The court emphasized that parties cannot seek arbitration for one dispute while pursuing their own claim in court, and an alleged agreement made the basis of a counter claim cannot be referred to arbitration, leading to inconsistency.

( 1 ) APPLICATION filed by the defendants invoking Section 5 and 8 of the arbitration and Conciliation Act, 1996 is being disposed of by the present order. Section 5 and Section 8 relied upon read as under:- 5. Extent of judicial intervention.- Notwithstanding anything contained in any other law for the time being in force, in matters governed by this Part, no judicial authority shall intervene except where so provided in this Part. 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 so applies not later than when submitting his first statement on the substance of the dispute refer the parties to arbitration. (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. (3) notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.

( 2 ) PLEADINGS of the defendants in aid of the relief prayed in the application, relief being to refer the dispute to arbitration, are as under:- that the Defendants herein submits that the enterprise Partner agreement dated 26th August 2000 although not signed by the Plaintiff but upon which the Plaintiff insists and relied at various points of time consist of an arbitration clause being clause No. 19, which states as under: all disputes or the differences whatsoever arising between the parties hereto out of or relating to the construction, meaning and operation or effect of this Agreement or the breach thereof which cannot be settled by mutual discussion the same shall be referred to the decision of an arbitrator to be appointed in writing by the parties to the agreement or if they cannot agree upon a single arbitrator to the decision of three arbitrators, one each to be appointed by the Parties herein and the third to be mutually agreed upon by the two arbitrators will be appointed as the Chairman. The arbitration proceedings shall be conducted at New Delhi and the arbitration proceedings shall be in accordance with the provisions of the Arbitration and Conciliation Act, 1996.

( 3 ) SH. BISWAJEET Bhattacharya, counsel for the defendants urged that mandate of Section 5 of the Arbitration and Conciliation Act, 1996 prohibited a judicial authority to determine any dispute which was the subject matter of an arbitration agreement between the parties. Counsel urged that mandate of Section 8 required a judicial authority before which an action is brought to refer the parties to arbitration if the subject matter of the action was the subject matter of an arbitration agreement.

( 4 ) THERE could hardly be any dispute to the proposition of law propounded by counsel for the defendants, but the issue is, whether facts of the present case would prohibit a trial of the suit in this court.

( 5 ) APPLICATION has to be dismissed for two reasons. The first and the foremost reason is that the defendants have not only filed a written statement simultaneously when the application was filed but have also laid a counter claim. Sh. Biswajeet Bhattacharya argued that the suit has to be referred to arbitration but the counter claim has to continue in this court.

( 6 ) I am quite surprised with the arguments urged for the reason the alleged agreement dated 26. 8. 2000 which has been made the basis of the application has been made the basis of the counter claim by the defendants themselves. If the defendants lay a counter claim under the alleged agreement dated 26. 8. 2000 and require this court to adjudicate their counter claim, defendants cannot approbate and reprobate, requiring the dispute raised in the plaint to be referred to arbitration.

( 7 ) THE second reason as to why the