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MANU/SC/0072/2010

IN THE SUPREME COURT OF INDIA Civil Appeal No. 89 of 2010 (Arising out of SLP (C) No. 20808 of 2008) De i!e! "n# 0$.01.2010 Appellants# Vijay Kumar Sharma @ Manju Vs. %espon!ent# Raghunan an Sharma @ !a"uram an Ors. H#n$"%& 'u g&s( %.&. %aveen!ran an! '.S. %a!(a)ris(nan* ++. C#uns&%s( ,or Appellant-Petitioner-Plaintiff# P.N. Mishra* Sr. A!v.* K.N. Tripathy* R.M. Patnai * !.P. Sah" an! #.K. Si$harthan* A!vs ,or %espon!ents-Defen!ant# K.#. #i%&anthan* Sr. A!v.* Neha* San%ee' Panigrahi* #i as Mehta* (ayanat K. Mehta an! Amit )han$ari* A!vs. Su"j&)*( Ar"i*ra*i#n Su"j&)*( Pr#+&r*y
Catch Words Mentioned IN

A)*s,Ru%&s,Or &rs( Ar.itration an! Con iliation A t* 199/ 0 Se tions 1* 1(2)* 1(2)* 1(3)* 8* 8(1)* 8(2)* 11* 11(/)* 13* 13(1)* 1$ an! 1$(2)4 Civil Pro e!ure Co!e (CPC) 0 "r!er 1* %ule 11 Cas&s R&-&rr& ( %a5 'u6ar v. S(iva Prasa! 7upta MANU/*)/0171/1+,+ # A8% 1929 Cal. $004 +ag!is( C(an!er v. %a6es( C(an!er MANU/SC/1+-,/2007 # 2001 ($) SCC $19 Pri#r His*#ry , High C#ur* S*a*us( ,ro6 t(e +u!g6ent an! "r!er !ate! 1/.0$.2008 of t(e 9ig( Court of +u!i ature for %a5ast(an at +aipur :en ( in S: Civil Ar.itration Appli ation No. 12 of 2001
.MANU/R!/02/0/20001

Ci*ing R&-&r&n)&(
Ra% K"mar 2. Shi2a Prasa$ 3"pta MANU/*)/0171/1+,+ (ag$ish Chan$er 2. Ramesh Chan$er MANU/SC/1+-,/2007 4is5"sse$ 4is5"sse$

Dis+#si*i#n( Appeal allo;e! ORDER R.V. Ra.&&n ran/ '. 1. Leave grante!. 9ear! t(e learne! Counsel. 2. <(e first respon!ent an! appellant are .rot(ers. <(e first respon!ent file! a suit (Civil Suit No. 100 of 200/) against t(e appellant alleging t(at t(eir fat(er Durganara=an S(ar6a !ie! on 20.10.200$ leaving a ;ill !ate! 21.10.2002 .e>ueat(ing portions of propert= .earing No. :0122* :apu Nagar* +aipur (for s(ort t(e suit pre6ises) to (i6* an! t(at t(e appellant ;(o ;as in possession of t(e sai! portions* ;as lia.le to !eliver possession t(ereof to t(e first respon!ent on t(e .asis of t(e sai! ;ill. <(e ?@e utors of t(e sai! ;ill ;ere i6plea!e! as !efen!ants 2 an! 2 (respon!ents 2 an! 2 (erein). 2. <(e appellant (erein* in turn file! a Civil Suit No. $2 of 2001 for partition an! separate possession of (is one0si@t( s(are in t(e an estral properties. 9e also soug(t a !e laration t(at t(e ;ill !ate! 21.10.2002 propoun!e! .= t(e first respon!ent ;as fa.ri ate!* null an! voi!. 8n t(e sai! partition suit* first respon!ent an! (is son ;ere i6plea!e! as !efen!ants 1 an! /4 appellantAs anot(er .rot(er an! t(ree sisters ;ere i6plea!e! as !efen!ants 2 to $4 t(e son of anot(er .rot(er ;(o (a! .een given a;a= in a!option ;as i6plea!e! as !efen!ant No. 14 an! t(e e@e utors un!er t(e ;ill ;ere i6plea!e! as !efen!ants 8 an! 9. 3. <(e t;o suits ;ere onsoli!ate! for trial. %espon!ents 2 an! 2 lai6ing to .e t(e e@e utors of t(e ;ill of Durganara=an S(ar6a file! an appli ation un!er Se tion 0 of t(e Ar.itration B Con iliation A t* 199/ (AA tA for s(ort) in t(e sai! suits alleging t(at t(e !e ease! Durganara=an S(ar6a (a! 6a!e a !e laration on 1$.10.200$* s(ortl= .efore (is !eat(* t(at if t(ere ;as an= !ispute in onne tion ;it( t(e ;ill* t(e sa6e s(oul! .e !e i!e! .= S(ri C.N. :(an!ari* A!vo ate4 t(at t(e parties to t(e t;o suits .eing (il!ren an! gran! (il!ren of Durganara=an S(ar6a ;ere .oun! .= t(e sai! !e laration an! t(e !isputes ;(i ( ;ere t(e su.5e t 6atter of t(e t;o suits s(oul! t(erefore .e !e i!e! .= ar.itration. <(e trial ourt (ear! t(e sai! appli ation an! .= or!er !ate! 19.9.12001* (el! t(at in vie; of t(e sai! provision for resolution of !isputes .= ar.itration* its 5uris!i tion ;as .arre! .= t(e provisions of t(e A t. Conse>uentl=* t(e trial ourt !is6isse! .ot( t(e suits* un!er "r!er 1 %ule 11 of t(e Co!e of Civil Pro e!ure (ACo!eA for s(ort).

$. ,eeling aggrieve! .= t(e or!er !ate! 19.9.2001* t(e appellant (erein file! an appeal (S: Civil Appeal No. //3 of 2001) onten!ing t(at t(ere ;as no agree6ent for ar.itration an! t(at t(ere ;as no groun! for !is6issal of (is suit an! a Division :en ( of t(e 9ig( Court* ;(ile issuing noti e to s(o; ause ;(= t(e appeal s(oul! not .e a!6itte!* sta=e! t(e or!er !ate! 19.9.2001 passe! .= t(e trial ourt* .= or!er !ate! 13.11.2001. /. <(e first respon!ent a epte! t(e !e ision of t(e trial ourt an! file! a lai6 state6ent on 20.10.2001 .efore S(ri C.N. :(an!ari* t(e sole Ar.itrator na6e! in t(e !e larations of (is fat(er* t(e reliefs earlier soug(t .= (i6 in Civil Suit No. 100-200/. <(e sai! C.N. :(an!ari issue! noti es to t(e appellant an! ot(er non0petitioners in t(e lai6. <(e appellant appeare! .efore S(ri C.N. :(an!ari* an! o.5e te! to (is 5uris!i tion to a t as an ar.itrator* onten!ing t(at t(ere ;as no ar.itration Aagree6ent .et;een t(e parties. 9e also pointe! out t(at neit(er (e nor first respon!ent (a! signe! t(e !e laration of (is fat(er giving onsent to S(ri C.N. :(an!ari .eing t(e Ar.itrator. 9e also .roug(t to t(e noti e of S(ri :(an!ari* t(at t(e or!er !ate! 19.9.2001 passe! .= t(e trial ourt (a! .een sta=e! .= t(e 9ig( Court. 9e also (allenge! t(e ontinuation of S(ri :(an!ari as an ar.itrator .= alleging .ias against (i6. 8n t(ese ir u6stan es on 11.11.2001* S(ri :(an!ari ;it(!re; (i6self fro6 t(e ar.itrator. "n su ( ;it(!ra;al* t(e first respon!ent file! an appli ation un!er Se tion 11.-1 rea! ;it( Se tion 1/.11.'1 an! 16.21 of t(e A t for appoint6ent of an in!epen!ent ar.itrator. <(e !esignate of t(e C(ief +usti e ;(o (ear! t(e 6atter* allo;e! t(e sai! appli ation .= t(e i6pugne! or!er !ate! 1/.$.2008* an! appointe! an Ar.itrator to resolve t(e !isputes. <(e sai! or!er is (allenge! in t(is appeal .= spe ial leave. 1. <(e first ontention raise! .= t(e appellant is t(at ;(en t(e >uestion (;(et(er t(ere is a vali! ar.itration agree6ent .et;een t(e appellant an! first respon!ent) is pen!ing onsi!eration .= t(e 9ig( Court in S.:. Civil ,irst Appeal No. //3 of 2001* t(e !esignate of t(e C(ief +usti e oul! not (ave entertaine! or !e i!e! an appli ation un!er Se tions 11* 1/ an! 16 of t(e A t involving t(e sa6e >uestion. 8t is su.6itte! t(at t(e or!er of t(e trial ourt !ate! 19.9.2001 (ol!ing t(at t(e parties s(oul! resolve t(eir !isputes .= ar.itration (a! .een sta=e! .= t(e 9ig( Court in t(e pen!ing appeal. 8n vie; of t(e pen!en = of S.:. Civil first Appal No. //3 of 2001 an! t(e interi6 sta= of t(e or!er !ate! 19.9.2001* grante! .= t(e 9ig( Court on 13.11.2001* t(e appellant su.6itte! t(at t(e learne! !esignate of t(e C(ief +usti e oug(t not to (ave pro ee!e! to !e i!e t(e appli ation for appoint6ent of a fres( ar.itrator* .ut oug(t to (ave a;aite! t(e !e ision in t(e first appeal. 8t ;as su.6itte! t(at in t(e pen!ing first appeal (against t(e !e ision !is6issing (is suit un!er "r!er 1 %ule 11 of t(e Co!e)* if it is (el! t(at t(ere is no ar.itration agree6ent .et;een t(e parties or if t(e ourt refuses to refer t(e parties to ar.itration* t(e suits ;ill (ave to pro ee! an! t(at ;ill lea! to onfli ting !e isions. 8. Se tion 0 of t(e A t ;(i ( is relevant is e@tra te! .elo;# 8. Po;er to refer parties to ar.itration ;(ere t(ere is an ar.itration agree6ent. 0 (1) A 5uri!i al aut(orit= .efore ;(i ( an a tion is .roug(t in a 6atter ;(i ( is t(e su.5e t of an

ar.itration agree6ent s(all* if a part= so applies not later t(an ;(en su.6itting (is first state6ent on t(e su.stan e of t(e !ispute* refer t(e parties to ar.itration. (2) <(e appli ation referre! to in Su.0se tion (1) s(all not .e entertaine! unless it is a o6panie! .= t(e original ar.itration agree6ent or a !ul= ertifie! op= t(ereof. (2) Not;it(stan!ing t(at an appli ation (as .een 6a!e un!er Su.0se tion (1) an! t(at t(e issue is pen!ing .efore t(e 5u!i ial aut(orit=* an ar.itration 6a= .e o66en e! or ontinue! an! an ar.itral a;ar! 6a!e. 9. 8t is evi!ent fro6 Su.0se tion (2) of Se tion 0 t(at t(e pen!en = of an appli ation un!er Se tion 0 .efore an= ourt ;ill not o6e in t(e ;a= of an ar.itration .eing o66en e! or ontinue! an! an ar.itral a;ar! .eing 6a!e. <(e o.vious intention of t(is provision is t(at neit(er t(e filing of an= suit .= an= part= to t(e ar.itration agree6ent nor an= appli ation .eing 6a!e .= t(e ot(er part= un!er Se tion 0 to t(e ourt* s(oul! o.stru t or pre lu!e a part= fro6 initiating an= pro ee!ings for appoint6ent of an ar.itrator or pro ee!ing ;it( t(e ar.itration .efore t(e Ar.itral <ri.unal. 9aving regar! to t(e spe ifi provision in Se tion 0.,1 provi!ing t(at t(e pen!en = of an appli ation un!er Se tion 0.11 ;ill not o6e in t(e ;a= of an ar.itration .eing o66en e! or ontinue!* ;e are of t(e vie; t(at an appli ation un!er Se tion 11 or Se tion 16.21 of t(e A t* for appoint6ent of an ar.itrator* ;ill not .e .arre! .= pen!en = of an appli ation un!er Se tion 0 of t(e A t in an= suit* nor ;ill t(e Designate of t(e C(ief +usti e .e pre lu!e! fro6 onsi!ering an! !isposing of an appli ation un!er Se tion 11 or 16.21 of t(e A t. 8t follo;s t(at if an ar.itrator is appointe! .= t(e Designate of t(e C(ief +usti e un!er Se tion 11 of t(e A t* not(ing prevents t(e ar.itrator fro6 pro ee!ing ;it( t(e ar.itration. 8t also t(erefore follo;s t(at t(e 6ere fa t t(at an appeal fro6 an or!er !is6issing t(e suit un!er "r!er 1 %ule 11 CPC (on t(e groun! t(at t(e !isputes re>uire to .e settle! .= Ar.itration) is pen!ing .efore t(e 9ig( Court* ;ill not o6e in t(e ;a= of t(e appoint6ent of an ar.itrator un!er Se tion 11 rea! ;it( Se tion 16.21 of t(e A t* if t(e Aut(orit= un!er Se tion 11 fin!s it ne essar= to appoint an Ar.itrator. <(erefore t(e first ontention of t(e appellant is lia.le to .e re5e te!. 10. <(e appellant ne@t onten!e! t(at t(e parties to t(e !ispute (ave not entere! into an ar.itration agree6ent* t(ere is no ar.itration agree6ent in e@isten e as onte6plate! un!er Se tion 7 of t(e A t* an! t(e Aut(orit= un!er Se tion 11 of t(e A t ;as not 5ustifie! in appointing an ar.itrator. 11. <(e learne! Designate (el! t(at an ar.itration agree6ent nee! not .e signe! .= t(e parties an! if a provision for ar.itration is in orporate! .= a <estator in (is Dill* su ( a provision ;ill .e .in!ing on (is (il!ren-legatees* after (is !eat(. 9e (el! t(at a provision in a Dill provi!ing for ar.itration* in t(e event of a !ispute a6ong t(e legatees* is an ar.itration agree6ent un!er Se tion 7 of t(e A t* for t(e purposes !e i!ing an= !isputes a6ong t(e legatees. 9e relie! upon a !e ision of t(e Cal utta 9ig( Court in Raj Kumar v. Shiva Prasad Gupta MANU/*)/0171/1+,+ # A8% 1929 Cal. $00 ;(ere it ;as o.serve! t(at a fat(er (as t(e po;er to refer to ar.itration t(e !isputes relating to a 5oint fa6il= propert=* provi!e! su ( referen e ;as for t(e .enefit of t(e fa6il=* an! t(at an

a;ar! 6a!e .= an ar.itrator upon su ( referen e* ;ill .e .in!ing upon all 6e6.ers of t(e fa6il=* in lu!ing an= 6inors. 12. De are of t(e vie; t(at t(e sai! !e ision (as no relevan e to t(e >uestion on (an! an! at all events* is not of an= assistan e to !eter6ine ;(et(er t(ere ;as an= ar.itration agree6ent* as onte6plate! un!er Se tion 7 of t(e A t. Se tion 7 !efines Aar.itration agree6entA as 6eaning an agree6ent .= t(e parties to su.6it to ar.itration all or ertain !isputes ;(i ( (ave arisen or ;(i ( 6a= arise .et;een t(e6 in respe t of a !efine! legal relations(ip* ;(et(er ontra tual or not. Su.0se tions (2) an! (2) of Se tion 7 re>uire t(at an ar.itration agree6ent s(all .e in ;riting (;(et(er it is in t(e for6 of an ar.itration lause in a ontra t or in t(e for6 of a separate agree6ent). Su.0se tion (3) of Se tion 7 enu6erating t(e ir u6stan es in ;(i ( an ar.itration agree6ent ;ill .e onsi!ere! as .eing in ;riting* is e@tra te! .elo;#
7./1.

An ar.itration agree6ent is in ;riting if it is ontaine! in 0

(a) a !o u6ent signe! .= t(e parties4 (.) an e@ (ange of letters* tele@* telegra6s or ot(er 6eans of tele o66uni ation ;(i ( provi!e a re or! of t(e agree6ent4 or ( ) an e@ (ange of state6ents of lai6 an! !efen e in ;(i ( t(e e@isten e of t(e agree6ent is allege! .= one part= an! not !enie! .= t(e ot(er. 12. 8n t(is ase* a!6itte!l=* t(ere is no !o u6ent signe! .= t(e parties to t(e !ispute* nor an= e@ (ange of letters* tele@* telegra6s (or ot(er 6eans of tele o66uni ation) referring to or re or!ing an ar.itration agree6ent .et;een t(e parties. 8t is also not in !ispute t(at t(ere is no e@ (ange of state6ent of lai6s or !efen e ;(ere t(e allegation of e@isten e of an ar.itration agree6ent .= one part= is not !enie! .= t(e ot(er. 8n ot(er ;or!s* t(ere is no ar.itration agree6ent as !efine! in Se tion 7 .et;een t(e parties. 8n Jagdish Chander v. Ramesh Chander MANU/SC/1+-,/2007 # 2001 ($) SCC $19* t(is Court (el!# <(e e@isten e of an ar.itration agree6ent as !efine! un!er Se tion 7 of t(e A t is a on!ition pre e!ent for e@er ise of po;er to appoint an ar.itrator-Ar.itral <ri.unal* un!er Se tion 11 of t(e A t .= t(e (ief +usti e or (is !esignate. 8t is not per6issi.le to appoint an ar.itrator to a!5u!i ate t(e !isputes .et;een t(e parties* in t(e a.sen e of an ar.itration agree6ent of 6utual onsent. 13. D(ile t(e respon!ents rel= upon t(e Dill* t(e appellant !enies t(e e@isten e of an= su ( Dill. <(e vali!it= of t(e Dill is pen!ing onsi!eration in t(e t;o ivil suits file! .= t(e appellant an! t(e first respon!ent* referre! to a.ove. <(e allege! Dill* a!6itte!l=* !oes not ontain an= provision for ar.itration* t(oug( t(e learne! Designate (as pro ee!e! on an erroneous assu6ption t(at t(e Dill provi!es for ar.itration. ?ven if t(e Dill (a! provi!e! for referen e of !isputes to ar.itration* it ;oul! .e 6erel= an e@pression of a ;is( .= t(e testator t(at t(e !isputes s(oul! .e settle! .= ar.itration an! annot .e onsi!ere! as an Ar.itrator agree6ent a6ong t(e legatees. 8n t(is ase*

a or!ing to t(e respon!ents* t(e provision for ar.itration is not in t(e Dill .ut in a su.se>uent !e laration allege!l= 6a!e .= Durganara=an S(ar6a* stating t(at if t(ere is an= !ispute in regar! to (is Dill !ate! 28.12.2002* it s(all .e referre! to (is frien!* C.E. :(an!ari* A!vo ate* as t(e sole ar.itrator ;(ose !e ision s(all .e final an! .in!ing on t(e parties* A unilateral !e laration .= a fat(er t(at an= future !isputes a6ong t(e sons s(oul! .e settle! .= an ar.itrator na6e! .= (i6* an .= no stret ( of i6agination* .e onsi!ere! as an ar.itration agree6ent a6ong (is (il!ren* or su ( of (is (il!ren ;(o .e o6e parties to a !ispute. At .est* su ( a !e laration an .e e@pression of a fon! (ope .= a fat(er t(at (is (il!ren* in t(e event of a !ispute* s(oul! get t(e sa6e settle! .= ar.itration. 8t is for t(e (il!ren* if an! ;(en t(e= .e o6e parties to a !ispute* to !e i!e ;(et(er t(e= ;oul! (ee! to t(e a!vi e of t(eir fat(er or not. Su ( a ;is( e@presse! in a !e laration .= a fat(er* even if prove!* annot .e onstrue! as an agree6ent in ;riting .et;een t(e parties to t(e !ispute agreeing to refer t(eir !isputes to ar.itration. 1$. De are t(erefore of t(e vie; t(at t(ere is no ar.itration agree6ent .et;een t(e parties an! t(e learne! Designate o66itte! a serious error in allo;ing t(e appli ation un!er Se tions 11 an! 16.21 of t(e A t an! (ol!ing t(at t(ere is an ar.itration agree6ent .et;een t(e parties to t(e !ispute an! appointing an ar.itrator. 1/. D(at (as .een onsi!ere! an! !e i!e! a.ove is onl= t(e >uestion ;(et(er t(ere is an ar.itration agree6ent or not. De (ave not e@a6ine! or re or!e! an= fin!ing as to t(e e@isten e or vali!it= of t(e Dill !ate! 21.10.2002 or t(e !e laration !ate! 1$.10.200$ sai! to (ave .een 6a!e .= Er. Durganara=an S(ar6a* propoun!e! .= t(e respon!ents an! !enie! .= t(e appellant. 11. 8n vie; of t(e foregoing* t(is appeal is allo;e! an! t(e i6pugne! or!er of t(e Designate of t(e C(ief +usti e appointing an Ar.itrator is set asi!e. || Email this page F Eanupatra 8nfor6ation Solutions Pvt. Lt!.
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