1. Heard Mr. J.F. Mehta, learned advocate appearing for the petitioner and Mr. Saurabh Mehta, learned advocate appearing for the respondents.

2. By way of present petition, the petitioner herein has challenged the order dated 16.12.2022 passed below Exh.34 by the City Civil Court, Ahmedabad. The respondent No.1 preferred application under Section 8 of the Arbitration and Conciliation Act, 1996 (for short 'the Act') in Civil Suit No.670 of 2022 preferred by the petitioner herein praying to the competent Court to refer the matter to the Arbitrator in view of Page 1 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined clause 17 of one Memorandum of Understanding (for short 'MOU') dated 25.08.2016 executed between the father of the petitioner, father of the respondent No.1 and respondent No.2 himself.

2.1 Being aggrieved by the impugned order dated 16.12.2022 passed by the Chamber Judge, Court No.21, City Civil Court, Ahmedabad, allowing the application below Exh.34 filed by the respondent No.1 - original defendants under Section 8 of the Act, the petitioner herein has approached this Court by filing the present petition seeking following reliefs:

3. The brief facts leading to the filing of the present petition read thus:

The petitioner did not submit reply to the said application preferred by the respondent - original defendants under Order 7 Rule 11 of the Code, the same being pure question of law but, orally argued that the MOU was only for the purpose of super structure and the division in the super structure thereon and the same has nothing to do with undivided share in land, whereon the super structure is constructed. The respondent No.1 thereafter preferred an application under Section 8 of the Act on 07.11.2022 urging the competent Court to refer the suit to the Arbitrator.

3.2 It is the case of the petitioner that the respondent No.1 having submitted to the jurisdiction of the competent Court by filing the written statement, the application under Section 8 of Page 3 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined the Act was not maintainable. The competent Court having considered the said application preferred by the respondent - original defendants under the provision of Section 8 of the Act, by order dated 16.12.2022 passed below Exh.34, the petitioner has approached this Court seeking quashing of the said order.

4. Mr. J.F. Mehta, learned advocate appearing for the petitioner, submitted that the competent Court committed an error in interpreting the scope of Section 8 of the Act and has failed to appreciate the meaning of First Statement on the defence in Section 8 of the Act. It was submitted that the competent Court failed to appreciate that mere contention in the written statement would not suffice to invoke Section 8 of the Act. Mr. Mehta, learned advocate, submitted that the respondent No.1- original defendant Nos.1.1 and 1.2 contended that they desire to prefer an application under Order 7 Rule 11 of the Code to reject the plaint and not only that, an application under Order 7 Rule 11 of the Code came to be preferred on the same day of filing of the written statement. In view of the aforesaid, an application under Section 8 of the Act came to be filed at a later point of time, which was not tenable in the eye of law. Mr. Mehta, learned advocate, Page 4 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined submitted that the said application under Section 8 of the Act is tenable only till the filing of the written statement. Placing reliance on the aforesaid submissions, Mr. Mehta, learned advocate appearing for the petitioner, submitted that the prayers, as prayed for by the petitioner, be allowed.

5. Mr. Saurabh Mehta, learned advocate appearing for the respondents, placed reliance on arbitration clause in the Memorandum of Understanding dated 25.08.2016 more particularly, clause 17 which provides for the parties to relegate themselves to the arbitration. Mr. Saurabh Mehta, learned advocate also relied on the expression "First Statement on the substance of the dispute contained in Section 8(1) of the Act and submitted that, the petitioner herein inconsonence with the aforesaid provision, at the first instance, raised the objections by filing the written statement that the parties are governed by arbitration clause and that, the parties be relegated to arbitration. Mr. Mehta, learned advocate, placed reliance on paragraph 32 of the written statement, duly filed by the respondents - original defendants dated 07.7.2022.

that, on the very same day, the respondent herein also filed an application under the provisions of Order 7 Rule 11 seeking rejection of the plaint on the ground of arbitration clause in accordance with the MOU. It was submitted that under Section 8(1) of the Act, specific objection is to be raised by the parties seeking arbitration at the first instance. The respondent herein raised the objections at the first instance in the written statement, filed by the respondents herein wherein, it was clearly stated that the parties be relegated to arbitration in view of clause 17 of the MOU. In view of the arbitration clause, the suit itself would not be maintainable. Placing reliance on paragraph 32 of the written statement, Mr. Mehta, learned advocate, submitted in paragraph 32 it was submitted that in view of the clause 17 of MOU entered into between the parties, parties be relegated to the arbitration and the Exh.5 application is required to be dismissed under Order 7 Rule 11 of the Code.

5.2 Mr. Saurabh Mehta, learned advocate appearing for the respondents, submitted that the respondents herein after filing of the written statement, filed an application below Exh.34 under Section 8 of the Act, which came to be allowed by the Page 6 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined competent Court considering the provisions of the Act therefore, this Court may not interfere with the order passed by the competent Court dated 16.12.2022.

6. Heard the learned advocates appearing for the respective parties. The facts being undisputed are that, the petitioner herein filed a Suit for partition being Civil Suit No.670 of 2022 and prayed for the reliefs, as referred to in paragraph 15 of the plaint, Annexure - C. The respondent - original defendants herein appeared and filed written statement in July, 2022, which is duly produced at Annexure - D wherein, the respondents herein in paragraph 32 stated that the parties herein are governed by the MOU entered into between the father of the petitioner, father of the respondent No.1 and respondent No.2 himself in the year 1986. Over and above the aforesaid, the respondents also submitted that the father of the petitioner, father of the respondent No.1 - original defendant no.1 and defendant no.2 and respondent No.2 also entered into MOU in the year 2016 and placed reliance on the clause 17 of the said MOU. Placing reliance on the said MOU, the respondents herein submitted that in the said written statement, it was contended that the Civil Suit and the Page 7 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined application below Exh.5 were not maintainable in view of the aforesaid MOU entered into between the parties where the parties would relegate themselves to arbitration and the Suit was required to be dismissed under Order 7 Rule 11 of the Code. The application under Order 7 Rule 11 also came to be filed by the respondents herein on the even date. The petitioner filed reply to the same and filed objections. 6.1 The respondents herein preferred an application below Exh.34 under Section 8 of the Act and prayed for a direction to refer the matter to the arbitration as the disputes between the parties are the subject matter which is to be adjudicated by way of arbitration only in accordance with the MOU. The same is duly produced at Annexure - A which came to be allowed by the competent Court. The operative part of the said order dated 16.12.2022 passed by the competent Court reads thus:

7. Further, the subject matter of the present dispute cannot be said to be non-arbitrable as the parties to the M.O.U had clearly spelled out the scope of the M.O.U and the mechanism for the dispute resolution in case if any dispute arises. Further, for my this standpoint, I want to refer to the judgment passed by the Hon'ble Supreme Court of India in the case of A. Ayyasamy vs. A. Paramasivam and Others reported in 2016 SCC ONLINE SC 1110, wherein the Hon'ble Apex Court had held in paragraph 25 as

-".....While dealing with such an issue in an application under Section 8 of the Act, the focus of the court has to be on the question as to whether jurisdiction of the court has been ousted instead of focusing on the issue as to whether the court has jurisdiction or not. It has to be kept in mind that insofar as the statutory scheme of the Act is concerned, it does not specifically exclude any category of cases as non-arbitrable. Such categories of non-arbitrable subjects are carved out by the courts, keeping in mind the principle of common law that certain disputes which are of public nature, etc. are not capable of adjudication and settlement by arbitration and for resolution of such disputes, courts i.e. public fora, are better suited than a private forum of arbitration. Therefore, the inquiry of the Court, while dealing with an application under Section 8 of the Act, should be on the aforesaid aspect viz. whether the nature of dispute is such that it cannot be referred to arbitration, even if there is an arbitration agreement between the parties...." Therefore in view of the aforesaid judgment there is no dispute that the present suit cannot be decided in arbitration.

8. In view of the discussion made hereinabove, I pass the following Order.

ORDER * The present application exh.34 filed by the defendant under section 8 of The Arbitration and Conciliation Act, 1996, is hereby, allowed.

* The present application is disposed off accordingly.

* No Order as to Costs."

7. Section 8 of the Arbitration and Conciliation Act, 1996 Page 9 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined reads thus:

"8. Power to refer parties to arbitration where there is an arbitration agreement.--

8. The petitioner herein in the written statement, at the first instance, submitted that the parties are governed by the arbitration clause no.14 in MOU dated 03.11.1986 and clause no.17 in MOU dated 25.08.2016. The Court below has considered both the MOUs and has held that the ancestors of the respective parties had agreed that in the event of difference of opinion, impasse, stalemate or misunderstanding that may arise between the parties or their heirs; under such circumstances, rather than approaching the Court, the same be settled by way of arbitration. The competent Court also considered that the MOUs meticulously dealt with the aspect of partition of the property, the usage of the property and it was also spelled out that the open space will fall within the share of Page 10 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined all the parties. It was considered by the competent Court that the dispute-in-question is with regard to the alleged illegal construction over the open space of the suit property and as per the MOUs, the open space was allotted to all the parties and therefore, any dispute with respect to the open space falls within the scope of arbitration as envisaged by the parties of the MOUs.

9. This Court has also considered the documents which are produced along with the petition i.e. MOU dated 25.08.2016. Clause - 17 of the said MOU, which reads thus: (true translation) "17. If any difference of opinion, impasse, or misunderstanding that may arise amongst three brothers or their heirs in respect of the above agreement, they have to resolve the same through arbitration instead of approaching the Court and it will be binding to all."

10. At this stage, it is apposite to refer to the ratio as laid down by the Hon'ble Supreme Court in case of M/s. Asian Avenues Pvt. Ltd. v. Syed Shoukat Hussain , reported in AIR 2023 SC 2185, wherein paragraphs 1, 2, 7, 8, and 9 read thus:

11. It is also apposite to refer to the ratio as laid down by the Hon'ble Delhi High Court in case of SPML Infra Ltd. vs. Page 12 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined Trisquare Switchgears Pvt. Ltd., reported in 2022 SCC Online Del. 1914, wherein paragraph 25 reads thus:

12. Considering the aforesaid position of law, the suit came to be filed by the petitioner herein being Civil Suit No.670 of 2022 on 25.05.2022. The respondents - original defendants appeared and filed written statement on 25.07.2022 wherein, at the first instance, objections came to be raised and it came to be contended by the respondents that the parties be relegated to arbitration in accordance with the arbitration clause, as referred above. An application under Order 7 Rule 11 came to be filed by the respondents on the same day. The respondents also preferred an application below Exh.34 on 13.09.2022 with a prayer to relegate the parties to the arbitration. The competent Court considered the same and allowed the said application.

13. Considered the provision of Section 8 of the Act, which Page 13 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined clearly provides that the party to the arbitration merely needs to insinuate the judicial authority about the arbitration clause before the filing of the first statement. Thereafter, the judicial authority has to compulsarily refer the parties to the arbitration. For invoking the arbitration clause, Section 8 of the Act provides a time limit and within what time limit, the parties need to intimate the judicial authority about the arbitration clause, the said intimation is described in the provision as "not later than the date of submitting his first statement on the substance of the dispute."

14. In the opinion of this Court, while filing the written statement, the respondents - original defendants contended that the parties be relegated to the arbitration in accordance with the arbitration clause. Therefore, it can be concluded that written statement would also be considered as the first statement on the substance of the dispute. Hence, application for arbitration under Section 8 of the Act by the respondents - original defendants at the time of filing the written statement would be maintainable. No interference is called for in the order dated 16.12.2022 passed by the competent Court by allowing the application below Exh.34 under Section 8 of the Page 14 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023 NEUTRAL CITATION C/SCA/4313/2023 ORDER DATED: 14/07/2023 undefined Act. The said order is passed considering the terms of the MOUs, which has also been considered by this Court.

15. In view of above, no interference is called for in the order passed by the Chamber Judge, Court No.21, City Civil Court, Ahmedabad, dated 16.12.2022.

16. The petition fails and the same is hereby dismissed.

(VAIBHAVI D. NANAVATI,J) NEHA Page 15 of 15 Downloaded on : Sat Sep 16 21:35:46 IST 2023