YOGI AGARWAL v. M-S, INSPIRNFION CLOTHES & U AND ORS

Citation: [2008] 16 S.C.R. 895

Court: Supreme Court of India

Bench: R.V. RAVEENDRAN, D.K. JAIN

Case summary

YOGI AGARWAL v. M-S, INSPIRNFION CLOTHES & U AND ORS.pdf

Judgment text

_,I [2008) 16 S. C. R. 895 YOGI AGARWAL -":,"' v. M/S, INSPIRNFION CL~THES & lJ AND ORS. (Special Leave P~titiPfl (Q) Ng, ~~333/2008) DEC~MBER 1, 2ooa [R. V. RAVEENDRAN AND D. K. JAIN, JJ. ] -+- ARBITRATION ANO CONG/LIA TION ACT, 1996: s. 8 rlw s. 7 - Application by defendant in suit seeking· reference to arbitration - HELD: In order to constitute an areftration agreement for purpo. ses Of SS. 7 and 8, two. pgnqifion~ ~houlq be satisfied - Firstly, it should be between the p@rti@s to the dis[! ute - Secondly, it should relate to or be applic;able to the disput~ - In th@ instant case, neither of the · two conditions was satisfif3d ,. ,... Firstly, the suit related to transactions said to have taken place between plaintiff and defendant no. 1 company and its two directors, whereas the 7 t documents put forth as containing the arbitration agreement related to some transactions between a proprietary concern ·E of defendant no.

2 and plaintiff - Secondly, the provision for er-/:Jitration is not contained in any contract or document . ,_' ~-" ' , ' I I I • relating to the suit transapfions, but contained in documents relating to some unconnected independent transactions - Defendants, in ff1f#( ;;Jppfiqation uls. 8, did not even allege th~t there was an arbitration agreement in regard to the ,. _ IJY/;Jj@p( matter of the suit- What they alleged was that 'subject m~tter pf the suit' was similar to or identical to with the subject matter qf the arbitration agreement' - That does not entitle tht? m tp see/ -. the Act, should satisfy two conditions. Firstly, it should be between the parties to the dispute. Secondly, it should relate to or applicable to the dispute. \ AND ORS. [R. V. RAVEENDRAN, J. ] .. -'\ 8. In this case, neither of the two conditions was satisfied.

Firstly, the suit related to transactions said to have takeil place between plaintiff and first defendant company and its two directors, whereas the documents put forth as containing the arbitration agreement related to some transactions between a proprietary concern of second defendant and plaintiff. Secondly, the provision for arbitration is not contained in any contract br y· document relating to the suit transactions, but contained jn .. documents relating to some unconnected independent transactions. It is significant that, in their application under section 8 of the Act, the defendants did not even allege that there was an arbitration agreement in regard to the subject '· matter of the suit. What they alleged was that 'subject matter of the suit' was similar to or identical with the 'subject matter qt the arbitration agreement'. That does not entitle them to see~ relief under section 8 of the Act.

As there was no 'arbitration agreement', the requirements of section 7 were not met. t- 9. As there is no arbitration agreement with reference tG> the subject-matter of the suit filed by the plaintiff (first respondent _: . herein), rejection of the application filed by defendants undet Section 8 of the Act, does not call for interference. The special leave petition is, therefore, dismissed both on the ground of delay and on merits. RP. Special Leave Petition dismissed. >~