ORDER

1. The respondent filed a suit for money claim against the appellant and two other parties before the City Civil Court in Calcutta. It is the case of the a appellant that goods were supplied to the respondent under certain invoices which contained an arbitration clause and, therefore, any dispute touching the said transaction was required to be subject to arbitration. The respondent, however, denies that there is an arbitration agreement so as to amount to an impediment to its money suit pending before the City Civil Court at Calcutta.

2. When Bharat Merchants Chamber issued a notice to the respondent b calling upon it to appoint its arbitrator and indicated its intention to commence arbitral proceedings, the respondent moved an application for interim relief before the civil court in the pending suit under Order 39 Rules 1 and 2 CPC. The interim relief sought therein was an injunction restraining the respondents to the suit (the present appellants) from taking any steps or further steps in terms of the notice dated 5 - 12 - 2003, which had C been issued by Bharat Merchants Chamber. The civil court declined to grant any ad interim relief. An appeal was moved thereagainst by the respondent in which the appeal court took the view that the application made by the respondent under Order 39 Rules 1 and 2 should be treated as one made under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the 1996 Act") and be disposed of within a specific time - d fnvne. After the application came back, the civil court made an order dismissing the application holding that there existed a valid arbitration agreement under Section 7 of the 1996 Act and that the parties were required to go for arbitration by reason of Sections 5 and 8 of the 1996 Act. The respondent once again appealed against the said order which has resulted in the impugned judgment of the High Court.

3. By the impugned judgment the High Court allowed the appeal of the respondent by holding that the endorsement at the foot of the invoice could not have been construed to be an arbitration agreement within the meaning of the 1996 Act. Since the appeal has been allowed, it would mean that the interim relief sought for in the application under Order 39 Rules 1 and 2 was f granted, this judgment has been impugned before us.

4. We have extensively heard the learned counsel for both the sides and at the end of the day we are satisfied that the whole proceedings were started, continued and concluded under misconception of law. In the first place, Section 8 is not intended to restrain arbitration proceedings before an Arbitral Tribunal. The situation contemplated by Section 8 can arise only at the first 9 instance of an opponent and defendant in a judicial proceeding, or, at the highest, suo motu at the instance of the judicial authority, when the judicial authority comes to know of the existence of an arbitration agreement. In either event, there is no question of the court under Section 8 of the 1996 Act restraining the arbitral proceedings from commencing or continuing. In fact, Section 8 is intended to achieve, so to say, the converse result. Unfortunately, h in this case the application for interim relief was made by the respondent who was the plaintiff before the civil court. The relief sought therein is the restraint of arbitral proceedings. It could only have been decided as an application under Order 39 Rules 1 and 2 for whatever it was worth. Once the objection to this application was filed by the appellant bringing to the notice of the court the existence of an arbitration agreement, thereafter the proceedings could have been continued only within the parameters of Section 8 of the 1996 Act. A proceeding under Section 8 could never result in an order restraining the arbitral proceedings, which is what finally the impugned order before us does.

5. Considering all the complications that have arisen in this case because of an erroneous order