Alok Nath Chattopadhya Vs Sri Anil NaraIn Tadvalkar and ors. - Court Judgment

Excerpt:
[s. abdul nazeer j.] code of civil procedure, 1908 - order 3 rule 1 -appearance of a party in the court, either in person, by recognized agent or by pleader - action for ejectment of the defendant from the suit schedule premises - suit filed through the power of attorney holder of the plaintiff -decretal of the suit - appealed against - main ground of objection to the decree is that the plaintiff cannot maintain the suit through his general power of attorney holder -authority given to a power of attorney holder under the instrument - language used in the instrument - scope of interpretation - need for fair interpretation of the words, specific powers, general powers and incidental powers given under the instrument - held, a holder of power of attorney is the recognized agent of the party for the purpose of order 3 rule 1 of cpc - suit for ejectment of the defendant from the suit premises: filed by the plaintiff through his power of attorney holder is maintainable. -the scope of the power has to be gathered from the language of the document. there is no magic in the nomenclature of a power of attorney being a general power of attorney. the extent of power given by the principal to his agent has to be spelled out on a fair interpretation of the language used therein. the operative part of the deed is controlled by the recitals where there is ambiguity. where authority is given to do particular acts followed by general words, the general words are restricted to what is necessary for the proper performance. if power is given to do a particular job, then all the powers usually are necessary to do that job may be assumed. it is no' necessary to set out all those powers in detail. it is construed as including all incidental powers necessary for carrying out its object effectively. - further held although the power of attorney must authorize the agent' to do necessary acts, this authority must appear not in special power of attorney but a general power of attorney the interpretation of the expression "general power attorney" must be made on general principles of law an not in the light of any provision contained in order 3 rule _ itself, because all that order 3 rule 2 requires is that whatever be the power of attorney, that power of attorney must confer the necessary power upon the agent. - the most important factor in interpreting a power of attorney is the purpose for which it is executed, which must appeal primarily from the terms of the power of attorney itself an it is only if there is an unresolved problem left by t language of the document, there is a need to consider t manner in which the words used could be related to the facts and circumstances of the case. - on facts, held, from the conduct of the plaintiff, it is manifest that even if it is assumed that express power has not been granted under ex.p.l, the plaintiff has ratified the action of the attorney in terminating the tenancy of the defendant, filing of suit for his ejectment from the property and pursuing the suit at every stage till the date of decree. - (1) power of attorney act, 1882 (act no.55/1982) - (2) indian contract act, 1872 - section 182 - the words "agent" and "principal" - section 188 - "agent's authority" - "ratification" - discussed. (paras 10,11,12,16,17,20,22,23) regular first appeal is dismissed. 1. heard shri chandra bhan gupta, learned counsel for the petitioner. facts giving rise to the dispute are as under. petitioner and respondent no. 1 entered into a partnership to carry out business in the name and style of m/s. metals & methods vide partnership deed dated 04.04.1997. the said firm was engaged in the business of foundry and binders. there was a dispute amongst the partners, and the petitioner filed a suit for dissolution of the partnership firm, rendition of account as well as partition of the partnership property and possession and injunction, imp leading the other partner of firm and the firm as defendants. defendant-respondent no. 3, who is stated to be a tenant in the property belonging to the partnership firm was also imp leaded. in response to the summons and notice, the defendants put in appearance and filed written statement dated 15.05.2006. a specific plea was taken in the written statement that the subject matter of the suit being covered by the arbitration agreement entered into between the parties, the suit was not maintainable. 2. an application dated 09.09.2008 was moved by the defendant-respondents with a prayer that the proceedings of the suit may be terminated and the parties be referred to arbitration. the application was contested by the plaintiff-petitioner. however, vide order dated 04.02.2009, the trial court allowed the application and directed the case to be fixed for being referred to arbitration. dissatisfied with the order, the plaintiff-petitioner filed a review application, which has been dismissed by the trial court vide order dated 27.10.2009. aggrieved, the petitioner has approached this court.3. it has been contended by the learned counsel for the petitioner that the application filed by the defendant-respondents under section 8 of the arbitration act, was not maintainable and has wrongly and illegally been allowed by the trial court, inasmuch as in view of provision of section 8 of the arbitration and conciliation act (for short hereinafter referred to as the 'act'), the plea is to be raised at the time of submitting the first statement on the substance of the dispute and any application moved at a later point of time is not maintainable and liable to be dismissed. it has further been submitted that since respondent no. 3 was also made a party in the suit, who is not a party to the partnership deed, hence, the matter could not have been referred to arbitration.i have considered the argument advanced on behalf of the learned counsel for the petitioner and perused the record. section 8 of the act reads as under:- 8. power to refer parties to arbitration where there is an arbitration agreement. - (1) a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) 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. (3) notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. a perusal of the aforesaid provision goes to show that the judicial authority has been conferred with the powers to refer the dispute pending before him in case the same is the subject of an arbitration agreement between the parties, subject to fulfilment of the precedent prescribed in the section, one of which is that the power shall be exercised if a party so applies at the time of submitting his first statement on the substance of the dispute and not later. in the case in hand, a perusal of the record indicates that in the written statement filed on behalf of defendant-respondent nos. 1 to 3, a specific plea was raised in paragraph 4 that in view of the arbitration clause between the parties, the matter was liable to be referred for arbitration and the suit was liable to be dismissed. paragraph 4 of the written statement is quoted hereunder. 4) that the suit has been fled on the basis of a partnership deed dated 04.04.1997 which was dissolved as on 18.09.1998. even otherwise as per the contents of para 16 of the above said partnership deed, in case of dispute and differences the matter shall be referred to a arbitrator duly appointed with the mutual free will and consent of the partners as per the provision of arbitration act. prior of filing the above said suit it was necessary and expedient legally, socially, morally and otherwise that the disputes raised in the plaint should have been referred to a arbitrator prior of coming to a court. in the abeyance of enforcement of the said provisions of arbitration act the suit is liable to be dismissed. from the aforesaid, it is clear that the defendant-respondents raised the plea of section 8 in the written statement itself. thus, they did not submit to the jurisdiction of the court and did not waive their rights. they, in effect and substance, questioned the jurisdiction of the court in proceeding with the matter in view of the arbitration clause between the parties. thus, it cannot be said that the objection was being raised for the first time when the defendants moved an application, paper no. 50 c that in view of the arbitration clause between the parties, the matter is liable to be referred to arbitration. the said application, as held by the court below, was moved by the defendant-respondents making the plea that the plea has already been taken in the written statement, but the same has not yet been taken for hearing and, hence, it is being agitated again by means of the application. court below has rightly recorded the finding that application paper no. 50 c is not the inception of the arbitration clause plea, but it is the reminder to the court to take up the issue already pleaded in the written statement.in view of above, the first argument advanced on behalf of the petitioner that plea was not raised at the time of submitting the first statement, is devoid of any merits and is not liable to be accepted. in so far as second submission is concerned, since respondent no. 3 who was a tenant and was not a party to the partnership deed, but was made a party in the suit, hence, the matter could not have been referred to an arbitration, is also not tenable because of the fact that even though respondent no. 3 was impleaded in the suit, a perusal of the plaint filed as annexure 5 to the writ petition goes to show that no relief was claimed against him. the entire relief claimed in the suit was in respect of partnership property, partition of the partnership property and actual possession of the partnership property, dissolution and rendition of the accounts of partnership property. admittedly, the partnership was between the plaintiff-petitioner and defendant-respondents and, thus, defendant no. 3 who was a tenant, was only a superfluous party and his presence in the suit would not bar the reference of dispute to arbitrator in view of the arbitration clause between the parties. the hon'ble apex court in the case of rashtriya ispat nigam ltd. & anr. v. m/s. verma transport company, air 2006 sc 2800 has held that even4 if an application under section 8 of 1996 act is filed by the defendants even before filing of his first statement on the substance of the dispute, the same cannot be held to be wholly unmaintainable. it may be relevant to quote the following observation made in paragraph 34 and 40 of the said judgment. 34. the expression 'first statement on the substance of the dispute' contained in section 8 (1) of the 1996 act must be contra-distinguished with the expression 'written statement'. it employs submission of the party to the jurisdiction of the judicial authority. what is, therefore, is needed is a finding on the part of the judicial authority that the party has waived his right to invoke the arbitration clause. if an application is filed before actually filing the first statement on the substance of the dispute, in our opinion, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction of the court. what is, therefore, material is as to whether the petitioner has filed his first statement on the substance of the dispute or not, if not, hisb application under section 8 of the 1996 act, may not be held wholly unmaintainable. 40. waiver of a right on the part of a defendant to the lis must be gathered from the fact situation obtaining in each case. in the instant case, the court had already passed an ad interim ex parte injunction. the appellants were bound to respond to the notice issued by the court. while doing so, they raised a specific plea of bar of the suit in view of the existence of an arbitration agreement. having regard to the provisions of the act, they had, thus, shown their unequivocal intention to question the maintainability of the suit on the aforementioned ground.the ratio of the decision of the hon'ble apex court in rashtriya ispat nigam ltd. (supra) appears to be that a party should raise the question of jurisdiction of the court to entertain the proceedings in view of the arbitration clause between the parties at the first possible opportunity and in any case not later than submitting his first statement on the substance of dispute. in case, the question is not raised either before or at the time of submitting his first statement on the substance of dispute then it shall be deemed that the party has submitted to the jurisdiction of the court and has waived the right.applying the law laid down by the hon'ble apex court to the facts of the present case since the jurisdiction of the court to entertain the suit in view of the arbitration clause between the parties was raised by the defendant-respondents while submitting the written statement which was their first statement on the substance of the dispute, the court below has committed no illegality in passing the impugned order. the writ petition is, thus, devoid of any merits and, accordingly, stands dismissed in limine.

Judgment:
1. Heard Shri Chandra Bhan Gupta, learned counsel for the petitioner. Facts giving rise to the dispute are as under. Petitioner and respondent no. 1 entered into a partnership to carry out business in the name and style of M/s. Metals & Methods vide partnership deed dated 04.04.1997. The said firm was engaged in the business of Foundry and Binders. There was a dispute amongst the partners, and the petitioner filed a suit for dissolution of the partnership firm, rendition of account as well as partition of the partnership property and possession and injunction, imp leading the other partner of firm and the firm as defendants. Defendant-respondent no. 3, who is stated to be a tenant in the property belonging to the partnership firm was also imp leaded. In response to the summons and notice, the defendants put in appearance and filed written statement dated 15.05.2006. A specific plea was taken in the written statement that the subject matter of the suit being covered by the arbitration agreement entered into between the parties, the suit was not maintainable.

2. An application dated 09.09.2008 was moved by the defendant-respondents with a prayer that the proceedings of the suit may be terminated and the parties be referred to arbitration. The application was contested by the plaintiff-petitioner. However, vide order dated 04.02.2009, the trial court allowed the application and directed the case to be fixed for being referred to arbitration. Dissatisfied with the order, the plaintiff-petitioner filed a review application, which has been dismissed by the trial court vide order dated 27.10.2009. Aggrieved, the petitioner has approached this Court.

3. It has been contended by the learned counsel for the petitioner that the application filed by the defendant-respondents under Section 8 of the Arbitration Act, was not maintainable and has wrongly and illegally been allowed by the trial court, inasmuch as in view of provision of Section 8 of the Arbitration and Conciliation Act (for short hereinafter referred to as the 'Act'), the plea is to be raised at the time of submitting the first statement on the substance of the dispute and any application moved at a later point of time is not maintainable and liable to be dismissed. It has further been submitted that since respondent no. 3 was also made a party in the suit, who is not a party to the partnership deed, hence, the matter could not have been referred to Arbitration.

I have considered the argument advanced on behalf of the learned counsel for the petitioner and perused the record. Section 8 of the Act reads as under:- 8. Power to refer parties to arbitration where there is an arbitration agreement. - (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) 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. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. A perusal of the aforesaid provision goes to show that the judicial authority has been conferred with the powers to refer the dispute pending before him in case the same is the subject of an arbitration agreement between the parties, subject to fulfilment of the precedent prescribed in the section, one of which is that the power shall be exercised if a party so applies at the time of submitting his first statement on the substance of the dispute and not later.

In the case in hand, a perusal of the record indicates that in the written statement filed on behalf of defendant-respondent nos. 1 to 3, a specific plea was raised in paragraph 4 that in view of the arbitration clause between the parties, the matter was liable to be referred for arbitration and the suit was liable to be dismissed. Paragraph 4 of the written statement is quoted hereunder. 4) That the suit has been fled on the basis of a partnership deed dated 04.04.1997 which was dissolved as on 18.09.1998. Even otherwise as per the contents of para 16 of the above said partnership deed, In case of dispute and differences the matter shall be referred to a Arbitrator duly appointed with the mutual free will and consent of the partners as per the provision of Arbitration Act. Prior of filing the above said suit it was necessary and expedient legally, socially, morally and otherwise that the disputes raised in the plaint should have been referred to a Arbitrator prior of coming to a court. In the abeyance of enforcement of the said provisions of Arbitration Act the suit is liable to be dismissed. From the aforesaid, it is clear that the defendant-respondents raised the plea of Section 8 in the written statement itself. Thus, they did not submit to the jurisdiction of the court and did not waive their rights. They, in effect and substance, questioned the jurisdiction of the court in proceeding with the matter in view of the arbitration clause between the parties.

Thus, it cannot be said that the objection was being raised for the first time when the defendants moved an application, Paper No. 50 C that in view of the arbitration clause between the parties, the matter is liable to be referred to arbitration. The said application, as held by the court below, was moved by the defendant-respondents making the plea that the plea has already been taken in the written statement, but the same has not yet been taken for hearing and, hence, it is being agitated again by means of the application. Court below has rightly recorded the finding that application Paper No. 50 C is not the inception of the arbitration clause plea, but it is the reminder to the court to take up the issue already pleaded in the written statement.

In view of above, the first argument advanced on behalf of the petitioner that plea was not raised at the time of submitting the first statement, is devoid of any merits and is not liable to be accepted. In so far as second submission is concerned, since respondent no. 3 who was a tenant and was not a party to the partnership deed, but was made a party in the suit, hence, the matter could not have been referred to an arbitration, is also not tenable because of the fact that even though respondent no. 3 was impleaded in the suit, a perusal of the plaint filed as Annexure 5 to the writ petition goes to show that no relief was claimed against him. The entire relief claimed in the suit was in respect of partnership property, partition of the partnership property and actual possession of the partnership property, dissolution and rendition of the accounts of partnership property. Admittedly, the partnership was between the plaintiff-petitioner and defendant-respondents and, thus, defendant no. 3 who was a tenant, was only a superfluous party and his presence in the suit would not bar the reference of dispute to Arbitrator in view of the arbitration clause between the parties.

The Hon'ble Apex Court in the case of Rashtriya Ispat Nigam Ltd. & Anr. v. M/s. Verma Transport Company, AIR 2006 SC 2800 has held that even4 if an application under Section 8 of 1996 Act is filed by the defendants even before filing of his first statement on the substance of the dispute, the same cannot be held to be wholly unmaintainable. It may be relevant to quote the following observation made in paragraph 34 and 40 of the said judgment. 34. The expression 'first statement on the substance of the dispute' contained in Section 8 (1) of the 1996 Act must be contra-distinguished with the expression 'written statement'. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, is needed is a finding on the part of the judicial authority that the party has waived his right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the dispute, in our opinion, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction of the court. What is, therefore, material is as to whether the petitioner has filed his first statement on the substance of the dispute or not, if not, hisb application under Section 8 of the 1996 Act, may not be held wholly unmaintainable. 40. Waiver of a right on the part of a defendant to the lis must be gathered from the fact situation obtaining in each case.

In the instant case, the court had already passed an ad interim ex parte injunction. The appellants were bound to respond to the notice issued by the Court. While doing so, they raised a specific plea of bar of the suit in view of the existence of an arbitration agreement. Having regard to the provisions of the Act, they had, thus, shown their unequivocal intention to question the maintainability of the suit on the aforementioned ground.

The ratio of the decision of the Hon'ble Apex Court in Rashtriya Ispat Nigam Ltd. (supra) appears to be that a party should raise the question of jurisdiction of the court to entertain the proceedings in view of the arbitration clause between the parties at the first possible opportunity and in any case not later than submitting his first statement on the substance of dispute. In case, the question is not raised either before or at the time of submitting his first statement on the substance of dispute then it shall be deemed that the party has submitted to the jurisdiction of the court and has waived the right.

Applying the law laid down by the Hon'ble Apex Court to the facts of the present case since the jurisdiction of the court to entertain the suit in view of the arbitration clause between the parties was raised by the defendant-respondents while submitting the written statement which was their first statement on the substance of the dispute, the court below has committed no illegality in passing the impugned order. The writ petition is, thus, devoid of any merits and, accordingly, stands dismissed in limine.