SHIV NARAYAN DHINGRA, J. - (1.) THE petitioner is aggrieved by an order dated 4th June, 2008 passed by Learned Additional District Judge whereby an application of the petitioners under Section 8 of Arbitration and Conciliation Act as well as under Section 151 of the CPC was dismissed.
(2.) BRIEF facts relevant for the purpose of deciding this petition are that the petitioner had hired services of respondent No. 1 herein for providing security guards for mining department at its mining project area at Kahalgon Super Thermal Power Project, District Bhagalpur, Bihar. The respondent No. 1 and other persons who had contested bid were sponsored by the Directorate General of Re -settlement (DGR). The contract was awarded to respondent No. 1 on 18th July, 2005 for a period of one year extendable for another period of one year. The respondent No. 1 was awarded a fresh contract on 13th December, 2006 for a period of one year. This contract was extendable only for a period of four months after its expiry in December 2007. The respondent No. 1 filed a suit before the Court below for recovery of Rs. 19,02,880/ - and for mandatory and permanent injunction in April, 2008 with a prayer that the petitioners be directed to clear the statutory dues like provident fund, Government service pension to concerned departments as the petitioners had failed to clear the statutory dues like provident fund, Government service pension to concerned departments as the petitioners had failed to clear these dues and the petitioners be restrained from terminating the contract of the respondent No. 1 and engaging any new security agency without clearing the dues respondent No. 1. Respondent No. 1 claimed that he had to recover a sum of Rs. 9,02,880/ - from the petitioners. An ex parte interim injunction was granted by the Court below restraining the petitioners from terminating the contract of service with respondent No. 1 (plaintiff before the Court below). After service of notice, the petitioners made an application for dismissal of the suit on the ground that there was an arbitration clause in the contract and the suit filed by the plaintiff was not maintainable. The petitioners drew attention of the trial Court to clause 7 of the agreement between the parties wherein it was provided that all disputes and differences arising out of the contract shall be decided by the process of settlement and arbitration as specified in Clauses 56 and 57 of the general conditions of the contract and amended provisions of Arbitration Act, 1940 shall apply. The petitioners also drew attention of the court to the fact that clause 7 provided that the Court at Bhagalpur alone shall have exclusive jurisdiction in all matters arising under the contract and the arbitrator shall give a reasoned award. The petitioners contention was that the suit was barred in view of the provisions of Arbitration and Conciliation Act, 1996 and the matter was to be governed only by the arbitration and the suit filed by respondent No. 1 was not maintainable. This application of the petitioners was dismissed by the impugned order of the trial Court for six reasons. The learned trial Court enumerated all these reasons in the impugned order.
(3.) THE first reason given by the trial Court is that the arbitration agreement stipulates deciding of disputes as per the Arbitration Act, 1940. The petitioner was equipped with the Law Officers and battery of Lawyers and despite knowing the enactment of 2006 and that the Arbitration Act, 1940 stands repealed, this Act has been mentioned as a governing Act in the agreement. The second reason given by the trial court is that the suit was filed for recovery of an amount and prayer also included mandatory and permanent injunction. Some of the amount was for the period when there was no contract between the parties, hence the arbitration agreement between the parties has to be ignored. The third reason given by the trial Court is that the instructions issued by DGR provided that in case of dispute, arbitration will be entertained at a request from both sides and it was DGR who had a right to enter into the arbitration. These instructions supersede and override the contract between the parties and the guidelines and instructions of DGR would be applicable between the parties as the same were in the nature of tripartite agreement. The fourth reason given by the trial Court is that the respondent No. 1 had written to the petitioner that respondent No. 1 would agree and abide by those terms, conditions and provisions of tender documents which were not violating the guidelines/instructions of the sponsor (DGR) and fifth reason given was that there was an arbitration meeting held in the office of DGR on 9th April, 2008 between the parties and it was instructed by DGR that fresh sponsorship shall be forwarded by the office on receipt of existing security agency and since the petitioner had not cleared the bills of the security agency, the fault was of the petitioner. The sixth reason given by the trial Court is that there was no clear and unambiguous arbitration agreement between the parties to refer the dispute between the parties to arbitration. The learned ADJ also dealt with the issue of jurisdiction and observed that the respondent was having its office in Delhi. The headquarters of the petitioner was in Delhi and the office of the DGR was also in Delhi and, therefore, the Court had jurisdiction to try and decide the suit.;