1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION CIVIL REVISION APPLICATION NO.197 OF 2006 Prabhakar Waman Patil and others ..Applicants. Vs. Rakesh Kishanlal Jain and others ..Respondents. ... Shri Sachin Punde for the Applicants. Shri Nitin V. Gangal for Respondents 1 to 4. Shri G.A. Karmalkar i/b Mr. G.S. Hegade for Respondents 4 and 6. .... CORAM: N.V. DABHOLKAR, J. 25th July, 2008. P.C. : 1. The Revision Application under Section 115 of the Code of Civil Procedure impugns the order dated 6th October, 2006 passed by the Civil Judge, Senior Division, Panvel in Special Civil Suit No.351 of 2006. 2. Present Respondent Nos.1 to 4 filed Special Civil Suit No.351 of 2006 against the Applicants (original Defendants 1 to 6) for specific performance of the agreement dated 1st November, 2004. For the purpose of adjudication of the present Revision Application, I am not required to go into the details of the pleadings 2 in the suit. On 8th September, 2006 the Applicants / Defendants filed an application Exhibit 20, relying upon the provisions of Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, praying for framing of a preliminary issue as to the jurisdiction of the Court. It was the contention of the revision petitioners that the agreement upon which the suit was based, did contain arbitration clause and therefore, it was obligatory on the judicial authority to refer the parties to arbitration. The Applicants on the same day had also filed an application seeking time to file say and written statement. 3. Heard the respective counsel who have taken me through the impugned order. It appears that there is no controversy of existence of arbitration clause in the form of Clause 12 in the agreement which was the subject matter of the suit. In fact the Learned Trial Judge referred to couple of reported judgments and the ratio laid down by the Hon'ble Apex Court observing that when there is an agreement between the parties before the Civil Court containing arbitration clause, the Civil Court ought to refer dispute to the Arbitrator. Learned Judge rejected the application seeking directions to refer the parties to arbitrator on 3 totally different ground. He observed that Defendants 1 to 6 having filed an application seeking time to file say and written statement, this amounts to taking part in the proceedings and taking other steps in the suit proceedings. 4. Section 8 and more particularly sub section (1) of the Arbitration and Conciliation Act, 1996 reads thus : “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 statement on the substance of the dispute, refer the parties to arbitration.” 5. I have underlined the clause from the sub section for the purpose of emphasis and from the language of the impugned order, I gather that the Learned Trial Judge feels that the Defendant by filing an application for seeking time to file say and written statement has taken part in the progress of the dispute. In fact for the purpose the Learned Judge appears to have relied upon the observations of the Supreme Court to the effect that taking other steps in the suit proceedings connotes the idea of doing something in aid of the progress of the suit for submitting to 4 the jurisdiction of the court for the purpose of adjudication of the merits of the controversy in the suit. 6. In the discussion of the Learned Judge, I do not have the factual details in the matter before the Hon'ble the Apex Court. In the matter in hand, it appears that the Defendants not only filed an application seeking time to file say and written statement, but at the same time they had also filed an application requesting the Court to refer the parties to arbitration. It will be a too technical view to say that the application seeking time to file written statement was first in time or whether application for directions to refer the parties to arbitration was first in time. In fact both the applications were filed simultaneously. The Learned Trial Judge ought to have viewed the situation with practical approach. The Defendants had desired a reference to arbitration and in the alternative if the Trial Court was not pleased to uphold such a request, in that case the Defendants had prayed for time to file written statement. Otherwise also mere application for seeking time to file written statement, it is difficult for me to agree, can be termed as “submitting his first statement on the substance of the dispute”. Had the Defendants filed their written statement raising all the 5 contentions challenging the suit claim without filing an application for reference to arbitration, the bar created in sub section (1) of Section 8 could have come into play. I therefore feel that the Trial Court was in error in coming to a conclusion that the Defendants had made first statement on the substance of the dispute and therefore it arrived at a wrong conclusion not to make a reference to the arbitration. 7. The impugned order is therefore quashed and set aside; the application Exhibit 20 is allowed. The Trial Judge shall refer the parties to arbitration and taking into consideration the distinction between Section 34 of the Arbitration Act, 1940 and Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, there would be no need to keep the suit pending till the decision of the arbitration. 8. In the meanwhile, parties shall maintain status quo insofar as the suit property is concerned and the Defendants shall not create any third party interest or encumbrances upon the suit property. 6 The Revision Application is allowed in the above terms and disposed of. (N.V. DABHOLKAR, J.)