Invoking arbitration in the written statement suffices under Section 8 of the Arbitration Act, and the court is obligated to refer the parties to arbitration.

Rajiv Sahai Endlaw, J.

1. The plaintiff has instituted this suit for recovery of Rs.46,71,768.29p from the defendant, pleading that he was trading in financial markets through the defendant who is a member of the National Stock Exchange and a sum of Rs.46,71,768.29p is due to the plaintiff from the defendant on account of such transactions.

2. Summons of the suit were issued and a written statement contesting the suit claim has been filed by the defendant. Para 3 of the preliminary objections of the said written statement is as under:-

“3. That this Hon’ble Court lacks the necessary jurisdiction to entertain and decide the present Suit in view of Clause 13 of Part A of the Agreements dated 23.05.2008 entered into between the parties, wherein the parties have agreed to refer any claims/disputes arisen between the parties to be resolved by the mode of Arbitration, as per the Rules, Regulations and bye-laws envisaged by the respective stock exchange. The contents of Clause 13 are reproduced herein for the ready reference of this Hon’ble Court.

..13 The Client and the Stock Broker agree to refer any claims and/or disputes to arbitration as per the Rules, Bye-laws and Regulations of the Exchange and Circulars issued there under as may be in force from time to time...”

The defendant, along with the written statement filed a list of documents which include a copy of the Agreement dated 23rd May, 2008 supra purportedly bearing the signatures of the plaintiff and on behalf of the defendant. The counsel for the plaintiff during admission/denial of documents has admitted the said Agreement which has been admitted into evidence as Ex.D3.

3. The plaintiff filed a replication to the written statement aforesaid, denying the contents of para 3 of the preliminary objections in the written statement and further pleading that “the present suit as filed by the plaintiff is not hit by any agreement of waiver and is well maintainable in law and thus objection raised is devoid of substance”.

4. The suit was listed for framing of issues on 17th February, 2014. Finding, that the claim of the plaintiff was premised on the plaintiff being the client of the defendant, a broker with the National Stock Exchange, it was on 17th February, 2014 enquired from the counsels whether not the bye-laws of the Stock Exchange provide for arbitration.

5. The counsel for the defendant had then invited attention to the preliminary objection aforesaid in the written statement and proposed the following issues thereon:-

“Does this Hon’ble Court lack the jurisdiction to entertain the present suit? OPD

Is the present suit maintainable? OPD”

The counsel for the plaintiff had sought time to address on, as to why the dispute is not referable to arbitration.

6. The counsel for the plaintiff has today not controverted that the action which has been brought by way of this suit before this Court is the subject matter of the arbitration agreement aforesaid between the parties. She has however, by referring to Booz Allen and Hamilton Inc. Vs. SBI Home Finance Limited (2011) 5 SCC 532 contended that since the plaintiff has also lodged an FIR against the defendant with respect to the same transaction as subject matter of the suit, the dispute relates to rights and liabilities which give rise to or arise out of a criminal offence and are non-arbitrable.

7. There is no merit in the aforesaid contention. What the Supreme Court in the judgment aforesaid has held is that the Arbitral Tribunal cannot decide criminality. The said judgment cannot be read as laying down that the civil disputes which are otherwise subject matter of arbitration agreement become non-arbitrable merely because the actions of the defendant also constitute an offence and FIR of the said offence is lodged.

8. The counsel for the plaintiff then refers to judgment in Sukanya Holdings (P) Ltd. Vs. Jayesh H. Pandya (2003) 5 SCC 531 where, in para 12 it has been held that a matter is not required to be referred to the Arbitral