The legal point established is that a new agreement giving a new cause of action can render a suit maintainable, obliterating the earlier cause of action.

The defendant in O.S. No. 4083 of 2005 on the file of XIV Assistant Judge, City Civil Court, Chennai is the revision petitioner. The said suit was filed by the respondent against the petitioner herein for recovery of sum of Rs.84,800/- together with interest. Pending suit, the petitioner herein has filed I.A. No. 23828 of 2005 in O.S. No. 4083 of 2005 under Section 8 (1) of the Arbitration and Conciliation Act, 1996 to refer the parties to arbitration and to dismiss the suit. The said application was dismissed by the court below on 18.04.2006, hence, the present revision petition has been filed.

2. The learned counsel appearing for the petitioner submitted that the court below failed to note that under Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, the suit itself is barred and it ought to have referred the dispute to arbitration; that the court below went wrong in holding that the present dispute is with regard to money and it failed to see that the alleged consideration has come in pursuance of the agreement where arbitration clause is provided; that when any dispute /misunderstanding subsequently arise between the parties, the same should have been tried by arbitrator only as the Civil Courts jurisdiction is ousted, which was not properly considered by the court below. In support of this contention, the learned counsel for the petitioner relied on the below mentioned decisions:-

i) (Agri Gold Exims Ltd., vs. Sri Lakshmi Knits & Wovens and others) (2007) 3 SCC 686 wherein in Para No.17, it was held thus:-

"17. The respondents had not filed any written statement in the suit. They had not disclosed their defence. They indisputably had raised a dispute in regard to the claim of the appellant. We have noticed the arbitration agreement entered into by and between the parties. It is of wide amplitude. The arbitration agreement brings within its fold dispute of any nature whatsoever. It is in broadest term. The respondents had made payments without prejudice to their rights and contentions. Payments were made keeping in view the ongoing business relationship between the parties. Out of five postdated cheques, two were dishonoured. But, despite pendency of the suit, payments had been made to satisfy the claim of the appellant in respect of the cheques which were dishonoured. Sufficient explanation has been offered by the respondents therefor. Certain contingencies of events, as indicated hereinbefore, are not in dispute. If the suit was confined to the amount in respect of those two cheques, the contention of Mr. Rao could have been accepted. But it is not so."

ii) (Andritz Oy rep. through Power of Attorney Agent Mr. Siraj Ahmad, New Delhi vs. Enmas Engineering Pvt. Ltd., rep. By its Director and Principal Officer, Chennai and another) (2007) 4 MLJ 290 wherein in Para NO.36, a learned single judge of this Court held thus:-

"36. The conclusion that the arbitration agreement is severable from the main contract, does not automatically mean that it would always survive the main contract. While the arbitration clause need not always follow the fate of the main contract, of which it is a part, the corollory that it will always survive even if the main contract perishes, cannot be taken to be true.

3. The learned counsel appearing for the respondent submitted that the petitioner and the respondent entered into an agreement of sale dated 16.06.2003 under which the petitioner agreed to sell the suit property at Valasaravakkam for Rs.5 lakhs and thereafter, the petitioner paid Rs.1 lakh towards advance and agreed to pay the balance of Rs.4 lakhs within six months, indeed he was ready to pay the said amount. The petitioner had shelved the scheme and no chance of revival. The respondent has demanded to refund the said amount of Rs.1 lakhs and the petitioner agreed for the same and paid only Rs.20,000/-and promised to pay the balance with interest in five months. Even after the said period, the petitioner has not paid t