IN THE HIGH COURT OF MADRAS, MADURAI BENCH
R. VIJAYAKUMAR, J.
G.T.L. Infrastructure Limited (GIL), Represented by its Authorized Signatory - Petitioner
Versus
Amaladoss – Respondent
C.R.P.(MD). No.145 of 2023 and C.M.P(MD). No.713 of 2023
Decided On : 16-03-2023
Arbitration and Conciliation Act, 1996 - Section 8 - Civil Procedure Code,1908 - Order 8 Rule 1 - Constitution of India,1950 - Article 227 - Decreetal Order - Suit challenging order - Lease Agreement - Suit schedule property - Arrears of lease - Legal notice - Whether a party has waived his right to seek arbitration and subjected himself to jurisdiction of court depends upon conduct of party in suit - Held, Civil Court should first see that whether there is ouster of jurisdiction in terms special statute namely the Arbitration and Conciliation Act 1996 - In present case trial Court has proceeded to hold that Section 8 application Arbitration and Conciliation Act has been filed belatedly relying upon Judgment of Hon'ble Supreme Court reported in Private Limited Infrastructure Private Limited and others which arises out of a commercial suit - Trial Court has erroneously interpreted Section 8 of Arbitration Act to hold that Section 8 application cannot be filed along with written statement - Existence of sale agreement and arbitration clause in said agreement are admitted by both parties - Petition is Allowed.
ORDER :
(Prayer: Civil Revision Petition filed under Article 227 of Constitution of India, to set aside the order and decreetal order dated 25.11.2022 passed in I.A.No.2 of 2022 in O.S.No.252 of 2021 on the file of the Additional Subordinate Court, Thanjavur and allow the civil revision petition.)
1. This civil revision petition has been filed by the defendant in a money suit challenging the order of dismissal of an application under Section 8 of the Arbitration and Conciliation Act, 1996.
2. The respondent herein had filed O.S.No.252 of 2021 on the file of the Additional Subordinate Court, Thanjavur for the relief of recovery of a sum of Rs.7,32,520/- towards rental arrears and for a mandatory injunction directing the defendant to dismantle a tower situated in the suit property.
3. According to the plaintiff, he is the owner of the suit schedule property and he had entered into an unregistered lease agreement with the defendant on 16.10.2007 to lease out the suit property for the purpose of erecting a mobile tower for a period of 12 years. The defendant had paid a sum of Rs.30,000/- as advance and agreed to pay a monthly rent of Rs.5,000/-. The plaintiff had further contended that the defendant has not paid the rent since November 2017 and the lease has come to end as per agreement on 15.10.2019. After the lease period had expired, the plaintiff had made several requests to the defendant to vacate premises by dismantling the tower and also to pay the arrears of lease amount. However, the defendant has not complied with the same. Therefore, the plaintiff has issued a legal notice on 27.11.2020, but the defendant has not complied with the said demand and hence, the present suit.
4. Summons were served in the said suit upon the defendant on 17.11.2011 and he was set exparte.
5. The defendant had filed I.A.No.134 of 2021 to set aside the exparte order and the same was dismissed for default on 22.12.2021. Thereafter, the defendant had filed I.A.No.96 of 2022 to restore the application filed under Order 9 Rule 7 application and the same was allowed.
6. For the second time, I.A.No.134 of 2021 was dismissed for default on 08.06.2022. Thereafter I.A.No.371 of 2022 was filed to restore I.A.No.134 of 2021 and the same was allowed by the Court on 01.09.2022. Thereafter, the defendant had filed I.A.No.2 of 2022 contending that as per Clause 6.2 of the lease agreement between the plaintiff and the defendant, the parties have agreed to refer the matter to arbitration and place of Arbitration shall be Coimbatore and the decision shall be final upon the parties.
7. In view of the said arbitration clause, the defendant had prayed that the suit may be referred to Arbitration in terms of Clause 6.2 of the lease deed dated 16.10.2007.
8. The plaintiff had filed a counter contending that the original Arbitration agreement has not been produced and hence, the present application is not maintainable. That apart, the present application has been filed under Section 8 of the Arbitration Act after filing of the written statement.
9. The trial Court after considering the submissions made on either side, had arrived at a finding that as per Proviso to Order 8 Rule 1 of Amended C.P.C, the defendant has to file a written statement within a period of 30 days and the said time can be extended up to 90 days for the reasons to be recorded by the Court.
10. In the present case, summons has been served upon the defendant on 17.11.2011 and the defendant has not filed his written statement within a period of 90 days. When the defendant has forfeited his right to file a written statement, thereafter an application under Section 8 of the Arbitration Act, cannot be filed. The trial Court relied upon a judgement of the Hon'ble Supreme Court reported in (2019) 12 SCC 210 (SCG Contracts (India) Private Limited Vs. K.S. Chamankar Infrastructure Private Limited and others) to arrive at a finding that outer time limit prescribed under C.P.C for filing of written statement is
SCG Contracts (India) Private Limited Vs. K.S.Chamankar Infrastructure Private Limited and others
Booz Allen and Hamilton Inc. Vs. SBI Home Finance Limited and others
An application under Section 8 of the Arbitration and Conciliation Act must be filed before the first written statement and within the prescribed limitation period; otherwise, it is not maintainable.
A party must apply for arbitration before submitting its first statement; once the opportunity to file a written statement is closed, so is the right to arbitration.
The main legal point established in the judgment is that a party forfeits its right to file an application under Section 8 of the A&C Act if it fails to do so within the time available for filing the....
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....
A party forfeits the right to apply under Section 8 of the Arbitration and Conciliation Act if it fails to file within the time allowed for submitting a written statement.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.