INDIAN DRUGS AND PHARMACEUTICALS LTD Vs. AMBIKA ENTERPRISES

JUDGEMENT

(1.) JANARDAN Sahai, J. The plaintiff-respondent M/s. Ambika Enterprises filed a suit for recovery of money against the applicant Indian Drugs and Pharmaceuticals Ltd. Its case is that it was appointed on commission as a special stockist by the applicant under an agreement dated 21-5-1992. The agreement contains an arbitration clause in para 21 which reads as under : " (21) In the event of any dispute on different between the parties arising out of or in connection with or in relation to this agreement the same should be referred to the arbitration of Chairman and Managing Director, IDPL who may enter upon reference himself or may nominate any other officer of IDPL as an Arbitrator, if any vacancy occur in the appointment of an Arbitrator, the same shall also be filled by Chairman and Managing Director, IDPL. The Special Stockist agrees that even if the Chairman and Managing Director of his nominee has acted in his executive capacity in the concerned mater, he can still be appointed as an Arbitrator. If for any reason, the arbitration cannot be carried on by Chairman and Managing Director or his nominee of this agreement is superseded by the Court then there shall be no arbitration. The decision of the Arbitrator shall be final, conclusive and binding on both the parties. "

(2.) AN application was filed by the defendant-applicant under Section 8 of the Arbitration and Conciliation Act, 1996 hereinafter called the 'act' that in view of the arbitration clause the dispute be referred to Arbitration. The trial Court (Additional Civil Judge, Senior Division) by its impugned order dated 29-8-2001 rejected the application. It held on a reading of the provisions that neither under Section 8 nor under Section 11 (2) of the Act nor under para 21 of the agreement had it (the Court of Additional Civil Judge Senior Division) power to appoint an Arbitrator. It referred to the definition of 'court' under Section 2 (e) and held that it meant the Principal Civil Court of original jurisdiction or the High Court. It referred to Section 11 and held that it was the Chief Justice who could appoint an arbitrator under that provision.

(3.) SRI Arvind SRIvastava Counsel for the respondent, however, contended that the Additional Civil Judge, Senior Division, Gorakhpur is a Court and not a judicial authority and it is only a judicial authority referred to in Section 8 of the Act, which can refer a dispute to the Arbitrator and no reference under that Section can be made by the Court to the Arbitrator.