D.V.S.S. Somayajulu, J.

This is an appeal filed against the order dated 16.11.2006 passed in I.A.No.1751 of 2006 in O.S.No.118 of 2005. By the impugned order, the I Additional Chief Judge, City Civil Court, Secunderabad rejected the plaint in O.S.No.118 of 2005.

2. O.S.No.118 of 2005 is a suit filed by Sri M. Sankara Reddy and Smt. P. Prabhavati against four (4) defendants viz., A. Ramakoteswararao, A. Susheela, A. Sashi Bindu and M/s. ASB Securities. As can be seen in the description of the plaint, the suit was for recovery of shares of various companies belonging to the plaintiffs share allegedly sold by the defendants 1 & 2, through defendant No.3 and others or for refund of the value thereof with other reliefs. The suit is valued at Rs.1,81,23,273/-.

3. After the suit was filed, the first defendant filed an application under Order VII Rule 11 CPC pleading inter alia that the dispute between the parties should be settled according to arbitration as per Bye-law No.248 (c) of the Bombay Stock Exchange (BSE) Bye-laws. The said Bye-law was reproduced in para-4 of the application. However, instead of asking for an order under Section 8 of the Arbitration and Conciliation Act, 1996 (for short the Act) to refer the parties to arbitration, said defendant sought for rejection of the plaint.

4. A reading of the said IA shows that it is filed under Order-VII, Rule-11 CPC. The prayer is to reject the plaint filed by the plaintiffs as the Hon’ble Court has no jurisdiction to try this matter in view of the Arbitration Clause, as contained in the contract notes as well as BSE Bye-laws. The application was opposed by the appellants/plaintiffs.

5. After hearing the parties, by order dated 16.11.2006, the learned I Additional Chief Judge held that there is an arbitration clause in the BSE Bye-laws which applies to the dispute raised, therefore, the plaintiffs cannot invoke the jurisdiction of the civil Court. Unfortunately, while holding that there is valid arbitration clause, the learned Chief Judge rejected the plaint and left it open to the parties to invoke the arbitration clause for their redressal. Being aggrieved, the appellant has filed present appeal.

6. The matter was heard at length and both the parties were given ample opportunity to present their case. Written arguments were also filed by both the parties.

7. Sri C.V. Narasimham, learned counsel for the respondents/defendants filed certain additional documents during the course of hearing stating that contract notes filed by the plaintiffs/appellants were not complete in all respects and that the reverse side of the contract notes were not xeroxed and filed. Sri Mahmood Ali, learned counsel for the appellants/plaintiffs did not raise any objection to receive these documents. Hence, the same are also taken on record and considered.

8. In order to decide this appeal, the point that arises for consideration is whether the order of the lower Court rejecting the plaint is correct or not?

9. The dispute centers round the sale of shares belonging to the plaintiffs in O.S. No. 118 of 2005 by the defendants 1, 2 & 3 who were engaged in the business of selling of shares. The 4th defendant is a sole proprietorship concern of the 3rd defendant. As per the averments in the plaint, the 4th defendant was a sub-broker of Maliram Makharia, Finstock Pvt. Ltd. Mumbai and a member of the Bombay Stock Exchange. It is also averred that 2nd defendant was looking after the affairs of the 4th defendant. Thus, it is pleaded that all the defendants were involved in the sale of the shares. The prayer in the suit is also for return of the shares handed over by the plaintiffs by buying back the said shares to the plaintiffs and in the alternative to pay the value of the said shares with damages and interest.

10. The appellants/plaintiffs filed number of documents including the contract notes issued by the members acting for constituents as brokers and agents. The contract notes contained a clause on the face