Holding

The Supreme Court held that the dispute between the parties is arbitrable and that the lower courts erred in applying estoppel and in allowing the pending suit to bar arbitration.

Summary

Lt. Gen. Depinder Singh (author) entered a publication agreement with Dattatreya Prakashan, later acquired by the appellant (Trishul Publications). After publishing the first and second editions, the appellant refused further editions and suggested the author authorize another publisher, Natraj Publishers, to reprint 1,000 copies, subject to a credit on the jacket. Natraj published without the required acknowledgment, prompting the appellant to allege piracy, issue a notice, and the author to terminate the agreement. The appellant invoked the arbitration clause (para 17) under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996, but the designated judge dismissed the application, citing estoppel and a pending civil suit by Natraj. The Supreme Court held that a genuine dispute existed between the parties that could be referred to arbitration, that estoppel was wrongly applied, and that the pending suit does not preclude arbitration. Consequently, the lower courts' orders were set aside and the matter remanded for appointment of an arbitral tribunal.

Issues considered

The existence of a dispute between the appellant and the author that can be referred to arbitration under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996.
Whether the doctrine of estoppel bars the appellant from invoking the arbitration clause.
The effect of a pending civil suit involving a third party on the jurisdiction to refer the dispute to arbitration.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 8
Copyright Act, 1957s. 19A

Subjects

arbitrationestoppelpublication agreementcopyright infringementbreach of contractarbitration clauseSection 8Section 11pending civil suitparallel editiontermination

Judgment

[2008] 16 S.C.R. 701

~
BRIGADIER MAN MOHAN SHARMA, FRGS (RETD.) A
v.
LT. GEN. DEPINDER SINGH
(Civil Appeal No. 6853 of 2008)

NOVEMBER 26, 2008
B
[ALT~MAS KABIR AND MARKANDEY KATJU, JJ.]

"" Arbitration and Conciliation Act, 1996 - ss. 8 and 11 -
Agreement for publication of book - Publisher refusing to take
c
out further edition of the book - Reprint of the book taken out
by another publisher with the consent of the original publisher
without acknowledging that reprint was with the permission of
the original publisher - Notice by original publisher to desist
from distributing parallel edition of the book - Author of the
book cancelling the agreement - Application by the original D
publisher for reference of the dispute to arbitration -
> Designated Judge as well as Division Bench of High Court
t denied the reference in view of pending suit by the new
publisher having identical issues - On appeal, held:
Termination of agreement and commercial ramification on E
account of publication by the new publisher are matters
between the original publisher and the author of the book -
These issues cannot be decided in the suit by the new
publisher - Designated Judge wrongly applied principle of
, estoppal - He was only required to examine as to whether any F
-+ dispute existed between the parties to be referred to
arbitration.

Respondent author of a book entered into a
publication agreement with a Publisher for publishing a
book. In the agreement, the respondent had assigned his G
~
exclusive rights for production and publication of the
book to the. Publisher. First Edition of the book was
published. Thereafter, appellant acquired the business
interest of the Publisher. Appellant published the second
701 H
702 SUPREME COURT REPORTS [2008] 16 S.C.R.

A edition of the b·ook. Thereafter he showed his ·+
unwillingness to publish further edition or to reprint. He
also advised the respondent to authorize one 'B' to
publish the book. The respondent, thereafter authorized
the sole proprietor of 'N' Publishers to print and publish
B the book. Appellant also permitted the Publisher 'N' to
reprint the book. Further the appellant wrote that
although he had given his consent to reprint the copies
of the book,. but the reprint would have to mention that it·
was with the leave and concurrence with the appellant.
c Publisher 'N' published the book without acknowledging
the fact that it was with the leave of the appellant.

Appellant sent a report to Copy Right Board in terms
of s.19A of Copy Right Act stating that publication by 'N'
Publishers amounted to piracy and paradigm. Appellant
D also issued a notice to the respondent and to the
proprietor of 'N' Publishers requiring them to desistfrom ,
distribution of .the parallel edition of the book. The
respondent, instead, terminated the agreement. Appellant
filed application u/ss. 8· and 11 of Arbitration and
E Conciliation Act, 1996 invoking arbitration clause· of the
agreement.

Designated Judge dismissed the application on the
grounds that the appellant was estopped from raising the
F dispute; there was hardly any dispute which nee~ed
further reference to arbitrator; and that the pending suit '
filed by the sole proprietor of 'N' Publishers was having
identical issues ..The Division Be.nch of High Court
upheld the order of Designated Judge in view of the
G pending suit to avoid conflicting decisions. The applicant
field the appeal.

. Allowing the appeal, the Court 1 .

. HELD:1. A Publi~~tion'' Agreement had been
H executed between. the appellant .and the respondent, by
704 SUPREME COURT REPORTS [2008) 16 S.C.R. -

A Anjali Sharma; M.S. Vinaik, Brajesh Kumar and Ajay.
Kumar Talesara for the Appellant.

Dr. Roxna Swamy, Ramesh Keshwani (for MIS. Keswani
& Co:) for th~ Respondent. -
B The Judgment of the Court was delivered by

ALTAMAS KABIR, J. 1. Leave granted.

2. The respondent herein, Lt. General Depinder Singh y
C (Retd.), entered into a Publication Agreement wi_th Dattatreya
Prakashan in September, 1991, for publication of his book titled
"IPKF in Sri Lanka" regarding his experiences while_ leading
the Indian Peace Keeping Force in_ Sri Lanka. Pursuant to the
said Agreement, the first edition of the book was published in
1991.' In paragraph 2 of the said Agreement, whereby the
D respondent assigned his exclusive rights for production and
publication of the book to Dattatreya Prakashan, it was
indicated as.follows:

"2. The AUTHOR(S) hereby assigned _to the
E PUBLISHERS,_during the lc~al terms of copyright ir:it;:luding
any renewals thereof, the exclusive rights to produce and
publish the WORK in a volume form in any part of the world
in the original language in which it is written as also to
license its translation in any other languages and
F publication of any other editions, but the copyright in the
WORK shall remain vested in the AUTHOR(S). The
AUTHOR(S) shall not during the continuance of -.this
Agreement publish or cause to be published in any part
of the world any copy of the WORK or any translation
G thereof save as herein provided."

3. The business interest in Dattatreya Prakashan was
acquired by the appellant who was carrying on business in the
name and style of "Trishul Publications", which published the
second edition of the book in May, 1992. From the materials
H
.
\ -
BRIGADIER MAN MOHAN SHARMA, FRGS (RETD.) v. LT. 705
GEN. DEPINDER SINGH [ALTAMAS KABIR, J.]

on record it appears that, although, initially there was a demand A
for the book, such demand decre,ased and the .appellant was,
thereafter, reluctant to invest money in printing further editions
of the book. In. fact, in response to the. respondent's qu.ery
regarding publication. of a further edition the appellant on
11.11.1991 wrote to the respondent and expressed his B
unwillingness to publish any further edition of the book. He also
informed the respondent on 1.6.1993 that the book was. a dead
stock and it had to be pushed at a lower price. On 28.10.1997,
't
the appellant again wrote to the respondents stating that he had
conducted a market survey and the demand of the book did c
not warrant any reprint. He also advised the respondent to
authorize one Bharat Verma to publish the book. As the said
letter is relevant to a decision in this case, the contents thereof
are reproduced hereinbelow:

'With reference to our last tele-conversation, I have carried D
out a thorough market survey and come to the conclusion
·that there is no large enough demand for the book
"~ warranting a special reprint. I have tried to check up from
Lancers but drawn a blank. Bharat Verma is a good
businessman and has perhaps received some demand E
,.
from his foreign contacts of which his staff are not aware.
He will do a good job for the Book and you may kindly
authorize him to publish. No problem. I have, however, a
suggestion. You may reshape the book- a new book titled
*'Failure of IPKF in Sri!anka" and draw lessons from it for F
_, .;
pasten'ty......... II
-t
4. The respondent, thereafter, approached one Shri
Upender Arora, sole proprietor of Natraj Publishers, with a
request to print and publish the book in question. Thereafter,
G
by a letter dated 28.8.2000 the respondent informed Shri Arora
...... that he had no objection to Mr. Arora's desire to reprint 1000
1 copies of the book, but he also suggested that Shri Arora
should obtain the concurrence of the appellant for doing so.
H
706 SUPREME COURT REPORTS . [2008] 16 S.C.R.

A 5. Pursuant to the aforesaid suggestion, Shri Arora wrote
"._
to the appellant on 31.8.2000 stating that the respondent had .i
granted permission to reprint the book but had also suggested
that Goncurrenee of the appellant should be obtained. ShriArora,
accordingly, requested the appellant to agree to the proposal
B so that he could go ahead with the reprint of the book. In reply
to the said letter, the appellant on 2.9.2000 wrote back to Shri
Arora as follows:

"TRISHUL PUBLICATIONS

C 216, SectorM28i Arun Vihar, Noida~201 303.

2Sep 2900
NATRAJ PUBLISHERS
DEHRADUN
D
THE IPKF IN SRI LANKA
Dear Sir,
Ref. Your letter of Aug 31, 2000.
E
2. Kindly go ahead with the reprinting of IPKF in Srilanka. .
·~-

3. Do send us a complimentary copy.
I
·I

4. We could help you in the marketing at a suitable
discount.

Yours faithfully,
(M.M. SHARMA)"
G . ·, €); While giving his concurrence to Shri Arora to go ·ahead
· with the·repri11ting of thebook, the appellant also wrote fo the
respondent qn 5tfr September, 2000, indicating that although
. . he·had given his consent to the reprint of 1000 copjes of the
Book the reprintwould have to have the Trishul name on the
.H jacket as \Yell as a suitable noting on the copyright page,
BRIGADIER MAN MOHAN SHARMA, FRGS (RETD.) v. LT. 707
GEN. DE PINDER SINGH [ALTAMAS KABIR, J.]
namely, "First Published by Trishul Publications, NO/DA". A
~
"This edition with special permission from Trishul
Publications".

7.· Pursuant to the consent given by the appellant, Shri
Arora published the book without acknowledging the fact that B
such publication was with the leave .and concurrence of Trishul
) Publications. Claiming that such publication. by Shri Arora
amounted to piracy and plagiarism, the appellant sent a detailed
~ report to the Copy Right Board in terms of Section 19A of the
Copy Right Act for necessary administrative action. The.
appellant also issued a notice on 10.5.2002 to the respondent
c
and also to Shri Arora requiring them to desist from distribution
of the "Parallel edition of the book". In stead of doing so, the
respondent by a letter dated 20.6.2001 terminated the
agreement between the parties, which resulted in the filing of
an application by the appellant under Sections 8 and 11 of the D
Arbitration and Conciliation Act, 1996, before the Chief Justice
. of Delhi High Court, invoking clause 17 of the Agreement which
contains the arbitration agreement in the following terms :
~
"ARBITRATION E

17. If any question, difference or dispute shall arise
between the AUTHOR(S) and the PUBLISHERS relating
to this Agreement or any matter arising therefrom or
incidental thereto, the same shall be submitted to the
arbitration of two persons (one to be named by each party)
F
#-
and in case of the said arbitrators not agreeing, then·it may
-+
be submitted to the award of an umpire to be appointed
by the arbitrators in writing before proceeding on the
reference. The decision of the arbitrator or, in the event of
their agreeing of the umpire appointed by them, shall be G
final and conclusive. The provisions of the Indian Arbitration
-· Act 1940 and the Rules thereunder any statutory
modifications thereof shall be deemed to apply to the
reference."
H
· 708 SUPREME COURT REPORTS (2008] 16 S:C.R.
I
r-
A a. Th~ applicatio_n was heard by the designated Judge ~
. .who came to the conclusion that the appellant had fqrfeited all
his rights in connection with the. book after having given his
consent to Natraj Publishers to go ahead with the reprint of the ~

same. The learned Judge also held that the appellant was ;
s. estopped by his own a"ct and cbnduct from asserting any right 1--
in support of the said.book. According to the learned Judge, i,_
l
there was hardly any dispute which needed further reference .(

· ,to ·arbitration.·
)I
9. Another fact which weighed with the learned Judge was
C that Shri Arora had filed a suit which was pending in the Court
of District Judge, Dehradun, UUranchal, and the issues involved
therein were purportedly identical with those raised in the
application for appointment of an Arbitral Tribunal. The learned
Judge also observed that this ·fact had not even been
D mentioned by the appellant in his application for apppintment
--of an Arbitral Tribunal. · I'
f

10. Qn the basis of his sai~ contlusions, the learned Judge
dismissed the application filed by the appellant. ..."·
E .>--
11. The Division Bench in appeal taking note of the .....
pending civil suit -filed by Shri Arora in which both the appellant
as well as the respondent had been made parties,_ chose not
to interfere with th~ decision of the learned designated Judge
and dismissed the appeal in order to avoid conflicting '
. F t-
decisions.
'
.. -~

12. Appearing in support of the appeal, Mr. M.S. Vinaik, +--
and Ms. Anjali Sharma, learned advocates for the appellant,
submitted that both the learned designated Judge and also the I
G Division ,Bench had misunderstood the scope of Section 11 of t
the Arbitration a_nd Conciliation Act, 1996, in rejecting the ~
appellant's prayer for appointment of an Arbitral Tribunal on the ,.,
. ground that a civil sLiit .was pending between Shri Arora, the ~
appellant and the respondent. It was urged that the disputes in ~

. H the pending civil suit and those raised in the application for )
I
. \
'
BRIGADIER MAN MOHAN SHARMA, FRGS (RETD.) v. LT. 709
GEN. DEPINDER SINGH [ALTAMAS KABIR, J.]

appointment of an Arbitrator were not the same, though based A
)--
on the same set of facts.

13. It was urged that while the pending suit had beeri filed
by Shri Arora, who was not ·a party to the Publication
Agreement, the prayer for appointment of an Arbitral Tribunat B
had been made by the appellant with regard to the disputes '
that had arisen between the appellant and the responde·nt out
• of the same Agreement and had little to do with Shri Arora who
~ had merely been granted permission by the appellant to reprint
1000 copies of the Book .. It was submitted that the dispute
between the appellant and the respondent stemmed from-'
c
breach of the conditions of the Agreement, as also the
termination.thereof, which gave rise. to disputes inter se
between the parties and that it was for such purpose that
paragraph 17 had been included in the Publication Agreement.
It was submitteq that the learned desig.nated Judge had wrongly D
. dismissed the appellant's application on the errdneous finding
that hardly a~y dispute existed between the parties which
• warranted the appointment of an Arbitral Tribunal. The decision
~·
of the Division Bench was also impugned on the same
grounds. E

14. Dr. Roxna Swami, who appeared for the respondent,
~:m the other hand contended, that it was clear from' the letters
addressed by the appella.nt to the respondent that he had no
intention of publishing any further edition of the book and he F
• actually advised the respondent to authorize one Bharat Verma
-t to publis.h further editions of the book. Instead of entrusting
Bharat Verma with the publication of the further edition of the
book as suggested by the appellant, the respondent gave such
right to Shri Arora and Natraj Publications after terminating the
G
Publication Agreement with the appellant.
.....
; 15. The learned counsel also submitted that the civil suit
filed by Shri Arora covered all the said issues, and, as had been
rightly held by the learned designated Judge, continuance of
the suit as well as the arbitration proceedings simultaneously, H
,
710 SUPREME COURT REPORTS (2oos1 1s s.c.R.

A could result in conflicting decisions. __,
16. Learned counsel submitted that there was no case for
~
Jntetference 'A'.ifh the .decisions both of the designated Judge I
·and also.the Division Bench of the High Court. I-

r
B· 17. Having ·considered the submissions made on behalf
of the parties arid having fUrther perused the materials on
record, we find ourselves' unable fo agree with the deci~ion of
as
the learned designated Judge also that of the Division Bench y
of the High Court impugned in this appeal.
c
18. While the learned Single Judge came to the conclusion
that there was hardly any dispute between the parties which
merited the appointment of an Arbitral Tribunal and that a civil
suit was pending over the selfsame issues, the Divisio·n Bench
D relied more on the pendency of the pending civi.I suit at
Dehradun in rejecting the appellant's prayer for appointment of
an Arbitral Tribunal for settlement of the dispute which
according to the appellant had arisen between the~parties.
,4"
19. There is no denying the f~ct that a Publication
E Agreement had been executed between the appellantanc:Uhe
respondent herein by which the power to produce and publish
the book in question during the period of the Copy 'Right and ,_
its extension was assigned by the respondent to the appellant.·
It is quite true that the appellant did not think it fit to publish a
F third edition of the book at the relevant point of time as there j. ..

was little demand for the same, but it also appears from the
materials disclosed that he had agreed to reprint of the second +-
edition to the extent of1000 copies by Shri Arora. The very fact
that the Publi'cation Agreement was terminated by the
G respondent is a matter· of dispute between the appellant and
the respondent. Whal would be the c'Ommercial ramifications
on account of the publication of the edition by Shri Arora is also
a matter betWeen the appellant and the 'respo1.1dent to a large +
extent. These are issues which cannot be decided in the ·suit
H filed by ~hri Arora, as these amount to breach ofthe terms of
BRIGADIER MAN MOHAN SHARMA, FRGS (RETD.) v. LT. 711
GEN. DEPINDER SINGH [AlTAMAS KABIR, J.]
>--
the Publication Agreement with which Shri Arora had no A
concern. The principle of estoppel sought to be invoked by the
learned designated Judge, also appears to have been wrongly
applied to the facts of the case since the learned designated
Judge was only required to examine as to whether any dispute
existed between the parties which could be referred to B
~ arbitration. The said question, in our view, should have been
left to the Arbitral Tribunal for a decision.
't'

20. For the reasons aforesaid, we are unable to sustain
the order of the Division Bench of the High Court impugned in C
this appeal or the judgment of the learned designated Judge,
and, accordingly, set aside the same. The matter is remanded
to the learned designated Judge for appointment of an Arbitral
Tribunal in accordance with the Arbitration Agreement
contained in paragraph 17 of (he Publication Agreement
arrived at between the respondent and the appellant in D
September 1991.

't 21. The appeal is allowed. There will, however, be no order
as to costs.
E
K.K.T. Appeal allowed.

' -+