The central legal point established in the judgment is that the Trial Court has a statutory obligation to refer the dispute to arbitration under Section 8 of the Arbitration and Conciliation Act, 1996, when the plea is raised by a party in the written statement or through a specific prayer, even if the trial of the suit has commenced.

1. Rule. Rule made returnable forthwith and heard finally by consent.

2. This petition is directed against the order dated 13th December, 2007, passed by the City Civil Court, Bombay, whereby the Notice of Motion No. 3765/2007 taken out by the defendants to refer the dispute to arbitration is allowed.

3. The suit is filed by the petitioner to claim his share in the suit property on the basis of partnership deed. The partnership deed contains an arbitration clause wherein it is provided that in case of any dispute, the same would be referred to arbitration.

4. It is the case of the petitioner that the suit before the Trial Court is part-heard and it is only during the course of cross-examination of the petitioner that the Respondent No.1 has filed the Notice of Motion being Notice of Motion No. 3765 of 2007 praying that the matter be referred to arbitration. The learned Counsel for the petitioner submitted that the suit is of the year 2000 and the Notice of Motion is taken out in the year 2007 and the intention of the respondent is only to delay the hearing of the suit. The learned Counsel further contended that it was not permissible for the petitioner to refer the dispute to arbitration at this stage, when the Written Statement of the respondent was filed long back and the petitioner has participated in the trial of the suit. The learned Counsel pointed out that the provisions of section 8 of the Arbitration and Conciliation Act, 1999 and submitted that though ordinarily the Court is required to refer the matter to arbitration, the case of the petitioner falls within the exceptions provided under the said section 8, which provides that the Judicial Authority is required to refer the dispute to arbitration only in cases where the application for referring the matter to arbitration is made prior to the filing of the first statement i.e. prior to the filing of the written statement and since the written statement in the suit is filed long back, the Trial Court ought not to have referred the parties to arbitration.

5. The learned Counsel has referred to the decisions in the cases of (1) P.Anand Gajapathi Raju V. P.V.G. Raju, reported in AIR 2000 SC 1886 (2) Ganesh Trading Company V/s Government of Maharashtra, reported in 2007(4) Mh.L.J., 715 (3) Motilal S/o Khanyalal Bharadiya V/s Kedarmal Jainarayan Bharadiya, reported in 2003(2) Mh.L.J. 751 wherein it was held that the parties who desire to refer the matter to arbitration have to apply before the filing of the written statement and once the written statement is filed it can be assumed that the party has submitted to the jurisdiction of the Court and the Court ceases to have jurisdiction to refer the dispute to arbitration. He therefore, submitted that the Trial Court has erred in allowing the Notice of Motion of the petitioner and referring the dispute to arbitration.

6. The learned Counsel for the respondent No.1 on the other hand submitted that Trial Court has no jurisdiction to entertain the suit in view of the arbitration clause in the partnership deed. He submitted that the petitioner in the course of his cross-examination has himself stated that he does not have any objection if the dispute is referred to arbitration and accordingly the Notice of Motion was taken out to refer the dispute to arbitration. He submitted that in any case, the plea of having the matter referred to arbitration was taken in the Written Statement itself and it cannot be said that it is for the first time this issue being raised in the Notice of Motion. The learned counsel further submitted that the Trial Court had already framed a specific issue under Order 14 rule 2 of CPC regarding the maintainability of the suit in view of the arbitration clause in the partnership deed. He further argued that once the respondents had brought to the notice of the Court that there exists the arbitration agreement between the parties to the dispute, the Court was bound to refer the dispute to arbitrat