Amitav Kumar Gupta, J. - (1.) THE present Civil Revision application is directed against the order dated 28.08.2013 passed by the learned Sub Judge -1, Chaibasa in T.S. Case No. 12 of 2013, whereby the application dated 20.07.2013 filed by Shiv Kumar Jain, petitioner(defendant No. 3 in the suit), under Section 5 read with Section 8 of the Arbitration and Conciliation Act, 1996 was dismissed and learned court refused to refer the case for arbitration.
(2.) THE brief facts of the case are as under: - - "The opposite Party No. 1, Akshay Jain (Plaintiff in the original suit) filed the suit against six defendants viz. The Branch Manager, Canara Bank, the Branch Manager, Union Bank, Shiv Kumar Jain, Deven Chand Jain, Tara Jain and Aayushi Jain, defendant Nos. 1 to 6 respectively, stating that Ashok Kumar Jain, the father of the plaintiff -Shiv Kumar Jain and Deven Chand Jain - defendant Nos. 3 and 4 were in mining business. The said business was carried out in the name of M/s. Misrilal Jain and Sons, a partnership firm. That they have executed a partnership agreement on 31.03.2004 having its Head Office at Chaibasa. The said firm has its accounts with Canara Bank, Chaibasa and Union Bank, Chaibasa. One of the partners - Ashok Kumar Jain i.e. father of the plaintiff died on 12.04.2013 and the plaintiff, Viz. Akshay Jain and the defendant Nos. 5 and 6 are his heirs. It is the case of the plaintiff that according to clause 17 of the partnership agreement dated 31.03.2004, the partnership shall not dissolve due to the death of a partner. The heirs of the deceased -partner shall be substituted in his place. Accordingly, the plaintiff and defendant Nos. 5 and 6 joined the partnership firm as partners on the demise of Ashok Kumar Jain. They send this information to Union Bank, Chaibasa and Canara Bank, Chaibasa. Union Bank, Chaibasa accepted the plaintiff as a partner of the firm and admitted him as its authorised signatory but Canara Bank, Chaibasa requested the plaintiff to produce the reconstituted partnership deed whereupon the plaintiff requested the defendant Nos. 3 and 4 for a reconstituted partnership deed for the firm so that it can be sent to different authorities but defendant No. 3, instead of reconstituting the partnership deed, claimed that the living partners i.e. defendant Nos. 3 and 4 are the only partners of the partnership firm and took no steps to include the plaintiff in the partnership firm due to which Canara Bank, Chaibasa did not recognize him as a partner of the partnership firm and refused to allow him to operate the firms account in the absence of the reconstituted partnership deed. The plaintiff, therefore, has an apprehension that defendant No. 3 will misuse the funds of the firm and wishes to transfer the same from Chaibasa to Kolkata, hence, the suit has been filed for a decree, declaring the status of plaintiff as a partner of the firm with the same rights, powers and liability as that of his late father Ashok Kumar Jain, in terms of partnership deed dated 31.03.2014; a decree directing the Canara Bank (defendant No. 1) to recognise the plaintiff as a partner of the firm; a decree directing defendant No. 3 to execute the reconstituted deed of partnership as per terms of partnership deed and for permanent injunction restraining defendant Nos. 1 and 2 from transferring any amount from any of the accounts of the partnership firm." Defendant No. 3 -Petitioner appeared in the suit and filed an application on 20.07.2013 for sending the suit to the arbitrator under the Arbitration and Conciliation Act. The learned trial court, relying on the judgment passed in " Sukanya Holdings Pvt. Ltd. Versus Jayesh H. Pandya and another", reported in : 2003 AIR (SC) 2252, rejected the application and refused to send the suit to an arbitrator.
(3.) HEARD the learned lawyer for the parties. The learned trial court has relied upon the judgment passed in the case of Sukanya Holdings Pvt. Ltd. Versus Jayesh H. Pandya and another", reported in : 2003 AIR (SC) 2252 wherein, inter alia, it has been held as follows: - - HELD: the relevant language used in Section 8 is "in a matter which is the subject matter of an arbitration agreement" Court is required to refer the parties to arbitration. Therefore, the suit should be in respect of 'a matter' which the parties have agreed to refer to, and which comes within the ambit of arbitration agreement. Where, however, a suit is commenced' as to a matter' which is outside the arbitration agreement and is also between some parties who are not parties to the arbitration agreement, there is no question of application of Section 8. The words ' a matter' indicates that entire subject matter of the suit should be subject to arbitration agreement. It has been further held: It would be difficult to give an interpretation to Section 8 under which bifurcation of the cause of action, that is to say subject matter of the suit, or in some cases bifurcation of the suit between parties, who are parties to the arbitration agreement, and others is possible. This would be laying down a totally new procedure not contemplated under the Act. If bifurcation of the subject matter of a suit was contemplated the legislature would have used appropriate language to permit such a course. Since there is no indication in the language, implies that bifurcation of the subject matter of an action brought before a judicial authority is not allowed. Secondly, such bifurcation of suit in two parts - one to be decided by the arbitral tribunal and other to be decided by the Civil Court - would inevitably delay the proceedings. The whole purpose of speedy disposal of dispute and decreasing the cost of litigation would be frustrated by such a procedure. It would also increase the cost of litigation and cause harassment to the parties. There is also a possibility of conflicting judgments and orders by two different forums. Reliance was placed on Section 89 C.P.C in support of the arguments that the matter should have been referred to arbitration. In my view, Section 89 C.P.C. cannot be resorted to for interpreting Section 8 of the Act as it stands on a different footing and it would be appreciable even in cases where there is no arbitration agreement for referring the dispute to arbitration. Further, for that purpose, the court has to analyse the condition contemplated under Section 89 of the C.P.C. and even if application under Section 8 of the Act is rejected, the court is required to follow the procedure prescribed under the said Section.;