TaxTMI 
TaxTMI 
2010 (4) TMI 613
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....ment agreement under which APTDC entrusted to the respondent, the development of a three-star hotel in Hill View Guest House property on construction, operation and management basis. According to the respondent, both agreements contained a provision for disputes resolution (clause 17 of the lease agreement and article 18 of the management agreement) providing that in the event of disputes, best efforts shall be made to resolve them by mutual discussions, amicably ; and in the event of the parties not finding an acceptable solution to the disputes within 30 days (60 days in the case of management agreement), the same shall be referred to arbitration in accordance with the procedure specified in the Act. 3. The APTDC claims that it had terminated the said agreements on 21-4-2004 and took possession of the property on 21-8-2004. The respondent filed an Arbitration Application No. 24 of 2005 in March, 2005 before the Andhra Pradesh High Court under section 11 of the Arbitration and Conciliation Act, 1996 ('the Act'), alleging that certain disputes had arisen between the parties in regard to the said lease agreement and management agreement, and the parties could not arrive at a mutu....
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....e signing of the contract containing the arbitration agreement, whether it can be said that there is an arbitration agreement between the parties ? (ii )whether the question as to the existence or validity of the arbitration agreement, has to be decided by the Chief Justice/designate when considering the petition under section 11 of the Act or by the arbitrator ?" Re : Question (i) 7. Section 7 of the Act defines an arbitration agreement. Sub-section (1) thereof provides that an arbitration agreement means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. Sub-section (2) provides that an arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Sub-section (3) provides that an arbitration agreement shall be in writing. Sub-section (4), inter alia, provides that an arbitration agreement is in writing if it is contained in a document signed by the parties. The specific and clear case of the respondent is that the arbitration agreement between the parties, is in writin....
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....of section 149 provides that the Registrar shall, on the filing of declaration/statement as stated therein, certify that the company is entitled to commence business. Section 149(4) of the Companies Act provides that any contract made by a company (which is already registered) before the date at which it is entitled to commence business shall be provisional only, and shall not be binding on that company until that date, and on that date it shall become binding. A certificate under section 149(3) of the Act was issued by the Registrar of Companies only on 6-6-2003, certifying that the respondent is entitled to commence business. It is thus clear that the applicant in application under section 11 of the Act was non-existent on 30-3-2002, when the arbitration agreement was entered into. 12. Section 7 of the Act as noticed above, defines an arbitration agreement as an agreement by the parties to submit to arbitration. The word "party" is defined in section 2(h) of the Act as a party to an arbitration agreement. An agreement enforceable by law is a contract. An agreement has to be between two or more persons. Therefore if one of the two parties to the arbitration agreement was not in....
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....r the purpose of the company to be incorporated, in their capacity as promoters and that such contract is warranted by the terms of the incorporation of the company, the agreement would have been valid; and the term regarding arbitration therein could have been enforced. But for reasons best known to themselves, the agreement was entered not by the promoters of Pampa Hotels Ltd., on behalf of a company proposed to be incorporated by them, but by a non-existing company claiming to be an existing company. This clearly shows that there is no arbitration agreement between the respondent (applicant in the application under section 11 of the Act) and APTDC against whom such agreement is sought to be enforced. Re : Question (ii) 15. Let us next consider the question as to who should decide the question whether there is an existing arbitration agreement or not. Should it be decided by the Chief Justice or his designate before making an appointment under section 11 of the Act, or by the arbitrator who is appointed under section 11 of the Act ? This question is no longer res integra. It is held in SBP & Co. v. Patel Engg. Ltd. [2005] 8 SCC 618 and National Insurance Co. Ltd. v. Boghara....
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....e law declared by the court applies to the cases arising in future only and its applicability to the cases which have attained finality is saved because the repeal would otherwise work hardship to those who had trusted to its existence. Invocation of the doctrine of 'prospective overruling' is left to the discretion of the court to mould with the justice of the cause or the matter before the court." [Emphasis supplied]. 18. Learned counsel for the appellants contended that the impugned order was rendered on 16-8-2005; that as on 26-10-2005, when the decision in SBP & Co.'s case (supra) was rendered, the time for filing a special leave petition under article 136 of the Constitution had not expired ; that the special leave petition was filed by the appellant on November 22, 2005, which has been entertained by granting leave. The appellants therefore contend that this appeal should be considered as a continuation of the application under section 11 of the Act or as pending matter to which the decision in SBP & Co.'s case (supra) would apply, even though the designate had rendered the decision on August 16, 2005. The appellants submitted that a pending matter would refer not only to....