JUDGMENT P. Krishna, J.
1. Three persons namely Bal Kishan Bansal, Devki Nandan Bansal and Pramit Bansal formed a partnership under the name and style of M/s Bhagwati Glass Enterprises with the object of carrying on the business for sale and manufacturing of glass and bangles and other glass products. The said partnership was the reduced in writing on the 1st day of April 1995. The partnership deed contains clause No. 13 which provide that in case of any dispute among the parties, the matter first shall be referred for arbitration and if such appointment is not possible, party or parties shall have right to recourse at the court of law.
2. With the passage of time, some dispute arose among the members of the aforesaid partnership, which led the filing of suit No. 266 of 2003 by Pramit Bansal and Devki Nandan Bansal (opposite parties in the present revision) against Bal Kishan Bansal (applicant), for permanent injunction restraining the defendant from interfering in the running and working and necessary affairs of the aforesaid firm in any manner whatsoever and also using stock of the said firm. An application paper No. 24-C was filed on behalf of the defendant, who is applicant in civil revision, to dismiss the suit as the same is barred under the provisions of Arbitration and Conciliation Act 1996 in view of arbitration clause between the parties. The said application has been rejected by the court below by order under revision. Aggrieved against the aforesaid order the present revision has been filed.
3. Heard Shri M.M.D. Agrawal and Shri Pradeep Kumar learned Counsel for the applicant and Shri S.N. Verma Senior Advocate assisted by Shri R.K. Garg for opposite parties.
4. Learned Counsel for the applicant submitted that in view of fact that partnership agreement contains an arbitration clause, therefore, jurisdiction of civil court is barred and court below committed illegality in rejecting the said application. Elaborating the arguments it was submitted that in view of Section 8 of Arbitration and Conciliation Act, 1996 (hereinafter called as the Act), it was incumbent upon Trial Court to dismiss the suit being not maintainable. In contra, learned Counsel for the opposite parties submitted that the civil court has plenary jurisdiction. Arbitration and Conciliation Act 1996 does not bar jurisdiction of civil court.
5. Before proceeding further it is desirable to reproduce Section 8 of Arbitration and Conciliation Act, 1996. The section reads as follows. -
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 mailer 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 arbitration award made.
(1) Close reading of Sub-section (1) of section 8 clearly shows that it has been couched in a mandatory form as it has used word 'shall'. It envisages that judicial authority before whom the matter is pending which is subject of an Arbitration Agreement shall refer the dispute to arbitration, if a party so applies not later than when submitting his first statement on the substance of dispute.
6. The Apex Court in the case of P. Anand Gajapathi Raju and Ors. v. P.V.G. Raju (died) and Ors. AIR 2000 Supreme Court 1886 on analysis of Section 8 of the Act has come to the conclusion that following four conditions are required to be satisfied before Court can exercise of powers under section 8(1) & 8(2). They are -
(1) There is an arbitration agreement; (2) a party to the agreement brings an action in the Court against the other party; (3) subject matter of the action is the same as the subject matter of the arbitration agreement; (4) the other party moves the Court for referring the parties to arbitration before it submits his first statement on the substance of the dispute. This last provision creates a right in the person bringing the action to have the dispute adjudicated by Court, once the other party has submitted his first statement of defence.
7. In the case in hand, the controversy raised by the learned Counsel for the opposite party is that the condition No. 4, out of the aforesaid conditions is wanting.
8. Sri S.N. Verma learned Senior counsel invited attention of the Court towards contents and prayer as contained in the application purported to have been filed under Section 8 of the Act and submitted that in the absence of any request on behalf of defendant applicant to refer dispute to arbitration, court below was justified in not granting the desired relief to the present applicant. In other words, he submits that there was no 'application' within the meaning of Sub-section (2) of Section 8 of the Act. Elaborating arguments, it was submitted that the applicant did not apply for arbitration under Section 8(1) of the Act. To appreciate the above arguments, it is desirable to look into the contents of the application filed by the applicant (defendant) in the suit, to find out as to whether the said application fulfills the requirement and ingredients of Section 8(1) of the Act. In the earlier part of the said application the fact that a partnership firm was formed is stated. The entire application is reproduce below: -
In case of disputes, doubt of difference arising between partners, the matter shall he referred to one or more than one Arbitrators, to be appointed with the mutual of all the parties and Award given by him them shall be binding on all parties.
In the above circumstances the above suit is barred by the provisions of the Arbitration and Conciliation Act.
In the above circumstances the suit is not legally maintainable and the Hon'ble Court has no jurisdiction to entertain or try the suit.
It is therefore prayed that the Hon'ble Court may kindly be pleased to dismiss the suit.
Dt. 28.11.03 Defendant.
9. It is axiomatic that aforesaid application is short of requirements and does not fulfill the ingredients of the aforesaid Section 8(1) and 8(2) of the Act. Defendant/Applicant has not expressed his desire to refer the dispute to arbitration. There should have been an expression of desire on his part to refer the matter to Arbitration. The application on the face of it cannot be termed as an application under Section 8 of the Act. The requirement of Sub-section (1) of Section 8 is that the party first should apply for enforcement of arbitration clause and also he should so apply with promptitude not later than when submitting his first statement. Words 'so applies' and 'not later than' do show that there should be an intention and willingness and readiness on the part of the party to invoke Arbitration Clause, to move in the matter quickly with speed and express his intention to invoke Arbitration Clause without any delay.
10. The dictionary meaning of word 'apply' as contained in Webster's Encyclopedic Unabridged Dictionary of the English language is as follows;-
1 to make use of as relevant suitable, or pertinent: to apply a theory to a problem. 2 to put to use. esp. for a particular purpose: to apply pressure: to apply pressure to open the door. 3. to bring into action: use :employ: They know where to apply their workers. He applied the brakes and skidded to a stop. 4. to use for or assign to specific purpose: He applied a portion of his salary each week to savings 5. to put into effect; they applied the rules to new members only. 6. to place in contact with: lay or spread on: to apply point to a wall: to apply a bandage to a wound. 7... 8... 9... 10... 11... 12...
11. The dictionary meaning of word "apply" as contained in Compact Oxford Reference Dictionary is as follows: -
1. to make a formal request for something he applied for a job as a carpentar. 2. bring into operation or use. 3. he relevant. 4 put (a substance) on a surface. 5. (Apply one self) put all one's efforts into a task-origin latin applicare 'fold, fasten to'.
12. In sub section (1) of Section 8, words used are 'so applies' and these words will draw colour from the words from the subject following it.
13. In Law Laxicon by P Ramamnatha Aiyar, word 'so' means in this manner or degree. "So COMPLETED" or "so ALTERED" imports the doing of the thing in the manner and so as to satisfy the requirements previously prescribed (per SMITH, J., G.Q. Ry v. Halesowen Ry. 52 LJQB 479).
14. The words 'so apply' as employed in Sub-section (1) of Section 8 has to be read harmoniously with the word 'application' in Sub-section (2) of Section 8 of the Act.
15. In the case of Shaik Saidulu @ Saidan v. Chukka Yesu Ratnam and Ors. , the Apex Court has reproduced dictionary meaning of the word "application" which is as follows: -
The dictionary meaning of the word 'application 'is: "(1) a formal request to an authority, (2) the action of putting something into operation, practical use or relevance, (3) the action of applying something to a surface, (4) sustained effort, (5) computing a program or piece of software designed to fulfil a particular purpose. " The word "application" could be understood in a generic sense as a prayer made to an authority for some relief to set aside an order of another authority.
16. The Apex Court in Prem Raj v. Ram Charan observed that the plaint, which makes a request to the court, is an application. However, written statement was held not to be an application because it does not include any request to the court.
17. In P. Philip v. The Director of Enforcement, new Delhi and Anr. AIR 1976 SC 1185 it was held, the word "application" is synonymous with the term "petition" which means a written statement or material facts, requesting the Court to grant the reliefer remedy based on those facts. It is a peculiar mode of seeking redress recognized by law.
18. From the above, it is easy to conclude that "application" means a written statement or material facts, requesting the Court to grant a relief or remedy based on those facts.
19. In the application, giving rise to the present revision, there was no request to refer the matter to the arbitration as per arbitration clause. A prayer "to dismiss the suit", in view of the arbitration clause, would not satisfy the fourth requirement of Section 8(1) of the Act, as mentioned by the Apex Court in the case of P. Anand Gajapathi Raju (Supra)
20. Learned Counsel for the applicant could not show any provision either under the Act or elsewhere, barring a suit in view of existence of Arbitration Clause between the parties of a suit. However, strong reliance was placed upon the judgment of the Apex Court in Hindustan Petroleum Corporation Ltd. v. Pinkcitv Midway Petroleums 2003 (SC)503. In this case, it has been pointed out by the Apex Court that language of Section 8 of the Act is peremptorily nature. Therefore, in case where there is Arbitration Clause in an Agreement, it is obligatory for court to refer the parties for arbitration in terms of there Arbitration Agreement and nothing remains to be decided in the original suit after such application is made except to refer the dispute to arbitrator. Aforesaid observations prima facie supports the contention of the applicant, at first sight but on going deeper it is clear that the aforesaid observations were made in a different factual background. In that case, there was an Arbitration Clause and the matter was not referred to arbitration by the courts below by misconstruing the Arbitration Clause on the ground that the alleged dispute was not covered under the Arbitration Clause. From para 8 of the report it is clear that in that suit, the applicant had filed an application "praying for referring the dispute pending before Civil Court to the Arbitrator as part of Clause 40 of the dealership agreement dated 26th March 1997". The applicant had also enclosed a copy of the agreement. It was disputed that the dispute was covered by the arbitration clause.
21. Coming to the facts of the present case, it is clear that no prayer for referring the dispute to the arbitration was made by the present applicant in the application, already reproduced above. This makes the judgment of the Apex Court distinguishable on facts.
22. On the other hand, learned senior counsel for opposite party has placed reliance upon the judgments of Apex Court in the case of State of Uttar Pradesh and Anr. v. Janki Saran Kailash Chandra and Anr. where in the Apex Court has made the following observations: -
It is however, to be clearly understood that the mere existence of cm arbitration clause in an agreement does not by itself operate as a bar to a suit in the Court. It does not by itself impose any obligation on the Court to stay the suit or to give any opportunity to the defendant to consider the question of enforcing the arbitration agreement. The right to institute a suit in some Court is conferred, on a person having a grievance of a civil nature, under the general law. It is a fundamental principle of law that where there is a right there is a remedy. Section 9 of the Code of Civil Procedure confers this general right of suit on aggrieved person except where the cognizance of the suit is barred either expressly or impliedly. A party seeking to curtail this general right of suit has to discharge the onus of establishing his right to do so and the law curtailing such general right has to be strictly complied with. To enable a defendant to obtain an order staying the suit, apart from other conditions mentioned in Section 34 of the Arbitration Act. he is required to present his application praying for stay before filing his written statement or taking any other step in the suit proceedings. In the present case the written statement was indisputably not filed before the application for stay was presented.
23. In view of the above discussion, I find no merit in the revision. The revision is devoid of substance and it is dismissed accordingly. No order as to costs.