Telangana High Court
M/S. Shreya Homes vs Kondakal Sai Reddy on 11 January, 2024
THE HON'BLE SMT JUSTICE K. SUJANA
CIVIL REVISION PETITION NO.712 OF 2023
ORDER :
This revision petition is filed by the revision petitioner/defendant aggrieved by the order dated 23.01.2023 passed in I.A.No.621 of 2021 (sic., i.e., I.A.No.621 of 2022) in O.S.No.441 of 2022 (old No.O.S.No.186 of 2014) by the learned Senior Civil Judge at Chevella, wherein the petitioner herein filed the said I.A., under Order VII Rule 11 of Code of Civil Procedure (CPC) praying the Court to reject the plaint on the ground that there is arbitration clause in the Development agreement-cum- GPA. As such, the suit is not maintainable.
2. The petitioner herein filed the said I.A., stating that the suit was instituted by the respondent/plaintiff praying the Court to pass decree for cancellation of registered Development agreement- cum-GPA dated 17.09.2012. Clause 35 of the said development agreement contains Arbitration clause wherein the parties agreed to settle their disputes through arbitration, if any dispute arises. In view of Section 8 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act, 1996'), the Civil Court has no jurisdiction to decide the dispute. As such, prayed the Court to reject the plaint. 2
3. The respondent/plaintiff filed counter stating that though petitioner filed written statement, he could not take the defence of suit being bad in view of Section 8 of the Act, 1996 and for the first time in the present petition, the defense of arbitration clause is taken and further submitted that plaint cannot be rejected on the ground of existence of arbitration clause in the agreement between the parties. The other contents of counter relates to the dispute and material facts between the parties. Therefore, prayed the Court to dismiss the petition.
4. Considering the averments of petition, counter and after hearing both sides, the trial Court dismissed the said application.
5. Heard Sri Chetluru Sreenivas, learned counsel for the petitioner and none appeared for the respondent.
6. The contention of learned counsel for the petitioner is that the trial Court dismissed the petition filed under Order VII Rule 11 of CPC without considering the fact that the Development agreement-cum-GPA which is sought to be cancelled is having arbitration clause. Section 8 of the Act, 1996 empowers the judge to refer the case to the arbitration. He also submits that the first statement appearing in Section 8 is not to be taken as written 3 statement filed by the defendant. The trial Court failed to see that the defendant did not submit to the jurisdiction of learned Senior Civil Judge. As such, prayed the Court to set aside the order of trial Court by allowing this revision.
7. None appeared on behalf of the respondent, even after receiving the notice.
8. Having regard to the submissions made by the petitioner and the material on available on record it is seen that I.A.No.621 of 2022 was filed under Order VII Rule 11 of CPC praying the Court to reject the plaint on the ground that there is an arbitration clause in the Development Agreement-cum-GPA. As seen from the record the suit is filed in the year 2014 and the defendant has filed written statement in the year 2021 and he did not take the defense that suit is being bad in law. Section 8 of the Act, 1996, says that if the party so applies not later than when submitting, his first statement on the substance of the dispute refer the parties to the arbitration. Further the High Court of Delhi in MI2C Security Facilities Pvt. Ltd., Vs North Delhi Municipal Corporation W.P.(C) 8197/2017 & CM.NO.33688/2017, observed that if the party has filed its first statement without any intimation of the arbitration clause before the Judicial authority then it would be 4 presumed that the party has waived off its right to invoke the arbitration clause as per Section 8 of the Act, 1996.
9. Though the learned counsel for the petitioner has contended that written statement is not the first statement, Section 8 of the Act, 1996, does not come into play as he filed written statement, whereas in Section 8 of the Act, 1996, it is clear that whatever it is first statement on the substance of the dispute and when he filed the written statement, he has not taken the defense even though suit is filed in the year 2014 and written statement is filed in the year 2021. Petitioner filed I.A.No.621 of 2022 after filing the written statement.
10. As observed in Chunduru Visalakshi Vs Chunduru Rajendra Prasad 1, Section 8 of the Act, 1996 only empowers the Court to refer the parties to the arbitration but does not give the Court an option to reject the plaint. Order VII Rule 11 of CPC empowers the Court to reject the plaint, when there is bar to the suit because of any law. Section 8 of the Act was not a bar to the Civil Court. It provides an alternative to the defendant against whom a civil suit is initiated to submit to the jurisdiction of the 1 2022 SCC online AP 888 5 Civil Court or to make an application at appropriate time under Section 8 of the Act, 1996 seeking an order to refer the parties to arbitration. The power under Section 8 of the Act cannot be considered as a bar to the civil suit to entertain petition under Order VII Rule 11 of CPC. As such there is no illegality in the order of the trial Court and Order VII Rule 11 of CPC does not apply to the present petition. Hence, there are no merits in this revision and the same is liable to be dismissed.
11. Accordingly, the Civil Revision Petition is dismissed. There shall be no order as to costs.
Miscellaneous applications, if any, pending shall stand closed.
__________________ K. SUJANA, J Date :11.01.2024 Rds