The High Court
Case Details
1 THE HIGH COURT OF MEGHALAYA CRP. No. 38 of 2013 1. The Shillong Club Ltd., a company, incorporated under the Companies its registered office at Kachari Road, Shillong, Act, 1956 having represented by it Director, Shri Rohit Arora. …Revisionist/Defendant -Versus- 1. M/S H.K.Loungani & Co., represented by Shri Hotchand Kalachand Loungani, Radha Soami Cottage, Oakland, Shillong.
Legal Reasoning
2. Shri Vincent H.Pala, S/o (L) John Dkhar, resident of Dhankheti, Shillong, represented by his Power of Attorney Holder Shri. Victor Balajied Lyngdoh, resident of Umpling, Dong Shrum, Shillong. 3. Shri Siddharth Ghosh, Rajshree Cottage, Bishnupur, Shillong – 34. …Respondents/Plaintiffs Mr. S.Jindal, Advocate, present for Revisionist/Defendant. Mr. B. Bhattacharjee, Advocate, and Mr. A.A.Mir, Advocate, present for the Respondents/ Plaintiffs. AND CRP. No. 46 of 2013 1. Shri Hotchand Kalachand Loungani, R/o ‘Radha Saomi Cottage’, Oakland, Shillong, East Khasi Hills District, Meghalaya. 2. Shri V.H.Pala, S/o (L) John Dkhar, R/o of Dhankheti, Shillong, East Khasi Hills District, Meghalaya. ….Revisionist/Plaintiffs -Versus- 2 1. The Shillong Club Ltd, a company registered under Section 25 of the Companies Act, 1956 having its registered office at Kachari Road, Shillong, East Khasi Hills District, Meghalaya. 2. Shri Siddharth Ghosh, Erstwhile Honorary Secretary, Managing Committee, Shillong Club Ltd., Care of Rajshree Cottage, Bishnupur, Shillong – 34, Meghalaya. ….Respondents/Defendants Mr. B. Bhattacharjee, Advocate, and Mr. A.A.Mir, Advocate, present for the Respondents/ Plaintiffs. Mr. S.Jindal, Advocate, present for Revisionist/ Defendant. Date of Hearing 5th December, 2013 Date of Judgment & Order 5th December, 2013 JUDGMENT AND ORDER HON’BLE PRAFULLA C.PANT, CHIEF JUSTICE Both these revisions relate to the proceedings of the Trial Suit No. 27(H) 2011 pending between the parties in which the defendants have moved an application under Section 8 of the Arbitration and Conciliation Act, 1996, and the plaintiffs have moved the application under Order VI of Rule 17 of the Code of Civil Procedure, 1908. The plaintiffs have filed this revision for expeditious disposal of the amendment application before the application under Section 8 of the Arbitration and Conciliation Act, 1996 is decided. On the other hand, the defendants have prayed for disposal of their application (Misc. Case No. 57(H) of 2011) filed under Section 8 of the Arbitration and Conciliation Act, 1996 before the amendment application is considered. 2. Heard learned counsel for the parties and perused the papers on record. 3 3. Briefly stated, the plaintiffs namely, M.S. H.K.Loungani & Co. and Vincent.H.Pala filed the suit before the trial court apprehending termination of their agreement dated 21-1-2009 with the defendant/revisionist for declaration that the agreement between the parties is valid. The defendant/revisionist, Shillong Club Ltd after putting their appearance filed the application (Misc. Case No. 57(H) of 2011) under Section 8 of the Arbitration and Conciliation Act, 1996 seeking that the dispute between the parties be referred to the arbitrator. It appears that for one reason or other, the suit remained pending without deciding the said application. Meanwhile the plaintiffs filed an application under Order VI of Rule 17 of the Code of Civil Procedure, 1908 in the year 2013 for amendment in the plaint challenging the election of the erstwhile Management Committee of the Shillong Club Ltd (Defendant No.1) whose term had already expired as the tenure of the elected committee was one year only. 4. Before further discussion, this Court thinks it just and proper to quote the arbitration clause in the agreement between the parties. The arbitration clause reads as under: “That the parties hereto shall always strive to amicably resolve all disputes arising out of this contract or any matter directly related to this contract but in the event of such disputes being not so resolved amicably, the same shall be referred to arbitration by a sole arbitrator to be appointed by the First Party in consultation with the Second Party and in that event such arbitration proceedings shall be governed by the law of arbitration obtained in India at the relevant time”. 5. Section 8 of Arbitration and Conciliation Act, 1996 empowers the Court to refer parties to arbitration where there is an arbitration agreement. Sub-Clause (1) of Section 8 of the Act provides that if a party 4 applies to the Court before or on the date of first statement for reference, the judicial authority (Court) can refer the parties to arbitration. Sub- Clause (2) of Section 8 requires that arbitration agreement will have to be filed with such application. Sub-Clause (3) of Section 8 provides that if the arbitration proceedings are on, irrespective of such application pending in the Court, the arbitrator can proceed with the same. 6. There is no dispute as to the fact that the defendant No.1 before making his first statement had moved an application under Section 8 of the Arbitration and Conciliation Act, 1996 by filing the arbitration agreement. It is also apparent that after more than one year, the plaintiffs have moved the amendment application to amend the plaint and that too, to challenge an election of the erstwhile Management Committee elected in 2010 whose term had already expired after one year of such election. 7. Learned counsel for the plaintiffs submitted that amendment is necessary for deciding the dispute between the parties as to the validity of the agreement. However, this Court is of the view that not only the dispute between the parties to the agreement, but also its validity can be examined by the arbitrator under the arbitration clause. That being so, the amendment application appears to be moved only to defeat the application moved under Section 8 of the Arbitration and Conciliation Act, 1996 as such cannot be said to be bonafide. 8. In the above circumstances, both these revisions are disposed of with a direction to the trial court to decide the application filed under Section 8 of the Arbitration and Conciliation Act, 1996 expeditiously, and if the arbitration application is rejected after hearing the parties, only then the amendment application can be considered on its merits. If the application under Section 8 of the Arbitration and Conciliation Act, 1996 is allowed, the amendment application shall stand dismissed. The 5 observations made in the body of this order shall not prejudice the rights of the parties on merits of the applications to be decided by the trial court. (Prafulla.C.Pant) CHIEF JUSTICE 5th December, 2013 S.Rynjah