$~7 * IN THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on 04.07.2012 + RFA 256/2012 SHOBHRAJ MOTWANI … Appellant Versus BMR LEASE & CREDIT LTD. …Respondent
Advocates who appeared in this case:
For the Appellant : Mr. Rajat Aneja For the Respondent : None.
CORAM:
HON'BLE MR. JUSTICE V.K.JAIN
JUDGMENT
HON'BLE MR. JUSTICE V.K.JAIN(ORAL)
RFA 256/2012 & CM 11001/2012(stay)
1. This appeal is directed against the order dated 29.02.2012 whereby an application filed by the appellant for grant of leave to contest was dismissed and consequently a decree for recovery of Rs.11,27,862/- with costs as well as pendente lite and future interest at the rate of 10% per annum was passed against the appellant.
2. A suit for recovery of Rs.11,27,862/- under the provisions of Order 37 of the Code of Civil Procedure was filed by the respondent against the appellant. The respondent which is a financial institution had granted a loan of Rs.7.5 lakhs to the appellant on 28.12.2006. The loan was to be re-paid in equated monthly instalment, along with interest at the rate of 24% per annum. Alleging default in repayment, the abovereferred suit was filed by the respondent.
3. The impugned judgment and decree has been assailed on these grounds. The first ground taken by the appellant is that there was an arbitration clause between the parties and, therefore, the matter was required to be referred to the Arbitrator for adjudication. The second plea which was also taken in the application for leave to contest is that the entire principal sum claimed in the suit had been paid to the respondent in cash and the third plea is that the claim is barred by limitation.
4. As regards the first plea, a perusal of the impugned judgment would show that in the application for leave to contest, no such plea was taken by the appellant. Section 8 of the Arbitration & Conciliation Act, to the extent it is relevant provides that 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.
5. A careful analysis of Section 8 of Arbitration and Conciliation Act, 1996 would show that the following conditions are required to be fulfilled before the Court can refer the matter to arbitration;
(a) the dispute between the parties should be subject matter of an arbitration agreement;
(b) one of the parties to the suit should apply for referring the parties to arbitration;
(c) the application should be filed on or before submitting first statement on the substance of the dispute and;
(d) the application should be accompanied by the original arbitration agreement or its certified copy.
6. The application for leave to contest being the first statement on the substance of the dispute between the parties, it was incumbent upon the applicant to make a request either in the application for leave to contest or by way of a separate application under Section 8 of Arbitration & Conciliation Act, to refer to parties to arbitration. No such plea having been taken either by way of an independent application or in the application for leave to contest the suit, it is not open to the appellant to say that the dispute between the parties should be referred to arbitration.
7. If the Court accepts the contention that an application under Section 8 of the Act can be filed even after the first statement on substance of the dispute between the parties has already been filed, this would not only be contrary to the express provisions of law but, would also defeat the very purpose behind stipulating that such an application needs to be filed not later than submitting the first statement on the substance of the dispute. If such an application is entertained after filing of the first statement, it would be possible for a party to the suit to first allow the trial to proceed by not filing the application by the stage stipulated in the Act and then come to the Court at a much later stage when the trial is substantially complete and seek reference of the dispute to arbitration.
8. As regards limitation, it has been averred in para 4 of the plaint that the appellant had last paid, to the respondent, Rs.45,000/- vide cheque No. 841416. Though the learned counsel for the appellant verbally stated that no payment in writing was made prior to 18.11.2010, he fairly conceded that no such plea had been taken in the application for leave to contest. Since the respondent had alleged that the last payment was made by way of cheque on 18.11.2010 and a specific reference to that payment was made in the plaint, it was incumbent upon the appellant in case no payment in writing was made within three years from the date of drawal of loan to specifically plead so in his application for leave to contest the suit. During the course of arguments, I specifically asked the learned counsel for the appellant as to whether the appellant was ready to file an affidavit stating that no payment in writing was made by the appellant within three years from the drawal of loan. The learned counsel for the appellant, however, expressed his inability to file any such application. I also find that no plea had been taken in the application for leave to contest claiming the suit was barred by limitation. Therefore, I find no merit in the second ground taken by the appellant.
9. As regards the alleged cash payments, I find that in the application for leave to defend, no particulars of the alleged cash payment have been pleaded. In case any cash payment was made by the appellant, he ought to have given necessary particulars such as the date and amount of the payment alleged to have been made in cash. In the absence of any particulars of the alleged cash payment, it is not possible for the Court to investigate into such allegations, even if the matter goes for trial. In my view, a bald allegation of cash payment without giving any details of the alleged payments, does not raise a triable issue and cannot be said to be a plausible defence.
10. For the reasons stated hereinabove, I find no merit in the contentions of the learned counsel for the appellant. During the course of arguments, the learned counsel for the appellant stated that a sum of Rs.60,000/- was made by the appellant, on 14.06.2011. Adjustment for that amount would be given to the appellant while calculating the decretal amount.
11. For the reasons stated hereinabove, the appeal is dismissed. There shall be no order as to costs. TCR be sent back.
V.K.JAIN, J JULY 04, 2012 ‘sn’