This Civil Revision Petition has been filed against the order passed in I.A.No.29 of 2007 in O.S.No.37 of 2005 by the petitioner herein/2nd defendant in the suit, wherein the application filed by the petitioner to refer the dispute to the arbitrator, was dismissed.
2. The suit has been filed in O.S.No.37 of 2005 on the file of the Learned Subordinate Judge, Devakottai by the respondent herein, seeking the relief of permanent injunction, restraining the defendants from invoking the bank guarantee. Pending the suit, an application has been filed by the petitioner herein in I.A.No.29 of 2007 on the ground that the petitioner is amalgamated with Bharti Televentures Limited in pursuance of the order of amalgamation passed by the High Court, Delhi. It was further stated in the application that in view of the specific clause in the agreement between the parties namely clause 16 of the Franchisee Agreement providing for an arbitrator in term of Arbitration Conciliation Act 1996, the dispute should be referred to the arbitrator.
3. On the contrary, the respondents/plaintiff contended before the trial Court that the amalgamation have been done behind the back of the plaintiff and cannot bind the plaintiff and it was further submitted that as per clause 16(4), the arbitration can be invoked only when the agreement is not terminated. In other words, it was submitted that when the agreements got terminated as in the present case, the arbitration clause as mentioned under clause 16 cannot be pressed into service.
4. The Court below has rejected the application by holding that inasmuch as there was an unilateral amalgamation, the present application cannot be maintained and therefore, the clause 16 which provides for arbitration cannot be pressed into service.
5. Being aggrieved against the same, the second respondent has preferred this revision.
6. The learned Counsel for the petitioner has referred to clause 16 of the Franchisee Agreement which was signed between the parties on 21.05.2003. A perusal of the said agreement makes it clear that in the event of any dispute between the parties, the terms of arbitration and conciliation Act 1966 would be made applicable.
7. The learned Counsel for the petitioner has also referred to the fact that the amalgamation has been made and as a result, the petitioner by named Bharti Cellular Limited got amalgamated with Bharti Televentures Limited in pursuance of the order passed by the Honourable High court, Delhi. The learned Counsel has also brought to the knowledge of this Court about the terms of the amalgamation which specifically provided that all pending disputes, rights and liabilities of Bharti Cellular Limited would become that of the newly amalgamated company by name Bharti Televentures Limited. The trial Court without even going to the facts of the case, simply rejected the application that the amalgamation was one without notice to the plaintiff in the suit and therefore, the revision will have to be ordered.
8. On the contrary, the learned Counsel for the respondent submitted that a perusal of clause 16(4) has shown that the arbitration clause can be invoked only when there is no termination of agreement. In other words, the learned Counsel submitted that when there is a termination, the arbitration clause cannot be invoked. In order to appreciate the argument of the learned Counsel, the argument is hereby accepted.
9. I have considered the arguments of the learned Counsel for the petitioner as well as respondent.
10. It is not in dispute that the petitioner company has got merged with Bharti Televentures Limited in pursuant of the order passed by the Honourable Hight Court, Delhi. The terms of the said amalgamation specifically mention that the rights and other liabilities of Bharti Cellular Limited would become that of the newly amalgamated company by name Bharti Televentures Limited. Therefore, the reasoning of the Court below that earlier agreement was with only Bharti Cellular Limited and therefore, in view of the unilateral amalgamation, the arbitration clause cannot be invoked is in my view, is totally wrong. Further, there is nothing in law which stipulate that while amalgamating the parties concerned, notice should be given to others.
11. Secondly, as contended by the learned Counsel for the petitioner, in view of the express provision contained in the Franchisee agreement on 21.05.2005 in clause 16 which provides for an arbitration, the application filed by the petitioner is liable to be allowed. It is not in dispute that the said arbitration clause is still in force.
12. The contention of the learned Counsel for the respondent that the said clause cannot be pressed into service when there is a termination does not find favour with this Court. A reading of the said clause would only show that pending the adjudication by the arbitrator except in the event of termination, the parties should continue to do the normal transactions. The said clause cannot be interpreted to say that the arbitration cannot be invoked in case of termination of the agreement.
13. The learned Counsel for the petitioner also relied upon the judgment of the Honourable Supreme Court reported in AIR 2003 SUPREME COURT 2881(Hindustan Petroleum Corporation Ltd., Vs M/s Pinkcity Midway Petroleums) wherein the Honourable Supreme Court has held that the question of applicablity of arbitration clause in dispute cannot be gone into by the Court. The Honourable Supreme Court in the said decision held that when there is an agreement providing for arbitration between the parties before the civil Court, the Civil Court ought to have referred the said dispute before the arbitrator. This Court is of the opinion that the said judgment of the Honourable Supreme Court is applicable to the facts of the cse on hand.
14. Therefore, taking into consideration the above said case, the Civil Revision Petition filed by the petitioner is to be allowed and accordingly, the same is allowed. Consequently, the connected miscellaneous petition is closed. No Costs. ssl To The Subordinate Judge, Devakottai.