Asia Health Care Development Private Limited Vs Murshidabad Zilla Parishad (Calcutta High Court)
Summary: Asia Health Care Development Private Limited filed an application under Section 11 of the Arbitration and Conciliation Act, 1996 before the Calcutta High Court seeking appointment of an arbitrator to adjudicate disputes arising out of a Deed of Agreement dated July 9, 2004. Clause 28 of the agreement provided that any dispute or difference between the parties, including regarding the validity or interpretation of the agreement, would be referred to the sole arbitration of the District Magistrate, Murshidabad.
A dispute arose following a letter dated January 11, 2022 issued by Murshidabad Zilla Parishad alleging neglect and failure to pay rent. The respondent also raised suspicion regarding the actual amount collected by the petitioner in running the hospital and the figures disclosed to it. The petitioner challenged the termination notice by filing a suit before the Civil Judge (Senior Division), First Court, Murshidabad at Berhampore. In that suit, the respondent invoked Section 8 of the Arbitration and Conciliation Act, 1996, contending that the dispute arising from the termination letter was required to be decided through arbitration.
The Trial Court rejected the Section 8 application and granted an injunction until disposal of the suit. The orders were challenged before the High Court in FMA 816 of 2025. By judgment dated July 15, 2025, the Division Bench allowed the appeal and held that the dispute ought to have been referred to arbitration under Section 8. The Division Bench also held that the injunction granted by the Trial Court was without jurisdiction because the Trial Court was required to refer the entire dispute to arbitration instead of entertaining the suit and deciding the prayer for injunction.
