The main legal point established in the judgment is that a party forfeits its right to file an application under Section 8 of the A&C Act if it fails to do so within the time available for filing the first statement on the substance of the dispute, including the written statement.

JUDGMENT :

Vibhu Bakhru, J.

1. The appellant has filed the present appeal impugning an order dated 28.03.2022 (hereinafter ‘the impugned order’) passed by the learned Commercial Court rejecting the appellant’s application filed under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter ‘the A&C Act’). The learned Commercial Court had declined to refer the parties to arbitration on the ground that the appellant had filed the said application after the statutory period to file the written statement had expired and the appellant’s right to do so was closed. In addition, the learned Commercial Court also observed that the proceedings indicated the appellant’s intention to participate in the same.

2. It is the appellant’s case that it had no intention to participate in the proceedings before the learned Commercial Court or to waive its right to refer the subject disputes to arbitration.

3. The principal question that is required to be addressed is whether a party forfeits its right to file an application under Section 8 of the A&C Act on expiry of time to file the written statement of its defence.

4. Briefly stated, the relevant facts necessary to address the controversy in the present appeal are as under:

4.1 The respondent (plaintiff) has filed the suit for recovery and claiming a decree against the appellant (defendant) for a sum of Rs. 15,60,000/- along with pendente lite and future interest at the rate of 18% per annum as well as costs. The plaintiff claims that it had supplied goods and raised invoices for a value of Rs. 1,06,32,953/-. Against the aforesaid amount, it had received an aggregate amount of Rs. 97,17,481/- till 31.03.2015. It had received a further payment of Rs. 1,146/- on 18.04.2015. Thus, a balance amount of Rs. 10,20,477/- remains outstanding and payable.

4.2 In its plaint, the plaintiff claims that it is entitled to the said amount along with interest at the rate of 18% per annum from 18.04.2015 till filing of the plaint on 26.03.2018 computed at Rs. 5,39,700/-. Thus, in aggregate, the plaintiff claims that it was entitled to a sum of Rs. 15,60,177/- inclusive of interest till the date of filing of the suit, which is rounded off to Rs. 15,60,000/-.

4.3 The said suit was listed before the learned Commercial Court on 11.04.2018 and a copy of the plaint and other documents were provided to the learned counsel for the defendant (the appellant herein). The learned Commercial Court granted one month’s time to file the Written Statement and listed the suit for further proceedings on 29.07.2018. The appellant failed to file the Written Statement within the specified period and the matter was adjourned. It was again listed on 03.11.2018. On that date, the learned Commercial Court noted that the appellant had not filed the Written Statement and the time for doing so had expired. Accordingly, the learned Commercial Court closed the right of the appellant to file the Written Statement and re-listed the matter for the plaintiff’s evidence on 29.01.2019.

4.4 The plaintiff (the respondent) filed an affidavit of its witness and a copy of the same was also provided to the appellant. However, since the representative of the plaintiff (the respondent) had not brought the original documents to court on 29.01.2019, the learned Commercial Court adjourned the matter to 18.04.2019.

4.5 At this stage, the appellant has filed an application under Section 8 of the A&C Act. The appellant relied upon the dispute resolution clause as included in the Purchase Order dated 01.04.2018 and sought reference of the subject disputes to arbitration.

5. Mr. Khurana, learned counsel appearing for the appellant, submitted that the learned Commercial Court had relied upon the decision of a Single Bench of this Court in Anil Mahindra & Anr. v. Surender Kumar Makkar & Anr. 2017 SCC Online Del 11532 and on the strength of the said decision, rejected the appellant’s application under Section 8 of the A&C Act. He submitted that the said decision was