Case Note & Summary
The petitioners, original plaintiffs, filed S.C. Suit No.1512 of 2021 before the Civil Judge, Senior Division at Vadgaon, Pune, seeking a declaration that a registered deed of conveyance is null and void as it is against their interest, and for cancellation of various agreements. The suit was filed against Madhurkumar Ramkrishnaji Bajaj and others. Upon filing, defendant Nos.1 and 2 filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference of the dispute to arbitration based on arbitration clauses in agreements dated 31/03/2007 and 25/07/2008. The trial court rejected the application, holding that the dispute regarding the validity of the registered conveyance deed does not arise from the agreements containing the arbitration clause. The petitioners challenged this order by way of a writ petition before the Bombay High Court. The High Court examined the arbitration clauses, which covered disputes arising from or in relation to the agreements. The court noted that the suit primarily challenges a registered deed of conveyance, which is a separate registered instrument and not part of the agreements. The court held that the dispute does not fall within the scope of the arbitration agreement, as the arbitration clause cannot be invoked to challenge a registered document that is not part of the agreements. The court also discussed the concept of inherent lack of jurisdiction, stating that if a court lacks inherent jurisdiction, any decree is a nullity, but in this case, the civil court had jurisdiction. The High Court dismissed the writ petition, upholding the trial court's order and confirming that the suit is not liable to be referred to arbitration.
Headnote
A) Arbitration Law - Section 8 of the Arbitration and Conciliation Act, 1996 - Reference to Arbitration - The court considered whether a suit seeking declaration that a registered deed of conveyance is null and void can be referred to arbitration when the arbitration clause covers disputes arising from the agreements. Held that the dispute regarding the validity of the registered conveyance deed does not arise from the agreements containing the arbitration clause, as the deed is a separate registered instrument. The arbitration clause cannot be invoked to challenge a registered document that is not part of the agreements. (Paras 1-26) B) Civil Procedure - Inherent Lack of Jurisdiction - The court examined the concept of inherent lack of jurisdiction versus lack of territorial or pecuniary jurisdiction. Held that if a court lacks inherent jurisdiction, any decree passed is a nullity and can be challenged at any stage. However, in this case, the civil court had jurisdiction to entertain the suit as the arbitration clause did not cover the dispute. (Paras 20-26) C) Arbitration Law - Scope of Arbitration Agreement - The court analyzed the arbitration clauses in the agreements dated 31/03/2007 and 25/07/2008. Held that the clauses only cover disputes arising from or in relation to those agreements. The challenge to the registered conveyance deed, which is a separate document, does not fall within the scope of the arbitration agreement. (Paras 3-10)
Issue of Consideration
Whether the dispute raised in the suit, seeking declaration that a registered deed of conveyance is null and void, falls within the ambit of the arbitration clause contained in the agreements dated 31/03/2007 and 25/07/2008, so as to warrant reference to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996.
Final Decision
The High Court dismissed the writ petition, upholding the trial court's order rejecting the application under Section 8 of the Arbitration and Conciliation Act, 1996. The court held that the dispute regarding the validity of the registered conveyance deed does not fall within the scope of the arbitration clause and the civil court has jurisdiction to entertain the suit.
Law Points
- Section 8 of the Arbitration and Conciliation Act
- 1996
- arbitration clause
- scope of arbitration agreement
- dispute arising from agreement
- registered deed of conveyance
- civil suit for declaration
- inherent lack of jurisdiction
- prima facie existence of arbitration agreement
