Sunidhi Finvest Ltd. vs Mukesh Kumar Agarwal

I.P. Mukerji, J. - This is an application to set aside an order dated 19th July, 2012. This order was passed by the Hon''ble The Chief Justice in exercise of his lordship''s jurisdiction under Section 11 of the Arbitration and Conciliation Act, 1996 . At that point of time the Chief Justice used to name the arbitrator. By my order dated 2nd July, 2012 I had recorded the death of Mr. Justice Ajit Kumar Sengupta, who had been acting as the Arbitrator and had referred the matter to the Chief Justice for naming the new arbitrator.

First of all, the applicant has to show that there was sufficient ground, which prevented him from appearing in court when these orders were passed. Mr. Mitra drew this court''s attention to a letter dated 16th May, 2012 written by H.L. Datta & Co., Solicitors & Advocates, acting for the petitioner in the Section 11 application to the Registrar, Original Side with a copy served upon Mr. Mitra''s advocates on record. That letter stated that the matter was released by Mr. Justice Sanjib Banerjee. On the copy of the said letter, Mishra & Co., Advocates, Mr. Mitra''s Advocates on record endorsed that they were to be intimated upon assignment of the matter. Mr. Mitra submits that the said firm of advocates, Mishra & Co., were not so intimated by the advocate on record for the said petitioner and that is why his client had no notice of this application.

I do not accept this submission. Mr. Mitra''s advocates on record had knowledge about the release of the matter by Justice Sanjib Banerjee. It is a known practise of this court that when a matter is released, the file is sent to the Hon''ble The Chief Justice for assignment. After assignment the matter is never taken up straightaway. It is always placed in the list as ''To Be Mentioned'' with specially assigned written in acronym [s.a.] against the cause title. So, the applicant had sufficient notice of the matter. He could not sufficiently explain his absence when the order was passed.

However, I also venture to go into the merits of the matter.

The primary case of Mr. Mitra is that there was no arbitration agreement, which was alleged by the said petitioner to have been executed on 30th March, 2011 and that his client''s signature had been forged thereon. He told the court that on 3rd August, 2011 when he received notice from the said petitioner''s advocate about commencement of the arbitration proceeding, he filed an FIR with the police.

The proposition of law advanced by Mr. Mitra citing Reva Electric Car Company Pvt. Ltd. v. Green Mobil; reported in [2012] 2 SCC 93 and Bharat Rasiklal Ashra v. Gautam Rasiklal Ashra And Another; reported in [2012] 2 SCC 144 is that whenever there is a dispute regarding execution of the arbitration agreement in a Section 11 application, the point has to be decided by the court. In paragraph 13 of the latter judgment, the dictum of the Supreme Court is that the allegation of forgery is to be tried by the Section 11 court.

In my opinion, every pronouncement of law has to be given due meaning and interpretation. If one alleges that the arbitration agreement was fabricated by forging the signature of Mr. Mitra''s client, a mere allegation would not do. If a mere allegation would suffice then each and every Section 11 could effectively be stalled or delayed by a party by alleging that there was no arbitration agreement or that the signature on it was forged or that there was coercion by a party upon another to sign the agreement or exercise of undue influence, misrepresentation, fraud etc. by a party. In order to sustain this plea some kind of a prima facie case has to be made out. The court has to be prima facie satisfied that there is some triable issue in the Section 11 application. This principle finds vindication in the judgment of the Supreme Court in Swiss Timing Ltd. v. Commonwealth Games 2010 Organising Committee; reported in [2014] 6 SCC 677 [see paragraphs 25 to 28].

In this case, I do not think that any prima facie case is made out. Some sketchy averments are made in paragraphs 8 [ii], [iii] of the application. I have compared the signature in the alleged agreement with that in the FIR. Prima facie, I cannot hold that there was forgery.

On this pretext I will not divest the Arbitrator of his jurisdiction to decide the issue and take it upon the court to do so.

Therefore, this application is dismissed. The above prima facie finding can be tested by Mr. Mitra''s client before the learned arbitrator, who will be empowered to finally decide the issue.

All points are kept open before the learned arbitrator.

Certified photocopy of this order, if applied for, be supplied to the parties subject to compliance with all requisite formalities.