IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
VAIBHAVI D. NANAVATI, J.
Dwarkadas Himatlal Shah Thro Lhs Ripak Dwarkadas Shah D/o. Dwarkadas W/o. Hiren Rasikbhai Mandaliya - Petitioner
Versus
Lhs of Decd. Girishbhai Himatlal Shah - Respondent
R/Special Civil Application No. 4313 of 2023
Decided On : 14-07-2023
Civil Procedure Code,1908 - Order 7 - Rule 11 – Arbitration and Conciliation Act, 1996 - Section 8 – Application – Arbitration - challenged the order - Praying to the competent Court to refer the matter – Held, judicial authority has to compulsarily refer parties to arbitration – For invoking arbitration clause, Section 8 of Act provides a time limit and within what time limit, parties need to intimate judicial authority about the arbitration clause, said intimation is described in provision as “not later than date of submitting his first statement on substance of the dispute – Original defendants at time of filing written statement would be maintainable - No interference is called for in order dated passed by competent Court by allowing application below Exh.34 under Section 8 of Act - Said order is passed considering terms of the MOUs, which has also been considered by this Court - No interference is called for in order passed by Chamber Judge, Court No.21, City Civil Court, dated - Petition dismissed
ORDER :
1. Heard Mr. J.F. Mehta, learned advocate appearing for the petitioner and Mr. Saurabh Mehta, learned advocate appearing for the respondents.
2. By way of present petition, the petitioner herein has challenged the order dated 16.12.2022 passed below Exh.34 by the City Civil Court, Ahmedabad. The respondent No.1 preferred application under Section 8 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) in Civil Suit No.670 of 2022 preferred by the petitioner herein praying to the competent Court to refer the matter to the Arbitrator in view of clause 17 of one Memorandum of Understanding (for short ‘MOU’) dated 25.08.2016 executed between the father of the petitioner, father of the respondent No.1 and respondent No.2 himself.
2.1 Being aggrieved by the impugned order dated 16.12.2022 passed by the Chamber Judge, Court No.21, City Civil Court, Ahmedabad, allowing the application below Exh.34 filed by the respondent No.1 – original defendants under Section 8 of the Act, the petitioner herein has approached this Court by filing the present petition seeking following reliefs :
b. Your Lordships will be pleased to quash and set aside the order passed by the Hon’ble City Civil Court in C.S. No.670 of 2022 below ex.34 on 16.12.2022 and consequently pleased to restore the C.S. No.670 of 2022 to the file of the City Civil Court at Ahmedabad.
c. Hon’ble Court will be pleased to pass any other order deem fit in the nature of justice.
d. Your Lordships will be pleased to allow the petition.
e. Cost of the petition may pleased be awarded.”
3. The brief facts leading to the filing of the present petition read thus:
3.1 The petitioner herein preferred Civil Suit No.670 of 2022 against the respondent Nos.1 and 2 seeking the partition by mates and bound of the property situated at 7/A, Divyajyoy Society, Bhairavnath, Maninagar, Ahmedabad. The respondent No.1 – original defendant nos.1.1 and 1.2 appeared in the aforesaid suit proceedings and filed their written statement as well as Injunction application on 24.05.2022. The respondent No.1 also preferred an application under Order 7 Rule 11 of the Code of Civil Procedure to dismiss the said suit in view of the arbitration clause 17 of the Memorandum of Understanding. The petitioner did not submit reply to the said application preferred by the respondent – original defendants under Order 7 Rule 11 of the Code, the same being pure question of law but, orally argued that the MOU was only for the purpose of super structure and the division in the super structure thereon and the same has nothing to do with undivided share in land, whereon the super structure is constructed. The respondent No.1 thereafter preferred an application under Section 8 of the Act on 07.11.2022 urging the competent Court to refer the suit to the Arbitrator.
3.2 It is the case of the petitioner that the respondent No.1 having submitted to the jurisdiction of the competent Court by filing the written statement, the application under Section 8 of the Act was not maintainable. The competent Court having considered the said application preferred by the respondent - original defendants under the provision of Section 8 of the Act, by order dated 16.12.2022 passed below Exh.34, the petitioner has approached this Court seeking quashing of the said order.
4. Mr. J.F. Mehta, learned advocate appearing for the petitioner, submitted that the competent Court committed an error in interpreting the scope of Section 8 of the Act and has failed to appreciate the meaning of First Statement on the defence in Section 8 of the Act. It was submitted that the competent Court failed to appreciate that mere contention in the written statement would not suffice to invoke Section 8 of the Act. Mr. Mehta, learned advocate, submitted that the respondent No.1-original defendant Nos.1.1 and 1.2 contended that they desire to prefer an application under Order 7 Rule 11 of the Code to reject t
The court emphasized strict adherence to procedural requirements for references to arbitration under the Arbitration Act, dismissing applications that do not explicitly comply.
Rejection of plaint – When a statute prescribes to do certain thing in a certain manner, the thing has to be done in same manner or not at all – All other modes are expressly forbidden.
The court established that a party does not forfeit its right to apply for arbitration under Section 8 even after the expiration of the time to file a written statement, provided there are intervenin....
Disputes capable of being adjudicated by the Civil Court are generally amenable to arbitration, unless expressly excluded. The importance of appointing an eligible arbitrator was also emphasized.
The court held that disputes regarding settled amounts are not arbitrable under the Arbitration and Conciliation Act, 1996, unless specifically covered by the arbitration agreement.
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