M/S Jonson Rubber Ind Ltd. vs M/S Shree Conveyor System Pvt. ...
2014 Latest Caselaw 5201 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+
             C.M.(M) No.960/2013 & C.M.No.14494/2013 (Stay)

%                                                  16th October, 2014

M/S JONSON RUBBER IND LTD.                     ......Petitioner
                  Through: Mr.Jeevesh, Advocate.

                         VERSUS

M/S SHREE CONVEYOR SYSTEM PVT. LTD.         ...... Respondent

Through: Mr.Umesh Mishra, Advocate.

CORAM:

HON'BLE MR. JUSTICE VALMIKI J.MEHTA

To be referred to the Reporter or not? Yes

VALMIKI J. MEHTA, J (ORAL)

1. Challenge by means of this petition under Article 227 of the

Constitution of India is to the impugned order dated 03.7.2013 of the trial

court dismissing an application under Section 8 of the Arbitration and

Conciliation Act, 1996 (hereinafter referred to as 'the Act'). The application

under Section 8 of the Act had been filed in the suit for recovery of

Rs.6,72,675/- along with interest @ 18% per annum pendente lite and future.

2. The trial court has dismissed the application because it was found that

the petitioner/defendant had made an application to the court for supply of

the documents in order to file the written statement, and which act of filing

of the application as per the trial court amounts to an act of submitting to the

jurisdiction of the court.

3. The petitioner/defendant after service in the suit filed before the trial

court an application directing the respondent/plaintiff to supply Annexures

P-1 to P-9 of the plaint, and which were required as stated in para 3 of the

application for filing a detailed reply/written statement. These paras 2 and 3

read as under:-

" 2. That it is pertinent to note that the plaintiff has relied upon number of documents which are stated to be annexed with the plaint from Annexure P-1 to P-9, however, the defendant has not received any copy of the said documents i.e. Annexure P-1 to P-9.

3. That in the absence of the abovesaid documents upon which the plaintiff is relying the defendant is unable to prepare/file his detailed reply/written statement and as such a necessary direction is required to be given to the plaintiff to supply the complete paper book along with the plaint to the defendant so that the defendant may file the detailed reply/written statement."

4. The trial court in view of the specific language of para 3 as aforesaid

in the application filed by the petitioner/defendant has relied upon the

observations made in the judgment of the Supreme Court in the case of Booz

Allen & Hamilton Inc. Vs. SBI Home Finance Limited & Ors. (2011) 5

SCC 532, and which hold that filing of any application showing submission

to the jurisdiction of the court will amount to waiver of the right of such a

party/defendant to seek arbitration. The relevant paras of this judgment are

paras 25 & 29, and which read as under:-

" 25. Not only filing of the written statement in a suit, but filing of any statement, application, affidavit by a defendant prior to the filing of the written statement will be construed as "submission of a statement on the substance of the dispute", if by filing such statement/application/affidavit, the defendant shows his intention to submit himself to the jurisdiction of the court and waives his right to seek reference to arbitration. But filing of a reply by a defendant, to an application for temporary injunction/attachment before judgment/appointment of Receiver, cannot be considered as submission of a statement on the substance of the dispute, as that is done to avoid an interim order being made against him.

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29. Though Section 8 does not prescribe any time-limit for filing an application under that section, and only states that the application under Section 8 of the Act should be filed before submission of the first statement on the substance of the dispute, the scheme of the Act and the provisions of the section clearly indicate that the application thereunder should be made at the earliest. Obviously, a party who willingly participates in the proceedings in the suit and subjects himself to the jurisdiction of the court cannot subsequently turn around and say that the parties should be referred to arbitration in view of the existence of an arbitration agreement. Whether a party has waived his right to seek arbitration and subjected himself to the jurisdiction of the court, depends upon the conduct of such party in the suit." (underlining is mine)

5. I completely agree with the conclusions of the trial court in view of

the categorical language of the Supreme Court in Booz Allen's case (supra)

taken with the language of para nos. 2 & 3 of the application filed by the

petitioner/defendant quoted above, inasmuch as, the effect of the language in

para 3 of the application amounts to "submitting to the jurisdiction of the

court" because documents are sought for filing of the written statement.

Thus, as per the language of paras 25 & 29 in Booz Allen's case (supra),

filing of the application seeking documents to file the written statement

amounts to submission to the jurisdiction of the court and waiver of the right

to seek resolution of disputes through arbitration.

6. Learned counsel for the petitioner relied upon the judgment of the

Supreme Court in the case of Rashtriya Ispat Nigam Ltd. & Anr. Vs. Verma

Transport Co. (2006) 7 SCC 275 to argue that filing of any application will

not amount to submission to the jurisdiction of the court and reliance was

placed upon para nos. 36 & 38 of the judgment, and which paras read as

under:-

" 36. The expression "first statement on the substance of the dispute" contained in Section 8(1) of the 1996 Act must be contradistinguished with the expression "written statement". It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, needed is a finding on the part of the

judicial authority that the party has waived its right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the dispute, in our opinion, the party cannot be said to have waived its right or acquiesced itself to the jurisdiction of the court. What is, therefore, material is as to whether the petitioner has filed his first statement on the substance of the dispute or not, if not, his application under Section 8 of the 1996 Act, may not be held wholly unmaintainable. We would deal with this question in some detail, a letter later."

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38. In Janki Saran Kailash Chandra an application for time to file written statement was considered to be a step in the proceedings. We have noticed hereinbefore the respective scope of Section 34 of the 1940 Act vis-a-vis the scope of Section 8 of the 1996 Act. In view of the changes brought about by the 1996 Act, we are of the opinion that what is necessary is disclosure of the entire substance in the main proceeding itself and not taking part in the supplemental proceeding."

7. In my opinion, but for the categorical ratio of the judgment in the case

of Booz Allen (supra), this Court would have been inclined to hold that

filing of any application would not amount to submission to the jurisdiction

of the court, however, once the ratio of Booz Allen's case (supra) which

specifically holds that filing of any application can amount to submitting to

the jurisdiction of the court, and considering the categorical language in para

3 of the application filed by the petitioner/defendant for seeking annexures

to the plaint for filing of the written statement, the filing of such an

application clearly amounts to submitting to the jurisdiction of the court.

8. I may note that the present case is not a case where the

petitioner/defendant had only received summons of the suit without a copy

of the plaint. It is an admitted position even before this Court that the

petitioner/defendant had received the copy of the plaint, and therefore the

petitioner/defendant very much knew what was the dispute in the suit. Also,

it is not the case of the petitioner/defendant that it did not have with it the

purchase order in question dated 19.5.2010 which contained the arbitration

clause. Therefore, having a copy of the plaint and also having a copy of the

purchase order containing the arbitration clause, and yet filing an application

for seeking annexures to the plaint for filing of the written statement, in my

opinion in view of the ratio of the judgment in Booz Allen's case (supra),

the filing of the application by the plaintiff/defendant clearly amounts to

submission to the jurisdiction of the civil court.

9. I would like to clarify that the present judgment has been passed in the

peculiar facts of the present case where there is a specific averment in the

application which was filed by the petitioner/defendant that

documents/annexures are sought for filing of the written statement by the

petitioner ie written statement is to be filed on being supplied the annexures

to the plaint. Also, it may be relevant to note that though in the application

filed by the petitioner/defendant though the expression 'reply/written

statement' is used in para 3 of the application, however, it is conceded

before me that there was no interim application filed by the

respondent/plaintiff in the nature of supplemental proceeding under Section

94 of the Code of Civil Procedure, 1908 (CPC) and to which any reply was

to be filed by the petitioner/defendant, and therefore I do not agree with the

contention on behalf of the petitioner/defendant that the expression

'reply/written statement' should be taken as having reference only to any

interim application.

10. In view of the above, there is no merit in this petition, and the same is

therefore dismissed, leaving the parties to bear their own costs.

VALMIKI J. MEHTA, J OCTOBER 16, 2014 KA