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Arbitration clause of the agreement be tried first

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01st-Sep-2018       
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High Court Division :
(Civil Appellate Jurisdiction)
Syed Md Ziaul Karim J
Sheikh Md Zakir Hossain J
Mizanur Rahman (Md)
.......................Plaintiff-Appellant
vs
Managing Director, and CEO Agrani Bank Ltd ............Defendant No. 1 Respondent
Judgment
January 10th, 2018
Code of Civil Procedure (V of 1908)
Order VII, rule 11
Plaint of the suit should not be rejected under Order VII, rule 11 (d) of the Code, where there is an arbitration clause in agreement to dissolve the dispute by Arbitration and parties are willing to go for arbitration.
If Sections 7 and 10 of the Arbitration Act are read together the intention of the legislature becomes clearer that once the parties to a contract agreed to settle their disputes that may arise out of execution of the contract they must be encouraged and directed to follow the procedure what they agreed to, and the Court should not proceed with any civil proceedings commenced by one party against other party in respect of any matter covered by such arbitration agreement. ........(27 & 28)
Code of Civil Procedure (V of 1908)
Order VII, rule 11(d)
Clause (d) of rule 11, authorise the rejection of a plaint when the suit appears from the statements in the plaint to be barred by any law. This clause applies when it appear from the statements in the plaint that the suit is barred but it has no application where there is no clear or specific admission in the plaint suggesting that the suit is barred. This clause is attracted only when on the admitted facts as appearing from the plaint itself the suit is prima facie barred.
Clause (d) of rule II, authorise the rejection of a plaint when the suit appears from the statements in the plaint to be barred by any law. This clause applies when it appear from the statements in the plaint that the suit is barred but it has no application where there is no clear or specific admission in the plaint suggesting that the suit is barred. This clause is attracted only when on the admitted facts as appearing from the plaint itself the suit is prima facie barred. ... ( 14)
Code of Civil Procedure (V of 1908)
Order VII, rule 11
There is nothing on record to show that on the admitted facts as appearing from the plaint itself the suit is prima facie barred. Rule l1(d) is not at all attracted and the plaint cannot be rejected on that score. .. ... (17)
Ratan Chand Dharam Chand vs Secretary of State for India in Council, 18 CWN 1340; Maqsood Ali vs Deputy Commissioner, Bara Banki, AIR 1928, Oudh, 495; Sreedam Chandra Bhur vs Tencori Mukherjee. AIR 1953 Cal. 222; 'Gunnaji Bhavaji vs Makanji Khoosal Chand', 34 Bom. 250; Prankrishna vs Kripannath. 21 Cal. WN 209; Mannan vs Md Serajul Islam Sarker 56 DLR (AD) 210; Abdul Malek Sawdagar vs Md Mahbubey Alam 57 DLR(AD) 18; Md Abul Khair vs Pubali Bank Ltd. 21 BLD (AD) 32 = 53 DLR (AD) 62; Afzal Hossain Diptee vs Radha Kanta Korati 15 BLC 196; Bangladesh Water Development Board vs Contractor, Manu Barrage 9 BLT 21 = 53 DLR 200 and Shafi A. Chowdhury vs Pubali Bank Ltd. 54 DLR 310 ref.
Shafique Ahmed. Senior Advocate with Khair Ezaz Maswood, with Mahbub Shafique, and Md Humayun Bashar, Advocates-For the Plaintiff-Appellant.
Md Mehedi Hasan Chowdhury with Jausna Perveen, and Rokonuzzaman Prince. Advocates-For the Defendant No. 1 Respondent.
None appears-For the Proforma Defendant No. 2 Respondent.
Judgment
Syed Md Ziaul Karim J : By this appeal, the plaintiff appellant has challenged the legality and propriety of the judgment and decree dated 26-9-2017 passed by learned Joint District Judge, Fifth Court, Dhaka, rejecting the plaint of Title Suit No. 326 of 2017 under Order VII,  rule 11 (d) of the Code of Civil Procedure (briefly as the Code).
2. Material facts leading to this appeal are that on 26-9-2017 the appellant as plaintiff instituted Title Suit No. 326 of 2017 in the Fifth Court of Joint District Judge, Dhaka impleading the respondents as defendants for realisation of arrear of rents for Taka 205,24,45,760, mandatory injunction and compensation. The relieves claimed in suit reads as hereunder:
 (ক) মোকদ্দমা দায়ের পর্যন্ত ১নং বিবাদীর বকেয়া ভাড়া বাবদ ১,২৬,২৪,৪৫,৭৬০ (একশ ছাব্বিশ কোটি চব্বিশ লক্ষ পয়তাল্লিশ হাজার সাত শত ষাট) টাকা এবং ক্ষতি পূরণ বাবদ ৭৯,০০, ০০,০০০ (ঊনাশি কোটি) টাকা সর্বমোট ২০৫,২৪, ৪৫,৭৬০ (দুইশত পাঁচ কোটি পয়তাল্লিশ হাজার সাত শত ষাট) টাকা বাদী বরাবরে পরিশোধ ডিক্রী দিতে ;
(খ) আদালতের নির্ধারিত মেয়াদ মধ্যে ১নং বিবাদীর আপোষে টাকা পরিশোধ না করিলে আদালত যোগে টাকা আদায়ের ডিক্রী দিতে ;
(গ) মোকদ্দমা চলাকালীন সময়ের জন্য  একই ক্ষতিপূরণের ডিক্রী দিতে ;
(ঘ) ১নং বিবাদী তাহার বিগত ২৫-১-২০১৭ খ্রিষ্টাব্দের পত্র অনুসারে ভবনের ১৪তম তলা ৩০-৪-২০১৭ খ্রিষ্টাব্দে ছাড়িয়া না দেওয়ায় ১-৫-২০১৭ হইতে প্রতি বর্গফুট ২০০ টাকা হারে ভাড়া প্রদান এবং তদনুসারে নতুন চুক্তি সম্পাদন এর ডিক্রী দিতে ;
(ঙ) ১নং বিবাদী যাহাতে ভবনের ১৪তম তলার ২০০ টাকা হারে বকেয়া ভাড়া এবং ১২, ১৩, ও ১৪তম তলার চুক্তি বর্হিভূতভাবে ৩৬ মাসের পরে থাকায় প্রতি বর্গফুটে ২০০ টাকা হারে পরিশোধ না করায় ফেব্রুয়ারী, ২০১৩ হইতে ফেব্রুয়ারী, ২০১৬ পর্যন্ত অর্থাৎ ৩৬ মাসের চুক্তি মোতাবেক ১০৮ টাকা বর্গফুট হারে বাদীকে পরিশোধ না করিয়া যাহাতে ভাড়াটিয়া প্রেমিসেস ত্যাগ করিত না পারে সে মর্মে ডিক্রী প্রদান করিতে ;
(চ) চুক্তি পত্রের ৭নং প"ষ্ঠার ১নং দফার শর্ত অনুসারে ১নং বিবাদীকে প্রতি বর্গফুট ২০০ টাকা হারে ভাড়া প্রদানের নির্দেশ প্রদান ;
(ছ) মোকদ্দমার যাবতীয় খরচ বাদী পক্ষের অনুকূলে এবং ১নং বিবাদী পক্ষের প্রতিকূল ডিক্রী দিতে ;
(জ) আইন ও ইকুটি মতে বাদী পক্ষ আর যে সকল প্রতিকার পাইতে পারে সেই মর্মে ডিক্রী দিতে মহোদয়ের মর্জি হয়।
3. In suit, on 26-9-2017 the plaintiff filed an application under Order XXXIX, rules 1 and 2 and Section 151 of the Code for temporary injunction restraining the defendant No. 1 from removing furniture from the suit premises without paying the arrear rents for Taka 205,24,45,760.
4. After hearing the learned Judge by the impugned order dated 26-9-2017 rejected the plaint of the suit under Order VII, rule 11 (d) of the Code as the suit is barred under Section 7 of the Arbitration Act 2001.
5. Feeling aggrieved the plaintiff as appellant preferred the instant appeal.
6. The learned Advocate appearing for the appellant seeks to impeach the impugned judgment and decree on two fold arguments:
Firstly: The defendant No.1 is his tenant and both the parties entered into an agreement on 20-2-2013. In the said agreement there is an Arbitration Clause wherein it has been stated that if any dispute arises between the parties the dispute should be referred for Arbitration and the same should be dissolved therein pursuant to the Arbitration Act 2001. So the learned Judge without giving the plaintiff any scope to resolve the matter in Arbitration rejected the plaint which caused a serious miscarriage of justice.
Second and lastly: The plaint clearly discloses the cause of action and from plain reading of the plaint it appears that there is no such statement that the suit is barred under law so the plaint cannot be rejected under Order VII, rule 11 of the Code but the learned Judge of the Court below without considering such law and facts dismissed the suit which is absolutely contrary to law. Moreso, the plaintiff is willing to dissolve the matter in dispute with the defendant No. 1 by Arbitration and in accordance with Arbitration Act 2001 but the learned Judge without giving him any scope to take such step rejected the plaint which cannot be sustained in the eye of law.
7. The learned Advocate appearing for the respondent No. 1 candidly submits that the learned Judge of the Court below without rejecting the plaint could give an opportunity to plaintiff to dissolve the matter in issue by arbitration. He lastly submits that the defendant No. 1 is also willing to dissolve the matter-in- issue by Arbitration.
8. In order to appreciate their submissions we have gone through the records and given our anxious consideration to their submissions.
9. The point for consideration whether the impugned judgment and decree calls for interference by this Court.
10. For the convenience of understanding the provisions of Order VII, rule II of the Code of Civil Procedure reads as hereunder:
"11 The plaint shall be rejected on the following issues:
(a) Where it does not disclose a cause of action.
(b) Where the relief claimed is undervalued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court fails to do so;
(c) Where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped and the plaintiff, on being required by the Court to supply the require stamp-paper within a time to be fixed by the Court, fails do so.
(d) Where the suit appears from the statement in the plaint to be barred by any law."
11. Provided that the time fixed by the Court for the correction of the valuation or supplying of the requisite stamp-paper shall not exceed twenty one days.
12. On going to the materials on record it transpires that the plaintiff instituted Title Suit No. 326 of 2017 for realisation of money for Taka 205,24,45,760 from the defendant No. I, mandatory injunction compensation. The only point assigned in impugned order that the suit is barred under law i.e. under Arbitration Act. The question whether the plaint is liable to be rejected being barred by law must be apparent from the statement made in the plaint itself and not from the written statement or any other material other than that has been put in the plaint.
13. From the plain reading of the statements of plaint of the instant suit it is evident that the same clearly discloses the cause of action; the relief claimed is not undervalued; the plaint was not written upon paper insufficiently stamped; from the statement of the plaint it does not appear that the suit is barred by any law.
14, Now coming to clause (d) of rule 11, it appears that clause (d) of the rule authorise the rejection of a plaint when the suit appears from the statements in the plaint to be barred by any law. This clause applies when it appear from the statements in the plaint that the suit is barred but it has no application where there is no clear or specific admission in the plaint suggesting that the suit is barred.
This clause is attracted only when on the admitted facts as appearing from the plaint itself the suit is prima facie barred. As for instance when from the statements made in the plaint it appears that the cause of action arose beyond the period of limitation fixed under the statute and no indication is given that limitation has been saved, the plaint may be rejected. In a proper case, when it appears to be barred by limitation, the plaint may be allowed to be amended without rejection. It is not mandatory for the Court to reject the pliant. It may ask the plaintiff to amend it so as to make suit maintainable. Where the plaintiff does not comply with such an order the Court may reject the plaint. Reference may be made to the cases reported in 18 CWN 1340. AIR 1928 Oudh 495 and AIR 1953 Cal.222.
15. In the case of Ratan Chand Dharam Chand vs The Secretary of State for India in Council. reported in 18 CWN 1340. a Division Bench of Calcutta High Court while considering the scope of Order VII, rule 11 (d) observed as follows:-
"That rule obviously has no application, for there was no statement in the plaint which
suggested that the suit was barred. On the contrary it was specifically stated that notice under Sec. 80 had been served on the "Collector" without specifying the district. The defect was not discovered till after the defendants had entered appearance and it was then too late to reject the plaint".
Similarly in the case of Maqsood Ali vs Deputy Commissioner, Bara Banki, reported in AIR 1928 Oudh 495, a Division Bench of Oudh held that if the suit was not on the face of it barred by any law, Order VII rule 11(d) had no application. The relevant portion of the judgment ran as follows:
"We do not consider that the suit appeared from the statement in the plaint to be barred by law and we do not think that rule had any application. He has pointed out to us that in a suit which was filed in a similar manner a Bench of the Allahabad High Court stated in Nachhu vs Secy of State that the plaint ought to have been rejected under the proviso of Section 54(c) of the old Code of Civil Procedure, that clause was exactly the same as Order VlI, rule 11 (d). The learned Judge composing the Bench gave no reasons for this conclusion and did not give any effect to it for we find that the suit with which they were concerned had been dismissed but the Subordinate Judge and as their order was an order dismissing the appeal, the plaint was apparently not rejected. Their Lordships said:" "It ought to have been rejected" but gave no effect to that view. We have only to note in respect of this point that exactly the same question could have been raised in Bhagchand Dagadusa vs Secy. of Stale. There the suit had been dismissed by the District Judge. The appeal had been dismissed by the High Court and the appeal was again dismissed by their Lordships of the Judicial Committee. It was not there suggested that the proper procedure was to reject the plaint.
 (To be continued)
In a case such as this we are of opinion the suit is not on the face of it barred by law. The very arguments which have been advanced in appeal show that the suit on the face of it is not barred by law, as the suit has been found to be a suit that has to be dismissed after consideration of the legal arguments. Therefore we are unable to accept this view of the learned Counsel.
16. The Calcutta High Court in the case of Sreedam Chandra Bhur vs Tencori Mukherjee reported in AIR 1953 Cal222 also held that Order VII rule 11(d) was attracted only when on the admitted facts as appearing from the plaint itself the suit was prima facie barred. The Division Bench in this connection observed as follows:-
"This clause is attracted only when on the admitted facts as appearing from the plaint itself the suit is prima facie barred. As for instance when from the statements made in the plaint it appears that the cause of action arose beyond period of limitation fixed under the statute and no indication is given that limitation has been saved, the plaint may be rejected. Even in such a case, an opportunity is to be given to the plaintiff to amend the plaint by setting out an acknowledgement in writing signed by the defendant within the period of limitation if it is so prayed, and that without passing an order for rejection of the plaint. 'Gunnaji Bhavaji vs Makanji Khoosal Chand', 34 Bom. 250. As was observed in 'Ratan Chand vs Secy. of State 18 Cal. WN 1340, action is to be taken under Order VII, rule 11 of the Code of Civil Procedure only if there is a clear and specific admission in the plaint from which it follows that the suit is barred. Reference may also be made to the observations of this Court.' Prankrishna vs Krlpannath '. 21 Cal. WN 209 held:
"Let us now consider whether on the plaint as filed the Court will be justified in rejecting. in limine the plaint under cl.(d) rule 11,  Order VII, Civil PC In the body of the pliant there is no admission for the Council of the Assembly is the Government under Section 80, Civil PC. On the other hand, it is seriously contested on behalf of the plaintiff that neither of the two bodies can even be deemed to be the government. The learned Subordinate Judge refers to his order vaguely to the Trend of French Statutes conferring greater and greater powers on the french Settlement in India and creating a 'Council du Government' there and later a cutting out Chandernagore from the Federation and conferring on Chandernagore all those powers with a separate delegate of the 'Commissionaire de la re-oblique, it is evident that the Chandernagore administration is a government in the grammatical and ordinary sense of the word though its functions may fall short  of the those of the Governments existing in India.
We do not think it necessary to refer to other points urged before us by the contending parties. Suffice it to say that the question whether even if the Code of Civil Procedure applies, whether Section 80 would be attracted or not cannot be decided merely on the plaint as it stands. The Court should have registered the plaint, issued notices on the defendants and allowed them to file their written statements. After issues were raised it would have been open to the Court to take up one or more of the issues as preliminary ones and decide the same. Objection that had been raised by the Court 'suo-motu' and such other objection as may be raised by the defendants would have to be tried on the merits, and only after all the necessary facts and materials are brought before the Court."
17. There is no reason to differ from the above principles of law. In the instant case, there is nothing on record to show that on the admitted facts as appearing from the plaint itself the suit is prima facie barred. So the rule 11(d) is not at all attracted here and the plaint cannot be rejected on that score.
18. In the case of Sundar Ali being dead his heirs: Mannan vs Md Serajul Islam Sarker 56 DLR (AD) 210 held:
"For the ascertainment of the cause of action the Court is required to read the plaint in its entirety.
19. In the case of Abdul Malek Sawdagar vs Md Mahbubey Alam 57 DLR (AD) 18 held:
"The question whether the plaint is liable to be rejected being barred by law must be apparent from the statement made in the plaint itself and not from the written statement or any other material other than that has been put in the plaint.
20. In the case of Md Abul Khair vs Pubali Bank Ltd. 21 BLD (AD) 32 = 53 DLR (AD) 62 held:
"Where in a suit an application under Order VII, rule 11 of the Code is filed for rejecting the plaint on the ground that the averments made in the plaint do no disclose a cause of action for the suit, the Court is not called upon to decide the suit on merit on taking evidence. It is only the averment made in the plaint which are to be considered to come to a finding as to whether those disclose a clause of action. The Court while deciding such application is not permitted in law to travel beyond the averments made in the plaint."
21. In the case of Afzal Hossain Diptee vs Radha Kanta Korati 15 BLC 196 held:
"Code of Civil Procedure
Order VII rule 11
22. On going to materials on record it transpires that the grounds urged for rejection of the plaint are absolutely the subject matter of evidence, which cannot be decided before taking evidence. On plain reading of the statements of the plaint it is evident that the same clearly discloses the cause of action, the relief claimed is not under valued, the plaint was not written upon paper insufficiently stamped and not barred by any other law. The question whether the plaint is liable to be rejected being barred by law must be apparent from the statement made in the plaint itself and not from the written statement or any other material other than that has been put in the plaint."
23. In the case of Bangladesh Water Development Board vs Contractor, Manu Barrage 9 BLT 21 = 53 DLR 200 held:
"Arbitration Act, 1940 Section 32
Whether the suit instituted in presence of the arbitration agreement is maintainable.
Held: We find no such provisions in the Act barring a suit on the ground of existence of an arbitration agreement."
24. In the case of Shafi A Chowdhury vs Pubali Bank Ltd. 54 DLR 310 held:
"Section 11 & Order VII, rule 11 of the Code.
Ordinarily, a plaint should not be rejected under Order VII, rule 11 of the Code on the ground of res judicata unless it is so palpably clear and obvious from a meaningful reading of the plaint that no further evidence is required."
25. The facts 'indicate that the plaintiff instituted the suit for realisation of arrear rents, mandatory injection and for compensation against the defendant No.1. It is pertinent to point out that the plaintiff entered into a tenancy agreement with defendant No. I on 20-2-2013. In the said agreement both the parties were agreed to dissolve their matter in dispute by Arbitration and in accordance to Arbitration Act 2001. The terms of the clause of the agreement reads as hereunder:
"In the event of any dispute of any difference (s) arising out of the clauses of the terms and conditions mentioned therein above, such dispute of difference (s) shall be referred to the arbitration or .arbitrators, one to be appointed by each Part: (Lessor and Lessee)), and a third Arbitrator/ Umpire to be appointed by the mutual consent of the Two Arbitrators so appointed by the parties. Such arbitration shall be in accordance with and subject to the provisions of the Arbitration Act, 2001 and the rules hereunder, and the awards made by the arbitrators shall be final and binding upon both the LESSOR and the LESSEE."
26. We find that the learned Advocates of both appellant and respondent No. 1 candidly submit that they are willing to dissolve the matter in dispute by Arbitration and in accordance with the Arbitration Act 2001.
27. All the facts and submissions of the learned Counsel of both the parties indicate that the plaint of the suit should not be rejected under Order VII, rule 11 (d) of the Code, where there is an arbitration clause in agreement to dissolve the dispute by Arbitration and parties are willing to go for Arbitration.
28. If sections 7 and 10 of the Arbitration Act are read together the intention of the legislature becomes clearer that once the parties to a contract agreed to settle their disputes that may arise out of execution of the contract they must be encouraged and directed to follow the procedure what they agreed to, and the Court should not proceed with any civil proceedings commenced by one party against other party in respect of any matter covered by such arbitration agreement.
29. In view of such facts the ends of justice would best to serve if we direct the plaintiff appellant and defendant respondent No. I to dissolve their dispute by Arbitration and in accordance with the Arbitration Act 2001.
30. In view of the above, the Court below without considering the materials on record and aforesaid principles of law, by rejecting the plaint of the suit committed an error of law. Therefore, the impugned judgment and decree of the Court below is liable to be interfered by the High Court Division.     .
31. Moreover the impugned order in its entirety is not well founded in the facts and circumstances of the case. So, the submissions advanced by the learned Counsel for the appellant prevails and appears to have a good deal of force.
32. In the light of discussions made above and the preponderant judicial views emerging out of the authorities referred to above, we are of the view that the impugned judgment and decree suffers from legal infirmities which calls for interference by this Court. Thus the appeal having merit succeeds.
33. In the view of foregoing narrative, the appeal is allowed. The impugned judgment and decree dated 26-9-2017 passed by learned Joint District Judge, fifth Court, Dhaka in Title Suit No. 326 of 2017 is hereby set-aside. The learned Judge of the Court below shall direct the plaintiff and defendant No.1 to take every possible step to dissolve their matter in dispute by Arbitration and in accordance with the Arbitration Act 2001 within three months, from the date of receipt of this order and till then the further proceeding of the suit shall be stayed.
The office is directed to communicate the order at once.

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Attack on Iran`s elite guards


IRANIAN Supreme Leader Ayatollah Ali Khamenei accused US-backed Gulf Arab states of carrying out a shooting attack on a military parade that killed 25 people, almost half of them members of the country's elite Revolutionary Guards. Khamenei ordered security forces to bring to justice those responsible for one of the ...

Sports »

Bertens defeats Tomljanovic to secure Korea Open win


AFP, Seoul :Kiki Bertens defeated Australia's Ajla Tomljanovic in the Korea Open final on Sunday, securing her third WTA Tour singles title of the season to continue her career-best year.The second-seeded Bertens came back from break down in the deciding set to defeat the Australian in two hours and 22 ...

International »

World leaders gather at UN under threat from unilateralism


AP, United Nations :With rising unilateralism challenging its very existence, the United Nations convenes its annual meeting of world leaders Monday and will try once more to tackle problems together as a community of nations, addressing threats ranging from Mideast conflicts to the effects of global warming - and also ...

 
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