# M/s L.R. Print Solutions Defendant/ v. M/s Exflo Sanitation Pvt. Ltd. Plaintiff/

- **Citation:** (2022) 12 ILRA 729
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-12-06
- **Bench:** Manoj Kumar Gupta, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-l-r-print-solutions-defendant-v-m-s-exflo-sanitation-pvt-ltd-plaintiff-47982
- **Pages:** 6

## Headnote

Civil Law - Arbitration and Conciliation
Application Act, 1996 - Section 8 - Power to
refer parties to arbitration where there is an
arbitration agreement - A judicial authority,
before which, an action is brought, in a
matter,
which
is
the
subject
of
an
arbitration
agreement,
shall
refer
the
parties to arbitration unless it finds that
prima facie no valid arbitration agreement
exists - Notwithstanding that an application
has been made u/s 8(1) and that the issue
is pending before the judicial authority, an
arbitration may be commenced or continued
and an arbitral award made - i.e. there is no
embargo for a party to approach the arbitral
tribunal for getting the dispute decided
during pendency of the suit - It would be an
ideal scenario if the parties themselves
respect their contractual commitment &
approach the arbitrator without the judicial
authority compelling them to do so under
Section 8 of the Act. (Para 15)

Civil Law -Arbitration and Conciliation
Application Act, 1996 - Section 8 - Order 7
Rule 11 C.P.C. - Appellant, a proprietorship
concern, entered into an agreement of
tenancy with the respondent in respect of
an industrial property - clause 14 of the
lease deed provided that in the event of any
dispute or difference arising out of lease
agreement, the same was to be referred to
an arbitrator appointed by the lessor - As
the appellant failed to vacate the tenanted
premises, the respondent instituted a suit -
trial court rejected the plaint in exercise of
power under Order 7, Rule 11 (d) CPC
holding that the suit is barred by S. 8 of the
Act - Court simply rejected the plaint and
did not make reference of the dispute u/s 8
of the Act - Appellant contended that unless
the court refers the parties to arbitration,
the parties themselves cannot invoke the
arbitral machinery nor the arbitral tribunal
gets jurisdiction to decide the dispute and
differences between the parties - Held -
although the trial court while deciding the
issue relating to bar u/s 8 had rejected the
plaint without referring the parties to
arbitration and to that extent it's order is
erroneous, but that in no manner was an
impediment in invoking the mechanism of
redressal viz. arbitration agreed to by the
parties themselves - Court held that the
submission of learned counsel for the
appellant is inherently contrary to the
legislative
intent
and
cannot
be
countenanced and hence rejected (Para 15)
730 INDIAN LAW REPORTS ALLAHABAD SERIES
Dismissed. (E-3)

List of Cases cited:

## Text

12 All. M/s L.R. Print Solutions Vs. M/s Exflo Sanitation Pvt. Ltd.
729
has miserably failed to demonstrate diligence
and bonafide to make out 'sufficient cause' for
condoning the delay. Therefore, it is held that
delay in filing this appeal has not been
sufficiently explained and there exists no
sufficient cause for condoning the delay in
filing the aforesaid appeal. Under the facts
and circumstances, the delay condonation
application is rejected.

Order on Appeal

11. Since, the delay condonation
application has been rejected, the present
appeal also stands dismissed.
----------
(2022) 12 ILRA 729
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.12.2022

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE JAYANT BANERJI, J.

Appeal U/S 37 of Arbitration & Conciliation Act
1996 Defective No. 46 of 2022

M/s L.R. Print Solutions
 ...Defendant/Appellant
Versus
M/s Exflo Sanitation Pvt. Ltd.
 ...Plaintiff/Respondent

Counsel for the Appellant:
Sri Ashish Kumar Singh, Sri Ishwar Kumar
Upadhyay, Sri Rakesh Pande, Sr. Advocate

Counsel for the Respondents:
Sri Ishir Sripat

Civil Law - Arbitration and Conciliation
Application Act, 1996 - Section 8 - Power to
refer parties to arbitration where there is an
arbitration agreement - A judicial authority,
before which, an action is brought, in a
matter,
which
is
the
subject
of
an
arbitration
agreement,
shall
refer
the
parties to arbitration unless it finds that
prima facie no valid arbitration agreement
exists - Notwithstanding that an application
has been made u/s 8(1) and that the issue
is pending before the judicial authority, an
arbitration may be commenced or continued
and an arbitral award made - i.e. there is no
embargo for a party to approach the arbitral
tribunal for getting the dispute decided
during pendency of the suit - It would be an
ideal scenario if the parties themselves
respect their contractual commitment &
approach the arbitrator without the judicial
authority compelling them to do so under
Section 8 of the Act. (Para 15)

Civil Law -Arbitration and Conciliation
Application Act, 1996 - Section 8 - Order 7
Rule 11 C.P.C. - Appellant, a proprietorship
concern, entered into an agreement of
tenancy with the respondent in respect of
an industrial property - clause 14 of the
lease deed provided that in the event of any
dispute or difference arising out of lease
agreement, the same was to be referred to
an arbitrator appointed by the lessor - As
the appellant failed to vacate the tenanted
premises, the respondent instituted a suit -
trial court rejected the plaint in exercise of
power under Order 7, Rule 11 (d) CPC
holding that the suit is barred by S. 8 of the
Act - Court simply rejected the plaint and
did not make reference of the dispute u/s 8
of the Act - Appellant contended that unless
the court refers the parties to arbitration,
the parties themselves cannot invoke the
arbitral machinery nor the arbitral tribunal
gets jurisdiction to decide the dispute and
differences between the parties - Held -
although the trial court while deciding the
issue relating to bar u/s 8 had rejected the
plaint without referring the parties to
arbitration and to that extent it's order is
erroneous, but that in no manner was an
impediment in invoking the mechanism of
redressal viz. arbitration agreed to by the
parties themselves - Court held that the
submission of learned counsel for the
appellant is inherently contrary to the
legislative
intent
and
cannot
be
countenanced and hence rejected (Para 15)
730 INDIAN LAW REPORTS ALLAHABAD SERIES
Dismissed. (E-3)

List of Cases cited:

1. Vidya Drolia & ors. Vs Durga Trading
Corporation 2021 (2) SCC

2. Himangni Enterprises Vs Kamaljeet Singh
Ahluwalia 2017 10 SCC 706

(Delivered by Hon'ble Manoj Kumar
Gupta, J.)

1. The instant appeal is directed
against the order dated 30.06.2022 passed
by the Presiding Officer, Commercial
Court, Gautam Budh Nagar rejecting the
objection of the appellant filed under
Section
34
of
the
Arbitration
and
Conciliation
Act,
1996
(Arbitration
Objection Case No.150 of 2017).

2. The facts in brief are as follows:-

(a)
The
appellant
is
a
proprietorship concern. It entered into an
agreement of tenancy for a period of 11
months
dated
11.06.2008
with
the
respondent ( M/s Exflo Sanitation Pvt Ltd.)
in respect of an industrial property No.C156, Sector 10, Noida. The tenancy was for
a period of 11 months starting from
1.07.2008 at the rate of Rs.8000/- per
month. Under Clause 4 of the lease deed, it
was provided that the lease rent will be
enhanced by 10% after expiry of 11
months. Clause 7 gave option to both lessee
and lessor to terminate the lease after
giving one month notice. Under Clause 14,
in the event of any dispute or difference
arising out of lease agreement, the same
would be referred to an arbitrator appointed
by the lessor. The decision of the arbitrator
was made binding on both the parties.

(b) The respondent by notice
dated 13.09.2011 demanded arrears of rent
amounting
to
Rs.80,688/-
and
also
terminated the lease after expiry of 30 days.

(c) As the appellant failed to
vacate
the
tenanted
premises,
the
respondent instituted a suit (SCC Suit
No.19 of 2011) for recovery of arrears of
rent and damages as well as for eviction.

(d)
The
appellant
filed
an
application in the suit purporting to be
under Section 8 of the Arbitration and
Conciliation Act, 1996 (hereinafter referred
to as 'the Act') read with Order 7 Rule 11
C.P.C. contending that as per the lease
agreement, it was agreed between the
parties that in case of any dispute or
difference arising out of the same, it would
be
decided
by
the
arbitrator
and
consequently, the court had no jurisdiction.
As per Section 8 of the Act, the dispute can
only be decided by the arbitrator, therefore,
the plaint should be rejected under Order 7
Rule 11 C.P.C.

(e) The trial court accepted the
objections and by order dated 19.09.2015
rejected the plaint in exercise of power
under Order 7, Rule 11 (d) CPC holding
that the suit is barred by Section 8 of the
Act.

(f) The respondent thereafter
nominated Sri Ashok Kumar Tripathi as
arbitrator and filed a claim before him for
arrears of rent; damages at the rate of
Rs.25,000/- per month; interest at the rate
of 18%; and eviction of the appellant.

(g) The appellant contested the
claim by filing objections.

(h) The arbitrator framed five
issues
and
gave
his
award
dated
19.07.2017. The claim of the respondent
was decreed for recovery of arrears of rent,
damages and eviction of the appellant.

(i) The appellant filed objections
under Section 34 of the Act against the
award which was registered as Arbitration
Objection Case No.150 of 2017. The court
12 All. M/s L.R. Print Solutions Vs. M/s Exflo Sanitation Pvt. Ltd.
731
below has rejected the objections by order
dated 20.06.2022 and aggrieved thereby the
instant appeal has been filed.

3. The appeal was admitted by order
dated 10.08.2022. Counsel for the appellant
on the date the appeal was admitted made a
statement that he has annexed all relevant
documents with the memo of appeal and it
can be heard without calling for the records
of the court below. Learned counsel for the
respondent also made a statement to the
same effect. Accordingly, we fixed a date
for hearing of the appeal and it has been
heard finally.

4. The sole submission of counsel for
the appellant Sri Rakesh Pande, learned
senior counsel assisted by Sri Ishwar
Kumar Upadhyay, is that the arbitral
tribunal does not get jurisdiction to decide
dispute between the parties without dispute
being referred to it by the court. It is
submitted that the court simply rejected the
plaint and did not make reference of the
dispute under Section 8 of the Act. Thus,
the contention is that unless the court refers
the parties to arbitration, the parties
themselves cannot invoke the arbitral
machinery nor the arbitral tribunal gets
jurisdiction to decide the dispute and
differences between the parties. In support
of his submission, he places reliance on
paragraph 244.3 of the judgement of the
Supreme Court in Vidya Drolia and
others Vs. Durga Trading Corporation.

5. On the other hand, learned counsel
for the respondent submitted that it is not
necessary that the court should refer the
parties to arbitration and the respondent was
fully competent to appoint the arbitrator in
terms of Clause 14 of the agreement and the
arbitrator had rightly proceeded to decide the
dispute between the parties. It is submitted
that the appellant itself challenged the
jurisdiction of the civil court on the ground
that there was arbitration agreement between
the parties and the respondent having invoked
the said remedy, the appellant cannot be
permitted to challenge the jurisdiction of the
arbitral tribunal or the award given by him.

6. We have considered the rival
submissions and perused the record.

7. As would appear, the facts to the
extent noted above, are not in dispute
between the parties. Before we proceed to
dwell on the rival contentions, we would like
to advert to the judgement of the Supreme
Court in Vidya Drolia (supra). It is a
judgement
by
a
Three
Judge
Bench
answering a Reference as to whether
landlord-tenant disputes governed by the
provisions of the Transfer of Property Act,
1882 can be decided through the mechanism
of arbitration or recourse to such remedy
would be against public policy. The
Reference arose out of the order by a Two
Judge Bench dated 28.02.2019 in Civil
Appeal No.2402 of 2019 Vidya Drolia and
others Vs. Durga Trading Corporation
doubting the correctness of the law laid down
in Himangni Enterprises Vs. Kamaljeet
Singh Ahluwalia.

8. Two larger issues were decided viz:-

"2.1.
(i)
meaning
of
nonarbitrability and when the subject matter of
the dispute is not capable of being resolved
through arbitration; and

2.2. (ii) the conundrum - "who
decides" - whether the court at the
reference stage or the arbitral tribunal in
the arbitration proceedings would decide
the question of non-arbitrability.

2.3. The second aspect also
relates to the scope and ambit of
732 INDIAN LAW REPORTS ALLAHABAD SERIES
jurisdiction of the court at the referral
stage
when
an
objection
of
nonarbitrability is raised to an application
under Section 8 or 11 of the Arbitration
and Conciliation Act, 1996 (for short, the
''Arbitration Act')."

9. The first issue relating to nonarbitrability of the subject matter of
disputes between landlord and tenant was
decided by holding that the disputes
between them are, normally, arbitrable
except where the dispute is covered by a
legislation.
The
law
laid
down
in
Himangni Enterprises was accordingly
overruled. The conclusion drawn is as
follows:-

"80. In view of the aforesaid, we
overrule the ratio laid down in Himangni
Enterprises and hold that landlord-tenant
disputes are arbitrable as the Transfer of
Property Act does not forbid or foreclose
arbitration.
However,
landlord-tenant
disputes covered and governed by rent
control legislation would not be arbitrable
when specific court or forum has been
given exclusive jurisdiction to apply and
decide special rights and obligations. Such
rights
and
obligations
can
only
be
adjudicated and enforced by the specified
court/forum, and not through arbitration."

10. While deciding the second issue as
to who would be competent to decide a plea
of non-arbitrability, the Supreme Court after
noticing the statutory regime as it existed
prior to Act No.3 of 2016, after the amending
Act No.3 of 2016 and after Act No. 33 of
2019 held that Section 8 and Section 11 of
the Act are complementary provisions. The
object and purpose behind the two provisions
is identical i.e. to compel and force the parties
to abide by their contractual understanding.
Section 11, it has been noted, does not
prescribe any standard of judicial review for
determining
whether
any
arbitration
agreement is in existence or not while Section
8 states that the judicial review at the stage of
Reference is 'prima facie' and not final. The
'prima facie' satisfaction test regarding
existence of an arbitration agreement in
Section 11 can also be read in Section 8.
Accordingly, it is held that a limited power of
judicial review to the extent of prima facie
examination of the existence of an arbitral
agreement would effectuate the mechanism
of arbitration rather than obstruct it. The
conclusions
have
been
crystallized
in
paragraph 154 as follows:-

"154.1. Ratio of the decision in
Patel Engineering Ltd. on the scope of
judicial review by the court while deciding an
application under Sections 8 or 11 of the
Arbitration Act, post the amendments by Act
3 of 2016 (with retrospective effect from
23.10.2015) and even post the amendments
vide Act 33 of 2019 (with effect from
09.08.2019), is no longer applicable.

154.2. Scope of judicial review and
jurisdiction of the court under Section 8 and
11 of the Arbitration Act is identical but
extremely limited and restricted.

154.3. The general rule and
principle, in view of the legislative mandate
clear from Act 3 of 2016 and Act 33 of 2019,
and the principle of severability and
competence-competence, is that the arbitral
tribunal is the preferred first authority to
determine and decide all questions of nonarbitrability. The court has been conferred
power of "second look" on aspects of nonarbitrability post the award in terms of subclauses (i), (ii) or (iv) of Section 34 (2)(a) or
sub-clause (i) of Section 34 (2)(b) of the
Arbitration Act.

154.4. Rarely as a demurrer the
court may interfere at the Section 8 or 11
stage when it is manifestly and ex facie
12 All. M/s L.R. Print Solutions Vs. M/s Exflo Sanitation Pvt. Ltd.
733
certain that the arbitration agreement is
non- existent, invalid or the disputes are
non-arbitrable, though the nature and facet
of non-arbitrability would, to some extent,
determine the level and nature of judicial
scrutiny. The restricted and limited review
is to check and protect parties from being
forced to arbitrate when the matter is
demonstrably ''non-arbitrable' and to cut
off the deadwood. The court by default
would refer the matter when contentions
relating to non-arbitrability are plainly
arguable; when consideration in summary
proceedings would be insufficient and
inconclusive; when facts are contested;
when the party opposing arbitration adopts
delaying tactics or impairs conduct of
arbitration proceedings. This is not the
stage for the court to enter into a mini trial
or elaborate review so as to usurp the
jurisdiction of the arbitral tribunal but to
affirm and uphold integrity and efficacy of
arbitration as an alternative dispute
resolution mechanism."

11. While laying down the above, a
caveat was added. It has been held that
while deciding the issue relating to
existence of an arbitration agreement under
Section 11 of the Act, if debatable and
disputable facts are involved, the court
would force the parties to abide by the
arbitration
agreement
as
the
arbitral
tribunal is fully competent to rule on its
jurisdiction and non-arbitrability.

12. The Chief Justice in his separate
but concurring judgment noted that the
discretion in referring the parties to
arbitration under the old Arbitration Act,
1940 has been done away with after
coming into force of the 1996 Act. Section
8 of the new Act contains a mandate that
where an action is brought before a judicial
authority in a matter which is subject
matter of an arbitration agreement, the
parties have to be referred to arbitration. It
is in said context that it was observed in
paragraph 244.3 as follows:-

"The Court, under Sections 8 and
11, has to refer a matter to arbitration to
appoint an arbitrator, as the case may be,
unless a party has established a prima facie
(summary findings) case of non-existence
of
valid
arbitration
agreement,
by
summarily portraying a strong case that he
is entitled to such a finding."

13. The above observation is not
intended to mean that when any dispute
arises between the parties to the arbitration
agreement, they cannot set the arbitral
machinery in motion without intervention
of the court. In fact, such an interpretation
would be contrary to the object of the Act
and also the interpretation given to the
amendments made in Section 8 in Vidya
Drolia (supra) .

14. As noted above, the primary aim
behind Section 8 and Section 11 is to
compel and force the parties to abide by
their contractual commitment and get the
dispute resolved through arbitration. For
the said reason, even while applying prima
facie test while exercising power of judicial
review, the judicial authority/court has to
steer through a very narrow path. It cannot
enter into the arena of factual discord and
appreciation of evidence. Where the court
or the judicial authority feels that prima
facie test would be inconclusive and
inadequate
as
it
requires
detailed
examination of facts, the matter has to be
left for final determination by the arbitral
tribunal selected by the parties. The
underlying reason being to discourage the
parties from using referral proceeding as a
ruse to delay and obstruct.
734 INDIAN LAW REPORTS ALLAHABAD SERIES

15. While the provision of Section 8 is
mandatory and obligates the court to refer the
parties to arbitration where the subject matter
of dispute is covered by arbitration agreement,
it no where imposes any restriction on a party
in invoking the arbitral machinery and getting
the lis decided. In the instant case, although the
trial court while deciding the issue relating to
bar under Section 8 had rejected the plaint
without referring the parties to arbitration and
to that extent it's order is erroneous, but that in
no manner was an impediment in invoking the
mechanism of redressal viz. arbitration agreed
to by the parties themselves. In fact, subsection (3) of Section 8 when it provides that
"notwithstanding that an application has been
made under sub-section (1) and that the issue
is pending before the judicial authority, an
arbitration may be commenced or continued
and an arbitral award made" is conclusive of
the legislative intent that there is no embargo
for a party to approach the arbitral tribunal for
getting the dispute decided during pendency of
the suit. It would be an ideal scenario if the
parties themselves respect their contractual
commitment and approach the arbitrator
without the judicial authority compelling them
to do so under Section 8 of the Act. The
submission of learned counsel for the
appellant is inherently contrary to the
legislative intent and cannot be countenanced
and hence rejected.

16. The appeal lacks merit and is
dismissed.
----------
(2022) 12 ILRA 734
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 01.11.2022

BEFORE

THE HON'BLE AJAY BHANOT, J.

First Appeal From Order No. 2397 of 2016
With
First Appeal From Order No. 2697 of 2016 &
2507 of 2016

The New India Assurance Co. Ltd.
 ...Insurance Company/Defendant Appellant
Versus
Sunil Kumar Dwivedi & Ors.
 ...Claimants/Respondents

Counsel for the Appellant:
Sri Rahul Sahai

Counsel for the Respondents:
Sri Nigamendra Shukla, Sri Rakesh Kumar
Porwal, Sri Ram Singh

A. Civil Law - Motor Accident Claim -
Motor Vehicles Act, 1988 - Contributory
Negligence - deceased was travelling in
the Wagon R, which was being driven in
its lane at 80 km per hour on the Yamuna
Expressway in the morning hours
-
offending truck was moving in another
lane - truck driver suddenly swerved into
the lane of the WagonR at a very fast
speed and abruptly halted - He did not
alert the driver of the WagonR before
changing lanes - driver of the Wagon-R
had no time and opportunity to stop his
car or take safety measures to prevent the
accident - negligence was entirely on part
of the offending truck driver and he was
fully
responsible
for
the
accident
-
Negligence on part of the WagonR driver
is not proved - offending driver had a valid
driving license on the date of the accident
- tribunal erred by imposing contributory
negligence liability of 30% on the driver
of the WagonR - finding reversed -
insurance company liable to pay the full
compensation

B. Civil Law -Motor Accident Claim -
Motor Vehicles Act, 1988 - computation of
the compensation - Salary of the deceased
- House Rent Allowance - deceased was an
Assistant
Teacher
in
a
government
primary
school
-
tribunal
unlawfully
deducted
the
House
Rent
Allowance
amount from the salary of the deceased -