Delhi District Court
Shri Sanjay Raina vs M/S. Homex India Pvt. Ltd on 13 January, 2014
CS-543/13 //1//
IN THE COURT OF MS. POONAM CHOUDHARY, ADJ03,
SAKET COURTS COMPLEX, NEW DELHI.
CS No. 543/2013
Shri Sanjay Raina
S/o Shri Avtar Kishan Raina
R/o WZ130, Mandir Lane,
Shadipur, West Patel Nagar,
New Delhi110008
Presently residing at 2983/1, Gali No. 11
Ranjeet Nagar, West Patel Nagar, New Delhi
.......... PLAINTIFF
VERSUS
M/s. Homex India Pvt. Ltd.
L2A (LGF), Hauz Khas Enclave,
New Delhi110016
........DEFENDANT
13.01.2014
ORDER
1. Vide this order I proceed to dispose off the application under Section 8 of the Arbitration and Conciliation Act 1996 moved by defendant.
2. Briefly stated the averments made therein are that the plaintiff entered into a Contract of Employment (hereinafter referred to as " the Contract") with the defendant on 17.06.2010. It is further stated that plaintiff was appointed as Senior Manager by defendant after completion of probation period of 6 months.
3. It is further alleged that pursuant to the confirmation, plaintiff failed to perform his duties properly as such the defendant issued a letter dated 02.02.2012 to the plaintiff regarding his undisciplined behaviour. It is also alleged that plaintiff remained on leave from 31.05.2012 to 31.07.2012 without giving prior intimation due to which the operation of the defendant's company were adversely affected.
CS-543/13 //2//
4. It is further stated that defendant company as per terms of the Contract, vide letter dated 22.11.2012 terminated the employment of the plaintiff after giving one month's advance notice. It is also alleged that aggrieved by the letter of termination, plaintiff approached the Court seeking recovery of certain amount alleged to be due from defendant towards salary, bonus and interest etc. It is further stated that plaintiff has failed to comply with the Contract which specifically provides for Arbitration for the purposes of Dispute Resolution.
5. It is also alleged that as per terms of the Contract in case of any dispute arising in connection with the interpretation, implementation, execution or performance by either parties, the employee and the defendant company shall attempt in the first instance to resolve such dispute by friendly consultation or conciliation and in the event of failure of consultation/conciliation, the Contract provides the appointment of Arbitrator.
6. It is further stated that all efforts by the defendant to resolve the disputes with the plaintiff by friendly consultations have failed, in the said circumstances, the disputes be referred to the Arbitration in terms of the Contract.
7. Reply has been filed by plaintiff opposing the application on taking preliminary objections that it is an abuse of process of law and has been filed with malafide intention to delay the suit. It is further stated that defendant has already filed his written statement and taken part in the proceedings as such defendant has lost the right to get the dispute referred to the Arbitration. It is also stated that defendant has also moved an application seeking modification of the order dated 21.05.2013 whereby the bank account of defendant was attached.
8. On merits, it is denied that in pursuant to confirmation of plaintiff's employment with defendant, plaintiff failed to perform his duties properly. It CS-543/13 //3// is also denied that due to unwarranted behaviour of plaintiff defendant issued a letter to the plaintiff regarding the undisciplined behaviour. It is also denied that plaintiff remained on leave from 31.05.2012 to 31.07.2012 without prior intimation due to which work of defendant company was adversely affected.
9. It is further stated that plaintiff met with an accident on 31.05.2012 and was thus unable to attend to his work and this fact was well within the knowledge of defendant. It is also denied that defendant vide letter dated 22.11.2012 terminated the employment of plaintiff as per terms of Contract. It is alleged that infact plaintiff is being deprived of his rightful dues by defendant. It is further alleged that defendant waived his right to get dispute settled by arbitration by filing the written statement. It is also alleged that plaintiff was constraint to file present suit as defendant had the intention to flee to Mexico after winding up the company. It is further alleged that defendant arbitrarily issued terminating the services of plaintiff.
10. I have heard the ld. counsel for parties and perused the record.
11. Section 8 of the Arbitration and Conciliation Act provides that Court must refer the parties to arbitration in case there exists on arbitration agreement. For the application of section 8 it is essential that their exists an arbitration agreement between the parties.
12. In this regard it has been held in 2009 10 SCC, Branch Manager Magma Leasing & Finance Ltd & Anr. Vs Polturi Madhavi & Anr.
"An analysis of Section would show that for its applicability, the following conditions must be satisfied:
(a) that there exists an arbitration agreement;
(b) that action has been brought to the court by one party to the arbitration agreement against the other party;
(c) that the subjectmatter of the suit is same as the subjectmatter of the arbitration agreement;
CS-543/13 //4//
(d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and
(e) that along with the application the other party tender the original arbitration agreement or duly certified copy thereof "
13. The ld. Counsel for defendant has contended that defendant has not waived its right by taking part in the interlocutory proceedings which does not come within the purview of main proceedings.
14. The contentions of Ld. Counsel for defendant is that interlocutory proceedings are incidental to main proceedings and any steps taken in the interlocutory proceedings does not amount to taking part in the proceedings. Thus, the application moved by defendant for modification of order dated 21.05.2013 does not amount to waiver of benefit of arbitration. However, it is pertinent to note that the said application was filed after filing written statement.
15. In support of said contention he has placed reliance upon: Arbitration and Conciliation Act,1996 Section 8 Arbitrationpower of court to refer parties to arbitration where there is arbitration agreement. Suit for permanent injunction filed by respondent restraining appellants from blacklisting respondents of terminating consignment agency contract. Appellants took specific plea that subject matter of suit being covered by arbitration agreement. Hence, suit not maintainable. They filed application under Section 8. Application rejected. Revision there against dismissed by High Court. Whether justified? Held, no. High Court proceeded on wrong premise. For maintaining application under section 8, service of notice under arbitration agreement not mandatory. Filing of reply to injunction application. Could also not have been ground to refuse to entertain plea taken by appellants that suit should be referred to arbitral Tribunal. Appellants thus did not submit to jurisdiction of Court. They did not waive their right. Expression first statement on substance of dispute used in Section 8 (1). Must CS-543/13 //5// be contra distinguished from expression written statement. If application under Section 8 filed before filing statement of first statement on substance of dispute. Party cannot be said to have waived his right or acquieseed to jurisdiction of Court. Application under section 8 held to be maintainable. Impugned judgment unsustainable and set aside.
Code of Civil Procedure, 1908 Section 94 Arbitration and Conciliation Act, 1996 Section 8 Suit for permanent injunction. By opposing prayer for interim injunction in suit. Restriction contained in Section 8(1) not attracted Disclosure of defence in such opposition. Not necessarily to mean that substance of dispute already disclosed in main proceedings. Supplemental and incidental proceedings. Are not main proceeding.
16. However, the judgment relied upon is distinguishable as defendant filed written statement prior to moving the applications under section 8 of the Arbitration and Conciliation Act and has thus submitted to the jurisdiction of this court and waived its right to get dispute referred to the arbitration.
17. It is also pertinent to note that defendant did not take a plea in the WS that there was an arbitration agreement between the parties. Section 8 provides that the court shall to refer the parties to arbitration only if a party applies not later than when submitting his first statement on the substance of dispute. In this regard it has been held by Hon'ble High Court of Delhi in M/s. Engineers India Ltd. v. Zoom Developers Pvt. Ltd., CS (OS) 1201/2010 decided on 04.02.2013 as follows:
"Section 8 of the Arbitration and Conciliation Act, 1996 requires this Court to refer the parties to arbitration only if a party applies not later than when submitting his first statement on the substance of the dispute. The defendant / applicant has already filed its first not entitled under Section 8 to seek reference to arbitration.
Section 8 (1) however does not admit of any exception and the language thereof is quite clear. Moreover the filing of the application under Section 8 by CS-543/13 //6// a defendant is not dependent upon the plaintiff filing the Arbitration Agreement and it is for the defendant to take the requisite plea. Significantly no such plea has been taken in the written statement also though the territorial jurisdiction of this Court is opposed.
The counsel for the defendant / applicant is unable to show any exception being required to be read into the language of Section 8 (1) of the Arbitration and Conciliation Act, 1996.
18. Thus, in view of the above judgment as defendant has filed his first statement on the substance of the dispute by filing written statement he is not entitled to seek reference of dispute to arbitration. The application is accordingly dismissed.
19. To come up now for filing of replication and arguments on the application U/o 7 Rule 14 CPC on 27.03.2014.
Announced in the open court
on 13.01.2014 (POONAM CHAUDHARY)
ADJ03, SAKET COURT
NEW DELHI/13.01.2014