:1: IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE SIDE CIVIL APPELLATE SIDE CIVIL APPELLATE SIDE APPEAL FROM ORDER NO.99 OF 2008 APPEAL FROM ORDER NO.99 OF 2008 APPEAL FROM ORDER NO.99 OF 2008 WITH WITH WITH CIVIL APPLICATION NO.124 OF 2008 CIVIL APPLICATION NO.124 OF 2008 CIVIL APPLICATION NO.124 OF 2008 HDFC Bank Ltd. having its registered office at HDFC Bank House, Senapati Bapat Marg, Lower Parel (W), Mumbai 400 013 and one of its branches amongst others at 60, Sonawala Building, 1st floor, Mumbai Samachar Marg, Fort, Mumbai 400 001 ...Appellant. v. Ashish Sheshmani Pandey of Navi Mumbai Adult, Male aged about 25 yrs., residing at Shashi Villa, Plot No.A-50, Sector 14, Kalamboli, Navi Mumbai, Maharashtra 410 218 ...Respondent. Mr.Mahesh Menon i/by M/s.Mahesh Menon & Co. , adv. for the Appellant. Mr.M.A.Dharmraj , adv. for the Respondent. CORAM: CORAM: CORAM: J.H.BHATIA,J. J.H.BHATIA,J. J.H.BHATIA,J. DATE: 11th February, 2008. DATE: 11th February, 2008. DATE: 11th February, 2008. ORAL JUDGMENT: ORAL JUDGMENT: ORAL JUDGMENT: 1. Heard the learned counsel for the Parties. 2. Admittedly the respondent/plaintiff had taken a vehicle loan in respect of vehicle No.MH-06 AG 178 from the defendant/bank, which is appellant before this Court. The plaintiff contended that he had paid all the dues in respect of the said vehicle loan and he requested the bank to issue No Objection Certificate. :2: The bank refused to issue No Objection Certificate and, therefore, the plaintiff filed suit seeking direction to the bank. He also took out Notice of Motion No.3263 of 2007 seeking direction for the same purpose. The defendant/bank admitted that in respect of the said vehicle loan all the dues have been cleared. However, the bank was not willing to issue No Objection Certificate because in respect of certain other transactions, certain amounts were due from the plaintiff. Bank took a plea that as per the terms of the contract, if there is any dispute, differences and/or claim arising out of or touching upon the said agreement, the dispute has to be referred to the arbitrator. The Bank requested the Court to refer the matter to the arbitrator and not to grant notice of motion. The learned trial Court rejected the contention of the bank holding that when there is no dispute in respect of said loan, the question of referring the matter to the arbitrator does not arise. In view of the admission that the whole of the loan in respect of the said vehicle has been cleared, notice of motion was allowed in terms of prayer clause (a) and thereby, bank was directed to issue No Objection Certificate. Against that order, bank has preferred the present appeal. 3. The learned counsel for the defendant/appellant contends that in view of the provisions of Section 8 when the question of arbitration is raised by one of the :3: parties, the matter must be referred to the Arbitrator by the Court. Section 8 of the Arbitration & Conciliation Act, 1996 reads as follows: "8. Power to refer parties to arbitration where "8. Power to refer parties to arbitration where "8. Power to refer parties to arbitration where there is an arbitration agreement.- there is an arbitration agreement.- there is an arbitration agreement.- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Clause 29 of the relevant agreement, which was admittedly entered into by the parties reads as follows: "All disputes, difference and/or claim arising out of or touching upon this Agreement whether during its subsistence or thereafter shall be settled by arbitration in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof and shall be referred to the sole Arbitration of an Arbitrator nominated by the Bank. The award given by such an Arbitrator shall be final and binding on the Borrower and Guarantor to this Agreement." :4: 4. On reading aforesaid Clause 29 in the agreement and the provisions of Section 8, it becomes clear that when a judicial authority before which an action is brought in a matter, which is subject of an arbitration agreement shall, if a party so applies not later than submitting his first statement on the substance of the dispute, refer the parties to arbitration. In Garden Garden Garden Finance Limited v. Prakash Industries Ltd. 2001(4) Finance Limited v. Prakash Industries Ltd. 2001(4) Finance Limited v. Prakash Industries Ltd. 2001(4) Maharashtra Law Journal 425, Maharashtra Law Journal 425, Maharashtra Law Journal 425, this Court relied upon P.Anand Gajapathi Raju v. P.V.G. Raju (dead) & Ors. P.Anand Gajapathi Raju v. P.V.G. Raju (dead) & Ors. P.Anand Gajapathi Raju v. P.V.G. Raju (dead) & Ors. (2000) 4 SCC 539 (2000) 4 SCC 539 (2000) 4 SCC 539 wherein Their Lordships of the Supreme Court held that following conditions are required to be satisfied under Section 8(1) and (2). "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. The learned Single Judge of this Court in Garden Finance Garden Finance Garden Finance Limited Limited Limited after referring to the above Supreme Court authority observed as follows in paragraph 9: :5: 9. It is clear from these observations that one of the aspect to be considered by the Court while considering the application for referring the parties to arbitration is that the subject matter of the action is the same as the subject matter of the arbitration agreement. Now, this requirement will involve reference to the contents of the plaint as also to the arbitration agreement and the manner in which the applicant wants the court to read the averments made in the plaint as also the recital in the arbitration agreement. It is obvious that the Plaintiff who has brought the action would also have the right of audience on such an application, in order to afford the Plaintiff a complete opportunity of being heard on an application under Section 8 of the Arbitration Act, in my opinion, it would have to be held that the party which seeks to refer the dispute to the arbitrator has to make a written application for that purpose, so that the Plaintiff, who has instituted the suit, knows exactly the grounds on which the reference is sought. In the present case, though the Defendant has been served with this suit long back, there is no written application made....." Admittedly in the present case, the defendant/bank has not made any application in writing to refer the matter to the Arbitration. In view of this Section 8(1) has no application. Secondly, Clause 29 of the agreement provides for reference of the dispute, difference and/or claim arising out of and touching upon this agreement, which means the agreement pertaining the loan taken for the particular vehicle. Admittedly, that loan has been fully satisfied and nothing remains to be paid. In view of this, there is no dispute between the parties in respect of that vehicle loan and, therefore, question of referring the matter to the arbitration does not arise. :6: If there are certain other transactions between the parties, bank may take action as per the law in respect of those transactions. In view of these circumstances, I find no fault in the impugned order passed by the trial Court. 5. Therefore, Appeal stands dismissed. 6. As the appeal itself is dismissed, civil application does not survive and stands disposed off accordingly. (J.H.BHATIA,J.) (J.H.BHATIA,J.) (J.H.BHATIA,J.)