Delhi District Court
M/S Cst Engineering vs M/S Triveni Engineering & Industries ... on 9 September, 2015
CS No. 122/14 M/s CST Engineering vs M/s triveni Engineering & Industries Ltd. 0992015 ORDER
1) Vide this order I shall disposed off the defendant application U/s 8 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as Act).
2) The defendant in its application stated that it had placed two purchase orders i.e., Order no. 4300006691 on 20062011 and order no. 4300007007 on 06082011. The terms and conditions of the purchase orders were dully accepted by the plaintiff. Plaintiff did not adhere to the terms and conditions of the said purchase orders and supplied the substandard material which was rejected by it and the plaintiff was duly informed of the same. It is further pleaded that the present dispute, if any, between it and the plaintiff falls within the purview of the Arbitration Clause contained in the aforesaid purchase orders. Hence, suit be dismissed.
3) Plaintiff opposed the application by filing the detailed reply stating therein that defendant by way of present application had wrongly invoked the jurisdiction of this court. There exists no bonafide and substantial dispute in between the parties to the suit. It is also plead that the goods were sold and delivered to the defendant company as per the terms and condition of the purchase orders and defendant raised the issue of supply of substandard material first in this application.
4) I have heard the argument of Ld. Counsel for parties and perused material placed on record and the written argument filed by the Ld. Counsel for plaintiff.
5) Plaintiff filed its suit U/O XXXVII CPC stating therein that defendant company regularly purchasing the goods from it and lastly, the defendant had purchased the goods vide Bill no. 111 dated 2372011 for a sum of Rs. 163771/ against purchase order no. 4300006691 dated 2062011 and through bill no. 145 dated 0692011 for a sum of Rs. 38703.00 against purchase order no. 4300007007 dated 0682011. Plaintiff had demanded his balance payment but defendant did not make the balance payment on one pretext to other. Hence, instant suit was filed.
6) It is not in dispute that defendant placed purchase order no. 4300006691 on 2062011 and purchase order no. 4300007007 on 0682011 to plaintiff for supply of the material/goods. It is also not in dispute that in the term of said purchase orders plaintiff supplied the goods and raised the bill no. 111 for Rs. 1,63,771.00 and bill no. 145 for Rs. 38,703.00. It is also admitted fact that both the purchase order has clause 18 on its back side which is read as under.
"In the event of any dispute or differences arising out between the parties out of this Purchase order, they will endeavour to resolve the same amicably, falling which, the same shall be referred to Sole Arbitration of President (Sugar) of TEIL, whose decision shall be final and binding on both parties and shall not be open for them to challenge the decision taken by him before any court of law. The venue of all Arbitration proceedings shall be at TEIL - Noida Office alone. The cost of Arbitration Proceedings shall be borne by both the parties individually "
7. Defendant in his application claimed that in term of purchase orders placed by it plaintiff supplied substandard material which was rejected by it and plaintiff company was duly informed. Plaintiff claimed that prior to filing of this application defendant has not informed regarding rejection of material on ground of substandard, so there is no dispute between plaintiff company and defendant. Defendant claimed that intimation regarding supply of sub standard material and rejection of same was duly informed to the plaintiff whereas plaintiff denied this fact. Hence, there is a dispute between plaintiff and defendant which has to be resolved according to the Arbitration Clause 18 of Purchase orders. Hence, issue regarding supply of substandard material and rejection thereof can be raised before Arbitrator. Hon'ble Delhi High Court in case Devinder Kumar Gupta vs Realogy Corporation 2011 (182) DLT 32 held that existence or validity of arbitration agreement can not be agitated by filing a civil suit and such question can be raised before Arbitrator.
8) Hon'ble Supreme Court in Sundaram Finance Ltd and another vs T. Thankam, 2015(2) CLJ 570 SC, held that Once an application in due compliance of Section 8 of the Arbitration Act is filed, the approach of the civil court should be not to see whether the court has jurisdiction. It should be to see whether its jurisdiction has been ousted.
9) Further Hon'ble Delhi High Court in Arti Jethani Vs Daeshan Tranding (India) Ltd, 2011 (4) AD (D) 668 and Fujifilms India P. Ltd. Arbn. Petition No. 249/2012 decided on 2952014 held that " where the arbitration clause in the agreement exists, then civil suit is not maintainable and civil court has no jurisdiction to entertain suit after application u/s 8 is filed which is in conformity with the requirement of the Section 8 fo Arbitration & Conciliation Act.
10) The ratio of case laws relied by Ld. Counsel for plaintiff in support of his argument is not applicable in the present facts and circumstances of the case. The case of Rai & Son (P) Ltd vs Poysha Industries Co. Ltd, AIR 1972 AP 302, Lohmann Rausher Gmbh vs Medisphere Marketing Pvt. Ltd, 117(2004) DLT 95, M/s Klg Systel Ltd vs M/s Fujitsu Icim Ltd, AIR 2001 Delhi 2001 357, are not pertain to Section 8 of Act. Whereas in Dimple Overseas Ltd vs Mineral & Metal Trading Corporation Ltd, 2000 (V) AD (Delhi) 527, plaintiff has denied the execution of Arbitration Agreement and in Sukanya Holdings Pvt. Ltd vs Jayesh H. Pandya and Anr, JT 2003 (4) SC 58. Hon'ble Supreme Court held that defendant no. 3 to 25 are not parties to the Arbitration Agreement, so bifurcation of suit in two part, one to be decided by Arbitration Tribunal and other to be decided by Civil Court would inevitably delay the proceeding.
11) The plaintiff itself has filed the original copy of both the purchase order. There is no dispute regarding Arbitration Clause in both the purchase order. It is also admitted fact that on the basis of purchase order no. 4300006691 & 4300007007, plaintiff supplied the material vide bill bearing no. 111 for a sum of Rs. 1,63,771.00 and bill no. 145 for a sum of Rs. 38,703/ respectively on which the plaintiff filed the instant suit.
12) In view of aforesaid discussion, I am of considered opinion that defendant has filed its application at the first instance i.e., it filed the same alongwith application to put its appearance on receipt of summons of the suit. Hence there is no ground for nonentering the application U/s 8 of Act. Since, purchase orders containing Arbitration Clause which is admitted by plaintiff, so the application of defendant U/s 8 of Act is allowed and accordingly suit is hereby dismissed being not maintainable.
File be consigned to Record Room.
(Ravinder Singh) Additional District Judge Shahdara District Karkardooma Courts Delhi 0992015