Valmiki J. Mehta, J (Oral):

C.M. No.18930/2014 (exemption)

1. Exemption allowed subject to just exceptions.

C.M. stands disposed of.

C.M.(M) No.1021/2014 and C.M. No.18931/2014 (stay)

2. This petition under Article 227 of the Constitution of India is filed by the plaintiff in the suit seeking setting aside of the impugned order dated 31.7.2014 by which trial court has allowed the application filed by the defendant/respondent no.1 under Section 8 of the Arbitration & Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) and held that the suit proceedings could not be continued in view of the arbitration clause between the parties i.e parties were to resolve their disputes by arbitration.

3. The subject suit was filed by the petitioner/plaintiff for recovery of Rs.12,64,258.80/- claiming that the defendant has failed to perform the contract and has failed to give the flat which was booked by the petitioner/plaintiff in a project “Parklands” in Faridabad, Haryana. The total amount claimed in the suit was Rs.12,64,258.80/- out of which Rs.8,97,671/- was towards principal amount being the advance sale price paid and the balance was towards interest.

4. It is an undisputed position before me that the petitioner/plaintiff when he booked a flat with the respondent no.1/defendant, in the allotment letter, there was an arbitration clause and this arbitration clause reads as under:-

“All and any disputes arising out of or touching upon or in relation to the terms of this application and/or Standard Floor Buyer’s Agreement including the interpretation and validity of the terms thereof and the respective rights and obligations of the parties shall be settled amicably by mutual discussion failing which the same shall be settled through arbitration. The arbitration proceedings shall be governed by the Arbitration & Conciliation Act, 1996, or any statutory amendments/modifications thereof for the time being in force. The arbitration proceedings shall be held at an appropriate location in New Delhi by a sole arbitrator appointed by the Company. The applicant(s) hereby confirms that he/she shall have or raise no objection to this appointment. The Courts at New Delhi alone shall have the jurisdiction in all matter arising out of/touching and/or concerning this application and/or Floor Buyers agreement regardless of the place of execution of this application which is deemed to be at New Delhi ”

5. Learned counsel for the petitioner argues that as per the agreed arbitration clause, before going in for arbitration there was a pre-condition of taking place a mutual discussion between the parties and since no mutual discussion took place, arbitration clause/agreement could not have been invoked by the respondents/defendants. Reliance is placed by the petitioner upon the judgment of the learned Single Judge of this Court in the case of M/s Haldiram Manufacturing Company Pvt. Ltd. Vs. M/s DLF Commercial Complexes Limited 193 (2012) DLT 410. It is argued that the trial court has committed an illegality in ignoring this binding judgment in which it is held that an application under Section 8 of the Act has to be dismissed if the application under Section 8 of the Act does not comply with the pre-condition of entering into mutual discussion before invoking the arbitration clause/agreement. Paras 14 to 16 of the judgment in the case of M/s Haldiram Manufacturing Company Pvt. Ltd. (supra) are relied upon by the petitioner and which paras read as under:-

“14. The controversy in hand does not come to an end here as the arbitration clause under consideration has another dimension. It would be manifest on perusal of the above arbitration clause that the disputes arising between the parties at the first instance were to be mandatorily settled amicably by mutual discussion as the word used is shall in the clause and it is only on the failure of any settlement arrived at between the parties after the mutual discussion, the other alternative was the