JESSOP AND CO LTD Vs. TECPRO SYSTEMS LTD

JUDGEMENT

(1.) This is a section 8 application taken out by the first defendant in the suit [the defendant hereafter]. In this suit some interim orders have been passed, as a result of which the United Bank of India, the second defendant is holding the sum represented by the bank guarantee, in a separate no lien interest bearing account. Ms. Bhattacharyya for the defendant showed me the arbitration clause, which is clause 15 of the agreement between the parties at page 53 of this application. This clause is inserted below:

(2.) The disputes in the suit, admittedly arise out of the agreement of which the arbitration clause is a part.

(3.) But two points were raised on behalf of the plaintiff by Mr. Sinha and then by Mr. Sharma, learned advocates regarding the merits of this application. The first point was that there was allegation of fraud and the arbitrator could not go into it. Secondly, the bank had been impleaded. The bank had issued the subject bank guarantee. As fraud and special equity in its invocation were alleged and bank was a party, according to the plaintiff there was a party involved i.e. the bank, which was not a party to the arbitration agreement. Hence, the Court should not exercise jurisdiction. Both the points are bad.