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TMI Blog2019 (7) TMI 1469X X X X Extracts X X X X X X X X Extracts X X X X ..... substituted a new agreement by way of compromise. As per the agreement dated 01.05.1997, the appellant was the clearing and forwarding agent for the entire north-eastern region; whereas under the terms of the compromise, the appellant has been appointed as stockist of the company only for Guwahati and Agartala and not as clearing and forwarding agent for north-eastern region. The clauses in the compromise memo also clearly state that the appellant handed over all the stocks of goods to the respondent-Company. The appellant had also handed over the entire documents in their possession both used and unused as well as sales tax documents, road permit, C forms from stockists and other documents. When the parties have settled their differences and compromised the matter, in the dispute subsequently arising between the parties, arbitration clause in the prior agreement cannot be invoked. Since the agreement dated 01.05.1997 (agreement for appointing the appellant as clearing and forwarding agent) and the compromise (appointing the appellant as stockist) are different, the arbitration clause in the agreement dated 01.05.1997 cannot be read into the terms of the compromise as per whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided in favor of appellant. - Civil Appeal No. 4430 of 2009 - - - Dated:- 30-7-2019 - R. Banumathi And A. S. Bopanna, JJ. JUDGMENT R. BANUMATHI, J. This appeal arises out of the order dated 26.03.2007 passed by the Guwahati High Court in Civil Revision (P) No.31 of 2005 in and by which the High Court allowed the revision petition preferred by the respondent and referred the parties to arbitration. 2. Brief facts which led to filing of this appeal are as follows:- The appellant is a Company registered under the Companies Act, 1956 and is involved with various types of agency businesses including that of clearing and forwarding agents, freight contractors, etc. M/s Rhone Poulene India Limited (RPIL) vide agreement dated 01.05.1997 appointed the appellant Company as its clearing and forwarding agent for a period of three years. Clause 17 of the agreement dated 01.05.1997 contains arbitration clause. The agreement was renewed for a further period from 01.04.2001 to 31.03.2002. 3. RPIL vide its letter dated 20.07.2001 informed the appellant that their Company is getting merged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... omplaint in C.R. Case No.1446 of 2002 before the Chief Judicial Magistrate, Kamrup for the offences punishable under Sections 420, 406, 409 and 403 IPC read with Section 34 IPC. The respondent had also filed an application under Section 151 CPC praying for setting aside/recalling of compromise decree dated 24.12.2001 on the ground that the compromise decree was obtained by appellant by false inducement and misrepresentation and the same is vitiated on account of fraud. 6. On 30.04.2003, appellant had filed Money Suit No.73 of 2003 claiming compensation for rupees twenty crores. In the suit, the appellant inter alia alleged that due to intentional acts of omission and commission by respondent, the appellantplaintiff had suffered huge financial loss as well as loss of goodwill and reputation in the market. On 15.06.2004, relying upon Clause 17 of the agreement dated 01.05.1997, the respondent filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 (for short the Act ) praying for referring the parties to arbitration in Money Suit No.73 of 2003. The trial court vide order dated 19.02.2005 dismissed the application filed under Section 8 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers (2009) 1 SCC 372 and Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya and Another (2003) 5 SCC 531, the learned counsel for the appellant submitted that in order to refer the parties to arbitration, the dispute must relate to the contract in respect of which the parties have agreed to refer to arbitration. Taking us through the pleadings and relief sought for in the subsequent suit in Money Suit No.73 of 2003, learned counsel for the appellant submitted that the dispute is exclusively determinable by the trial court and the High Court erred in referring the parties to arbitration. It was also submitted that the High Court did not keep in view that the respondent has challenged the very compromise decree dated 24.12.2001 on the ground of inducement and fraud by filing a petition and the same is still pending. 9. Per contra, the learned counsel for the respondent submitted that the factum of arbitration clause in the agreement dated 01.05.1997 is admitted by the appellant and the appellant is seeking compensation on account of illegal termination of clearing and forwarding agent agreement and the issue continues to be arbitrable. It was also submitted that the compro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant as clearing and forwarding agent in any manner in case of RPIL s merger with NPIL and sought for permanent injunction. As pointed our earlier, the said Title Suit No.241 of 2001 ended in compromise and compromise decree was passed on 24.12.2001. As per the said compromise, an amount of ₹ 23,50,000/- was paid by RPIL to the appellant by way of four demand drafts being (i) Draft No.215684 for ₹ 7,50,000/-; (ii) Draft No.215682 for ₹ 6,70,000/-; (iii) Draft No.215683 for ₹ 6,20,000/-; and (iv) Draft No.215685 for ₹ 3,10,000/-, all dated 04.01.2001 drawn on Allahabad Bank, Panbazar, Guwahati. As a part of compensation package, the respondent appointed the appellant as stockist of the company at Guwahati and Agartala. In terms of the compromise, the appellant has handed over all the documents to the respondent. The relevant portion of the terms of compromise reads as under:- . (iv) The defendant No.3 by letter dated 07.12.2001 has appointed the plaintiff as a stockist of the company at Guwahati and Agartala as part of compensation package. (v) The plaintiff has handed over all the stocks of goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the subject matter of the suit or not. 14. The parties can be referred to arbitration in an application filed under Section 8 of the Act only if the subject matter of the action before the judicial authority relates to dispute which is the subject matter of the arbitration agreement. As per Section 8 of the Act, the following conditions have to be satisfied for referring the parties to arbitration:- (i) there is an arbitration agreement; (ii) a party to the agreement brings an action in the court against the other party; (iii) subject-matter of the action is the same as the subject-matter of the arbitration agreement; (iv) the opposite party applies to the judicial authority for referring the parties to arbitration before it submits his first statement on the substance of the dispute. An application under Section 8 of the Act can be made only if the subject matter of the suit is also the same as the subject matter of arbitration. In other words, only those disputes which are specifically agreed to be resolved through arbitration can be the subject matter of arbitration; and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreement dated 01.05.1997. Learned counsel further submitted that the words .touching upon these presents .. used in the agreement has wide meaning which not only relates to the dispute arising out of the appointment of the appellant as clearing and forwarding agent, but also any other dispute arising out of the same would necessarily fall within the ambit of ..touching upon these presents .. and the High Court rightly referred the parties to arbitration. In support of his contention, the learned counsel placed reliance upon P Ramanatha Aiyar s Advanced Law Lexicon, 4th Edition, Page 4876. The relevant portion relied upon reads as under:- The dictionary meaning of the word touching is in reference or relation to, respecting, regarding, or concerning and this meaning indicates that the disputes need not directly arise out of the business of the society; but that it is enough that it should have reference or relation to or concern the business of the society. M.S. Madhava Rao v. D.V.K. Surya Rao, AIR 1954 Mad 103, 107 (FB). [Madras Co-operative Societies Act (6 of 1932), S.51] In this regard, reliance was also placed upon in Deccan Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , by the agreement dated 01.05.1997, the appellant was appointed as clearing and forwarding agent of RPIL for the entire north-eastern region; whereas under the compromise memo, the appellant has been appointed as stockist of the respondent Company at Guwahati and Agartala which is entirely a different appointment though, as part of compensation package. Clause 17 of the agreement dated 01.05.1997 cannot be invoked regarding the agreement of the parties to appoint the appellant as stockist for Guwahati and Agartala pursuant to the compromise. 21. It is also pertinent to note that the respondent has challenged the compromise decree alleging that it has been obtained by inducement and fraud. In view of the allegations of fraud levelled by the respondent that the compromise decree is vitiated by fraud, the parties cannot be referred to arbitration. Observing that where there are allegations of fraud which are so complicated that it becomes absolutely essential that such complex issues can be decided only by the Civil Court on apprehension of the evidence adduced by the parties, in A. Ayyasamy v. A. Paramasivam and Others (2016) 10 SCC 386, it was held as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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