IMPORTANT POINT
An application under section 8(1) of the Arbitration and Conciliation Act must precede the submission of the first statement on the substance of the dispute, and failure to comply with statutory requirements results in dismissal.

JUDGMENT :

Moushumi Bhattacharya, J.

The Appeal arises out of an order passed by the Commercial Court on 06.10.2023 dismissing the appellant’s application under section 8(1) of The Arbitration and Conciliation Act, 1996.

2. The appellant is the defendant in a Suit filed by the respondent herein for handing over the peaceful possession of the suit schedule property to the plaintiff and for payment of outstanding rents and other charges including maintenance with regard to the suit schedule property.

3. The appellant obtained an interim order from a Co-ordinate Bench on 27.12.2023 whereby the Co-ordinate Bench directed the Commercial Court/Trial Court not to insist on filing of the Written Statement by the appellant.

4. Learned counsel appearing for the appellant/defendant argues that the Commercial Court disregarded the mandate under section 8(1) of the Act whereby the parties have to be referred to arbitration in the presence of a valid Arbitration Agreement forming the subject matter of the dispute. Counsel also submits that the application under section 8(1) of the Act was filed before the Written Statement of the appellant.

5. Learned counsel appearing for the respondent/plaintiff urges that the appellant has approached this Court with unclean hands and has suppressed several facts which are relevant to the matter. Counsel submits that the appellant has not complied with the requirement of section 8(2) of the Act and that there is delay and laches on the part of the appellant.

6. We have heard learned counsel appearing for the parties and considered the documents on record.

7. The material dates brought to our notice on behalf of the appellant are as follows:

7.1 The appellant filed an application under section 9 of the Act on 11.08.2016 which however lost its efficacy since the appellant did not take steps for constitution of the Arbitral Tribunal under section 9(2) of the Act. The respondent thereafter filed the Suit (O.S.No.1336 of 2016) on 13.12.2016. The appellant filed an application purportedly under section 8 (1) of the Act on 31.03.2017 and the Written Statement on 10.04.2017. The Trial Court thereafter transferred the Suit to the Commercial Court and the Suit was renumbered on 06.08.2019. The appellant’s application for amendment of the section 8 (1) petition was allowed on 11.07.2023. The Commercial Court dismissed the said application by the impugned order dated 06.10.2023.

8. What the appellant has however not indicated in the narration of events is that the appellant, despite getting an order in the section 9 proceedings on 11.08.2016 failed to take any steps for constitution of the Arbitral Tribunal under section 9(2) of the said Act. Section 9(2) of the Act mandates that the applicant must take steps within 90 days from the date of obtaining an order under section 9(1) of the Act.

9. The narration of events, as presented by the appellant, also does not state that the appellant filed an application for amendment of the initial application filed under section 8 of the Act in 2021 i.e., 4 years after the filing of the first application. Further, both these applications failed to comply with the requirement of section 8(2) of the Act that is appending the original or a duly certified copy of the Arbitration Agreement to the application under section 8(1) of the Act.

10. The Court is also informed that Clause 18.5 of the 2 Lease Agreements dated 24.06.2013 and 02.08.2014 was subsequently superseded by an arrangement entered into between the parties. The Court however is not inclined to enter into the merits of the dispute including on the subsistence or supersession of the Lease Agreements for the reasons as stated below:

11. Section 8(1) of The Arbitration and Conciliation Act, 1996 contemplates a judicial authority referring the parties to arbitration on an application being made by a party to an Arbitration Agreement which forms the subject matter of the action pending before the judicial authority subject to existence of