1. This appeal will be heard.
2. Since the real contesting party, namely the plaintiff, has already entered appearance, service of notice upon the other defendants/respondents stands dispensed with. Filing of Paper Books and all other formalities also stand dispensed with. Lower Court's records need not be called for.
3. By consent of the contesting parties, appeal is treated as on day's list and taken up for hearing along with the connected application.
4. The defendant No. 2 is aggrieved by the Order No. 2 dated 7th June, 2006 passed by the learned District Judge, Alipore in Title Suit No. 80 of 2006. On examination of the available records and the order passed by the learned District Judge of the Court below, it appears that the defendant No. 1 herein as the owner of the suit premises entered into a development agreement with the defendant No. 4 for construction of the multi-storied building in the suit premises on certain terms and conditions. The said agreement was, however, signed by the constituted attorney of the defendant No. 1. In the said agreement a specific arbitration clause has been mentioned which is set out hereunder:
“In case there be any dispute between the parues hereto touching or concerning this agreement then the same shall be referred to arbitration under Arbitration Act, 1940.”
5. From the aforesaid arbitration clause it is clear that any dispute between the parties to the said agreement can only be referred to the arbitration. Undisputedly, the appellant/defendant No. 2 is not a party to the agreement.
6. Mr. Anindya Mitra, the learned senior Counsel representing the appellant/defendant No. 2, specifically urged before this Court that the plaintiff herein can neither drag the appellant herein to the arbitration proceeding nor any interim order can be passed against the said appellant in connection with the arbitration proceeding since the appellant/defendant No. 2 is not a party to the arbitration agreement. Mr. Mitra further submits that the arbitrator does not get the authority and jurisdiction to make the award against anyone who is not a party to the arbitration agreement and therefore, no interim order can be passed against the appellant on the basis of the petition filed by the plaintiff/opposite party No. 1 under section 9 of the Arbitration and Conciliation Act, 1996. According to Mr. Mitra, section 9 of the Arbitration and Conciliation Act, 1996 only provides an interim measure and there is no scope to issue any interim order against any one who is not a party to the agreement.
7. Mr. Mitra, the learned senior Counsel representing the appellant/defendant No. 2 cited the following decisions:
1) AIR 2006 Kerala 206.
2) 1994 (5) SCC 570.
3) AIR 1957 SC 652.
8. In the case of Shoney Sanil v. Coastal Foundations (P) Ltd. & Ors., reported in AIR 2006 Kerala 206, it has been specifically held that by interim measure, right of a third party cannot be interfered with.
9. In the case of Sukalu Ram Gond v. State of M.P reported in 1994 (5) SCC 570, it has been held that the award against the person not a party to the reference for arbitration is not bound by the said award.
10. In the other decision of the Constituted Bench of the Supreme Court of India reported in AIR 1957 SC 652, Union Of India v. Chaman Lal Loona & Co, it has been held that no one could be dragged to an arbitration proceeding on the strength of an agreement to which it was not a party.
11. In the present case, undisputedly the appellant herein is not a party to the arbitration agreement and therefore, no award can be passed against the said appellant by the arbitrator.
12. In the aforesaid circumstances, there is also no scope to interfere with the right of the appellant herein by an interim measure under section 9 of the Arbitration and Conciliation Act, 1996. The appellant herein cannot be subjected to the proceeding initiated by the plaintiff/opposite party No. 1 herein under section 9 of the Arbitration and Conciliation Act, 1996 as the appellant is not a party to the alleged arbitral agreement.
13. In view of the settled position in law as discussed hereinbefore, we are of the opinion that the interim order passed by the learned Judge of the Court below should be suitably modified and/or varied. However, we are also of the opinion that the learned Judge of the Court below should finally decide the pending application filed on behalf of the plaintiff on merits as expeditiously as possible but positively on or before 21st July, 2006. The defendants will be at liberty to file objection to the said application within 13 July, 2006 and reply thereto, if any, be filed within 17 July, 2006.
14. The interim order already passed in the matter by the learned District Judge on 7 June, 2006 is also modified only to the extent that the same will not operate against the appellant/defendant No. 2 herein.
15. The appeal thus stands disposed of.
16. In view of the disposal of the appeal, no further order is required to be passed in the connected stay application being C.A.N 4637 of 2006 and the same is accordingly disposed of without any order as to costs.
17. Let Xerox plain copy of this order duly countersigned by the Assistant Registrar (Court) be given to the learned Advocates of the parties on usual undertaking.
P.K Chattopadhyay and K. Mukherjee, JJ.:
Appeal disposed of.
A.D