Arbitration clause in an agreement

pushpakrishna (Querist) 25 August 2014 This query is : Resolved
A company registered under the Indian companies act regd.office at bombay.. the company collected the amounts from the public offering higher rate of interest from throughout the country. of course the company given an acknowledgement for receipt of the same. but back side of the receipt there is a clause 1)subject to the bobmay court jurisdiction 2)when ever there is a dispute regarding the same the matter should be referred to an arbitrator. we are on of the investors based at Hyderabad. a land is there at Hyderabad in the name of company.we filed a suit for recovery of amount basing the receipt along with an application for attachment of the land before judgement.but the hon'ble court returned with objections 1)when there is a clause of bombay jurisdiction of the disputes and 2) when there is an arbitrator clause how the suit is maintainable?Section 9 of cpc clearly says where there is right there is remady and in this case we have already given notices to the comapany and it's managing director but returned from the postal authority stating LEFT. dear Experts CANT WE FILE A SUIT FOR RECOVERY OF THE AMOUNT ALONG WITH AN APPLICATION FOR ATTACHMENT OF THE LAND BEFORE JUDGEMENT though there is a clause of arbitration.Thank you.

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ROHIT SHARMA (Expert) 25 August 2014
1. I think the court has erred in referring you to be a partner of such company. It only when the partners have dispute then the jurisdictional and the arbitration clause is attracted. You are a simple investor and even if the such term is mentioned on the reverse of the receipt of your investment they are superfluous and can be challenged for their legal applicability to investors who hail from all over India.

2. You need to represent this factual distinction as between a partner and investor. File a counter motion reply. Let the trial court decline and then you can make a writ petition motion before the H.C. under Article 227 of the C.O.I. Your petition will survive.

3. If you feel the need and necessity to have further discussion you may feel free to have a private legal consultation. You can get my contact details by clicking my name (expert) shown in the L.h.S. margin of this reply format.

Kumar Doab (Expert) 25 August 2014
Obtain the reply from Sub/postmaster and certified copy of run sheet of postman showing: LEFT.

This should help you to agitate at your location and attachment.

Discuss with your lawyer.

Advocate Bhartesh goyal (Expert) 26 August 2014
As per sec 8 of Arbitration and Conciliation Act,your suit for recovery of amount is not maintainable before civil court however you can proceed u/sec 9 of arbitration and Conciliation Act for interim measure at Hyderabad as per sec 16 & 20 of CPC.

8. Power to refer parties to arbitration where there is an arbitration agreement.—

(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 substance of the dispute, refer the parties to arbitration.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration

may be commenced or continued and an arbitral award made.