BALMAT & OTHERS Vs. NITIN LALCHANDANI & ANOTHER

JUDGEMENT

(1.) The applicants have filed the present revision challenging the order dated 10/02/2016 passed by 3rd Additional Judge Class-I to the Court of 1st Civil Judge Class-I Bhopal in Civil Suit No.109-A/2015, whereby rejecting the application preferred by the applicants under Section 5 read with Section 8 of the Arbitration & Conciliation Act, 1996 (hereinafter referred as "the Act").

(2.) Brief facts of the case are that respondent No.1 filed a civil suit for specif performance of the contract on the basis of agreement to sale dated 06/01/2012. In the said agreement Clause 9 provides for the arbitration clause that in case if any dispute arises between the parties the same will be resolve as per the provisions of the Act. The applicants, therefore, filed an application under Section 5 r/w Section 8 of the Act, praying for dismissal of the suit on the ground of availability of an alternative remedy under the Act. The respondent/plaintiff had filed reply to the said application. The trial Court vide impugned order dated 10/02/2016 had rejected the said application. Being aggrieved by that order the applicants have filed the present petition.

(3.) Learned counsel appearing on behalf of the applicants submits that the impugned order passed by the trial Court is illegal and contrary to law. He submits that Clause 9 of the Agreement provides that if any dispute arises between the parties the same will be decided as per the provisions of the Act and, therefore, as per the said Clause the suit filed by the respondent No.1 was not maintainable. He further submits that Section 8 of the Act is mandatory in nature and, therefore, if any application has been filed under Section 8 of the Act then it is obligatory for the Court to refer the parties to the arbitration in terms of their agreement and nothing remains to be decided in the original action after such an application is made except to refer arbitration for the said preposition. He relied on a judgment passed by the Hon'ble Apex Court in the case of Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums, 2003 6 SCC 503.