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Judgment
Mohan Shantanagoudar
The petitioners'' application filed u/s 8 of the Arbitration and Conciliation Act, 1996 is rejected by the Court below mainly on the ground that the dispute has arisen prior to cause of action of the suit. The trial Court has also observed that the bye-laws of the second defendant are subsequent to the cause of action. On both the counts, the Court below is not correct. The bye-laws of the association are in existence much prior to 2009. Merely because they were produced by second respondent along with the proceedings of annual general body meeting dated 30-05-2010, it cannot be said that the bye-laws were framed only on that day. It is not in dispute that the bye-laws were framed much prior to the date of cause of action for filing the suit.
Section 8 of the Arbitration and Conciliation Act clearly reveals that the judicial authority before which an action is brought in the matter which is a subject matter of arbitration agreement, shall refer the parties to arbitration in case if a party so applies for the same.
In the matter on hand, the respondent No. 1 herein has field a suit for injunction. In the said suit, the petitioners herein who were the defendants filed an application u/s 8 of the Arbitration and Conciliation Act, praying for referring the matter to the Arbitration Tribunal for adjudication. It is well settled that it is not necessary that arbitration agreement must be already in existence before the action is brought in the Court. In the matter on hand, the arbitration agreement was already in existence even prior to filing of the suit. Even otherwise, it is not necessary that the arbitration agreement must already be in existence before the action is brought in the court. In view of this, the impugned order is liable to be quashed and accordingly, the same is quashed. The Court below is directed to rehear I.A. No. 8 filed by the petitioners and pass orders as per law.
The writ petitions are disposed of accordingly.