The mandatory nature of Section 8 of the Arbitration and Conciliation Act, 1996, and the requirement for the court to satisfy the conditions under Order 23 Rule 1(3) C.P.C. before permitting the withdrawal of a suit with liberty to file a fresh suit.

I have already heard the learned Senior Counsel Mr. Chitranjan Sinha for the petitioner and the learned counsel Mr. Madhuresh Prasad for the respondents.

2. This civil miscellaneous application has been filed by the defendant-petitioner under Article 227 of the Constitution of India for setting aside the order impugned dated 27.08.2016 passed by Subordinate Judge-I at Danapur, Patna in Title Suit No.2658 of 2015 whereby the learned trial court has allowed the application of the plaintiff-respondent no.1 under Order 23 Rule 1(3) C.P.C. and permitted the plaintiff-respondent to withdraw the suit and file a fresh suit.

3. From perusal of the record, it appears that the plaintiff-respondent filed the aforesaid suit praying for the relief that on adjudication of the facts stated in the plaint it be declared that the plaintiff is an authorized dealer of defendant no.1 (Company) in view of the agreement and further to grant a decree in favour of the plaintiff declaring the notice of termination of dealership and notice dated 30.07.2015 invalid and further prayed that if there is any difficulty in granting relief no.(ii), actual loss may be assessed. The plaintiff also prayed for injunction.

4. The defendant (Company)-petitioner herein appeared and filed an application under Section 8 of the Arbitration and Conciliation Act, 1996 along with the agreement. The court below by terms of order dated 10.09.2015 rejected the application filed by the petitioner under section 8 of the Arbitration and Conciliation Act,1996 relying on the decision of the Supreme Court in the case of Radha Krishna Vs. Maestro Engineering and Others, (2010) 1 Supreme Court Cases 72. Against the said order the petitioner herein filed C.W.J.C. 15462 of 2015. After hearing both the parties this Court by terms of order dated 03.02.2016 held that the decision of the Supreme Court in the case of Radha Krishna (supra) has already been held to be per incurium in the case of Swiss Timing Limited Vs. Commonwealth Games, (2014) 6 Supreme Court Cases 677 and remanded the matter after setting aside the order of the trial court with a specific direction that a fresh order be passed according to law in terms of arbitration clause according to Section 8 of the Arbitration and Conciliation Act, 1996. Against the said order a review application was filed being Civil Review No.80 of 2016. This Court on 12.05.2016 held that since the matter has only been remanded to the court below for fresh order, no case for review is made out. This court while disposing of the review application made clear that the order passed by this Court while remanding the matter shall not prejudice any parties in passing the final order.

5. After this order it appears that an application was filed by the plaintiff-respondent under Order 23 Rule 1(3) C.P.C. praying for permitting the plaintiff to withdraw the suit with liberty to institute fresh suit in respect of the subject matter of the suit. Rejoinder was filed by the defendant-petitioner. The court below by the impugned order dated 27.08.2016 allowed the application and permitted to withdraw and granted permission to the plaintiff to institute a fresh suit and awarded cost of Rs.5,000/- to be paid by the plaintiff to the defendant-petitioner.

6. The learned Senior Counsel Mr. Chitranjan Sinha submitted that the court below has got no jurisdiction to try the suit in view of the admitted arbitration agreement between the parties. If there is agreement wherein a clause of arbitration is there, it is mandatory for the Civil Court to refer the dispute to an arbitrator. In the present case, existence of arbitration clause is admitted. The application has been filed by the petitioner for making reference to the arbitrator according to Section 8 of the Arbitration and Conciliation Act, 1996. Since the provision as contained in Section 8 of the Arbitration and Conciliation Act, 1996 is mandatory, the Court is required to refer the matter to the arbitrator. In o