SHARIKA PEETH SANASTHA Vs. BANSILAL RAINA

JUDGEMENT

(1.) The question arising for consideration in this revision petition is whether the following clause existing in the constitution of Sharlka Peeth Sanastha, a registered society, constitutes and arbitration clause within the meaning of Arbitration and Conciliation Act ? "No clause of the constitution shall be enforceable in the Court of law. However, immediately after the registration of the constitution with the J & K Govt. the executive Committee should constitute an arbitration committee comprising of members other than those included in any of the committees mentioned in this constitution so far. Those nominated to arbitration committee should as far as possible be members of highest degree of integrity independent opinion and law knowing."

(2.) Admittedly no committee as envisaged by the abovesaid clause has been constituted. Arbitration agreement is defined in Section 7 of the Arbitration and Reconciliation Act. It reads as under : "7. Arbitration Agreement: In this part "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship whether contractual or not."

(3.) From the bare reading of the section it is manifest that arbitration agreement is an agreement whereby the parties agree to submit all or certain disputes which have arisen or which may arise in future to be referred for adjudication through arbitration by an Arbitral Tribunal. In K. K. Modi v. K. N. Modi, AIR 1998 SC 1297 it was held : "Among the attributes which must be present for an agreement to be considered as an arbitration agreement are (1) The arbitration agreement must contemplate that the decision of the tribunal will be binding on the parties to the agreement (2) That the jurisdiction of the tribunals to decide the rights of parties must derive either from the consent of the parties or from an order of the Court or from a statute, the terms of which make it clear that the process is to be an arbitration, (3) The agreement must contemplate that substantive rights of the parties will be determined by the agreed tribunal, (4) That the tribunal will determine the rights of the parties in an impartial and judicial manner with the tribunal owing an equal obligation of fairness towards both sides, (5) That the agreement of the parties to refer their disputes to the decision of the tribunal must be intended to be enforceable in law and lastly, (6) The agreement must contemplate that the tribunal will make a decision upon a dispute which is already formulated at the time when a reference is made to the tribunal. The other facts which are relevant include, whether the agreement contemplates that the tribunal will receive evidence from both sides and hear their contentions or at least give the parties an opportunity to put them forward. Whether the wording of the agreement is consistent or inconsistent with the view that the process was intended to be an arbitration, and whether the agreement requires the tribunal to decide the dispute according to law."