A party waives its right to seek arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 if it willingly participates in the suit proceedings and delays seeking arbitration.

JAYANT NATH, J.

1. This petition is filed under Article 227 of the Constitution of India seeking to impugn the order dated 13.01.2016 by which order the application filed by the petitioners/defendants under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter rererred to as ‘the Act’) was dismissed.

2. The respondents/plaintiffs have filed a suit for recovery of possession and a decree for payments of unpaid rents. It is the case of the respondents that the property being B-7, Model Town, Delhi was licensed to the petitioners. The premises consists of a hall with facility of latrine and bath room situated on the second floor. Over the years, the license fee/rent has increased from time to time. It is also the case of the respondents that w.e.f. 01.04.2014, the license fee/rent was increased to Rs.3520/- per month. A notice was issued to the petitioners which was served and delivered. However, neither any reply was received, nor arrears of rents were remitted which was demanded in the receipt. Hence, the present suit has been filed seeking a decree of Rs.3,69,440/- and a decree of possession. The premises is said to be duly furnished.

3. The petitioners have filed an application under Section 8 of the Act stating that under clause 9 of the License Deed dated 02.12.1985, there exists an arbitration clause. Accordingly, it was prayed that the disputes be referred to the arbitration.

4. The trial court by the impugned order concluded that license deed is not a registered lease agreement and hence the same is against the public policy and is of no use and void ab-initio. The impugned order also noted the judgment of the Supreme Court in the case of Booz Allen & Hamiltaon Inc. v. SBI Home Finance Ltd. & Ors. (2011) 5 SCC 532 where the Supreme Court held that where a civil suit is pending, the court will refuse to accept an application under Section 8 of the Act, if the subject matter of the suit is capable of adjudication only by a public forum or the relief claimed can only be granted by a special court or tribunal. In eviction or tenancy matters, only the specified courts are conferred with jurisdiction to decide the dispute, the court also noted and the named arbitrator in the agreement had died. The trial court also noted that the counsel for the defendants/petitioners appeared on 10.09.2014 and filed vakalatnama and sought an adjournment to file written statement. Despite lapse of statutory period of 90 days, the counsel for the defendants/petitioners did not file written statement and intentionally filed the present application to delay the proceedings. Accordingly, the application of the petitioners was dismissed.

5. I have heard learned counsel for the parties.

6. The learned counsel for the respondents has pointed out that the petitioners have taken three adjournments to file written statement. It is urged that on the first date itself, the petitioners were obliged to file the application under Section 8 of the Act and failed to do the needful and hence, the present application would not lie. It is urged that no petition would lie against an order passed in the application under Section 8 of the Act and hence, the present petition may be dismissed.

7. There are two aspects, which arise in the present case. Firstly, the license agreement which is bone of contention between the parties is admittedly unregistered and unstamped. The Supreme Court in the case of SMS Tea Estates Pvt. Ltd. v. Chandmari Tea Company Pvt. Ltd., (2011) 14 SCC 66, held as follows:

“22. We may therefore sum up the procedure to be adopted where the arbitration clause is contained in a document which is not registered (but compulsorily registrable) and which is not duly stamped :

22.1 The court should, before admitting any document into evidence or acting upon such document, examine whether the instrument/document is duly stamped and whether it is an instrument which is compulsorily registrable.

22.2 If the document is found to be not duly