IN THE HIGH COURT OF KERALA AT ERNAKULAM
WP(C).No. 718 of 2010(O)
1. SATHEESH MENON, AGED 48 YEARS
... Petitioner
Vs
1. C.MUKUNDEN MENON, AGED 57 YEARS
... Respondent
2. K.RAVISANKAR AGED 51 YEARS
3. P.K.BALACHANDRAN, AGED 48 YEARS,BUSINESS
For Petitioner :SRI.M.B.PRAJITH
For Respondent :SRI.BINOY VASUDEVAN
The Hon'ble MR. Justice S.S.SATHEESACHANDRAN
Dated :13/01/2010
O R D E R
S.S.SATHEESACHANDRAN, J.
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W.P.(C).No.718 of 2010 - O
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Dated this the 13th day of January, 2010
J U D G M E N T
Petitioner is the defendant in O.S.No.989 of 2009 on the file
of the Additional Sub Court, Thrissur. Suit is one for settlement
of accounts and the respondents are the plaintiffs. Parties
involved in the suit are stated to be the erstwhile parties of a firm
which is stated to have dissolved. Resisting the maintainability of
the suit before the Sub Court, petitioner/defendant contended
that there is an agreement providing for arbitration in the event
of disputes between the partners of the firm. An application was
also moved seeking reference of the disputes to arbitration as
provided under Section 8 of the Arbitration and Conciliation Act,
hereinafter referred to as ‘the Act’. The court below without
considering that application proceeded to appoint an advocate
commissioner to conduct a local inspection and file a report on
the application moved by the plaintiffs/respondents, is the
grievance espoused in the writ petition invoking the supervisory
jurisdiction for issuing a direction to the court below for
W.P.(C).No.718 of 2010 – O
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considering the application moved under Section 8 of the
Arbitration Act, expeditiously.
2. Notice given, respondents have entered appearance
through counsel. I heard the counsel on both sides.
3. There is no dispute that the partnership deed contain
an arbitration clause enabling the parties to resolve the disputes
through arbitration. It is also seen that the petitioner/defendant
has moved an application for reference to arbitration before
delivering of his defence as contemplated under Section 8 of the
Arbitration Act. When that be the case it was incumbent upon
the court to consider and dispose the application before taking
any further step in trial of the suit. The apex court in Hindustan
Petroleum Corporation Ltd. v. Pinckcity Midway
Petroleums (2000(3) KHC 1492) has held in unmistakable terms
that if there is an arbitration clause in the agreement between
the parties to resolve the disputes it is mandatory for the civil
court to refer the dispute to arbitration. It has been further held,
once an application under Section 8 of the Arbitration Act has
been filed, civil court has no jurisdiction to continue with the suit.
That being the settled position of law as laid down by the apex
W.P.(C).No.718 of 2010 – O
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court which is enshrined under Sections 5 and 8 of the Arbitration
Act the court below went wrong in continuing with the suit further
for disposing the suit without considering the application filed
under Section 8 of the Arbitration Act. There will be a direction
to the court below to dispose of Ext.P6 application of the
petitioner/defendant after hearing both sides taking note of the
observations made above and in accordance with law, as
expeditiously as possible, at any rate, within a period of one
month from the date of receipt/production of a copy of this
judgment. The court below is also directed to pass orders
keeping in abeyance execution of the commission order issued in
the above suit, and it shall be proceeded only subject to the
result of Ext.P6 application.
Writ petition is disposed of as above. Hand over a copy of
the judgment to the counsel on both sides on usual terms,
forthwith.
S.S.SATHEESACHANDRAN,
JUDGE.
bkn/-