IMPORTANT POINT
A suit referred to arbitration becomes infructuous, and its continuation constitutes an abuse of process, warranting termination.

ORDER :

Nyapathy Vijay, J.

1. The present Civil Revision Petition is filed against the interlocutory order dated 05.06.2013 in I.A.No.2466 of 2012 in O.S.No.63 of 2012 passed by the Principal Junior Civil Judge, Ongole, Prakasam District.

2. The petitioner is the defendant. The application is filed under Order IX, Rule 7 CPC to set aside the ex parte order dated 26.07.2012 in setting the petitioner ex parte for not appearing before the Court on the specified date. The said application was opposed by the plaintiff/respondent. The trial Court after considering the rival submissions dismissed the I.A by a reasoned order. Questioning the same, the present Civil Revision Petition is filed.

3. Heard Sri Maheswara Rao Kunchem, learned counsel for the petitioner and Sri K. Ramamohan, learned counsel for the respondent.

4. The learned counsel for the petitioner pointed out that the trial Court on 15.06.2012 pursuant to the application filed by the petitioner i.e. I.A.No.797 of 2012 referred the suit for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 in view of Clause 15 of the Land Hypothecation Agreement executed between the contesting parties. It is pointed out that in spite of there being an order for reference of the dispute to the arbitrator, the trial Court continued the suit proceedings and it was in that context the petitioner had to file the application to set aside ex parte order.

5. It is also contended by the learned counsel for the petitioner that pursuant to the order dated 15.07.2012, Arbitral Award was passed on 04.12.2012 in the A.O.P.No.1300 of 2012. The execution proceedings were also filed for recovery of the amount awarded under the Arbitral Award. A copy of the award was passed on to the Court at the time of hearing the case and the same was placed on record.

6. This Court after noticing the order dated 15.06.2012 called for a report from the concerned Court as to how it is proceeding with the suit in spite of there being an order under Section 8 of the Arbitration and Conciliation Act, 1996. A report dated 23.07.2024 received from the Principal Junior Civil Judge, Prakasam at Ongole is placed on record. As per the report, on 15.06.2012 i.e. the date on which the suit referred for arbitration, the predecessor of the presiding officer had passed orders in two I.As i.e. I.A.No.797 of 2012 and I.A.No.305 of 2012 and had posted the case to 26.07.2012 for filing a written statement. As the petitioner did not file a written statement, he was set ex parte on 26.07.2012. The report further states that PW.1 was examined and Ex. A.1 to A.7 were marked in evidence and that the suit was adjourned from time to time. Eventually, the Court heard the arguments of the counsel for the plaintiff on 17.5.2024 and was posted to 01.08.2024 for further arguments.

7. The report reflects an unfortunate scenario. Once, the lis between the parties is referred to Arbitration vide order under Section 8 of the Act, there is nothing left to be adjudicated upon in the suit. The order under Section 8 of the Act has the effect of disposing of the suit and the remedies for the contesting parties are governed by the Arbitration and Conciliation Act, 1996. The trial Court could not have proceeded with further proceedings as there is no suit in effect. Now, the next question is whether this Court can terminate the suit proceedings in this revision.

8. The Hon’ble Supreme Court in Shipping Corporation of India Ltd. Vs Machado Brothers and Ors. 2004(11) SCC 168 had considered the scope of Section 151 CPC to dismiss a infructuous suit on account of subsequent events. After considering the scope of Section 151 CPC, the Hon’ble Supreme Court held that it is the duty of the court and in the interest of justice to dispose of an infructuous suit. The relevant paragraphs are extracted below:-

25. Thus it is clear that by the subsequent event if the original proceeding has become infructuous, ex debito justitiae, it will be the duty of the cour