The petitioner/defendant filed a petition under Section 8
of the Arbitration and Conciliation Act,1996 (in brief the Act),
alleging that the respondents/plaintiffs filed the suit
for recovery of possession and mesne profits against the petitioner
though there is an arbitration clause in the agreement.
It is specifically
contended that the respondents pleaded in para-3 of the plaint
that there was an agreement between the petitioner and
respondents for appointment of one P.V.Subba Rao as arbitrator
for interpretation of the agreement.
In view of the arbitration
clause, the dispute before the civil Court has to be referred to
the arbitrator to settle the dispute between the petitioner and
respondents, as the respondents themselves admitted about
arbitration clause for referring the dispute to P.Subba Rao and
the suit is not maintainable before a civil Court.
petitioner sought to refer the matter to arbitrator, invoking
arbitration clause contained in the agreement as pleaded by the
respondents and prayed to refer the dispute between the
petitioner and respondents to the arbitrator, P.Subba Rao for
settlement and to grant of stay of all further proceedings.
Upon hearing argument of both the counsel, the trial
Court dismissed the petition on the ground that the arbitral
dispute is only for interpretation of terms of agreement but not
for resolving any other disputes. Therefore, the dispute for
recovery of possession and mesne profits is beyond the scope of
arbitration clause and dismissed the petition.
Whether the arbitration clause covered reference of the
dispute relating to delivery of possession and mesne profits, if
not, is the impugned order be sustained?
. In the following circumstances this Court cannot
exercise its discretion under Article 227 of the Constitution of
a) Where the only question involved is one of interpretation of
deed (New Gujarat Cotton Mills Ltd. vs Labour Appellate
b) On question of admission or rejection of particular piece of
evidence, even though the question may be of everyday
c) To correct erroneous exercise of jurisdiction, as a Court of
d) To set aside an intra vires finding of the fact, except where
it is founded on no material or is perverse.
e) to correct an error of law, not being an error apparent on
the face of the record
f) to interfere with the intravires exercise of discretionary
power, unless it is violative of principles of natural justice
g) The Court shall not interfere on a merely technical ground
which would not advance substantial justice.
It is clear from Section 7 of the Act that the exchange
of statements, letters etc., is sufficient to accept the existence
of agreement for reference to arbitrator.
In the present case, in para 3 of the plaint, there is a
reference of understanding dated 21.07.2009 which consists of
clauses (i) to (ix). Clause No.(viii) is the relevant clause.
of the plaint did not spell out whether the understanding was
reduced into writing and signed by the parties or not. When the
agreement is not in writing and it is only an understanding, the
alleged condition of agreement for reference would not fall
within the ambit of Section 7 of the Act.
According to Section 8(2) of the
Arbitration and Conciliation Act, 1996, any application for
reference of dispute mentioned in clause (1) shall not be
entertained unless it is accompanied by the original arbitration
agreement or a duly certified copy thereof
In any view of the
matter, it is for the revision petitioner to file, if there is an
understanding in writing duly signed by both parties along with
However, it is wholly unnecessary for us to decide
about maintainability of the petition in view of bar to entertain
petition under Section 8(2) of the Act, as the petitioner himself
admitted about the understanding and that apart we have
already concluded in the earlier paras that this Court cannot
exercise its discretionary power under Section 227 of the
Constitution of India to interfere in the order in question.
In view of the foregoing discussion, we find no ground
or legal infirmity which calls for interference of this Court,
devoid of merits and deserves to be dismissed.-2015 Telanga & A.P. msklawreports