Kaushik Biswas vs Indusind Bank Ltd.

Bhaskar Bhattacharya, J.—This appeal is at the instance of a defendant in a proceeding u/s 9 of the Arbitration and Conciliation Act (hereinafter referred to as the Act) and is directed against the Order No. 5 dated 21st July, 2008 passed by the learned Judge, Seventh Bench, City Civil Court at Calcutta in Miscellaneous Case No. 5310 of 2008 thereby refusing to stay the operation of the earlier order dated 7th July, 2008 by which an ad interim Receiver was appointed.

Being dissatisfied, the defendant has come up with the present appeal. Mr Sen, the learned advocate appearing on behalf of the appellant, has taken a pure question of law in support of this appeal. According to Mr Sen, even if it is assumed for the sake of argument that all the statements made in the application u/s 9 of the Act was true, the learned Trial Judge was not justified in appointing a Receiver over the property where the alleged agreement incorporating the clause of arbitration was not signed by the plaintiff itself. Mr Sen draws our attention to the application filed before the learned Trial Judge that the Xerox copy of the alleged agreement shows that the alleged agreement containing arbitration clause was signed only by the defendant and not signed by the plaintiff. According to Mr Sen, if the agreement is signed not by both the parties but only by the defendant, the same cannot be said to be a valid agreement for arbitration and, therefore, on the face of such document, the learned Trial Judge ought to have dismissed the application. In support of such contention Mr Sen relies upon two decisions of this Court; one in the case of ABN Amro Bank v. Saswata Sen reported in 2000 CWN 751 and the other, in the case of Tata Engineering & Locomotive Ltd. v. Samir Biswas and Ors. reported in 2000(2) CLJ 494.

Mr Mitra, the learned advocate appearing on behalf of the respondent, has, on the other hand, supported the order impugned and has contended that this Court at this stage should not interfere with the order appointing Receiver before the final hearing of the said application where the appellant will be entitled to file written objection. According to Mr Mitra, as provided in Section 7 of the Act, an arbitration agreement should be deemed to be in writing, if it is contained in a document signed by the parties or is manifest from exchange of letters, telex, telegrams or other means of telecommunications which provide a record of the agreement or an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. Mr Mitra contends that in this case, signature of the appellant in the document is apparent. It further appears that his client, the other party to the agreement, has not disputed such agreement and that is why referred the matter to the arbitration, as would appear from the letter written by his client to the arbitrator concerned. By referring to such letter, which is also part of the application u/s 9 of the Act, Mr Mitra contends that notwithstanding the fact that his client has not signed in the said document but is signed by the defendant alone, his client having accepted the existence of such arbitration, the same should be treated to be a valid agreement in writing.

Therefore, the only question that falls for determination in this appeal is whether simply because the agreement filed by the respondent in the Trial Court having indicated the signature of the defendant therein and not that of the plaintiff, the same should be treated to be valid clause for arbitration in writing. In order to appreciate the aforesaid questions, it will be profitable to refer to the provision contained in Section 7 of the Arbitration and Conciliation Act which is quoted below:

Arbitration agreement: (1) In this part, �arbitration agreement� means an agreement by the parties to submit to arbitration all or certain disputes which have arisen on which may arise between them in respect of a defined legal relationship, whether contractual or not.

(2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in �

(a) a document signed by the parties;

(b) an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

(5) The reference in a contract to a document containing an arbitration clause constitutes an arbitration agreement if the contract is in writing and the reference is such as to make the arbitration clause a part of the contract.

A plain reading of the aforesaid section indicates that an arbitration agreement should be in writing and the same should be deemed to be in writing if either it is signed by both the parties or it is contained in a document and such fact can be proved by exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement or an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other.

In the case before us, the scope of the present appeal is limited. The defendant, without disclosing his defence, has straightway come up in appeal for setting aside the appointment of Receiver on the ground that even if all the averments made in the application filed before the learned Trial Court and that in the annexed document are treated to be true, the learned Trial Judge should not have appointed a Receiver.

Therefore, at this stage, we shall presume that the signature of the defendant as appearing in the agreement is a genuine one. The moment, it appears that the appellant has apparently put his signature in the agreement containing arbitration clause and at the same time, the plaintiff is also admitting the existence of such agreement and pursuant to such agreement, has referred the dispute to the arbitrator, the existence of written agreement to refer the matter to the arbitration is prima facie proved. Therefore, the learned Trial Judge did not commit any illegality in appointing Receiver on the basis of the documents relied upon by the respondent.

We have already pointed out that at this stage, Mr Sen has accepted all the statements made in the application u/s 9 including in annexure to be true and we have proceeded on that basis.

In the case of Tata Engineering & Locomotive Ltd. v. Samir Biswas and Ors. (supra), relied upon by Mr. Sen, there was undisputedly no arbitration clause and in such circumstances, a Division Bench of this Court held that the learned Trial Judge erred in law in entertaining an application u/s 9 of the Act. In the case before us, if we accept the averments made in the application u/s 9 of the Act to be true, there is specific clause of arbitration, agreed to by the appellant and accepted by the respondent and thus, the principles laid down in that decision cannot have any application to the facts of the present case.

Similar facts as those of M/s. Tata Engineering and Locomotive Ltd. (supra), existed in the case of ABN Amro Bank v. Saswata Sen (supra), the other decision relied upon by Mr Sen and therefore, the Division Bench was of the view that in the absence of any such clause in the agreement, the application u/s 9 of the Act was not maintainable. Therefore, none of the decisions relied upon by Mr Sen helps his client in anyway.

Therefore, the only point raised by Mr Sen fails and accordingly we dismiss this appeal. We make it clear that we have, at this stage, not gone into the question whether the appellant had really signed on the agreement or whether his signature was obtained by practising fraud, as this question is beyond the purview of this appeal preferred without disclosing the defence in the Trial Court.

The appeal is, thus, dismissed. The learned Trial Judge, at the time of disposal of the final application, will not be influenced by this order as at this stage, we have not taken into consideration the defence of the appellant and we have proceeded solely on the basis of the statements made in the application u/s 9 of the Act.

In the facts and circumstances, there will be, however, no order as to costs.

Rudrendra Nath Banerjee, J.

I agree.