SRI RAGAVENDRA ADVERTSING Vs. PRASAR BHARTI

JUDGEMENT

(1.) Appeal No.319 of 2006 was filed by the defendant challenging the order of dismissal passed in Application No.2355 of 2005 seeking to set aside the exparte order passed in C.S.245 of 2005, while appeal No.378 of 2006 was filed by the defendant challenging the order of dismissal passed in application No.628 of 2005 seeking rejection of the plaint in C.S.No.245 of 2001.

(2.) The case of the appellant before the learned single Judge is as follows:

(3.) Advancing the arguments on behalf of the appellant/defendant, the learned counsel would submit that in the instant case, it was an agreed position that there was an agreement entered into between the parties on 26.6.1990 and clause 5 of the Agreement would clearly indicate that whenever dispute arose between the parties, it should be referred to arbitration. A very reading of the said clause would indicate the same. It is true the defendant did not file the written statement and there was delay of 1338 days in filing the written statement. When the matter was taken up for enquiry, at that time, the application was actually filed with an application to condone the delay in filing the written statement but it remained unnumbered and the same was also brought to the notice of the Court. There is an arbitral clause in the agreement and there was actually a dispute between the parties. When the claim was made by the plaintiff, there was denial on the part of the defendant and the arbitral clause also pave the way for solving the dispute before the arbitration. Hence, it is mandatory and the Court, after putting on notice, should have referred the matter to arbitration but the learned Single Judge has dismissed the application stating that the written statement was not filed in time and that before the defence was actually putforth, the application should have been taken and that would also mean that the written statement should be filed within the time stipulated under the procedural code and since it was not done so, the defendant has lost its right to seek reference to arbitration. That is the view taken by the learned Single Judge which is contrary to the settled decisions of the Apex Court. So long as the written statement was not filed, as the substantial defence, the defendant is entitled to invoke the arbitral clause. It is quite clear that there is dispute between the parties and the finding given by the learned single Judge regarding the liability is not correct. Since it was a claim made by the plaintiff, the defendant should be allowed to file its defence and the question of liability can be decided only after the trial of the suit. The learned single Judge has pointed out as if the collection made by the defendant was not paid to the plaintiff at all. This is also not correct. The defendant has putforth a plea denying the liability. The finding recorded by the trial Court is that there is no difference or dispute between the parties is also not correct. Under such circumstances, it is a fit case where it has got to be referred to arbitration. Hence, the order of the learned single Judge has got to be set aside. In support of his contention, the learned counsel relied on the following decisions.