M K MADHIVADANAN Vs. R SAMARASAM

JUDGEMENT

(1.) THE defendant in O. S. No. 4083 of 2005 on the file of XIV Assistant Judge, City Civil Court, Chennai is the revision petitioner. The said suit was filed by the respondent against the petitioner herein for recovery of sum of Rs. 84,800/- together with interest. Pending suit, the petitioner herein has filed I. A. No. 23828 of 2005 in O. S. No. 4083 of 2005 under Section 8 (1) of the Arbitration and Conciliation Act, 1996 to refer the parties to arbitration and to dismiss the suit. The said application was dismissed by the court below on 18. 04. 2006, hence, the present revision petition has been filed.

(2.) THE learned counsel appearing for the petitioner submitted that the court below failed to note that under Sections 5 and 8 of the Arbitration and Conciliation Act, 1996, the suit itself is barred and it ought to have referred the dispute to arbitration; that the court below went wrong in holding that the present dispute is with regard to money and it failed to see that the alleged consideration has come in pursuance of the agreement where arbitration clause is provided; that when any dispute /misunderstanding subsequently arise between the parties, the same should have been tried by arbitrator only as the Civil Court's jurisdiction is ousted, which was not properly considered by the court below. In support of this contention, the learned counsel for the petitioner relied on the below mentioned decisions:-

(3.) THE learned counsel appearing for the respondent submitted that the petitioner and the respondent entered into an agreement of sale dated 16. 06. 2003 under which the petitioner agreed to sell the suit property at Valasaravakkam for Rs. 5 lakhs and thereafter, the petitioner paid Rs. 1 lakh towards advance and agreed to pay the balance of Rs. 4 lakhs within six months, indeed he was ready to pay the said amount. The petitioner had shelved the scheme and no chance of revival. The respondent has demanded to refund the said amount of Rs. 1 lakhs and the petitioner agreed for the same and paid only Rs. 20,000/- and promised to pay the balance with interest in five months. Even after the said period, the petitioner has not paid the said amount. The respondent has issued an advocate notice dated 27. 10. 2004 which was evaded by the petitioner and ultimately the suit was filed; that there is no dispute arising out of or in connection with earlier agreement since new oral contract entered into between the parties and there is no need to refer the matter for arbitration; that I. A. No. 23828 of 2005 has been filed only to prolong and divert the proceedings. In support of this contention, the learned counsel for the respondent relied on the decision of the Honourable Supreme Court reported in (Union of India vs. Kishorilal Gupta and Bros) 1959 SCR 493 wherein in Page No. 507 and 508, the Honourable Supreme Court held thus:-