L.D. INDUSTRIES Vs. HINDUSTAN WIRES LTD

JUDGEMENT

(1.) IN this case, respondent No. 1-plaintiff filed a suit under Order 37 of the Code of Civil Procedure against the petitioners-defendants for recovery of a sum of Rs. 29,46,153/- in the High Court of Delhi, New Delhi on June 29, 1993. The learned Single Judge of High Court of Delhi, vide his order dated January 23, 1996, held that said Court did not have jurisdiction to try the suit and directed the plaint to be returned to the plaintiff for production in the Court of District Judge, Faridabad and the parties were directed to be present in that Court on February 13, 1996.

(2.) ON February 16, 1996, the case was assigned to the Court of Civil Judge, Senior Division, Faridabad. On March 27, 1997, summons for judgment were served on the petitioners-defendants. On April 4, 1997, the petitioners- defendants filed an application under Order 37 Rule 3(5) read with Section 151 of the Code of Civil Procedure seeking leave of the Court to defend the suit. In this application, the following prayer was made by the defendants :-

(3.) MR . Dogra, learned counsel appearing on behalf of petitioner No. 1 submitted that in the present case, the petitioner had filed an application under Section 8 of the new Act on August 30, 1997, for referring the dispute to the Arbitration, under the Arbitration Clause mentioned on the reverse side of the bill (Exhibit P-1). He submitted that under Section 34 of the old Arbitration Act, any party to arbitration agreement, may at any time, before filing of written statement or taking any other steps in the proceedings, could apply to the Judicial authority before which the proceedings were pending, to stay thee proceedings and refer the matter to arbitration in accordance with the Arbitration clause. He submitted that under Section 8 of the new Arbitration Act any party can file application "not later than when submitting his first statement on the substance of the dispute," to refer the parties to arbitration. The learned counsel further submitted that in a suit filed under Order 37, CPC the defendant is required to file the application seeking leave of the court to defend the suit within the stipulated period mentioned in the said order and filing of application under Order 37 Rule 3(5) CPC to seek leave of the Court to defend the suit, did not amount to submitting first statement on the substance of the dispute. He submitted that after the leave is granted by the court to the defendants to defend, the stage for submitting statement on the substance of the dispute would arise. He, therefore, contended that the statement on the substance of the dispute can be submitted in the written statement and before filing the written statement application under Section 8 of the new Arbitration Act could be filed for referring the parties to arbitration.