really govern the
other two matters. Whether I should grant any interim stay as prayed for by Mr.
Kapoor's clients on Section 8 application or not, that will really clinch the issue for the
time being. In this context it is to be considered whether the disputes for which
arbitration is sought for ceased to exist as it is argued that the suit has been
compromised outside Court. I am of the prima faice view that if the dispute in the suit
is lawfully compromised and decided before making any application under Section 8 or
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simultaneously then referring the disputes is not necessary at all. Though Mr. Kapoor
has cited the decisions of the Supreme Court as above, however, those decisions
prima facie cannot be made applicable in this case. So I shall decide the case on the
affidavits without granting any stay. Therefore, the application for compromise of the
plaintiff is required to be heard on affidavits.
9. On the question of entertain ability of the application under Section 8 of the said
Act in the context of non-production of original arbitration agreement, I opine that
production of the original partnership deed or for that matter the arbitration
agreement is not necessary in case of a private document when it is not within the
custody of the petitioner or the applicant. In the supplementary affidavit it has been
stated that the original is not lying with the defendants Nos. 18 and 19 applicants and
they have called upon the other parties with whom the original is lying to produce the
same. Sub-section (2) of Sec. 8 contemplates for compulsory production of the
original, no doubt, or the certified copy of the arbitration agreement. In my view,
certified copy of an agreement is possible to be produced when such certified copy is
available under provisions of Indian Evidence Act. Certified copies of public documents
or private document which partake of the character of public document can be
produced under the Indian Evidence Act. Admittedly, the partnership deed in this case
is not a public document. Therefore, production of certified copy is absolutely beyond
the question.
10. Further, in my considered view, production of the original documents as
contemplated in sub-section (2) of Section 8 is required in case of private document.
As I have already observed when the original document is not in the custody of a
particular person he can very well rely on a copy of a document when custody of the
same under the rule of evidence, is with the adversory or with the third party. Though
the word ‘shall’ apparently mandatory but it has to be interpreted realistically avoiding
absurdity. The meaningful object of the said sub-section is production of original if the
same is with custody of the petitioner, if not, then the Court must
Page: 229
compel the person with whom it is lying. In case despite having custody the petitioner
does not produce original, the application shall not be entertained.
11. These findings and observations of mine are absolutely tentative. So I hold
prima facie that this application can be entertained at this stage. On the other hand,
from various documents produced while considering grant of stay of hearing of the
suit, Mr. Kapoor's clients have denied and disputed the existence of an arbitration
agreement so far it relates to the dispute raised and canvassed by the plaintiff-
petitioner. Under such circumstances I cannot grant any absolute stay of hearing of
the suit or proceedings. The proceedings which are already pending shall, however, be
heard and the two applications taken out by Mr. Mitra's client will also be heard on
affidavits. For convenience's sake, I am of the view that all the applications which are
pending including Section 8 application shall also be heard analogously and one after
and Section 8 application shall be heard first. Thereafter all the other applications shall
be heard.
12. Affidavit-in-oppositions are to be filed by the respective parties in their
respective applications by two weeks from date, reply one week thereafter. Matter to
appear four weeks hence. Leave be given to file supplementary affidavit and copies of
the same be served by the respective parties mutually.
13. All parties are to act on a signed xerox copy of this dictated order on the usual
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undertaking.
———
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J 2002 SCC OnLine Cal 484 2003 1 ICC 226

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SCC Online Web Edition, Copyright © 2021

Page 1 Thursday, September 23, 2021

2002 SCC OnLine Cal 484 : (2003) 1 ICC 226 (Cal)

Vivek Arya v. Economic Transport Organisation

Vivek Arya … Plaintiff;

The Judgment of the Court was delivered by

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