Section 8 arbitration inquiry cannot decide share ownership dispute or prejudge the merits of the company petition.

While considering an application under Section 8 of the Arbitration and Conciliation Act, the Tribunal's inquiry is limited to whether a valid arbitration agreement exists and whether the dispute is referable to arbitration. It cannot decide the merits of the substantive controversy or record findings on title to shares. As ownership of 4,000 shares was the central dispute in the pending company petition, the Tribunal's pronouncement on that issue exceeded the permissible scope of Section 8 and could prejudice the main proceedings. The finding on ownership was therefore set aside.

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Issues: Whether, while dealing with an application under Section 8 of the Arbitration and Conciliation Act, 1996, the Tribunal could record a finding on ownership of 4000 shares, which was the substantive dispute in the company petition.

Analysis: The scope of Section 8 is confined to examining the existence of a valid arbitration agreement and whether the dispute is capable of reference to arbitration. At that stage, the Tribunal was not required to decide the merits of the main controversy or return a finding on title to shares. Since ownership of the shares was itself the central dispute pending between the parties, a pronouncement on that question in an application under Section 8 went beyond the permissible jurisdiction and could prejudice the pending proceedings.

Conclusion: The finding recorded by the Tribunal on ownership of 4000 shares was set aside, while the challenge to rejection of the Section 8 application was not pressed.

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