The main legal point established in the judgment is that for the applicability of Section 8 of the Arbitration and Conciliation Act, specific conditions must be satisfied, and once met, the court must refer the parties to arbitration.

MANMOHAN, J.

I.A.Nos.12362-12363/2017

1. While I.A.No.12363/2017 has been filed seeking leave to leave the instant suit, I.A.No.12362/2017 has been filed seeking condonation of delay of 271 days in re-filing the I.A.No.12363/2017.

2. In the leave to defend application, it has been averred that the present suit is not maintainable as the contract dated 08th December, 2008 executed between the parties contains an Arbitration Clause. It is further contended that the amount claimed in the present suit has been deducted by the defendant from the bills of the plaintiff for defect and delay in completion of contractual work and also for charging wrongful amounts in prior bills.

3. The learned predecessor of this Court by a detailed judgment and order dated 23rd August, 2017 dismissed the defendant’s application under Sections 5 & 8 of the Arbitration and Conciliation Act, 1996 holding that their existed no disputes between the parties for reference to Arbitration. The relevant paras of the said judgment and order dated 23rd August, 2017 is reproduced herein below:-

“16. The defendant has not denied its letter dated 01.04.2013 which is

reproduced as under:-

To

M/s Ahuja Builders

X-3 Hauz Khas

New Delhi 110016

Sub: Party Account balance confirmation

Date: 1st April 2013

Dear Sir,

We wish to confirm that as on 31/03/13 we have an outstanding of Rs. 2,72,04,349/- (Rs. Two crore seventy two lac four thousand thee hundred & forty nine only) towards you running bill for the civil work of Hotel & Mall. We wish to undertake that these dues shall be cleared by us latest by 15th May, 2013.

Thanking you,

Yours sincerely

For Doonvalley Technopolis Pvt. Ltd.

Sd/-

(Sanjeev Srivastava)

Director”

xxx xxx xxx xxx

18. In view of these facts, it is clear that none of the parties has raised any dispute arising out of the said Contract. When there is no dispute between the parties relating to the contract containing an arbitration clause, the arbitration clause cannot be invoked. There has to be dispute arising out of the contract for invoking the arbitration agreement. The findings in the cases relied upon by the defendant are given on different set of facts. The facts in ION case (supra), relates to liabilities under a letter of intent, containing arbitration clause. There arose a dispute between the parties as to the acceptance or non-acceptance of the liability or the acknowledgment of the liability and it was on these facts that the Court held that the suit CS(OS) 3205/2015 Page 10 under Order XXXVII was not maintainable. In Branch Manager case (supra), the Court laid down the proposition of law that even on termination of the Contract Agreement, the Arbitration Agreement survives and binds the parties and where the conditions mentioned in Section 8 of Arbitration and Consultation Act are satisfied, the matter needs to be referred for Arbitration and the Civil suits are not maintainable. The Court discussed Section 8 of Arbitration and Conciliation Act and has laid down the principle of law as under:-

“21. xxx xxx xxx xxx

22. An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof.

23. Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as afore-stated are satisfied, the court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court has to refe