The determination under Section 8 of the Act must be made 'prima facie' at the application stage, and the provisions requiring reference to arbitration are mandatory in nature.

JUDGMENT

Arun Bhansali, J. - This appeal under Section 37 (a) of the Arbitration and Conciliation Act, 1996 ('the Act') read with Section 13 of the Commercial Courts Act, 2015 ('the Act, 2015') is directed against the order dated 15/11/2018 passed by the Commercial Court, Jodhpur, whereby, the application filed by the appellant under Section 8 of the Act has been rejected.

2. The suit was filed by the respondent against the appellant and its Directors for recovery of sum of Rs.71,26,096/- before the District Judge, Jodhpur (Metro), which was initially transferred to the court of Addl. District Judge No.2, Jodhpur (Metro).

3. On being served with the summons in the suit, an application was filed by the appellant company under Section 8 of the Act seeking reference of the parties to arbitration in view of existence of arbitration clause between the parties.

4. Reply to the application was filed by the respondent-plaintiff contesting the application filed by the appellant-defendant. It was alleged that the documents filed with the application were concocted and no such purchase orders were issued to the defendant company. Along with the reply, original purchase orders were produced and it was claimed that on the back of said purchase orders, there were no conditions printed including the arbitration clause.

5. Further submissions have been made that there was huge difference between the purchase orders produced by the appellant and those produced by the respondent and as such, in absence of any arbitration clause between the parties, the matter cannot be referred to the arbitrator.

6. Later on, suit came to be transferred to the Commercial Court, Jodhpur by order of the District Judge, Jodhpur (Metro) dated 12/9/2018. After hearing the parties, the Commercial Court by its impugned order dated 15/11/2018 rejected the application under Section 8 of the Act.

7. Learned counsel for the appellant submitted that the Commercial Court was not justified in rejecting the application. Submissions were made that as the purchase orders produced by the appellant contain the arbitration clause between the parties, in view of the mandatory provisions of Section 8 of the Act, it was incumbent on the Commercial Court to refer the parties to arbitration, failure to refer the parties, is contrary to the mandate of law and, therefore, the order impugned deserves to be quashed and set aside.

8. Further submissions were made that the Commercial Court on the one hand observed that the defendant must take all its objections in the written statement and, thereafter, after framing of the issues the same would be decided on merits after evidence is led by the parties and on the other hand rejected the application, which is contradictory in nature and, therefore, the order impugned deserves to be set aside.

9. Learned counsel for the respondent vehemently opposed the submissions. It was submitted that the Commercial Court rightly rejected the application inasmuch as absolutely incorrect averments were made in the application filed under Section 8 of the Act accompanied with concocted documents. The original purchase orders did not indicate any conditions as claimed, which purchase orders were produced before the court and in absence of any arbitration clause between the parties, the application was liable to be rejected and, therefore, no interference is called for in the order impugned and the appeal deserves to be dismissed.

10. We have considered the submissions made by learned counsel for the parties and have perused the material available on record as well as the record, which was summoned from the Commercial Court.

11. The plaintiff filed the suit for recovery in which the present application under Section 8 of the Act was filed along with the copies of purchase orders inter alia indicating that the terms and conditions of purchase includes arbitration clause between the parties and, therefore, the dispute raised by the plaintiff in the suit deserves to be referr