The court emphasized that the arbitration clause covered all disputes, and the general law should yield to the special law, highlighting the need for minimum judicial intervention where parties have agreed to arbitrate the dispute.

JUDGMENT :

N.J. Jamadar, J.

This commercial division summary suit is instituted for recovery of a sum of Rs.1,24,08,764.54 on the basis of a memorandum of understanding and the negotiable instruments.

2. The claim of the plaintiffs is that on the representation of the defendants that the handsome return could be earned in the event of making an investment in the projects which the defendant No.1 was developing, the plaintiffs had collectively advanced a sum of Rs. 54 lakhs. The initial investment was of Rs. 35 lakhs. The defendants executed a Memorandum of Understanding, dated 22nd July 2014 ('MOU') and assured to repay the said amount along with interest @ 33% per annum at quarterly rest. The defendants, in order to instill a sense of confidence and security, had paid interest @ 33% per annum till December 2015. The plaintiff Nos. 2 and 3 advanced a further sum of Rs.19 lakhs to the defendants. The defendants had drawn bills of exchange in favour of plaintiff Nos.2 and 3. The defendants had drawn cheques towards the repayment of the said amount. However, the cheques were returned unencashed on presentment. Hence, the suit for recovery of the said amount alongwith interest.

3. The defendants entered appearance in response to the writ of summons. The plaintiffs took out the summons for judgment.

4. The defendants have preferred this interim application seeking the reference of the dispute to arbitration in view of an arbitration clause in the MOU. The defendants have contended that the transaction between the parties was of an investment in the project which was being developed by the defendants. The transaction was evidenced by the MOU. Apart from the other terms, the MOU contains an arbitration clause, which reads as under :

"If at any time, any dispute, difference or question shall arise, between the parties hereto, touching, pertaining, affecting concerning or relating to the terms of this MOU or meaning of these presents or the rights or liabilities, hereunder, which cannot be resolved by or between the parties themselves, then, every such dispute difference or question shall be referred to an arbitrator to be appointed by the parties under the provisions of Arbitration and Re-Conciliation Act, 1996 or any statutory amendment or re-enactment thereof."

As the plaintiffs have approached the Court with a claim for recovery of an amount advanced thereunder and the dispute is clearly covered by the arbitration clause, the reference under section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as 'the Act') is warranted.

5. The plaintiffs have resisted the application by filing an affidavit in reply. It is averred that there was a series of transactions between the plaintiffs and the defendants. As of now, five suits have been instituted against the defendants by the plaintiffs and other investors. Some of the transactions are not covered by Memorandum of Understanding, though forming part of one and the same bargain. In the case at hand, the subsequent loan of Rs. 19 lakhs is not covered by the MOU. The said advance is against the bills of exchange, which falls out of the purview of the dispute covered by the arbitration clause in the MOU. Thus, the subject matter of the suit cannot be bifurcated. The application under section 8 of the Act, therefore, becomes untenable. It is further contended that the plaintiffs are the senior citizens. In the event of reference of the dispute to arbitration, the plaintiffs would be required to wait for an indefinite period for an admitted claim. Thus, the prayer for reference to arbitration be rejected.

6. Heard Mr.Narayan Sahu, the learned counsel for the plaintiffs and Mr.Saurab Oka, the learned counsel for the defendants/applicants.

7. Mr. Oka, the learned counsel for the defendants submitted that the arbitration clause, extracted above, in the MOU is required to be give