- (1.) This revision petition has been filed against order dated 21.9.2004, vide which, in a pending suit, the dispute has been ordered to be referred to the Arbitrator. It is contention of counsel for the petitioner that after allowing the respondents to file the written statement on merits and allowing the petitioner to file rejoinder to that written statement, the Court was not competent to refer the matter to the Arbitrator, as has been done in the present case. It is an admitted fact that the petitioner filed a suit for recovery of an amount of Rs.1,32,000/-. After notice, respondents put in appearance and filed a written statement in Court on 31.1.2003.
(2.) Thereafter, rejoinder to the written statement was filed by the petitioner on 25.2.2003. Respondents, in the meantime, filed an application for referring the matter Civil Revision No.5190 of 2004 -2- to the Arbitrator on 20.3.2003, which was allowed by the Court below.
(3.) Hence, this revision petition. After hearing counsel for the petitioner, this Court feels that the order passed is not justified. As per provisions of Section 8 of the Arbitration and Reconciliation Act, 1996 (in short the Act), once a party has filed written statement on the substance of the dispute, thereafter, it is not open to the Court to refer the matter to an Arbitrator. In the present case, no doubt, in written statement, objection was taken to the extent that the matter is required to be referred to the arbitrator but in that written statement, reply was also filed on merits of the dispute. Thereafter, no objection was raised by the respondents when rejoinder was filed by the petitioner to the said written statement. Subsequent thereto, application was allowed, by the Court below, by ignoring the provisions of Section 8 of the Act. Their Lordships of Supreme Court in P.Anand Gajapathi Raju and others v. P.V.G.Raju (died) and others, AIR 2000 Supreme Court 1886, have laid down the parameters, in what circumstances, during pendency of the suit, the matter can be referred to an arbitrator. Para 5 of the said judgment reads thus:- "The conditions which are required to be satisfied under sub-sections (1) and (2) of Section 8 before the Court can exercise its powers are: (1) there is an arbitration agreement: (2) a party to the agreement brings an action in the Court against the other party: (3) subject matter of the action is the same as the subject matter of the arbitration agreement: (4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. This last provision creates a right in the person bringing the action to have the dispute adjudicated by Court, once the other party has submitted his first statement of defence. But if the party, who wants the matter to be referred to arbitration applies to the Court after submission of his statement and the party who has brought the action does not object as is the case before us, there is no bar on the Court referring the parties to arbitration.";