Case Note & Summary
The petitioner, M/s. GTS Pvt. Ltd., filed a writ petition under Article 227 of the Constitution of India challenging an order dated 14.10.2008 passed by the learned Ad hoc Additional District Judge-I, Fast Track Court, South Goa Margao in Special Civil Suit No. 69/2006. The impugned order deleted respondent no.3, Metal Scrap Trading Corporation Ltd., from the cause title of the suit. The petitioner had originally filed the suit against two defendants, and later joined respondent no.3 as defendant no.3. Respondent no.3 filed an application dated 19.1.2007 seeking to refer the dispute to arbitration on the ground that the agreement dated 31/1/2006 between the parties contained an arbitration clause. Instead of deciding that application on merits, the trial court ordered deletion of respondent no.3 from the suit. The petitioner argued that the trial court ought to have decided the application under Section 8 of the Arbitration and Conciliation Act, 1996 either granting or refusing it, and could not have ordered deletion without an application to that effect. Respondent no.3 contended that the trial court had inherent powers to delete it since arbitration proceedings were pending. The High Court held that while dealing with an application under the said Act, the trial court was expected to pass an order either granting or refusing the application. The court could have exercised jurisdiction to delete respondent no.3 while deciding such an application, but not without deciding it. On this ground alone, the impugned order was quashed and set aside. The matter was remitted back to the trial court to decide the application under Section 8 of the Arbitration and Conciliation Act, 1996 on merits in accordance with law.
Headnote
A) Civil Procedure - Deletion of Party - Inherent Powers - Arbitration and Conciliation Act, 1996, Section 8 - The trial court, while dealing with an application under Section 8 of the Arbitration and Conciliation Act, 1996, is expected to pass an order either granting or refusing the application. The court cannot order deletion of a party without adjudicating the application on merits. The impugned order was quashed and set aside as the trial court failed to decide the application under Section 8. (Paras 3-8)
Issue of Consideration
Whether the trial court could order deletion of a defendant without deciding the application under Section 8 of the Arbitration and Conciliation Act, 1996 on merits.
Final Decision
The impugned order dated 14.10.2008 is quashed and set aside. The matter is remitted back to the trial court to decide the application under Section 8 of the Arbitration and Conciliation Act, 1996 on merits in accordance with law.
Law Points
- Arbitration and Conciliation Act
- 1996
- Section 8
- Inherent powers
- Deletion of party
- Judicial order must decide application on merits
