Sunday, 15 January 2017

What are essential requirement for valid arbitration agreement?

 A reading of the aforementioned sections in
juxtaposition goes to show that in order to constitute a
valid, binding and enforceable arbitration agreement,

the requirements contained in Section 7 have to be
satisfied strictly. These requirements, apart from
others, are (1) there has to be an agreement (2) it has
to be in writing (3) parties must sign such agreement
or in other words, the agreement must bear the
signatures of the parties concerned and (4) such
agreement must contain an arbitration clause.

24) In other words, aforementioned four conditions
are sine qua non for constituting a valid and
enforceable arbitration agreement. Failure to satisfy
any of the four conditions would render the arbitration
agreement invalid and unenforceable and, in
consequence, would result in dismissal of the
application filed under Section 11 of the Act at its
(ARISING OUT OF SLP(C) No. 13369 of 2013)
Shri Vimal Kishor Shah & Ors.
Mr. Jayesh Dinesh Shah & Ors
Abhay Manohar Sapre, J.
Dated:August 17, 2016.
Citation:AIR 2016 SC3889,(2016) 8 SCC788,2017(1) MHLJ

36 SC

Print Page

What are important principles relating disobedience of order of court?

Few facets of relevant considerations when breach of order is alleged and facet of defence available would emerge as under from above case law.
"(1) In the context of breach of order, the order can be void or nullity but, the consequences flowing from its non-compliance or breach cannot be avoided by the party by advancing the plea that such order is void or nullity.
(2) Void order has to be so declared. The party '... has to approach the Court for seeking such declaration...'
(3) The reason for requirement of nullity order to be challenged is, the Court may refuse to quash such order at the instance of the person who has challenged it or on the ground of delay or waiver or any such legal ground. Further, such void order may be void for one person and it may not be so far as another person is concerned.
(4) If breach of permanent injunction (O. 21 R, 32) vis-à-vis breach of interim injunction (O. 39 R. 2(a)) are compared, subsequent enforcement of decree in the former case and subsequent setting aside of the interim order in a later case insofar as the consequences flowing from these two situations are concerned, - would be different in the sense that in former case, it may happen that no further consequence would ensue but in later case the effect of breach would not be erased.
(5) In case when objection to the jurisdiction of the Court is raised and later on it is upheld even then, interim order passed therein by the Court does not become vulnerable or bad only on that ground.
(6) In case where objection is raised, it would be more proper if the objection of the jurisdiction is decided first. But if the Court happens to pass the order before deciding that, the prior interim order would not loose its efficacy only on that ground.
(7) The party cannot avoid consequence flowing or breach merely because the order is subsequently vacated in appeal.
(8) Generally speaking, punishment would differ from case to case. For instance, in case of solitary breach attachment of property may not be restored to. The Court may direct to detain the guilty person in civil prison or commit him for contempt.
(9) The Court's action for breach would extend also to the person who is not party to the proceedings.
(10) It is not rule of law that unless the contemner purges the contempt, the contemner cannot be heard. It is only rule of practice. In fact, it depends upon the facts and circumstances of case.
(11) In order to decide whether the contemner should be heard or not, the Court would consider how interest of justice would be better served and also the nature of breach i.e. whether it is gross or not etc."
Civil Application (for Direction) No. 6510 of 2015 in Civil Application No. 4112 of 2015 in Appeal From Order No. 8 of 2012
Decided On: 16.03.2016
 Natha Harji Halai and Ors.
Coram:R.D. Kothari, J.
Print Page

Whether court can exclude counter claim of defendant as per request of plaintiff?

 The principal question which is required to be considered is whether
the opposition of the plaintiffs to the counter­claim made by the defendant
No.1, carries any weightage and the counter­claim has to be excluded though
otherwise counter­claim can be permitted.  The provisions of Order 8 Rule 6C
of the Code of Civil Procedure read as follows:
“6­C.  Exclusion of counter­claim ­  Where a defendant sets up a
counter­claim and the plaintiff contends that the claim thereby
raised ought not to be disposed of by way of counter­claim but in
an independent suit, the plaintiff may, at any time before issues
are settled in relation to the counter­claim, apply to the Court for
an order that such counter­claim may be excluded, and the Court
may, on the hearing of such application make such order as it
thinks fit.”

The intention of the Legislature in incorporating Rule 6C of Order 8
of the Code of Civil Procedure is clear and suggests that the request made on
behalf   of   the   plaintiff   to   exclude   the   counter­claim,   has   to   be   given   due
weightage.   It is the cardinal principle in judicial proceedings that the party to
the proceedings has the inherent right to oppose any claim made by the other
party, even if there is no provision in the statute providing a right to the party
to   oppose   the   claim   of   the   other   party.     Therefore,   when   Rule   6C   is
incorporated in Order 8 of the Code of Civil Procedure, it is clear that the Court
is bound to consider the request of the plaintiffs.  Though the latter part of Rule
6C of Order 8 of the Code of Civil Procedure gives discretion to the Court to
pass appropriate orders on the application made by the plaintiffs requesting
that the counter­claim be excluded, the discretion will have to be exercised in
favour of the plaintiff.    The object of Rule 6C of Order 8 of the Code of Civil
Procedure appears to be based on the cardinal principle that the plaintiff is
dominus litis and it it is the right of the plaintiff to proceed with the civil suit in
the   manner   he   feels   proper   and   best   suited   for   proving   his   case.     If   the
defendant is permitted to make counter­claim, he gets the right to steer the
civil suit as per his wishes and in certain situations there may be a conflict
between the plaintiff and the defendant on the point as to how the civil suit
should proceed. 
If   the   provisions   of   Rule   6C   of   Order   8   of   the   Code   of   Civil
Procedure are not given the above meaning, but are construed to mean that the
request of the plaintiff to exclude the counter­claim is immaterial, then the
provisions   of   Rule   6C   of   Order   8   of   the   Code   of   Civil   Procedure   will   be
rendered nugatory. 
Abhishek s/o Vikram Boke, 

 Dr. Ashwinikumar Arvind Deshmukh,
DATED  :   24.6.2016.
Citation: 2017(1) MHLJ342
Print Page

Whether court can permit filing of counter claim which is not related to cause of action pleaded by plaintiff?

The   submission   made   on   behalf   of   the   plaintiffs   that   the
counter­claim made by the defendant No.1 cannot be permitted as the cause of
action on the basis of which the counter­claim is made, is different and is not in
respect of the property which is the subject matter of the civil suit, also cannot
be accepted in view of the proposition of law laid down in the judgment given
in   the   case   of  Gayathri   Women's   Welfare   Association   V/s.   Gowramma   and
another (cited supra) and the judgment given in the case of Jag Mohan Chawla
and another V/s. Dera Radha Swami Satsang and others (cited supra).     The
above judgments lay down that the defendant can make counter­claim on the
basis of different cause of action and in respect of any claim that would be
subject matter of an independent civil suit.   The counter­claim made by the
defendant need not relate to or be connected with the original cause of action

or matter pleaded by the plaintiff and need not necessarily arise from or have
any nexus with the cause of action of the plaintiff.
Abhishek s/o Vikram Boke, 

 Dr. Ashwinikumar Arvind Deshmukh,

DATED  :   24.6.2016.
Citation: 2017(1) MHLJ342
Print Page