Indian Kanoon - Search engine for Indian Law

11. With respect to the plea of the petitioner/defendant, under Section 8 of the Arbitration and Conciliation Act, the learned Court below held that the said plea was not tenable as the petitioner/defendant did not avail the remedy by filing a petition/application under Section 8 of the Arbitration and Conciliation Act, 1996.

12. Learned counsel for the petitioner/defendant submitted that the application filed by the petitioner/defendant was a composite application under Order 7 Rule 11 CPC and under Section 8 of the Arbitration and Conciliation Act, 1996. He submitted that the partnership deed as also the reconstituted partnership deed contained arbitration clause in clause-18 thereof which provides that "any dispute between the partners hereto shall be referred to arbitration mutually accepted as governed by the Indian Arbitration Act any such decision shall be binding and conclusive among the partners". He submitted that in view thereof the dispute between the partners arising out of the maintenance and management of the firm can be referred to an arbitration mutually 7 CPK, J & RNT, J accepted as governed by Indian Arbitration Act, and the suit is barred. He further submitted that merely because of non-filing of the arbitration agreement or certified copy thereof along with the application under Order VII Rule 11 CPC, it cannot be treated as not a composite application.

41. In the present case, any application under Section 8 of the Arbitration and Conciliation Act, 1996 was not filed at the appropriate stage i.e., till the time of submission of the first statement i.e., the written statement. The submission of the learned counsel for the petitioner that the application which was filed is a composite application under Order VII Rule 11 CPC and Section 8 of the Arbitration and Conciliation Act, cannot be accepted, as this is simply an application for rejection of the plaint under Order VII Rule 11 CPC in which one of the grounds taken by the 22 CPK, J & RNT, J defendant to reject the plaint is that there was an arbitration clause in the partnership deed i.e., clause - 18, and in view thereof, the plaint should be rejected, without making any prayer in terms of Section 8 of the Arbitration and Conciliation Act to refer the parties to arbitration. In Rashtriya Ispat Nigam Ltd. (supra), the Hon‟ble Apex Court held that power under Section 8 of the Arbitration and Conciliation Act shall be exercised, if a party so applies.

43. The submission of the learned counsel for the petitioner based on the law laid down in Ananthesh Bhakta (supra), as aforesaid, may be correct, but the same is not applicable as in the present case. Any application under Section 8 of the Arbitration and Conciliation Act, 1996 was not filed and the application which was filed was under Order VII 23 CPK, J & RNT, J Rule 11 CPC, which We have already held is not a composite application, also under Section 8 of the Arbitration and Conciliation Act, 1996. The Law as laid down in Ananthesh Bhakta (supra) shall apply where an application has been filed under Section 8 of the Arbitration and Conciliation Act, 1996, which did not accompany with the original arbitration agreement or certified copy thereof, which was filed later on, before the application was being entertained, which is not the case here.

45. A perusal of the judgment in Syed Irfan Sulaiman (supra) shows that in that case the defendant had filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of the dispute to arbitration in terms of the arbitration clause contained in the partnership deed. He had also filed an application in the suit under Order 7 Rule 11 CPC seeking rejection of the plaint. In the present case, any application under Section 8 of the Arbitration and Conciliation Act, 1996 seeking reference of the dispute to the arbitration in terms of the arbitration clause in the partnership deed was not filed. We have already 24 CPK, J & RNT, J held that the application under Order 7 Rule 11 CPC in the present case cannot be termed as composite application. The judgment in the case of Syed Irfan Sulaiman (supra) is as such distinguishable.