NISSHO IWAI CORPORATION Vs. VEEJAY IMPEX

JUDGEMENT

(1.) This application has been taken out by the defendant No. 1 asking amongst other for revocation of leave under Clause 12 of the Letters Patent granted by this Court before institution of the suit. The suit has been filed by the plaintiff above-named praying following reliefs :-

(2.) This application is obviously opposed by filing an affidavit.

(3.) Mr. Binoy Sinha Roy, learned Counsel appearing with Ms. Pathayria, learned Counsel submits that his client, viz., the defendant No. 1 pursuant to an arbitration agreement which is sought to be challenged in this Court in the aforesaid suit has already taken out an application under Section 9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act) in the Court of the learned District Judge, 24-Parganas (North) at Barasat. The said application has been marked as Misc. Case No. 2 of 1998 and the same is pending. The plaintiff herein has entered appearance in the said Misc. Case No. 2 of 1998 and has been contesting the said case. This fact of pendency of this proceeding is also admitted in the plaint itself. He argues that the whole scope of the suit relates to existence of the aforesaid arbitration agreement. He argues in view of Section 42 of the aforesaid Act read with Section 5 thereof this Court has no jurisdiction at all to entertain this suit. By this special statute the jurisdiction of this Court has been expressedly ousted inasmuch as one of the defendants in an arbitration proceedings had no option but to approach the same Court where a proceedings under the above Act has been initiated in relation to arbitration agreement. Since by operation of law jurisdiction of this Court is ousted question of granting leave under Clause 12 of the Letters Patent does not and cannot arise. As such leave should be revoked. Moreover, the dispute raised in this application relates to existence of the arbitration agreement. So any dispute relating to validity, legality and existence of the arbitration agreement can be decided by the tribunal of arbitration alone and by virtue of Section 5 of the aforesaid Act the Civil Court is precluded from adjudicating disputes of this nature. On this score also leave already granted should be revoked. He also argues that Court must scrutinize cause of action and if the Court finds, in doing so, that there cannot be any cause of action under the law the Court should revoke. In support of his submission he relies on the following decisions :-(i) AIR 1949 Cal 495; (ii) AIR 1957 Andh Pra 894; (iii) AIR 1969 All 526; (iv) AIR 1989 SC 1239 and a Bench decision of this Court reported in (1998) 1 Cal HN 500.