IN THE HIGH COURT OF KERALA AT ERNAKULAM
CRP.No. 51 of 2007()
1. L.NAGESH, AGED 42 YEARS,
... Petitioner
Vs
1. K.ABDURAHIMAN HAJI,
... Respondent
2. CHERIKURIAKOSE,
For Petitioner :SRI.P.K.SURESH KUMAR
For Respondent :SRI.K.A.SALIL NARAYANAN
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :17/02/2010
O R D E R
S.S.SATHEESACHANDRAN, J.
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C.R.P.NO.51 OF 2007 ()
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Dated this the 17th day of February, 2010
O R D E R
Petitioner is the plaintiff in O.S.No.347 of 2005 on the
file of the Sub Court, Kozhikode. The above suit was one for
money, and the respondents are the defendants. Suit claim
was raised by the petitioner alleging that he was an erstwhile
partner in two firms along with the defendants, and later, he
retired from both the firms on the terms and conditions
stipulated in an agreement entered by all the partners. Some
claims were outstanding to be settled by the defendants as
agreed to in the agreement is the basis for the suit claim. He
also produced a photocopy of the agreement entered by him
with the defendants. The defendants on entering appearance
moved an application under Section 8 of the Arbitration and
Conciliation Act, 1996, hereinafter referred to as the
‘Arbitration Act’, contending that there is an arbitration clause
in the partnership deeds for resolving the disputes between
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the partners including the plaintiff. The defendants
contending as above sought for rejection of the plaint. The
learned Sub Judge, after hearing the counsel on both sides
and perusing the copies of the partnership deeds Exts.B1 and
B2 produced by the defendants and also copy of the
agreement A1 produced by the plaintiff, concluded that
arbitration clause contained in the partnership deeds will
prevail and the suit by the plaintiff before the civil court is not
entertainable. Observing that the parties have to pursue their
remedy as per the arbitration agreement, the application
moved by the defendants was allowed.
2. I heard the counsel on both sides. The relief
canvassed by the defendants was for rejection of the plaint
contending that there is an arbitration clause in the
partnership deeds entered by the parties. It is seen the court
below without looking into Section 8 of the Arbitration Act has
allowed that application, which in effect, constitute the
rejection of the plaint. Existence of an arbitration agreement
in respect of a dispute canvassed before the court, subject to
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the conditions stipulated under Section 8 of the Arbitration
Act, would result in passing of an order directing the parties
to arbitration. But, such an order is not one of rejection of the
plaint, but, only cessation or closing of the proceedings before
the court. True, in the present Arbitration Act, there is no
provision enabling the court to refer the parties to the
arbitration. But even then the order passed by the court
holding that the parties have to resolve their disputes by
arbitration, in the event of an arbitration agreement between
them, does not lead to rejection of the plaint, but only closing
of the suit. Perusing the impugned order, it is seen, the court
below has made some observations as regards the
insufficiency of stamp in Ext.A1 agreement on which the suit
claim has been raised by the plaintiff. What has been
produced before the court, it is stated, is only a photocopy and
not the original. Even assuming that the original is
insufficiently stamped, then also, if it is tendered in evidence,
proper orders as contemplated under the Stamp Act have to
be passed by the court. The defendants have advanced a case
disputing the genuineness of Ext.A1 agreement produced by
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the plaintiff with a further case that there is an arbitration
clause as covered by the partnership deeds. Exts.B1 and B2
would govern the parties in the event of disputes and
differences between them. They have not disputed that the
plaintiff has ceased to be a partner of the firm, which is the
foundation of the case set up by the plaintiff to sustain his suit
claim. Even assuming that the partnership deeds constituting
the firm in which the plaintiff was a partner contained an
arbitration clause, its effect and validity has to be examined
with reference to a specific agreement purported to have been
executed by the partners by which the plaintiff ceased to be a
partner of the firm. So much so, in the present case, the
genuineness of Ext.A1 agreement after the production of its
original by the plaintiff is vital in determining the question
whether the plaintiff is entitled to the reliefs canvassed in the
suit. What is noticed is that blindly accepting the contentions
of the defendants, the court below has rejected the plaint
presented by the plaintiff without giving him an opportunity to
present his case. The order impugned is clearly unsustainable
under law. Setting aside the impugned order, the court below
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is directed to re-examine the matter afresh taking note of the
observations made above and in accordance with law.
S.S.SATHEESACHANDRAN
JUDGE
prp