Section 8 of the Arbitration and Conciliation Act mandates that an application for arbitration must be made before the first written statement; dismissal of the suit under this section is not permissible.

JUDGMENT :

Sabyasachi Bhattacharyya, J.:

1. As per previous direction, the appeal itself is taken up for hearing along with the application.

2. The present appeal has been preferred by the plaintiff in a suit for specific performance of contract.

3. By the impugned judgment and decree, the learned trial Judge, simultaneously allowed an application of the respondent/defendant under Section 8 of the Arbitration and Conciliation Act, 1996 (in short “1996 Act”) and dismissed the suit itself.

4. Learned counsel for the appellant argues that even Section 8 of the 1996 Act does not contemplate a dismissal of the suit, but merely speaks about reference to arbitration.

5. That apart, the defendant/respondent did not take out any application under Section 8 of the 1996 Act either simultaneously with or prior to the filing of the written statement, which was the first statement on the merits of the defence within the contemplation of Section 8 of the 1996 Act.

6. Hence, in any event, the application under Section 8 of the 1996 Act filed subsequent to the filing of the written statement in the trial Court ought to have been dismissed by the learned trial Judge.

7. Learned counsel appearing for the defendant/respondent cites an unreported judgment of a learned Single Judge of the Delhi High Court dated November 6, 2023 in the matter of Madhu Sudan Sharma & Ors. Vs. Omaxe Ltd. In the said judgment, the learned Single Judge of the Delhi High Court, by relying on a previous Division Bench judgment of the Delhi High Court in the matter of Sharad P. Jagtani Vs. Edelweiss Securities Limited, arrived at the conclusion that even if an application under Section 8 of the 1996 Act was not filed but a proper objection as to jurisdiction of the Civil Court on the ground of existence of an arbitration clause was taken in the written statement, the matter ought to be referred to arbitration.

8. Upon a careful consideration of the arguments of the parties, we are of the opinion that the impugned judgment is bad in law on two very important counts.

9. First, even if an application for reference to arbitration under Section 8 of the 1996 Act was to be entertained by the learned trial Judge, the suit could not have been dismissed as a whole. The matter only ought to have been referred to arbitration.

10. Secondly and more importantly, in the present case, the defendant/respondent took out an application under Section 8 of the 1996 Act only after filing of the written statement, thereby defying the mandate of Section 8 of the 1996 Act itself.

11. Section 8 of the of the 1996 Act is quoted below for the purpose of convenience:

“8. Power to refer parties to arbitration where there is an arbitration agreement.- (1) A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any court, refer the parties to arbitration unless it find that prima facie no valid arbitration agreement exists.

(2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.

[Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the court to call upon the other party to produce the original arbitration agreement or its duly certified copy before the court.]

(3) Notwithstanding that an application has been mad under sub-section (1) and that the