JUDGMENT C.L. Pangarkar, J.
Page 0535
1. This review application is filed by the applicant in Civil revision Application No. 110 of 2001.
2. The facts giving rise to this application are as under The applicant/plaintiff had entered into an agreement with the Non-applicants/defendants for collection of Tendu leaves. In pursuance of the same, the applicant had deposited Rs. 22,20,000/ with the non-applicants/defendants. The non-applicants/defendants were to issue a transit pass for collection of Tendu leaves but failed to do it till 18/9/1993. Even though the installments were paid, the pass was not issued. Ultimately, the transit pass was issued for beat No. 23, 24 and others. Due to inordinate delay in issuing the pass, the applicants/plaintiffs suffered damages. The applicants sought to recover these damages by filing civil suit for recovery of Rs. 71,44,984/-.
3. In this suit, the non-applicants had put-in their appearance and had filed the written statement on 5/12/1997 vide Exh.16. The learned Civil Judge framed issues on 2/1/1998. Thereafter, an application for amendment of the written statement was filed and plea of existence of arbitration agreement was raised. The plea as regards maintenability of the suit, in view of the provisions of Section 18 of the Maharashtra Minor Forest Produce Act, was also raised. In view of this, an issue was framed as to Page 0536 whether the suit is tenable in Law. The issue was answered in the affirmative and suit was held to be tenable. This order was passed on 21/11/2000. On the same day, the learned judge of the trial court passed an order referring the dispute to the Arbitration without there being any application. This order was challenged in this Court by way of revision in Civil Revision Application No. 110 of 2001. This Court, after having heard the respective parties, dismissed the revision. Hence, this review.
4. The learned Counsel for the applicants/plaintiffs contends that the order as passed by this Court is not correct, since the statutory provisions were totally ignored. He submits that the order would show that the submissions, as were made before the court, were not even dealt with, which resulted into miscarriage of justice. Shri S.R. Deshpande, the learned Counsel for the non-applicants/ defendants, on the other hand, submitted that this cannot be a ground for the review. Shri Bhide, the learned Counsel for the applicants/plaintiff's, contention is that non-consideration of the arguments and non-appreciation of the facts on record should be treated as mistake apparent on the face of the record. The Apex court in (M.M. Thomas v. State of Kerala) has made the following observations:
14. The High court as a court of record, as envisaged in Article 215 of the Constitution, must have inherent powers to correct the record. As court of record envelops all such powers whose acts and proceedings are to be enrolled in a perpetual memorial and testimony. A court of record is undoubtedly a superior court which is itself competent to determine the scope of its jurisdiction. The High Court, as a court of record, has a duty to itself to keep all its records correctly and in accordance with law. Hence, if any apparent error is noticed by the High Court in respect of any orders passed by it the High Court has not only power, but a duty to correct it. The High Court's power in that regard is plenary. In Naresh Shridhar Mirajkar v. State of Maharashtra a nine-Judge Bench of this Court has recognised the aforesaid superior status of the High Court as a court of plenary jurisdiction being a court of record.
17. If such power of correcting its own record is denied to the High Court, when it notices the apparent error its consequence is that the superior status of the High Court will dwindle down. Therefore, it is only proper to think that the plenary powers of the High Court would include the power of review relating to errors apparent on the face of the record.
5. In yet another case reported in 2003(12) SCC 339 (Eastern Coalfields v. Joscon) , the Apex court ruled that the party had a right to file a review application when the court ignores some of the contentions raised before it. In the case at hand, it appears that the learned Counsel for the applicants did raise a plea that the order is not correct as no application was filed under Section 8 of the Arbitration Act. This Court while dealing with the submission has simply observed that the court has examined the impugned order and the reference order is correct. Apparently, therefore, the argument, Page 0537 as was raised, was not dealt with at all. It was contended that the court had also ignored the other argument that the defendant by filing written statement had submitted to the jurisdiction of the court and hence no reference could be made. I am in agreement with the argument of the learned Counsel that the argument though advanced, it was not dealt with. The review, therefore to my mind, is quite maintainable.
6. This takes me to consider if there is any substance in the two arguments, that were advanced and are now being advanced.
7. Section 8 of the Arbitration Act 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.
(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.
8. Section is very clear. The emphasis has to be laid on words "if a party so applies". These words make it very clear that a party seeking a reference to arbitration has to submit a written application. This Court in (Garden Finance Ltd. v. Prakash Industries Ltd.) observed as follows:
One of the aspects to be considerer by the Court while considering the application under Section 8(1) of the Arbitration and Conciliation Act, 1996 for referring the parties to arbitration is that the subject matter of the action is same as the subject matter of the arbitration agreement. This requirement will involve reference, to the contents of the plaint as also to be arbitration agreement and the manner in which the applicant wants the Court to read the averements made in the plaint as also the recital in the arbitration agreement. 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.
9. Thus, it is mandatory that a party, seeking reference has to make an application in writing. In the case at hand, no such application under Section 8 of the Arbitration Act was ever made. Apparently therefore court could not have made a reference and it did not get jurisdiction to make such a reference.
10. Shri Bhide, the learned Counsel for the applicants/plaintiffs submitted that the non-applicants/defendants had filed a written statement in the suit and even issues were struck and matter was fixed for recording of Page 0538 evidence, and it is at that stage that the court on its own passed an order of reference. Any party who seeks to make a reference to arbitration has to apply to the court before filing of the written statement i.e., in the words of that Section, the First Statement. Once a party submits a first statement on merits, it can be assumed that the party has submitted to the jurisdiction of the court and then the court ceases to have jurisdiction to refer the dispute to arbitration. Here, there was complete submission to the jurisdiction of the court. The written statement was filed on 5/12/1997. Issues were framed on 2/1/1998 and even amendment to the written statement was sought in 1999. In the initial written statement, there was no whisper to the existence of the arbitration agreement. It is only after the amendment that such a pleas was raised. All this conduct of the non-applicants/defendants suggest complete submission to the jurisdiction of the court. The trial court, for this reason also, had no right to refer the dispute to arbitration. Reliance in this regard can be placed on a case (Rashtriya Ispat Nigam Ltd v. Verma Transport Co.). I, therefore, find that for the non-consideration of these submissions made before this Court, the review application has to be allowed. The order passed by this Court on 10/3/2002 dismissing the revision is, therefore, set aside. The review is allowed. The order of the trial court making a reference to arbitration is quashed and set aside. The suit shall, therefore, stand restored to file. The trial court shall proceed to decide the suit on merits.