( 1 ) THIS is an application under Order 37 Rule 4 CPC seeking setting aside of the Judgment dated 30/07/2001 whereby the suit of the plaintiff was decreed on account of the failure of the defendant to enter appearance within the period of 10 days as prescribed under Sub rule (2) of Rule 2 of Order 37 CPC.

( 2 ) IT is pertinent to mention at the outset that the application for condonation of delay in entering the apearance was dismissed vide order dated 30/07/2001. Grounds for recall or setting, aside the said order are in brief as under :-

(I) That the service upon defendant No. 1 was effected only on 3/07/2001 whereas the service with respect to defendant No. 2, as contemplated by Order 37 rule 2 CPC was also effected only on 3/07/2001 though the summons of the suit were received on 23/05/2001 by registered post and, therefore, entering of appearance on 2/07/2001 was within the prescribed period.

(II) That the dispute sought to be raised in the suit arose pursuant to the purchase agreement dated 15/03/2001 executed between the parties and since there was arbitration clause namely clause No. 27 the instant suit was barred by Section 8 of the Arbitration and conciliation Act 1996. Section 8 provides as under:-

8. Power to refer parities to artbitration where there is am 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 sustance 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.

( 3 ) AS regards the first contention, the plea was considered while dealing with the application for condonation of delay and repealed vide order dated 30th july, 2001. Even otherwise the contention raised by the learned counsel that defendants 1 and 3 were served on 23/05/2000 but the proper service in terms of sub rule 2 of Rule 3 of Order 37 CPC was effected on 3/07/2001 as the copy of the plaint and annexures thereto were furnished to the defendant on 3/07/2001 is self contradictory. Had it been a case of service of summons of the suit being not in accordance with sub rule (1) of rule 3 of Order 37, the question of entering appearance on 2/07/2001 would not have arisen nor would have arisen the need for moving application of condonation of delay.

( 4 ) THE very fact that the appearance was entered on 2nd July shows that the service of summons was duly and legally effected on 23/05/2001 and the prescribed period of 10 days for entering appearance expired on 2/06/2000. So much so, the defendants did not take the plea while making an application for condonation of delay that they were not duly served with the copy of the plaint and annexures thereto. For the aforesaid reasons, I do not find any substance in the contention of the learned counsel.

( 5 ) AS regards the plea that there was an arbitration Clause in the basic purchase agreement executed between the parties on 15/03/2000, mr. S. K. Chaudhary, the learned counsel for the plaintiff contends that this purchase agreement was with regard to the supplies of goods made by defendant No. 1 from time to time whereas the instant transaction was an independent transaction by virtue of which the defendant while expressing their financial difficulty approached the plaintiff for loan and received Rs. 5 crors by way of demand promisory note and indemnity bond.

( 6 ) IN order to controvert the aforesaid contention, counsel for the respondent has relied upon the notice dated 2/02/2001 sent by the plaintiff wherein reference to the basic purchase ag