Tuesday 6 November 2018

Whether court can refer dispute to arbitration even if non signatory to arbitration agreement is party to suit?

The next contention raised by learned counsel for Respondent Nos. 1 and 2 is about the CIDCO, i.e. Respondent No. 3 herein, not being party to the 'Arbitration Agreement'. Again this contention was not raised before the Trial Court, but then, in order to resolve the dispute, even if this contention is taken up at this stage, as both the parties have argued thereon, the perusal of the plaint clearly goes to show that, Respondent No. 3 - CIDCO is merely a formal party. Only a consequential relief of injunction is claimed against the CIDCO, it being the owner of the said plot.

25. It is pertinent to note that, in the similar facts of the case, in Special Civil Suit No. 252 of 2008, the Trial Court has allowed the 'Reference', under Section 8 of the Arbitration Act, to the 'Arbitrator' and when the said 'Reference' was challenged before this Court in the case of Narayan Shankar Thakur v. Sitabai Sitaram Thakur (Since Deceased), through Legal Heirs, in Writ Petition No. 1882 of 2010, dated 1st August 2013, on the ground that, the CIDCO was a party to the Suit, but was not party to the 'Agreement', it was held by this Court that, as the CIDCO is the owner of the property, it has been joined as necessary and proper party in the Suit. As the specific performance of the 'Agreement of Sale' is sought after obtaining allotment from the CIDCO, it was necessary to include CIDCO as party to the Suit, but as no relief was claimed against the CIDCO and there was specific averment in the plaint that Plaintiff has no claim against it, reference made to the 'Arbitrator' by the Trial Court cannot be set aside. Though the said order of this Court was challenged in Special Leave Petition No. 27231 of 2013, the said Special Leave Petition came to be dismissed.

26. Here in the case, though it is true that, a relief is claimed against the CIDCO, it is merely of an ancillary or of a consequential nature. Such relief can be granted or refused, depending on whether Plaintiff's Suit for specific performance can be decreed or not. As held by another Single Bench of this Court in the case of M/s. Fiza Construction v. Smt. Parvati K. Thakur and Ors., in Writ Petition No. 943 of 2010, dated 10th February 2010, CIDCO being a Statutory Authority, would be required to consent to the transfer, once the Suit is decreed. It is, therefore, a formal party and would abide by the decision of the 'Arbitrator' and the decision of the 'Court'. Like in the said Suit, the main dispute in this case is also between the Petitioner and Respondent No. 1.

Civil Writ Petition (Stamp) No. 35221 of 2017

Decided On: 20.03.2018

 Suman Baburao Thapa Vs.  Jigar K. Mehta and Ors.

Hon'ble Judges/Coram:
Dr. Shalini Phansalkar Joshi, J.

Citation: 2018(5) MHLJ 260.
Read full judgment here:Click here
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