Legal Updates for Law Exams: 23rd September 2021

1. Arbitration Reference Can Be Declined If Dispute In Question Does Not Correlate To Arbitration Agreement: Supreme Court

• The bench of Chief Justice of India NV Ramana and Justice Surya Kant observed that it is not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator.

• The Supreme Court observed that prayer for reference to Arbitration under Section 11 of the Arbitration and Conciliation Act can be declined if the dispute in question does not correlate to the arbitration agreement.

• In this case, the court noted that the Parties have neither denied that there is no 'arbitrable dispute' between them nor have they challenged the existence of the arbitration clause(s) in the Construction Management Service Agreements. The nature of disputes that have arisen between the parties, thus, can be adjudicated in the arbitral proceedings, the court said.

• The court therefore appointed Justice (Retd.) R.V. Raveendran, Former Judge, Supreme Court of India as the sole arbitrator to resolve all disputes/differences between the parties.

• The bench observed thus while considering the petition filed by DLF Home Developers Limited under Section 11(6) read with Section 11(12) of the Arbitration and Conciliation Act, for appointment of sole arbitrator to adjudicate the differences between itself and other parties.

• Court referred to earlier judgments including  Vidya Drolia and Others v. Durga Trading Corporation, and observed:
  
  To say it differently, this Court or a High Court, as the case may be, are not expected to act mechanically merely to deliver a purported dispute raised by an applicant at the doors of the chosen Arbitrator. On the contrary, the Court(s) are obliged to apply their mind to the core preliminary issues, albeit, within the framework of Section 11(6-A) of the Act. Such a review, as already clarified by this Court, is not intended to usurp the jurisdiction of the Arbitral Tribunal but is aimed at streamlining the process of arbitration. Therefore, even when an arbitration agreement exists, it would not prevent the Court to decline a prayer for reference if the dispute in question does not correlate to the said agreement.

Source: Bar & Bench

2. Section 92 CPC- Judgment In Representative Suit Binds All Parties Interested In The Trust: Supreme Court

• The Supreme Court observed that a suit under section 92 CPC is of a representative character and all persons interested in the Trust would be bound by the judgment in the suit.

• Such persons interested would be barred by the principle of res judicata from instituting a subsequent suit on the same or substantially the same issue, the bench of Justices DY Chandrachud, Vikram Nath and Hima Kohli observed.

• In this case, Jamia Masjid Gubbi filed a suit seeking inter alia a declaration that the State Wakf Board is the owner in possession of the suit schedule property. The Defendants, in their written statement, raised the issue of Res Judicata. They contended that the issue is already decided in earlier suits.

• On the applicability of Res Judicata, the court referred to judgments in Raje Anandrao v. Shamrao, Ahmad Adam Sait v. M E Makhri, Shiromani Gurdwara Parbhandhak Committee v. Mahant Harnam Singh C. (Dead) M.N. Singh and R. Venugopala Naidu v. Venkatarayulu Naidu Charities and observed:
  
  It is evident that a representative suit is binding on all the interested parties. Therefore, the judgment of the court in the first suit would be binding on Jamia Masjid and would preclude it from instituting another suit on the same issue if it has been conclusively decided. It is now to be analysed if the substantive issue in the instant suit was conclusively decided in the first suit.

• The court added that while deciding on a scheme for administration in a representative suit filed under Section 92 of the CPC the court may, if the title is contested, have to decide if the property in respect of which the scheme for administration and management is sought belongs to the Trust.

Source: Bar & Bench

3. Educational Qualification A Valid Ground For Classification Between Persons Of Same Class In Matters Of Promotion : Supreme Court

• In the judgment delivered in the case Chandan Banerjee & Ors v. Krishna Prosad Ghosh & Ors, a bench comprising Justices DY Chandrachud, Vikram Nath and Hima Kohli held that such classification on the basis of educational qualification is not violative of Articles 14 and 16 of the Constitution.

• The Supreme Court held that educational qualification is a valid ground for classification between persons of the same class in matters of promotion.

• Observing that the reading of State of Jammu & Kashmir v. Shri Trilokinath Khosa (1974) 1 SCC 19 as urged by the SAE's holding diploma was fundamentally flawed, the Top Court observed that,
  
  "The appellants have sought to lay emphasis on the fact that the decision in Trilokinath Khosa (supra) was dependent on the existence of two different sources of recruitment, while in the present case there is a single source of recruitment. To read the decision in this light is to miss the wood for the trees. In Trilokinath Khosa (supra), the Court had adverted to the well-established principle that once direct recruits and promotees are integrated into a common pool, they cannot be treated differently based on the 'source of recruitment'. This however does not imply that they cannot be classified on other reasonable grounds. Thus, whether there are two different streams of recruitment, or a single source of recruitment merged into a common pool, the classification that was upheld in Trilokinath Khosa (supra) was based on the educational qualification which was linked to the purpose of enhancing administrative efficiency in the organization. We are unable to agree with the submission of the appellants that the decision in Trilokinath Khosa (supra) is not applicable in the present case."

Source: Bar & Bench