Thottathil B. Radhakrishnan, J.

These revision petitions are referred to the Division Bench particularly on the question whether T.M.L Financial Services Ltd. v. Vinod Kumar (2010 (1) KLT 209), hereinafter referred to as 'T.M.L.', requires reconsideration. The impact if any, of Section 9 of the Arbitration and Reconciliation Act, 1996, hereinafter referred to as the 'A & C Act', is focused in the reference order as a question that may be germane for consideration.

2. T.M.L was decided in a matter that arose from a suit filed for damages and for a declaration that the plaintiff was not liable to repay any outstanding instalments defaulted on a loan availed from the defendant. Holding out an arbitration agreement, the defendant invoked Section 8 of the A& C Act and applied to the trial court to refer the parties to arbitration. That was refused. That led to the judgment in T.M.L, holding, inter alia, that when the agreement is opposed to public policy or where one of the parties commit acts which are per se illegal and causes injury to the other party, the arbitration agreement cannot be put forward as a shield. In T M.L, it was found that suit of a civil nature would lie in situations where the act complained of is not referable to the agreement between the parties and relief sought for is built on legal rights de hors the agreement, including the arbitration agreement.

3. The fact that the arbitration agreement cannot be used as a shield in cases of acts which are per se illegal or unlawful is not in dispute before us. The fundamental issue that was sought to be focused is the effect of Section 9 of the A & C Act, including whether the availability of such remedy amounts to an implied\bar to other proceedings.

4. We heard learned counsel appearing for the petitioners and Adv. M. Gopikrishnan Nambiar as Amicus Curiae.

5. It was rightly pointed out by the learned Amicus Curiae that the Apex Court had issued guidelines in relation to matters involving the exercise of power in terms of hire purchase agreements and that the primary jurisdiction of the court to come to the aid of a person visited with actions cannot be stultified by making reference to the provisions of the A. & C. Act. Learned counsellor the petitioners point out that in many of the cases, by contract, the parties have chosen the jurisdiction of a particular court with reference to territory and therefore, if litigations are permitted to be instituted in different places, that may be a case where a lender has to scout the entire territory of India to face such litigations. It is pointed out that the obligation of a judicial authority under Section 8 of the A. & C. Act ought to be treated as salutary.

6. Section 8(1) of the A & C Act provides that a judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party applies in terms of that provision, refer the parties to arbitration. Therefore, if the conditions in Section 8(1) are satisfied, the judicial authority shall refer the parties to arbitration. The first condition for the exercise of the power to so refer the parties to arbitration, is that the action pending before the judicial authority is brought in a matter which is the subject of the arbitration agreement that is relied on in support of the application under Section 8(1). All the arbitration agreements which are held out by the lenders in these cases are agreements consisting of commercial transactions. The finding in T.M.L. that a suit can be maintained independent of the arbitration agreement in cases where the act complained of is per se illegal and in violation of the laws, necessarily means that the subject matter of the litigation before the judicial authority would stand before it notwithstanding an arbitration agreement between the parties, if the nature of the disputes are not referable to the rights and obligations of the parties on the basis of the agreement, between them, in