P. ANAND GAJAPATHI RAJU AND ORS. versus P.V.G. RAJU (DIED) AND ORS.

Citation: [2000] 2 S.C.R. 684 · Decided: 28-03-2000 · Supreme Court of India · Bench: D.P. WADHWA, RUMA PAL · Disposal: Disposed off

Cited by 5 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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P. ANAND GAJAPATHI RAJU AND ORS. 
v. 
P.V.G. RAJU (DIED) AND ORS. 
MARCH 28, 2000 
[D.P. WADHWA AND RUMA PAL, JJ.] 
Arbitration and Conciliation Act, 1996 : Sections 2( e }, 5, 7, 8 and 42. 
Section 8-Scope and interpretation of-Power of Supreme Court to 
refer matter to an arbitrator during pendency of appeal-Necessary conditions 
forapplic~bility of section 8-Exprr!ssion 'which is the subject of an arbitration 
agreement'-Held does not necessarily require that the agreement must be 
already in existence-Expression also connotes an arbitration agreement being 
brought into existence while action is pending before cow1-Woni 'is' nonnally 
refers to present-It often has a future meaning-But it is not synonymous with 
"shall have been"-Held language of section 8 is peremptory-In the instant 
case arbitratio_n agreement covers all disputes between the parties-It satisfies 
the requirnment of section 7-Held it is there/om. obligatory for the court to 
rf!ferthe parties to arbitration in tenns of their agreement-However; the Court 
to which the party shall have recourse to challenge the Award would be the 
Court as defined in clause ( e) of Section 2 of the new Act and not the Court to 
which an application under Section 8 of the new Act is made. 
Section 5-0bject of the Act-Encouraging resolution of disputes expe-
ditiously and less expensively and wizen there is an arbitration agreement, the 
Coun's inten•ention should be minimal. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5251 of 1993. 
From the Judgment and· Order dated 24.7.92 of the Andhra Pradesh 
High Cowt in A. No. 283 of 1980. 
K. Madhava Reddy, N.S. Hedge, C. Sitaramiah, Nikhil Nayar, Ms. T. 
Anamika, Guntur Prabhakar, A. Subba Rao, A.T. Rao, B. Parthasarathy, 
. A.D.N. Rao, G. Nageswara Reddy, Mrs. B. Reddy, Ms. Promila for the 
appearing patties. 
The following Order of the Comt was delivered : 
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No orders on I.As 3 and 4. 
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P.A.G. RAJU v. P.V.G. RAJU 
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During the pendency of this appeal all the parties have entered into an 
arbitration agreement. They have agreed to refer their disputes in this appeal 
and others to Justice S. Ranganathan, a retired Judge of this Court as sole 
Arbitrator. The arbitration agreement is in the form of an application and has 
been signed by all the parties and meets the requirements of Section 7 of the 
Arbitration and Conciliation Act. 1996 (new Act). 
The question that arises for consideration is whether this Court in appeal 
can refer the parties to arbitration under the new Act. The Arbitration Act, 
1940 expressly provided for the parties to a suit to apply for an order of 
reference of the subject matter of the suit (see Sections 21 to 25, Chapter IV 
relating to arbitration in suits). There is also autho1ity for the proposition under 
the 1940 Act that with the reference of the disputes, the suit itself may stand 
disposed of. 
Part I of the new Act deals with domestic arbitrations. Section 5, which 
is contained in Pait I of the new Act, defines the extent of judicial intervention 
in arbitration proceedings. It says that notwithstanding anything contained in 
any other law for the time being in force, in matters governed by Part I, no 
judicial authority shall intervene except where so provided in that Pait. Section 
5 brings out clearly the object of the new Act, namely, that of encouraging 
resolution of disputes expeditiously and less expensively and when there is an 
arbitration agreement, the Court's intervention should be minimal. Keeping 
the legislative intention in mind, Section 8 of the new Act may be construed. 
It reads: 
"Power to-refer parties to arbitration where there is an arbitration 
agreement. 
8(1 ). A judicial authority before which an action is brought in a matter 
which is the subject of an arbitration agreement. shall if a party so 
applies not later than when submitting his first statement on the 
substanc~ of the dispute, refer the parties to arbitration. 
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(1) 
The application referred to in sub-section (1) shall not be 
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entertained unless it is accompanied by the original arbitration 
agreement or a duly certified copy thereof. 
(2) 
Notwithstanding that an application has been made under sub-
section (1) and that the issue is pending before the judicial 
authority, and arbitration may be commenced or continued and 
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SUPREME COURT REPORTS 
(2000] 2 S.C.R. 
an arbitral award made." 
The conditions which are required to

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