The court emphasized that the presence of an arbitral clause in the agreement between the parties mandates referral to arbitration, regardless of delays in procedural filings.

(M. Chockalingam, J.)

Appeal No.319 of 2006 was filed by the defendant challenging the order of dismissal passed in Application No.2355 of 2005 seeking to set aside the exparte order passed in C.S.245 of 2005, while appeal No.378 of 2006 was filed by the defendant challenging the order of dismissal passed in application No.628 of 2005 seeking rejection of the plaint in C.S.No.245 of 2001

2. The case of the appellant before the learned single Judge is as follows:

The respondent/plaintiff Corporation is conducting a Broadcasting service and the plaintiff Corporation is also having another ancillary wing for broadcasting on commercial basis. The plaintiff and the defendant entered into an agreement on 26. 1990 which was given effect from 7. 1990. Under the terms of agreement, the defendant agreed to pay necessary charges as stipulated therein but there was default in payments. The plaintiff is entitled to get Rs.22,58,670/-from the defendant. Despite service of notice, there was no response from the defendant. Hence, the plaintiff has filed a suit. The suit summons were served and the defendant entered through counsel but they have not filed the written statement and the matter appeared under the caption undefended board on 212. 2004. Thereafter, the matter was adjourned on number of occasions. While the matter stood thus, the defendant filed an application under section 8 of the Arbitration and Conciliation Act seeking that the plaint has got to be rejected by invoking Clause 5 of the agreement. The respondent was given opportunity to file his counter. The Court heard the learned counsel on either side and after hearing the submissions made and looking into the available materials, the Court took the view that the application for rejection of the plaint is not maintainable since it is not a fit case where arbitral clause could be invoked, therefore, dismissed the application. Hence, this appeal at the instance of the appellant.

3. Advancing the arguments on behalf of the appellant/defendant, the learned counsel would submit that in the instant case, it was an agreed position that there was an agreement entered into between the parties on 26. 1990 and clause 5 of the Agreement would clearly indicate that whenever dispute arose between the parties, it should be referred to arbitration. A very reading of the said clause would indicate the same. It is true the defendant did not file the written statement and there was delay of 1338 days in filing the written statement. When the matter was taken up for enquiry, at that time, the application was actually filed with an application to condone the delay in filing the written statement but it remained unnumbered and the same was also brought to the notice of the Court. There is an arbitral clause in the agreement and there was actually a dispute between the parties. When the claim was made by the plaintiff, there was denial on the part of the defendant and the arbitral clause also pave the way for solving the dispute before the arbitration. Hence, it is mandatory and the Court, after putting on notice, should have referred the matter to arbitration but the learned Single Judge has dismissed the application stating that the written statement was not filed in time and that before the defence was actually putforth, the application should have been taken and that would also mean that the written statement should be filed within the time stipulated under the procedural code and since it was not done so, the defendant has lost its right to seek reference to arbitration. That is the view taken by the learned Single Judge which is contrary to the settled decisions of the Apex Court. So long as the written statement was not filed, as the substantial defence, the defendant is entitled to invoke the arbitral clause. It is quite clear that there is dispute between the parties and the finding given by the learned single Judge regarding the liability is not correct. Since it was a claim made