K.R. IMPEX Vs. PUNJAB LLOYD LTD.

JUDGEMENT

(1.) I.A. No. 13472/2016 (under Section 5 and 8 of Arbitration and Conciliation Act by defendant) Plaintiff filed the present suit for recovery of sum of Rs. 2,96,57,573/- along with interest pendent lite and future claiming that the plaintiff was the sub-contractor of the defendant and in this regard agreements were entered into between the parties. Based on the agreement/work order between the parties, plaintiff completed the work and job completion certificate was issued to the plaintiff, debt notes accepted by the defendant and TDS deducted. Since despite demands, the defendant failed to pay the dues of the plaintiff, plaintiff issued a statutory notice under Sections 433/434 of the Companies Act which was duly served on the defendant and thereafter filed a Company Petition No. 561/2013. After three months of service of the notice in the company petition, the defendant filed a complaint against the proprietor/CEO of the plaintiff company and its ex-employee resulting in registration of a First Information Report (FIR) at Police Station Kalkaji. Investigation on the said FIR was carried out resulting in filing of a closure report. Thus the plaintiff filed the present suit for recovery as noted above based on various causes of action mentioned in para 33 of the plaint.

(2.) On service of summons, defendant filed the present application seeking reference of the dispute to arbitration as the work order between the parties provided for an arbitration clause and thereafter filed the written statement wherein this preliminary objection was also raised.

(3.) Learned counsel for the plaintiff submits that in the written statement and the application, the defendant itself pleads that the claim of the plaintiff is based on forged and doctored documents and for the same it filed the FIR against the plaintiff. Thus fraud having been alleged against the plaintiff the subject matter of dispute between the parties cannot be decided by arbitration and has to be decided by a judicial forum/Court.