Non-Availability Of Original Agreement Is Not Material When The Parties Do Not Dispute The Existence Of The Agreement: Allahabad High Court

The Bench of Justice Salil Kumar Rai held that a joint reading of Section 8 with Section 7(4) of the A&C Act leads to the conclusion that requirement of filing the original agreement or its certified copy as provided under Section 8(2) is not a mandatory requirement and the judicial authority shall decide the application if the existence of the arbitration agreement is alleged by one party and not denied by the other.

The Court further held that the photo copy of the agreement would suffice the requirement of Section 8(2) of the A&C Act if there is no dispute as to the existence of original agreement between the parties.

Facts

The parties entered into an agreement dated 06.07.2004 whereby the respondent was appointed as a teacher respondent school. A dispute arose between the parties. Accordingly, the respondent filed a suit for permanent prohibitory injunction restraining the petitioner from obstructing it from doing his duties in the institution.

The respondent in his plaint also asserted that the parties have an arbitration agreement between themselves, however, the petitioner has failed to appoint an arbitrator despite several requests from it. In that suit, the petitioner filed an application under Section 8 of the A&C Act for referring the dispute to arbitrator. The trial court dismissed the application on the ground that the original agreement or its certified copy is not available on record. Consequently, the petitioner preferred an appeal against the order of trial court, however, the appellate court also dismissed the appeal on the same ground.

Aggrieved by the rejection of the application and the consequent appeal, the petitioner preferred a writ petition.

The Contention of the Parties

The petitioner challenged the impugned order on the following grounds:

• The written agreement dated 6.7.2004 and the existence of arbitration clause in the agreement was admitted by the respondent and a photo copy of the same was already on record of the case.
• t was within the jurisdiction of the trial court to consider the matter for reference to arbitrator if the photo copy of the agreement which was admitted by the parties was on record and the application of the petitioners – defendants could not have been dismissed only on the ground that the original agreement containing the arbitration clause was not on record.

The respondent countered the submission of the petitioner on the following grounds:

• The application under Section 8 was filed only as a dilatory tactic as the petitioner has no interest in arbitration which is evident from the fact that it sat on various requests of the petitioner to appoint the arbitrator.
• Under Section 8 of the Act, 1996, an application for referring the matter to the arbitrator cannot be entertained if the original agreement or its certified copy is not on record and, therefore, no error has been committed by the courts below in rejecting the application.

Analysis by the Court

The Court observed that the respondent in its plaint has also stated the existence of the arbitration agreement, moreover, the photo copy of the agreement is also available on record of the case.

The Court further observed that in terms of Section 7(4)(c) of the A&C Act, an arbitration agreement is in writing if it is contained in an exchange of statements of claim and defence in which existence of the agreement is alleged by one party and not denied by the other, therefore, an arbitration agreement is existing between the parties as the petitioner has asserted the existence and the respondent has not denied such existence.

The Court held that an application under Section 8 of the A&C Act cannot be rejected merely because the original agreement or its certified copy was not on record when the parties do not dispute the existence of the agreement.

It held that a joint reading of Section 8 with Section 7(4) of the A&C Act leads to the conclusion that requirement of filing the original agreement or its certified copy as provided under Section 8(2) is not a mandatory requirement and the judicial authority shall decide the application if the existence of the arbitration agreement is alleged by one party and not denied by the other.

The Court further held that the photocopy of the agreement would suffice the requirement of Section 8(2) of the A&C Act if there is no dispute as to the existence of original agreement between the parties.

Accordingly, the Court allowed the application and set aside the order of the lower court with a direction to consider the application on its merit.

Case Title: Sohel Ahmad Siddiqui v. Noorul Huda English Medium School, Matters Under Article 227 No. 5252 of 2022

Case Citation: 2022 LiveLaw (AB) 417

Counsel for the Petitioner: Ejaz Ahmad Khan,Mohd. Monis Chauhan,P.K. Tyagi,R.K. Saini

Counsel for the Respondent: Sanjay Agrawal

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