Tuesday, 6 November 2018

Whether court can refer dispute to arbitration even if application for reference is made after date of submission of written statement?

 As to the next contention raised by learned counsel for Respondent Nos. 1 and 2, which was, admittedly, not taken up before the Trial Court, pertains to the application under Section 8 of the Arbitration Act, not being filed before the Trial Court within the prescribed time. In the first place, it is submitted that, in view of the amendment made to Section 8 of the Arbitration Act, w.e.f. 23rd October 2015, by Act No. 3 of 2016, such application for reference to arbitration has to be made, not later than the date of submitting the first written statement on the substance of dispute by the Defendants.

18. Reliance is placed by learned counsel for Respondent Nos. 1 and 2 on the decision of Delhi High Court in the case of Krishan Radhu v. The Emmar MGF Construction Pvt. Ltd., MANU/DE/3422/2016 : 2016 Supreme(Del) 4484, wherein this relevant clause was interpreted to mean that, after the amendment of Section 8 of the Arbitration Act, such application for reference to arbitration cannot be entertained, once the period prescribed for filing of the written statement has expired. It is submitted that, in this decision of Delhi High Court, it was held that, as per the earlier Section 8(1) of the Arbitration Act, prior to amendment, the party was permitted to apply for reference to arbitration, even while submitting the reply or written statement. However, now such application for reference has to be made within the time stipulated for filing of written statement. In the present case, therefore, as the application is made after the time stipulated for filing of written statement has expired, such application cannot be allowed.

19. However, in my considered opinion, this Judgment of Delhi High Court cannot be made applicable to the facts of the present case, as the said case, particularly, pertains to the commercial dispute. In respect of commercial dispute, as observed in this Judgment, in view of amendment to Order 8 Rule 1 of CPC, in the year 2015, the period of 120 days is stipulated for filing of the written statement and such period, as observed in this authority, cannot be extended. Therefore, the discretion, which the Court has in the Suits, other than commercial disputes, of extension of this period of 90 days also for filing of written statement, is not at all available in the commercial disputes. In that view of the matter, it was held that, the application for reference to the 'Arbitrator', if not made in the time stipulated for filing of written statement, it cannot be entertained.

20. This is an ordinary Suit, to which the provisions of commercial disputes are not applicable and hence, in this Suit, the Court has discretion to extend the time stipulated for filing of written statement, as held by the Hon'ble Supreme Court in number of its decisions that, the provisions of Order 8 Rule 1 of CPC are not of mandatory nature but of a directory nature. Hence, the contention raised by learned counsel for Respondent Nos. 1 and 2 in this respect cannot be accepted.

IN THE HIGH COURT OF BOMBAY

Civil Writ Petition (Stamp) No. 35221 of 2017

Decided On: 20.03.2018

 Suman Baburao Thapa Vs.  Jigar K. Mehta and Ors.


Hon'ble Judges/Coram:
Dr. Shalini Phansalkar Joshi, J.


Citation: 2018(5) MHLJ 260.
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