ORDER
M. Jaichandren, J.
1. This civil revision petition has been filed against the fair and decretal order, dated 12.5.2009, made in I.A. No. 671 of 2008, in O.S. No. 295 of 2008, on the file of the Additional District Court, (Fast Track Court, No. III), Dharapuram.
2. The petitioners in the civil revision petition are the defendants in the suit, in O.S. No. 295 of 2008. The respondent had filed the suit, in O.S. No. 295 of 2008, on the file of the Additional District Court (Fast Track Court No. III), Dharapuram, praying for a decree a) to direct the defendants to pay to the plaintiff a sum of Rs. 10,00,000/- (Rupees ten lakhs), towards refund of security deposit, with 12% interest per annum, from the date of the suit, till the date of the payment of the said amount; b) to direct the defendants to pay to the plaintiff a sum of Rs. 20,921/- (Twenty thousand nine hundred and twenty one) towards balance of stock amount, with 12% interest per annum, from the date of the suit, till the date of the payment; c) to direct the defendants to pay to the plaintiff a sum of Rs. 3,92,432/- (Three Lakhs ninety two thousand four hundred and thirty two only) towards Return on Investment Support and d) to direct the defendants to pay to the plaintiff a sum of Rs. 3,00,000/- (Rupees Three Lakhs) being the sign up fee, with 12% interest per annum, from the date of the suit, till the date of such payment and for costs.
3. The plaintiff in the suit, who is the respondent herein had also filed an interlocutory application, in I.A. No. 671 of 2008, seeking the furnishing of security from the petitioners for the suit claim, failing which to order attachment of the suit schedule mentioned property.
4. The suit had been filed by the respondent in the month of October, 2008, basing the claims on the Dealership Agreement, dated 20.5.2005, filed as plaint document No. 4. Immediately thereafter, the petitioners, after receiving the suit summons and the petition, had filed an interlocutory application, in I.A. No. 19 of 2009 (CFR No. 16552 of 2008), Under Section 8 of the Arbitration and Conciliation Act, 1996, to refer the parties to arbitration, as provided in Clause 59 of the Dealership Agreement, dated 20.5.2005, and to dispose of the suit accordingly.
5. The trial Court, without deciding the application filed by the petitioners, Under Section 8 of the Arbitration and Conciliation Act, 1996, had chosen to pass orders, in I.A. No. 671 of 2008, arbitrarily, exceeding its jurisdiction. The petitioners had not filed their counter in the interlocutory application, in I.A. No. 671 of 2008, nor did they file the written statement, in O.S. No. 295 of 2008, before the trial Court, as they did not want to state their defence and to subject themselves to the jurisdiction of the said Court.
6. It has been further stated that the trial Court ought to have referred the matter to arbitration, as per Sections 5 and 8 of the Arbitration and Conciliation Act, 1996. However, the trial Court, without passing any order in the application, in I.A. No. 19 of 2009, filed Under Section 8 of the said Act, had passed an order, on 24.4.2009, in the application, in I.A. No. 671 of 2008, filed by the respondent, in O.S. No. 295 of 2008, stating that the petitioners had not filed the counter in the said application.
7. By the order, dated 24.4.2009, the petitioners were directed to furnish security for the suit claim, on or before 12.5.2009. Since the petitioners were not able to comply with the order, dated 24.4.2009, the trial Court had passed final orders, on 12.5.2009, in I.A. No. 671 of 2008, in O.S. No. 295 of 2008, directing the attachment of the petitioners' schedule mentioned properties, by 2.6.2009.
8. It has been stated that both the orders, dated 24.4.2009 and 12.5.2009, passed by the trial Court, in I.A. No. 671 of 2008, are without jurisdiction. The application filed by the petitioners in I.A. No. 19 of 2009, Under Section 8 of the Arbitration and Conciliation Act, 1996, was already pending on the file of the trial Court, wherein, the respondent had already filed the counter, on 23.4.2009.
9. It has been further stated that the respondent has filed a counter in the miscellaneous petition, in M.P. No. 1 of 2009, filed in the present civil revision petition, raising untenable contentions stating that the Dealership Agreement, dated 20.5.2005, had been terminated, on 29.1.2008, and therefore, the said agreement had seized to exist on the date of the filing of the suit. It had also been averred that the petitioners ought to have preferred an appeal, under Order XLIII Rule 1(q) of the Civil Procedure Code, 1908, against the impugned order, dated 12.5.2009, made in I.A. No. 671 of 2008. Therefore, the Civil Revision Petition filed by the petitioners, under Article 227 of the Constitution of India, is not maintainable, either in law or on facts.
10. It has been further stated that the petitioners had filed a detailed rejoinder to the counter filed by the respondent, in M.P. No. 1 of 2009, stating that, as per Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, the power of superintendence of the High Court, under Article 227 of the Constitution of India, is not confined to administrative superintendence only, as such power includes, within its sweep the power of judicial review. The power and the duty of the High Court is, essentially, to ensure that the Courts and Tribunals, inferior to the High Court, are doing what they are required to do. The High Court can interfere, under Article 227 of the Constitution of India, in cases of erroneous assumption of jurisdiction or refusal to exercise jurisdiction, error of law apparent on record and arbitrary or capricious exercise of authority resulting in manifest injustice.
11. It has been further stated that the trial Court ought to have referred the matter to arbitration, to resolve the disputes between the parties concerned. The trial Court ought to have found that all the issues, which are in dispute between the parties, based on the Dealership Agreement, dated 20.5.2005, could be resolved by way of arbitral proceedings. Once it is brought to its knowledge, the trial Court ought to have referred the matter to be resolved by arbitration, as per Clause 59 of the Dealership Agreement, which states that any dispute or difference, of any nature whatsoever, arising out of or in relation to the Agreement, shall be referred to a sole Arbitrator to be appointed by Reliance and the arbitration shall be held, in accordance with the provisions of the Arbitration and Conciliation Act, 1996. Therefore, the refusal of the trial Court to refer the dispute to arbitration would amount to failure to do justice. As such refusal by the trial Court would cause irreparable injury to the petitioners. In such circumstances, the petitioners have filed the present civil revision petition before this Court, under Article 227 of the Constitution of India.
12. The learned Counsel appearing on behalf of the petitioners had submitted that the order passed by the trial Court, on 12.5.2009, in I.A. No. 671 of 2008, stating that since, no counter had been filed on behalf of the respondents and as no security has been furnished for the suit claim, as per the earlier order, dated 24.4.2009, an order of attachment of the immovable properties had been passed, without deciding the application filed by the petitioners, Under Section 8 of Arbitration and Conciliation Act, 1996. The trial Court had ignored the interlocutory application filed by the petitioners, in I.A. No. 19 of 2009, in which the petitioners had stated that the suit and the interlocutory application filed by the respondent, in I.A. No. 671 of 2008, are not maintainable, in view of Clause 59 of the Dealership Agreement, dated 20.5.2005, which provides for the reference of the matter to arbitration in case of disputes arising between the parties.
13. The trial Court ought to have seen that the cause of action for the suit claim emanates from the Dealership agreement, dated 20.5.2005, and the said position has been admitted by the respondent herein, in paragraph XVIII of the plaint filed in the suit, in O.S. No. 295 of 2008. As such, the mandate of Section 8 of the Arbitration and Conciliation Act, 1996, would impose a statutory bar for the trial Court to proceed with the suit. The petitioners did not file their written statement in the suit, in O.S. No. 295 of 2008 and the counter in I.A. No. 671 of 2008, as the trial Court has no jurisdiction to try the case.
14. The order passed by the trial Court, on 12.5.2009, in I.A. No. 671 of 2008, is contrary to Section 8 of the Arbitration and Conciliation Act, 1996, which bars the continuation of the suit and the interim application filed by the respondent. The trial Court ought to have seen that the Dealership Agreement, dated 20.5.2005, cannot be deemed to be a non-existent document, though it had been cancelled by the parties, on mutual agreement, on 29.1.2008. However, since the dispute between the parties are relating to acts and omissions of the obligations and duties arising out of the dealership agreement, dated 20.5.2005, the trial Court ought to have followed the procedures, as per Clauses 59 and 60 of the said agreement. In view of the failure of the trial Court to exercise its jurisdiction, as provided Under Section 8 of the Arbitration and Conciliation Act, 1996, the order dated 12.5.2009, made in I.A. No. 671 of 2008, is illegal and invalid and therefore, it is liable to be set aside by this Court, invoking its jurisdiction, under Article 227 of the Constitution of India.
15. The learned Counsel appearing on behalf of the petitioners had relied on the following decisions in support of his contentions.
15.1. In Achutananda Baidya v. Prafulyla Kumar Gayen and Ors. : 1997 (5) SC 76, the Supreme Court had held as follows:
10. The power of superintendence of the High Court under Article 227 of the Constitution is not confined to administrative superintendence only but such power includes within its sweep the power of judicial review. The power and duty of the High Court under Article 227 is essentially to ensure that the Courts and Tribunals, inferior to High Court, have done what they were required to do. Law is well settled by various decisions of this Court that the High Court can interfere under Article 227 of the Constitution in cases of erroneous assumption or acting beyond its jurisdiction, refusal to exercise jurisdiction, error of law apparent on record as distinguished from a mere mistake of law, arbitrary or capricious exercise of authority or discretion, a patent error in procedure, arriving a finding which is perverse or based on no material, or resulting in manifest injustice. As regards finding of fact of the inferior Court, the High Court should not quash the judgment of the sub-ordinate Court merely on the ground that its finding of fact was erroneous but it will be open to the High Court in exercise of the powers under Article 227 to interfere with the finding of fact if the subordinate Court came to the conclusion without any evidence or upon manifest misreading of the evidence thereby indulging in improper exercise of jurisdiction or if its conclusions are perverse. If the evidences on record in respect of a question of fact is not at all taken into consideration and without reference to such evidence, the finding of fact is arrived at by inferior Court or Tribunal, such finding must be held to be perverse and lacking in factual basis. In such circumstances, in exercise of the jurisdiction under Article 227, the High Court will be competent to quash such perverse finding of fact. The High Court, in such circumstances, will be competent to consider the validity of the finding of fact assailed before it with reference to materials on record. In this case, the High Court has rightly held that the appellate authority came to the finding of non-existence of oral agreement of reconveyance without considering the evidence on record.
15.2. In P. Nand Gajapathi Raju v. P.V.G. Raju : 2000 (4) SCC 539 the Supreme Court had held as follows:
The conditions which are required to be satisfied Under Sections 8(1) and 8(2) of the Arbitration and Conciliation Act, 1996, before the Court can exercise its powers are:
(1) there is an arbitration agreement;
(2) a party to the agreement brings an action in the Court against the other party;
(3) subject-matter of the action is the same as the subject-matter of the arbitration agreement.
(4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute.
This last provision creates a right in the person bringing the action to have the dispute adjudicated by the Court, once the other party has submitted his first statement of defence. But if the party, who wants the matter to be referred to arbitration applies to the Court after submission of his statement and the party who has brought the action does not object, as is the case before us, there is no bar on the Court referring the parties to arbitration.
The phrase 'which is the subject of an arbitration agreement' does not, in the context, necessarily require that the agreement must be already in existence before the action is brought in the Court. The phrase also connotes an arbitration agreement being brought into existence while the action is pending.
The language of Section 8 is peremptory. It is, therefore, obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement. Nothing remains to be decided in the original action or the appeal arising therefrom. There is no question of stay of the proceedings till the arbitration proceedings conclude and the award becomes final in terms of the provisions of the new Act. All the rights, obligations and remedies of the parties would now be governed by the new Act including the right to challenge the award. The court to which the party shall have recourse to challenge the award would be the court as defined in Clause (e) of Section 2 of the new Act and not the court to which an application Under Section 8 of the new Act is made. An application before a Court under Section 8 merely brings to the court's notice that the subject-matter of the action before it is the subject-matter of an arbitration agreement. This would not be such an application as contemplated under Section 42 of the act as the Court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent court within the meaning of Section 2(e) of the new Act.
15.3. In Hindustan Petroleum Corporation Ltd. v. Pinkcity Midway Petroleums : 2003 (3) CTC 438 the Supreme Court had held as follows:
13. A perusal of Clause 40 of the Dealership Agreement clearly shows that the parties to the Dealership Agreement had agreed to refer their dispute arising out of the agreement, of whatever nature it may be, to an arbitrator, as contemplated in that agreement. Section 8 of the Act, in clear terms, mandates that a judicial authority before which an action is brought in a matter, which is the subject of an arbitration agreement, to refer such parties to arbitration, the language of this Section is unambiguous.
15.4. In Surya Dev Rai v. Ram Chander Rai : 2003 (6) SC 675 the Supreme Court had held as follows:
The power of the High Court under Articles 226 and 227 of the Constitution is always in addition to the revisional jurisdiction conferred on it. The curtailment of revisional jurisdiction of the High Court under Section 115 C.P.C. by Amendment Act 46 of 1999 does not take away and could not have taken away the constitutional jurisdiction of the High Court to issue a writ of certiorari to a civil Court, nor, is the power of superintendence conferred on the High Court under Article 227 of the Constitution taken away or whittled down. The power exixts, untrammelled by the amendment in Section 115 CPC, and is available to be exercised subject to rules of self-discipline and practice which are well settled.
In the initial years the Supreme Court was not inclined to depart from the traditional role of certiorari jurisdiction and consistent with the historical background felt itself bound by such procedural technicalities as were well known to the English Judges. In later years the Supreme Court has relaxed the procedural and technical rigours, yet the broad and fundamental principles governing the exercise of jurisdiction have not been given a go-by.
It is well settled that the power of superintendence conferred on the High Court under Article 227 is administrative as well as judicial, and is capable of being invoked at the instance of any person aggrieved or may even be exercised suo motu. The paramount consideration behind vesting such wide power of superintendence in the High Court is paving the path of justice and removing any obstacles therein. The power under Article 227 is wider than the one conferred on the High Court by Article 226 in the sense that the power of superintendence is not subject to those technicalities of procedure or traditional fetters which are to be found in certiorari jurisdiction.
Upon a review of decided cases and a survey of the occasions wherein the High Courts have exercised jurisdiction to command a writ of certiorari or to exercise supervisory jurisdiction under Article 227 in the given facts and circumstances in a variety of cases, it seems that the distinction between the two jurisdictions stands almost obliterated in practice. Probably, this is the reason why it has become customary with the lawyers labelling their petitions as one common under Articles 226 and 227 of the Constitution, though such practice has been deprecated in some judicial pronouncements.
The differences in jurisdiction between Article 226 and 227 are: Firstly, the writ of certiorari is an exercise of its original jurisdiction by the High Court; exercise of supervisory jurisdiction is not an original jurisdiction and in this sense it is akin to appellate revisional or corrective jurisdiction. Secondly, in a writ of certiorari, the record of the proceedings having been certified and sent up by the inferior court or tribunal to the High Court, the High Court if inclined to exercise its jurisdiction, may simply annul or quash the proceedings and then do no more. In exercise of supervisory jurisdiction the High Court may not only quash or set aside the impugned proceedings, judgment or order but it may also make such directions as the facts and circumstances of the case may warrant, may be by way of guiding the inferior court or tribunal as to the manner in which it would now proceed further or afresh as commended to or guided by the High Court. In appropriate cases the High Court, while exercising supervisory jurisdiction, may substitute such a decision of its own in place of the impugned decision, as the inferior court or tribunal should have made. Lastly, the jurisdiction under Article 226 of the Constitution is capable of being exercised on a prayer made by or on behalf of the party aggrieved; the supervisory jurisdiction is capable of being exercised suo motu as well.
In practice, the parameters for exercising jurisdiction to issue a writ of certiorari and those calling for exercise of supervisory jurisdiction are almost similar and the width of jurisdiction exercised by the High Courts in India unlike English courts has almost obliterated the distinction between the two jurisdictions. While exercising jurisdiction to issue a writ of certiorari the High Court may annul or set aside the act, order or proceedings of the subordinate courts but cannot substitute its own decision in place thereof. In exercise of supervisory jurisdiction the High Court may not only give suitable directions so as to guide the subordinate Court as to the manner in which it would act or proceed thereafter or afresh, the High Court may in appropriate cases itself make an order in supersession or substitution of the order of the subordinate court as the court should have made in the facts and circumstances of the case.
Certiorari, under Article 226 of the Constitution, is issued for correcting gross errors of jurisdiction, i.e., when a subordinate court is found to have acted (i) without jurisdiction - by assuming jurisdiction where there exists none, or (ii) in excess of its jurisdiction by overstepping or crossing the limits of jurisdiction, or (iii) acting in flagrant disregard of law or the rules of procedure or acting in violation of principles of natural justice where there is no procedure specified, and thereby occasioning failure of justice.
On the other hand, Supervisory jurisdiction under Article 227 of the Constitution is exercised for keeping the subordinate Courts within the bounds of their jurisdiction. When a subordinate Court has assumed a jurisdiction which it does not have or has failed to exercise a jurisdiction which it does have or the jurisdiction though available is being exercised by the Court in a manner not permitted by law and failure of justice or grave injustice has occasioned thereby, the High Court may step in to exercise its supervisory jurisdiction.
Be it a writ of certiorari or the exercise of supervisory jurisdiction, none is available to correct mere errors of fact or of law unless the following requirements are satisfied : (i) the error is manifest and apparent on the face of the proceedings such as when it is based on clear ignorance or utter disregard of the provisions of law, and (iii) a grave injustice or gross failure of justice has occasioned thereby.
Supervisory jurisdiction may be refused to be exercised when an alternative efficacious remedy by way of appeal or revision is available to the person aggrieved. The High Court may have regard to legislative policy formulated or experience and expressed by enactments where the legislature in exercise of its wisdom has deliberately chosen certain orders and proceedings to be kept away from exercise of appellate and revisional jurisdiction in the hope of accelerating the conclusion of the proceedings and avoiding delay and procrastination which is occasioned by subjecting every order at every stage of proceedings to judicial review by way of appeal or revision.
The power to issue a writ of certiorari and the supervisory jurisdiction are to be exercised sparingly and only in appropriate cases where the judicial conscience of the High Court dictates it to act lest a gross failure of justice or grave injustice should occasion.
Care, caution and circumspection need to be exercised, when any of the abovesaid two jurisdictions is sought to be invoked during the pendency of any suit or proceedings in a subordinate court and error though calling for correction is yet capable of being corrected at the conclusion of the proceedings in an appeal or revision preferred there against and entertaining a petition invoking certiorari or supervisory jurisdiction of High Court would obstruct the smooth flow and/or early disposal of the suit or proceedings. The High Court may feel inclined to intervene where the error is such, as, if not corrected at that very moment, may become incapable of correction at a later stage and refusal to intervene would result in travesty of justice or where such refusal itself would result in prolonging of the lis.
The High Court in exercise of certiorari or supervisory jurisdiction will not convert itself into a Court of Appeal and indulge in re-appreciation or evaluation of evidence or correct errors in drawing inferences or correct errors of mere formal or technical character. In the exercise of certiorari jurisdiction the High Court proceeds on an assumption that a Court which has jurisdiction over a subject-matter has the jurisdiction to decide wrongly as well as rightly. The High Court would not, therefore, for the purpose of certiorari assign to itself the role of an appellate Court and step into reappreciating or evaluating the evidence and substitute its own findings in place of those arrived at by the inferior Court.
Despite laying down the broad principles and working rules, the fact remains that the parameters for exercise of jurisdiction under Article 226 or 227 of the Constitution cannot be tied down in a straitjacket formula or rigid rules. Not less than often the High Court would be faced with dilemma. If it intervenes in pending proceedings there is bound to be delay in termination of proceedings. If it does not intervene, the error of the moment may earn immunity from correction. The facts and circumstances of a given case may make it more appropriate for the High Court to exercise self-restraint and not to intervene because the error of jurisdiction though committed is yet capable of being taken care of and corrected at a later stage and the wrong done, if any, would be set right and rights and equities adjusted in appeal or revision preferred at the conclusion of the proceedings. But there may be cases where a stitch in time would save nine'. The power is there but the exercise is discretionary which will be governed solely by the dictates of judicial conscience enriched by judicial experience and practical wisdom of the Judge.
15.5. In N. Rinivasa v. Kuttakaran Machine Tools Ltd. 2009 (5) LW 280, the Supreme Court had held as follows:
It is well settled that even if an agreement ceases to exist, the Arbitration clause remains in force and any dispute pertaining to the agreement ought to be resolved according to the conditions mentioned in the Arbitration clause. Therefore, the High Court was not justified in setting aside the order of the trial Court directing the parties to maintain status quo in the matter of transferring, alienating or creating any third party interest in the same.
15.6. In Magma Leasing and Finance Ltd. and Anr. v. V. Potluri Madhavilata and Anr. : 2009 (10) SCC 103, the Supreme Court had held as follows:
An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the Court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof.
15.7. In Radhey Shyam v. Chhabhi Nath : 2009 (5) SCC 616 the Supreme Court had held as follows:
Under Article 227 of the Constitution, the High Court does not issue a writ of certiorari. Article 227 of the Constitution, vests the High Courts with a power of superintendence which is to be very sparingly exercised to keep tribunals and courts within the bounds of their authority. Under Article 227, orders of both civil and criminal courts can be examined only in very exceptional cases when manifest miscarriage of justice has been occasioned. Such power, however, is not to be exercised to correct a mistake of fact and of law.
15.8. In Executive Director, H.P.C. Ltd. etc and Ors. v. Sri Prabh Transport etc. 2001 (2) LW 583, a learned Single Judge of this Court had held as follows:
In this case, there could be no doubt that there is an arbitration agreement within the meaning of the Act, vide Clause 51 of the Agreement, dated 29.1.1999. (2) The respondents had filed the action viz. The suit against the petitioner (3) subject matter of the arbitration agreement, the dispute between the parties, arises out of the contract which is covered by the arbitration clause and finally, the petitioner at the earliest juncture before filing their written statement had moved the Court under Section 8 of the Act. Section 8 also requires the party to file the original arbitration agreement or a duly certified copy along with the application. All the requirements as per Section 8 of the act have been satisfied.
15.9. In Andritz Oy v. Enmas Engineering Pvt. Ltd. 2007 (4) MLJ 290 a learned Single Judge of this Court had held as follows:
I. he cases falling under Part I are different from the cases falling under Part I are different from the cases falling under Part II of the Act of 1996 and therefore, any interpretation to Section 45 of the Act of 1996 could be made only by keeping the distinction between Part I and Part II in mind.
II. Doctrine of Severability is applicable to an Arbitration Agreement and Arbitration agreement is severable from the main contract.
III. An Arbitration Clause contained as part of a main agreement, would survive, even if the main agreement perishes, in cases where such an agreement is voidable and it also would survive in cases where the main agreement becomes void or becomes incapable of performance subsequent to its creation.
IV. The Arbitraiton Clause would not survive, if the main agreement, of which it is a part, is void ab initio.
V. The voidability of an agreement, is not one of the grounds available to the plaintiff to seek a rejection of a request under Section 45 of the Act of 1996.
VI. Under Order 6 Rule 4 CPC, a plaint should contain an exemplified form of pleadings in certain cases.
VII. Section 47(1)(b) of the Act of 1996, applies at the time of seeking enforcement of a Foreign Award and not at the time of seeking a reference under Section 45 of the Act.
VIII. The non-availability of the original Arbitration Agreement, the non signing of the agreement by the parties and the non-availability of the annexure to the original Agreement are all not matters which would fall within the scope of an enquiry under Section 45 of the Act of 1996, for the purpose of deciding whether to refer the parties to Arbitration or not.
15.10. In Union of India v. Rajesh Damani 2008 (3) CTC 740 a learned Single Judge of this Court had held as follows:
It is trite that an agreement containing a clause for arbitration need not expressly refer the term 'arbitration' and in case there is indication that the parties have agreed to a specific procedure for settlement of their dispute by referring the matter, the said consensus could be termed to be an Arbitration Agreement.
15.11. In Kotak Mahindra Bank Ltd. v. Sundaram Brake Lining Ltd. 2008 (4) CTC 1 a learned Single Judge of this Court had held as follows:
In an application under Section 8 to refer parties to Arbitration Court cannot and need not go into question as to whether Agreement entered into between parties is vitiated by fraud, etc. Such question can also be determined by Arbitrator himself. Judicial Authority cannot go into question as to whether Agreement is null and void, inoperative or incapable or being performed and these issues should be raised before the Arbitrator.
15.12. In Cash and Gain Finance and Investments v. Manjula Udaya Shankar 2009 (2) CTC 234, a learned Single Judge of this Court had held as follows:
In the present case, if a Suit had been instituted by one of the partners without reference to the Arbitration Agreement, the Court was bound to pass an order referring the parties to arbitration if there existed an arbitration clause. The duty of the Court is unexceptional.
16. The main contention of the learned Counsel for the petitioners is that the order, dated 12.5.2009, made in the interlocutory application, in I.A. No. 671 of 2008, is a nullity. The trial Court had exceeded its jurisdiction in passing the order, dated 12.5.2009, and the consequential order, dated 2.6.2009, attaching the property of the petitioners. Further, the trial Court had not exercised the jurisdiction vested in it, under Section 8(1) of the Arbitration and Conciliation Act, 1996, by referring the parties to arbitration. In such circumstances, the impugned order of the trial Court, dated 12.5.2009, made in I.A. No. 671 of 2008, is liable to be set aside.
17. The learned Counsel appearing on behalf of the respondent had submitted that the civil revision petition filed by the petitioners, under Article 227 of the Constitution of India, challenging the order, dated 12.5.2009, passed by the learned Additional District Judge, Fast Track Court No. III, Dharapuram, in I.A. No. 671 of 2008, in O.S. No. 295 of 2008, is not maintainable in law.
18. The learned Additional District Judge, Fast Track Court No. III, Dharapuram, had taken up I.A. No. 671 of 2008, for hearing, on 24.4.2009, when it had found that the respondents 1 to 3 had not filed the counter, even though sufficient time had been given to them for the said purpose. Therefore, the trial Court had held that the allegations made in the application remained unchallenged. Therefore, a direction had been issued to the respondents in the said application, who are the petitioners in the present civil revision petition, to furnish sufficient security for the value of the suit claim, by 12.5.2009. The application had been listed for further hearing, on 12.5.2009. Since, the petitioners herein had not furnished the security, as directed by the trial Court, a direction had been issued to attach the properties of the petitioners, by 2.6.2009. Thereafter, the application had been listed on 2.6.2009, when the trial Court had attached the property of the petitioners and the attachment was made absolute.
19. It had been further stated that the revision petitioners has challenged the impugned order, dated 12.5.2009, made in I.A. No. 671 of 2008. However, the revision petitioners had not challenged the attachment order, dated 2.6.2009. Therefore, the present civil revision petition is not maintainable in law. It has also been stated that the petitioners had not filed a counter in the interlocutory application filed by the respondent, even after ten adjournments had been granted by the trial Court. The revision petitioners had failed to file the counter statement, or a memo stating the fact that an application under Section 8 of the Arbitration and Conciliation Act, 1996, had been filed before the trial Court and that the said application had to be taken up for consideration before the other applications are heard.
20. It has also been stated that the order, dated 2.6.2009, had become final and that the petitioners ought to have challenged the said order only by way of an appeal, under Order XLIII Rule 1(q) of the Civil Procedure Code, 1908. Further, this Court had held, in Duraisamy v. R. Ramanathan 2002 (3) M.L.J. 540 that a revision petition against the order of the attachment is not maintainable.
21. The learned Counsel for the respondent had further stated that subsequent to the order of the attachment, dated 2.6.2009, it had been entered in the concerned registers in the Sub Registrar office, at Dharapuram. A certificate of encumbrance relating to the property had also been obtained by the respondent. The interim order, dated 12.5.2009, had merged with the final order, dated 2.6.2009. Thus, it is clear that the order of attachment passed by the trial Court had been given effect to and therefore, the civil revision petition has become infructuous. As such, the civil revision petition is devoid of merits and it is liable to be dismissed.
22. The learned Counsel appearing on behalf of the respondent had relied on the following decisions in support of his contentions:
22.1. In National Bal Bhawan v. Union of India : 2003 (9) SCC 671, the Supreme Court had held as follows:
Once a writ petition is finally disposed of by the High Court, any interim order passed in pending writ petition merges with the final order. If the respondents were aggrieved by the interim order in terms of which the writ petition was disposed of, it was incumbent upon the respondents either to have amended the memo of appeal by challenging the final order passed by the single Judge of the High Court or ought to have preferred fresh letters patent appeal against the final order passed by the Single Judge. That having not been done, the appeal became infructuous and it was not open to the High Court to decide the appeal on merits.22.2. In National Insurance Co. Ltd. v. Boghara Polyfab Pvt. Ltd. 2008 (4) CTC 854, the Supreme Court had held as follows:
It is thus clear that when a contract contains an arbitration clause and any dispute in respect of the said contract is referred to arbitration without the intervention of the Court, the Arbitral Tribunal can decide the following questions affecting its jurisdiction: (a) Whether there is an arbitration agreement; (b) Whether the arbitration agreement is valid; Whether the contract in which the arbitration clause is found is null and void and if so whether the invalidity extends to the Arbitration clause also. It follows therefore that if the respondent before the Arbitral Tribunal contends that the contract has been discharged by reason of the claimant accepting payment made by the respondent in full and final settlement, and if the claimant counters it by contending that the discharge voucher was extracted from him by practicing fraud, undue influence, or coercion, the Arbitral Tribunal will have to decide whether the discharge of contract was vitiated by any circumstance which rendered the discharge voidable at the instance of the claimant. If the Arbitral Tribunal comes to the conclusion that there was a valid discharge by voluntary execution of a discharge voucher, it will refuse to examine the claim on merits, and reject the claim as not maintainable. On the other hand, if the Arbitral Tribunal comes to the conclusion that such discharge of contract was vitiated by any circumstance which rendered it void, it will ignore the same and proceed to decide the claim on merits.22.3. In N. Radhakrishnan v. Maestro Engineers : 2010 (1) SCC 72, the Supreme Court had held that the Court is not empowered to refer parties to arbitration if procedural requirement in Section 8(2) not complied with.
22.4. In House Productions Pvt. Ltd v. Meediya Plus : 2005 (2) CTC 51, a Division Bench of this Court had held as follows:
It is obvious that while considering the question of grant of any interim relief in the nature of injunction, underlying principles for grant of injunction as applicable in proceedings under Order 39, Rules 1 and 2 of the Code of Civil Procedure would be applicable. So far as the grant of injunction under Order 39, Rules 1 and 2 is concerned, law is more or less well settled that the grant of injunction is a discretionary relief and while granting such injunction, the Court is required to satisfy itself that there is a prima facie case in favour of the party asking for injunction and irreparable injury or damage would be caused if injunction is not granted and balance of convenience lies in favour of the applicant. For considering as to whether there is a prima facie case or not, the applicant is not expected to prove his case to the hilt and the Court is only required to satisfy itself that there is a serious question to be tried and there is probability of the applicant being entitled to the relief asked for. Once prima facie case is found, the Court is further required to consider whether any irreparable injury would be caused. Irreparable injury in such sense would mean that there is no other remedy available to the applicant except injunction. Irreparable injury in such context would mean that a material injury which cannot be adequately compensated by way of damages. Apart from these two aspects, the Court is further required to conclude that balance of convenience lies in favour of the applicant and to find out comparative hardship, mischief or inconvenience, which is likely to occur if injunction is with-held and if the court finds that the comparative hardship, mischief or inconvenience is likely to be greater, if it is to be withheld, the Court in its exercise of sound judicial discretion may grant injunction. The aforesaid well settled principle would be equally applicable to the matters relating to grant of injunction as envisaged under Section 9 of the Arbitration and Conciliation Act.22.5. In Oomor Saith H.G. v. O. Aslam Sait 2001 (3) CTC 269, it has been held as follows:
Mere existence of an Arbitration clause does not create an embargo on the Civil Court to continue the proceedings pending before such Court. The Civil Court is not prevented from proceeding with suit despite an arbitration clause if the dispute involves serious questions of law or complicated questions of fact, adjudication of which would depend upon detailed oral and documentary evidence.22.6. In Das Lagerway Wind Turbines Ltd. v. Cynosure Investments Private Ltd. 2007 (3) CTC 524, this Court had held as follows:
10. From the rival contentions of the learned counsels and also a perusal of the typed set of papers would establish that when the revision petitioner states that the very subscription agreement, dated 16.2.1996 itself has got extinguished, there is no question of invoking the Arbitration Clause found in the said subscription agreement. Further, as rightly contended by the learned Counsel for the respondent, certain reliefs could be granted only by the Company Law Board, particularly, when provisions of Sections 397, 398, 402 and 403 of the Companies Act is invoked.
11. The learned Counsel for the respondent also rightly relied on the decision of the Apex Court in Sukanya Holdings Pvt. Ltd. v. Jayes H. pandya and another : 2003 (2) CTC 431 : 2003 (3) CLJ 68, as well as the decision of this Court reported in Gouri Spinning Mills Ltd. v. Adimoolam and also the decision in Sporting Pasttime India Ltd. v. Kasturi and Sons Ltd. : 2006 (4) CTC 377. In the above said cases this Court only reiterated the legal position that scope of the petition filed under Sections 397 and 398 is quite distinct from the scope of the Arbitration Clause contained in the agreement and reliefs claimed in the Company Petition cannot be granted by arbitrator and it can be granted by Company Law Board alone by virtue of Haryana Telecom Ltd. v. Sterlite Industries (India) Ltd. : 1999 (5) SCC 688, that what can be referred to the arbitrator is only the dispute or matter which the arbitrator is competent or empowered to decide. On the other hand the decision relied upon by the learned Counsel for the revision petition is factually distinguishable as in the said decision Section 8 Application has been filed when the matter was pending before a Civil Court and in that context only the Apex Court held that when there exists an Arbitration Clause it is mandatory for the Civil Court to refer the matter to the arbitrator. Therefore, considering all these aspects only, the Company Law Board has rightly observed that if CIPL does not have any right to file the Company Petition in view of the subsequent agreement, then it is always open to the DLWL to take preliminary objection on the maintainability of the Company Petition. Therefore, I do not find any illegality or irregularity in the order of the Company Law Board.
22.7. In Madhivadanan M.K. v. R. Samarasam : 2008 (2) CTC 659, this Court had held as follows:The substituted agreement that repayment of advance by the petitioner to the respondent and part payment made by him subsequently gave a new cause of action and obliterated the earlier one, hence, the suit is maintainable.
23. In view of the submissions made by the learned counsels appearing on behalf of the parties concerned and on a perusal of the records available and in view of the decisions cited above, this Court is of the considered view that the trial Court ought to have taken up the interlocutory application filed by the petitioners, in I.A. No. 19 of 2009, under Section 8 of the Arbitration and Conciliation Act, 1996, for hearing and disposal, on merits and in accordance with law, at the earliest convenient stage. However, in view of the fact that an order of attachment had already been passed by the learned Additional District Judge, Fast Track Court No. III, Dharapuram, on 2.6.2009, and the property in question had been attached pursuant to the said order, the trial Court is directed to consider I.A. No. 19 of 2009, filed by the petitioners, on merits and in accordance with law and pass appropriate orders thereon, after giving sufficient opportunity of hearing to the petitioners, as well as the respondent, within a period of four weeks from the date of receipt of a copy of this order.
The Civil Revision Petition is ordered accordingly. No costs. Consequently, connected miscellaneous petition is closed.