THE HON’BLE THE CHIEF JUSTICE ALOK ARADHE ARBITRATION APPLICATION No.162 of 2023

ORDER:

Mr. P.Pratap, learned counsel for the applicant.

Mr. Dinesh K. Gilda, learned counsel representing Mr. Damodar Mundra, learned counsel for the respondent. 2. This application under Section 11(6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as, “the Act”) has been filed for appointment of an arbitrator.

3. Facts giving rise to filing of this application briefly stated are that the parties had entered into an agreement on 03.09.2016. The agreement admittedly contains an arbitration clause. A dispute between the parties under the agreement had arisen. Therefore, the applicant had issued a notice on 24.11.2018 to which the respondent submitted response on 05.12.2018. However, the applicant did not take any further steps.

4. In the meanwhile, the respondent filed a civil suit, namely Civil Case No.39 of 2020, for recovery of an amount of Rs.63,75,356/- along with interest. In the aforesaid civil suit, the applicant filed an application under Order VII Rule 11 of the Code of Civil Procedure, 1908 (CPC). The aforesaid application was rejected by an order dated 06.04.2022 by the Upper District Judge, No.2, Jhunjhnu (Rajasthan) (hereinafter referred to as, the “Commercial Court”). Against the aforesaid order, the applicant filed an appeal, which is pending before the appellate court. Thereafter, the applicant has filed this application seeking appointment of an arbitrator on 21.08.2023.

5. Learned counsel for the applicant submits that the application filed by the applicant is within limitation as the applicant is entitled to seek exclusion of the period of limitation from 15.03.2020 to 28.02.2022 in view of the law laid down by the Supreme Court in Cognizance for Extension of Limitation, In Re, [(2022) 3 SCC 117]. It is contended that the requirement of making an application under Section 8(1) of the Act has been satisfied, as the applicant had brought to the notice of the Court that an agreement containing the arbitration clause is existing between the parties. It is urged that the applicant has not submitted itself to the jurisdiction of the Commercial Court in the civil suit. In support of the aforesaid submissions, reliance has been placed on the decisions in Booz Allen and Hamilton Inc. v. SBI Home Finance Limited, [(2011) 5 SCC 532], Sundaram Finance Limited v. T.Thankam, [(2015) 14 SCC 444], Vidya Drolia v. Durga Trading Corporation, [(2021) 2 SCC 1] and Madhu Sudan Sharma v. Omaxe Limited, [2023 SCC OnLine Del 7136]

6. On the other hand, learned counsel for the respondent has submitted that it had filed a civil suit in the month of February, 2020, in which the applicant, after rejection of the application under Order VII Rule 11 of CPC, has filed the written statement on 16.05.2022. It is further submitted that the applicant has failed to take action as envisaged under Section 8(1) of the Act and therefore, has forfeited the right to file the application under Section 11(6)

of the Act.

7. I have considered the submissions made on both sides and have perused the record.

8. The applicant had sent a notice on 24.11.2018. In view of the law laid down by the Supreme Court in Cognizance for Extension of Limitation, In Re (supra), the applicant is entitled to exclusion of time between the period from 15.03.2020 to 28.02.2022. Therefore, the application filed by the applicant under Section 11(6) of the Act is held to be within limitation.

9. Section 8(1) of the Act requires a party to bring to the notice of the Court that an arbitration agreement between the parties exists. The object of Section 8(1) of the Act is to bring the matter in relation to existence of an arbitration agreement to the notice of the Court. The Supreme Court in Sundaram Finance Limited (supra) dealt with the issue as to the approach of the trial Court once an application before it under Section 8 of the Act is filed. In paragraph

13, it was held as under:

13. On