O.A.No.27 of 2008 is filed by the applicant/plaintiff, seeking for an interim injunction, restraining the respondents/defendants from in any manner encumbering the leasehold property shown and covered by licence No.62, pending disposal of the suit.
2.The suit was filed by the plaintiff for a judgment and decree declaring that the order of rejection issued by the first respondent, dated 20.12.2007 in refusing to renew the lease and licence No.62 in favour of the plaintiff beyond 31.12.2007 is arbitrary and for a further direction to the defendants pay a sum of Rs.73 lakhs as compensation for the licensed lands covered by licence No.62 and also for a direction to allot an alternate salt pan lands to the plaintiff or in the alternative for a mandatory injunction directing the defendants to renew the lease in favour of the plaintiff and for a permanent injunction restraining the defendants from encumbering the salt pan lands covered by licence No.62.
3.The suit was admitted on 07.01.2008. In the interim application, no order was passed. After the suit summons were served, the defendants have filed an application in A.No.711 of 2008, seeking for a direction to refer the dispute in terms of the lease agreement, dated 27.4.1988 to the Salt Commissioner.
4.The defendants have stated that the defendants were the officers of the Central Government. The plaintiff had taken out an application to waive the statutory notice in terms of Section 80 CPC. He had not sued the Union of India in terms of Section 79 CPC, but only sued the officers of the Union of India. The suit is not maintainable.
5.It is pointed by the defendants that the Government of India had actively considered the proposal for transfer of an extent of 1164 acres of Salt Department land situated in Attiput(S), Ennore, Vallur villages in Tiruvallur District to Ennore Port Ltd. for its expansion activities and for HPCL and Bharat Petroleum for developing oil installation facilities. The lease of the salt manufacturers in Attiput(S) got expired on 31.12.2007. The Government of India had not issued any order transferring the salt department lands to others. A decision was taken not to renew the lease. The second defendant addressed a letter to the Government of India and he was in turn informed that he should not renew the lease beyond 31.12.2007.
6.It is agreed that the plaintiff was the holder of the licence No.62 covering an extent of 77.7950 acres of land leased to him for 20 years from 1.1.1988 to 31.12.2007. The said land was subsequently reduced to 73.6374 acres. There is no renewal clause in the lease deed, which is registered with the Registrar's office. Despite having agreed to produce the required salt, the plaintiff had not produced the same. After expiry of current lease period, the Salt Factory Officer in-charge at Attiput(S) had taken over the physical possession of the lands on 1.1.2008 in the presence of two witnesses.
7.It was also stated that there is arbitration clause in the agreement under clause 23 for referring the dispute to the arbitration by the Salt Commissioner. Therefore, this application was taken out by the defendants.
8.A certified copy of the lease deed was produced, in which clause 23 reads as follows:
"23.In the event of any question, dispute or difference arising in respect of or in connection with these presents (except as to any matters, the decision of which is specially provided for by these presents) the same shall be referred to the sole arbitration of the Salt Commissioner to the Government of India or of some other person appointed by him. It will be no objection that the Arbitrator is a Government servant, that he has to deal with matters to which these presents relate or that in the course of his duties as Government Servant, he has expressed views, on all or any of the matters in dispute or difference. The award of the arbitrator shall be final and binding on the parties to this indenture. It is a term of this clause that no person other than the Salt Commissioner, Government of India or the person appointed by him shall act as arbitrator and that, if for any reason, that is not possible, the matter shall not be referred to arbitration at all. The arbitrator, may, with the consent of the parties, enlarge the time from time to time for making any publishing the award. Subject as aforesaid, the Arbitration Act, 1940 and the rules thereunder and any statutory modification thereof for the time being in force shall be deemed to apply to the arbitration proceedings under this Clause."
9.As against the said application, the respondent/plaintiff has filed a counter affidavit. In the counter affidavit, it is stated that the defendants will have to file the original lease deed, containing the arbitration clause. Since the original deed is with the defendants, the application filed by them cannot be entertained. There is complete non compliance of the mandatory provisions of
Section 8(2) of the Arbitration and Conciliation Act, 1996, inasmuch as the original arbitration agreement or the certified copy was not enclosed along with the application.
10.In this context, reliance was placed upon the judgment of the Supreme Court in Atul Singh and others Vs. Sunil Kumar Singh and others reported in 2008 (2) SCC 602. Paragraphs 18 and 19 of the said judgment may be usefully extracted below:
"18.Sub-section (2) of
Section 8 of the 1996 Act says that the application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. As already stated in the earlier part of the judgment, Defendant 3 had moved an application on 25-11-2004 under
Section 34 of the Arbitration Act, 1940 for staying the proceedings of the title suit and for referring the matter to arbitration. He filed a supplementary petition to the aforesaid application on 16-12-2004. Herein also reference was made to
Section 34 of the Arbitration Act, 1940. Thereafter, he filed an application on 28-2-2005 praying that as the Arbitration Act, 1940 had been repealed and the suit is of 1998, to avoid any confusion, his earlier petitions may be treated to have been filed under
Section 8 of the Arbitration and Conciliation Act, 1996. None of these petitions were accompanied by the original arbitration agreement dated 17-2-1992 or a duly certified copy thereof. In fact, there is no requirement of filing the original arbitration agreement or a duly certified copy thereof under
Section 34 of the Arbitration Act, 1940 and as such there was no occasion for Defendant 3 to file the aforesaid document. The third petition filed on 28-2-2005 contained the following prayer:
"It is, therefore, prayed that Your Honour may graciously be pleased to treat the petitions dated 25-11-2004,16-12-2004 and the present petition as supplement and part of each other for deciding the prayer with regard to stay of the proceedings of the aforesaid suit and/or to refer to arbitration in view of the arbitration agreement covering the subject-matter of this suit."
19.There is no whisper in the petition dated 28-2-2005 that the original arbitration agreement or a duly certified copy thereof is being filed along with the application. Therefore, there was a clear non-compliance with sub-section (2) of
Section 8 of the 1996 Act which is a mandatory provision and the dispute could not have been referred to arbitration. Learned counsel for the respondent has submitted that a copy of the partnership deed was on the record of the case. However, in order to satisfy the requirement of sub-section (2) of
Section 8 of the Act, Defendant 3 should have filed the original arbitration agreement or a duly certified copy thereof along with the petition filed by him on 28-2-2005, which he did not do. Therefore, no order for referring the dispute to arbitration could have been passed in the suit."
11.In the light of the same, the learned counsel for the plaintiff pleaded for the dismissal of the application filed by the defendants.
12.According to the respondent/plaintiff, Clause 23 is also hit by the Indian Contract Act and opposed to the Arbitration and Conciliation Act, 1996. Clause 23 of the agreement was also not absolute. The reliefs claimed in the plaint cannot be decided by an arbitrator. Since multifarious reliefs claimed in the suit are civil right in nature, it can only be tried in a civil suit. Without prejudice to these submissions, it was stated that since the procedure under the 1996 Act had not been complied with, the application deserves to be dismissed.
13.In this context, it is necessary to refer to the latest decision of the Supreme Court in H.Lathakumari Vs. Vamanapuram Block Panchayat and others reported in (2009) 7 SCC 230. In paragraph 11, it was held as follows:
"11.In fact, in PWD contracts, to which the bar on arbitration was applied, the printed form of articles of agreement was amended to include a clause which confirmed that the "contractor has also signed the copy of the Madras Detailed Standard Specifications excluding Clause 73 and other clauses relating to arbitration ....".(emphasis supplied) Significantly such an exclusion is not made in the articles of agreement entered into by the first respondent Panchayat. It is thus clear that the arbitration clause was intended to form a part of the contract between the parties. Therefore, the disputes between the parties are referable to arbitration in terms of the said arbitration agreement. No other objection to the arbitration is raised."
14.Therefore, the objection regarding the non existence of an arbitration under clause 23 of the agreement cannot be entertained by this Court. But at the same time, the application filed by the respondents/defendants cannot be said to be not in compliance with
Section 8(2) of the Arbitration and Conciliation Act. The defendant had also produced a photo copy of the registered lease deed. The plaintiff had agreed that he had signed the said deed. A copy of the agreement had also been enclosed in the typed set filed by the plaintiff.
15.In the light of the existence of an arbitration clause, the only option to the plaintiff is to move the Salt Commissioner regarding the issues raised in the suit. The invalidity or illegality of Clause 23 of the agreement cannot be gone into as held by the Supreme Court in the decision referred to above. In view of the arbitration clause, the injunction sought for cannot be granted.
16.In the light of the above, the application in A.No.711 of 2008 stands allowed. O.A.No.27 of 2008 will stand dismissed. No costs.
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