Writ Petition No.7566 of 2005

4th April, 2006

Petitioner Counsel: Shri. S. S. THOMBRE
Respondent Counsel: Shri. A. S. BAJAJ

Cases Cited:
Salem Advocate Bar Association Tamilnadu Vs. Union of India, 2003(1) ALL MR 391 (S.C.)=AIR 2003 SC 189 [Para 6]
Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya, 2003 SC 2252 [Para 6]
Salem Advocate Bar Association Vs. Union of India, 2005(5) ALL MR 876 (S.C.)=(2005)6 SCC 344 [Para 7]

JUDGMENT

JUDGMENT :- Heard Shri. S. S. Thombre, learned counsel for petitioners and Shri. A. S. Bajaj, learned counsel for the respondent.

2. Rule.

3. Shri. A. S. Bajaj, learned counsel for the respondent waives service. By consent of the parties, Rule made returnable forthwith and the matter is taken up for final disposal.

4. The respondent - M/s. Maruti Constructions, Engineers and Contractors, a registered firm, filed a suit bearing Regular Civil Suit No.111/1993 in the Court of the Civil Judge, Senior Division, Nanded against the petitioners and others, inter alia, for recovery of amounts towards damages/compensation and other relief.

5. By an application dated 20th January, 2005 the respondent sought reference of the dispute to the Arbitrator under the provisions of Section 89 of the Civil Procedure Code. The petitioners objected to the same. The trial Court on dated 8-9-2005 passed the following order :

"1. The application is allowed.

2. The dispute involved in the suit be referred to the Arbitration. The Parties to propose the name of the "Arbitrator" - within one month."

6. The petitioners filed this petition challenging the above - quoted order passed by the 2nd Joint Civil Judge Senior Division Nanded. The trial Court referred to the judgments of the Apex Court in (1) Salem Advocate Bar Association Tamilnadu Vs. Union of India reported in AIR 2003 SC 189 : [2003(1) ALL MR 391 (S.C.)] and (2) Sukanya Holdings Pvt. Ltd. Vs. Jayesh H. Pandya reported in 2003 SC 2252.

7. It is necessary to refer to a reported judgment of the Apex Court in the case of Salem Advocate Bar Association Vs. Union of India reported in (2005)6 SCC 344 : [2005(5) ALL MR 876 (S.C.)]. In para 56 of the report it is observed by the Apex Court :

"56. One of the modes to which the dispute can be referred is "arbitrator". Section 89(2) provides that where a dispute has been referred for arbitration or conciliation the provisions of the Arbitration and Conciliation Act, 1996 (for short "the 1996 Act") shall apply as if the proceedings for arbitration or conciliation were referred for settlement under the provisions of the 1996 Act. Section 8 of the 1996 Act deals with the power to refer parties to arbitration where there is arbitration agreement. As held in P. Anand Gajapathi Raju Vs. P.V.G. Raju (2000)4 SCC 539 the 1996 Act governs a case where arbitration is agreed upon before or pending a suit by all the parties. The 1996 Act, however, does not contemplate a situation as in Section 89 of the Code where the Court asked the parties to choose one or other ADRs including arbitration and the parties choose arbitration as their opinion. Of course, the parties have to agree for arbitration". (emphasis supplied)

8. In the facts of the present case one of the parties did not agree for reference of the dispute to the arbitration. Therefore the order passed by the trial Court referring the dispute to the arbitration is not sustainable-in-law and deserves to be set aside.

9. For the reasons stated above, the petition succeeds. The impugned order dated 8-9-2005 passed by the 2nd Joint Civil Judge, Senior Division, Nanded is quashed and set aside. Rule made absolute accordingly with no order as to costs.

Petition allowed.