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The General Manager (Commercial) & Another v/s Exchange Travel Services Pvt. Ltd.

    WP(C) No. 4188 of 2003

    Decided On, 18 February 2005

    At, High Court of Delhi

    By, THE HONOURABLE MR. JUSTICE VIJENDER JAIN & THE HONOURABLE MR. JUSTICE J.P. SINGH

    For the Petitioner: Peeyoosh Kalra, Ms. Akansha, Advocates. For the Respondent: Mrs. Vasudha Indurkar, Mukesh Thakur, Advocates.



Judgment Text

Vijender Jain, J.

Rule D.B.

The petitioner has challenged the order of learned Additional District Judge dated 1st May, 2003 holding that the arbitration Clause 19 of the agency agreement is valid. As a matter of fact, the impugned order was in favour of the petitioner. At the outset, learned Counsel for the petitioner has contended that the Arbitration and Conciliation Act, 1996 is not applicable. Our attention has been drawn to Clause 19 of the agency agreement which is at page 4 of the paper book. As the same would be relevant for adjudicating the controversy, the same is reproduced below:

'19. Arbitration

Every dispute, difference or question which may at any time arise between the parties hereto, touching or arising out of or in respect of this Agreement of agency of the subject-matter hereof, shall be referred to arbitration as provided under the Indian Arbitration Act, 1940 with all its modifications/amendments up to date at Delhi only. Each party to the present Agreement will appoint one Arbitrator each which Arbitrators shall before commencing the arbitration appoint and nominate an Umpire who would be resident of Delhi. The Umpire may act on the evidence recorded earlier by the Arbitrators or record fresh evidence on the issues referred to him if he considers it necessary. The decision of the Arbitrators or of the Umpire as the case may be, shall be final and binding on the parties. All proceedings in all matters relating to, or touching upon, or arising out of, or in respect of this Agreement of Agency on the subject-matter hereof shall be subject to the jurisdiction of Courts at Delhi to the exclusion of all other Courts and/or authorities.'

2. On the basis of the aforesaid clause, it was contended by Mr. Peeyoosh Kalra learned Counsel for the petitioner that the parties did not agree that the matter has to be referred under the new Act and, therefore, the Arbitrator, if at all, has to be appointed was in terms of the old Act. Another contention which has been raised by the learned Counsel for the petitioner is that there was no dispute between the parties and the agreement on which the reliance has been placed was entered into between the parties in 1995 and, therefore, there was no occasion for the learned Additional District Judge to hold that there was a valid subsisting arbitration agreement between the parties. In support of his contention, learned Counsel for the petitioner has relied upon 1995 Suppl. 3 Supreme Court Cases 324. On the other hand, learned Counsel appearing for the respondent Mrs. Vasudha Indurkar has contended that the agreement of 1995 was extended in 1999. In this regard, our attention was invited to Page 21 of the paper book with the heading ‘DOMESTIC PASSENGER SALES AGENCY AGREEMENT’ dated 20th September, 1999 executed between the petitioner and the respondent. On the basis of the aforesaid agreement, it was contended that the arguments of learned Counsel for the petitioner that the agreement pertained to 1995 and the new Act is not applicable is incorrect as the agreement of 1999 also had the same Clause 19 as has been reproduced above. It was also contended by learned Counsel for the respondent that a suit for injunction against invocation of the bank guarantee was filed by the respondent against the petitioner The petitioner had in their counter affidavit pleaded the existence of an arbitration agreement. On the basis of the said objection of the petitioner, the suit was withdrawn and notice invoking the arbitration clause was given by the respondent to the petitioner on 4th March, 2002. However, as the petitioner failed to appoint the Arbitrator and supply the vacancy in terms of the arbitration clause in the suit, an application under Section 11(4) was filed in the Court of learned Additional District Judge, on which the impugned order has been passed. It was also contended that as a matter of fact, the present writ petition is an abuse of the process of the Court. After time for four weeks was granted to the petitioner to appoint the Arbitrator instead of supplying the vacancy in terms of the arbitration clause, petitioner filed this writ petition and obtained a stay order.

3. We have heard the arguments advanced by learned Counsel for the parties. We find that there is no force in the arguments of the petitioner. After perusing through the agreement of 1995 which was later on extended on 20th September, 1999, it does not lie with the petitioner to contend that the arbitration agreement was not a valid arbitration agreement or was not subsisting between the parties. As there is an agreement of 1999, we hold that there was a valid subsisting agreement between the parties. Even otherwise, in the suit for injunction which was filed by the respondent against the petitioner, the plea of the petitioner which is discernible from paragraph 5 at Page 110 of the paper book, the written statement filed by the petitioner, the stand of the petitioner becomes clear which is to the following effect:

'That the suit of the plaintiff is not maintainable and is liable to be dismissed in view of the agreement between the plaintiff and the defendant, as because as per Clause 19 of the agreement every dispute, difference or question which may at any time arise between the parties hereto touching or arising out of or in respect of this Agreement of agency or the subject matter hereof, shall be referred to arbitrators as provided under the Indian Arbitration Act, 1940. Moreover as per para 4 of the plaint and as per the self hand written letter (page 2) of the plaintiff to the defendant No. 1 dated 21.5.2001 which is being annexed herewith as Annexure `E’, plaintiff has further admitted that he shall invoke the arbitration clause of the agreement and take the matter to the Arbitrator. The relevant part is given as under:

'In the alternative, I shall have no option left but to invoke the arbitration clause of the agreement and take the matter to the arbitrator'.

4. The petitioner is trying to blow hot and cold in the same breath. At one place, the stand of the petitioner in the suit which was filed by the respondent for invocation of bank guarantee is that there is a valid arbitration agreement between the parties and, on the other hand, the petition has been filed stating that there is no valid arbitration agreement between the parties that shows the fallacy in the stand of the petitioner.

5. We find no merit in this petition. As per the arbitration agreement at page 21 of the paper book, which we have reproduced above from the written statement filed in the suit, the petitioner cannot be permitted to take different stand and resile from his stand that there is valid arbitration clause. W

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e find no force in the argument of the petitioner that written statement was filed in relation to the suit for injunction. It hardly makes a difference so long the reliance has been placed by the petitioner on arbitration clause. 6. For the reasons stated above, there is no merit in the writ petition. As the petitioner has failed to supply vacancy in terms of the arbitration agreement, we appoint Shri S.P. Sabharwal, a retired District Judge to act as an Arbitrator. The Arbitrator will fix his own fees. 7. Parties to appear before the Arbitrator on 24th March, 2005. Intimation for appointment of Arbitrator be sent by the Registry to Shri S.P. Sabharwal. With these observations, the petition stands disposed of.
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