IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD THURSDAY, THE SIXTH DAY OF AUGUST TWO THOUSAND AND NINE PRESENT THE HON'BLE MRS JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE G.V.SEETHAPATHY C.R.P. NO. 2744 of 2009 Between: M/s. Hotel Sri Balaji, M.G.Road, Kothagudem, Rep. By its Managing Partner and others Petitioners AND Ramesh Chandra Agarwal Respondnent THE HON'BLE SMT. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE G.V.SEETHAPATHY C.R.P. NO. 2744 OF 2009 ORAL JUDGMENT: (per the Hon’ble Sri Justice G.V.Seethapathy) This Revision is directed against the order dated 16.12.2008 passed in I.A. No. 1498 of 2007 in O.S. No. 1 of 2007 on the file of the Principal Senior Civil Judge, Kothagudem, wherein the said application filed by the petitioners herein under Sec. 8(1) of the Arbitration and Conciliation Act, 1996 (for brevity, the Act), was dismissed. Heard the learned counsel for the petitioners and the learned counsel for the respondent. Perused the records. The respondent herein has filed the suit O.S. No. 1 of 2006 for dissolution of partnership and for rendition of accounts against the petitioners/defendants and the petitioners have filed their written statement on 20.04.2007. On the same day, they also filed I.A. No.1498 of 2007 under Sec. 8(1) of the Act seeking stay of all further proceedings in O.S. No. 1 of 2007 and for a direction to the respondent – plaintiff to file an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator. The respondent – plaintiff opposed the application on the ground that the said application is not maintainable after the written statement is filed, in view of the bar contained under Sec. 8(1) of the Act and on the ground that the other prayer seeking direction to the respondent – plaintiff to file an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator is also misconceived and the petitioners are not entitled to seek two reliefs, which are independent, in the same application filed under Sec. 8(1) of the Act. Learned counsel for the petitioners submitted that the trial court has not adverted to the fact that the application under Sec. 8(1) of the Act was filed along with the written statement on the same day and erroneously dismissed the application on the ground that application filed subsequent to the filing of the written statement was not maintainable, as the issues are already settled and the matter is posted for trial. The learned counsel for the respondent – plaintiff submitted that the application under Sec. 8(1) of the Act was not filed along with the written statement and it was filed subsequently. Aggrieved by the order of dismissal of I.A. No. 1498 of 2007, the defendants filed the present Civil Revision Petition. Along with the C.R.P. they also filed CRP MP No. 3819 of 2009 seeking interim stay of all further proceedings in O.S. No.1 of 2007. This court by order 26.06.2009 granted interim stay of all further proceedings in O.S. No. 1 of 2007. The respondent – plaintiff filed CMP No. 4333 of 2009 seeking to vacate the order of stay granted by this court on 26.06.2009. Section 8(1) of the Act, which deals with the power to refer parties to arbitration where there is an arbitration agreement, reads as follows: “…8. Power to refer parties to arbitration where 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 written statement on the substance of the dispute, refer the parties to arbitration…” A perusal of the above provision and more particularly the words not later than when submitting his first written statement appearing therein clearly indicate that the petition under Sec. 8(1) of the Act can be filed along with the written statement, but the same shall not be entertained if it is filed subsequent to the filing of the written statement. In the present case, it is stated that the application under Sec. 8(1) of the Act was filed along with the written statement. However, Sec. 8(1) of the Act does not contemplate the other relief sought for by the defendants namely seeking a direction to the respondent – plaintiff to file an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator. The said relief prayed for in I.A. No. 1498 of 2007 is independent of the relief of stay and, in fact, the said relief seeking direction to the plaintiff to file an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator is misconceived. If really, the defendants are interested in seeking reference to the arbitrator, nothing prevented them from filing the said application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator. The defendants cannot compel the plaintiff to seek such a reference by filing an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court, merely because the agreement contained a clause for reference to the arbitrator. It is well settled law that mere existence of an arbitration clause in the agreement does not bar the jurisdiction of the civil court. Seeking stay of all further proceedings by the defendants without simultaneously seeking reference to the arbitrator does not serve any purpose. The intended purpose of Sec. 8(1) of the Act is to enable the party who is interested to have the matter referred to arbitration, to seek stay of further proceedings in the suit, so that there is no hindrance for arbitration proceedings. The defendants have not so far filed any application seeking reference to the Arbitrator invoking the arbitration clause. They merely sought stay of all further proceedings in O.S. No. 1 of 2007, for no purpose. Inasmuch as the other relief prayed for by the defendants namely for a direction to the plaintiff to file an application before the Hon’ble the Chief Justice of Andhra Pradesh High Court for appointment of an arbitrator is held to be misconceived as it does not fit in within the ambit of Sec. 8(1) of the Act, it is held that grant of stay of all further proceedings in O.S. No. 1 of 2007 does not serve any purpose. Under the above circumstances, it is held that the impugned order dismissing the application in I.A. No. 1498 of 2007 filed by the defendants under Sec. 8(1) of the Act does not warrant interference. It is open to either of the parties to move appropriate application before the concerned authority seeking reference to the Arbitrator by invoking arbitration clause existing in the agreement. Under the above circumstances, it is held that the impugned order does not suffer from any illegality or material irregularity and does not warrant interference by this court in exercise of revisonal jurisdiction. In the result, the Civil Revision Petition is dismissed. Consequently, CRP MP No. 3819 of 2009 is dismissed and the interim stay granted on 26.06.2009 is vacated. CRP MP No.4333 of 2009 accordingly stands disposed of. No order as to costs. ____________________ Justice T.Meena Kumari __________________ Justice G.V.Seethapathy August 18, 2009 Copy within a week //BO// MAS.