ORDER
Sat Pal, J.
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 :
“(a) grant unconditional leave to the defendants to defend the suit, as filed by the plaintiff;
(b) permit the defendants to file their written statement and contest the said suit; and
(c) pass such other order/orders as this Hon’ble Court may deem just and proper in the facts and circumstances of the case.”
The respondent-plaintiff filed reply dated May 9, 1997 to the application filed by the defendants under Order 37 Rule 3(5) of the Code of Civil Procedure.
3. During the pendency of the application filed by the defendants seeking leave of the Court to defend the suit, the defendants-petitioners filed another application on August 30, 1997, before the lower Court under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the new Arbitration Act). In the application, it was prayed that the parties be referred to arbitration for reconciliation of the disputes in the suit by the Indian Chambers of Commerce, Calcutta. The learned Civil Judge, Senior Division, by his order dated September 10, 1997, dismissed the application filed by the defendants-petitioners under Section 8 of the new Arbitration Act. In this order, inter alia it was observed that since the defendant had filed application for leave to defend the present suit of the plaintiffs and this suit being a suit under Order 37, C.P.C., it can be safely held that they had already stepped in the proceeding and, therefore, they had waived their right for entitling them to refer the matter to the arbitration under the Arbitration clause. Aggrieved by the said order dated September 10, 1997, passed by the learned trial Court, the present petition has been filed by the defendants-petitioners. Notice of this petition was issued to the respondents.
4. 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 arbitration 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 the 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, C.P.C. 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) C.P.C. 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.
5. Learned counsel further submitted that “taking any other steps in the proceedings” under Section 34 of the old Arbitration Act is in pari materia to the words “first statement on the substance of the dispute” mentioned in Section 8 of the new Arbitration Act. He submitted that the words “taking any other steps in the proceedings” have been interpreted by the Apex Court to mean that it must be first statement as would clearly and unambiguously manifest the intention to waive the benefit of Arbitration Act and to acquiesce in the proceedings and each and every step taken in the proceedings could not come in the way of a party seeking to enforce the arbitration agreement by obtaining stay of the proceedings. He, therefore, contended that by filing an application seeking leave of the Court to defend the suit, it cannot be said that the petitioners had manifested their intention to waive the benefit of arbitration agreement. He also submitted that after the leave was granted by the Court to defend the suit the defendants could take the plea for referring the dispute to the arbitration and, if such a plea could be taken after the decision of the said application, the same could be taken during the pendency of the application seeking leave of the Court to defend the suit. In support of his submission, the learned counsel placed reliance on the following Supreme Court judgments :
1. Food Corporation of India v. Yadav Engineers & Contractors (AIR 1982 SC 1302).
2. M/s. Sadhu Singh Ghuman v. F.C.I. and others (AIR 1990 SC 893 = 1990(1) Arb. LR 140).
3. General Electric Co. v. Renusagar Power Co. (1987(4) SCC 137).
6. Learned counsel for the petitioner also submitted that the decision of the Division Bench judgment of the Bombay High Court in Jadavji Narsidas Shah & Co. v. Hirachand Chatrabhuj (AIR 1954 Bom. 174), was not good law in view of the law laid down by the Supreme Court in the above mentioned three cases. The learned counsel also submitted that the learned trial court vide impugned order had disposed of the application filed by the petitioner-defendants under Section 8 of the new Arbitration Act, as if the same was filed under Section 34 of the old Arbitration Act. He therefore, contended that this also showed the non-application of mind by the learned trial court.
7. Mr. Minocha, learned counsel appearing on behalf of respondent No. 2, while reiterating the submissions made by the learned counsel for petitioner No. 1 stated that under Section 34 of the old Arbitration Act, the requirement was of specific prayer for stay of the civil suit but under Section 8 of the new Arbitration Act, it is mandatory for the Civil Court to refer the dispute to arbitration. He further submitted that a party should not be disallowed to make a prayer for reference of the dispute to arbitration in terms of the arbitration clause merely on technical grounds. The learned counsel submitted that before filing of the written statement, the matter with regard to reference of the dispute to arbitration could be raised at any stage. He also submitted that the defence taken in the application seeking leave of the Court to defend the suit is only to disclose the facts to the effect that it was a good case for grant of leave to defend the suit and it cannot be said that the facts stated in such an application would amount to statement on the substance of the dispute.
8. Mr. Sarin, learned counsel appearing on behalf of respondent No. 1 submitted that under Section 8 of the new Arbitration Act, the matter could be referred to arbitration only if the party so applied not later than when submitting his first statement on the substance of the dispute and secondly application under Section 8 could not be entertained unless it was accompanied by the original agreement. Learned counsel drew my attention to Exhibit P-1 and submitted that even as per the case of the petitioner, the arbitration clause was stated on the reverse of bill exhibit P-1 and the said bill Exhibit P-1 filed before the learned trial court did not bear the signature of respondent No. 1. he submitted that the bill (Annexure P-1) filed by the petitioners was blank proforma and as such the application filed by the petitioners under Section 8 of the new Arbitration Act was liable to be rejected on this short ground.
9. Learned counsel further submitted that admittedly before filing their application under Section 8 of the new Arbitration Act, the petitioner had filed an application on April 4, 1997, under Order 37, Rule 3(5), C.P.C. seeking leave of the court to defend the suit. Learned counsel further submitted that under Order 37, Rule 3(5), the defendant is required to disclose all facts as may deem sufficient to entitle him to defend the suit and in fact in the application filed by the petitioners-defendants, all facts with regard to their defence on merits of the suit were mentioned. Learned counsel further submitted that even in the prayer clause, the defendants have clearly prayed that they should be granted leave to defend the suit. He therefore, contended that the said prayer itself shows the intention of the petitioners to waive the arbitration clause and participate in the proceedings before the learned trial court. He also submitted that by filing the application under Order 37, Rule 3(5), the defendants expressed their unequivocal intention that the matter should be heard by the Civil Court so that they should resist the plaintiffs claim. He submitted that the facts stated in the application clearly constituted the first statement on the substance of the dispute and as such, the learned trial court had rightly dismissed the application filed by the petitioners under Section 8 of the new Arbitration Act. In support of his submission, the learned counsel placed reliance on the Division Bench Judgment of the Bombay High Court in Jadavji Narsidas Shah & Co. (supra).
10. Learned counsel further submitted that the judgment of the Supreme Court in Food Corporation of India (supra); M/s. Sadhu Singh Ghuman (supra) and General Electric Company (supra) are of no assistance to the petitioners as the facts in those cases are quite different. He submitted that in all those cases, the application seeking interim relief was filed, and in none of those cases, any application was filed by the defendant which contained the entire defence of the defendants and could amount to “taking any other steps in the proceedings”. He also submitted that in those cases the defendants had not succumbed to the jurisdiction of the Civil Court but in the present case the petitioner-defendants have clearly surrendered to the jurisdiction of the Civil Court in the prayer made in the application seeking leave of the court to defend the suit.
11. In the rejoinder argument, Mr. Dogra submitted that the contention raised by the learned counsel for respondent No. 1 that the Bill (Annexure P-1) was blank proforma is without any force as in the reply filed by respondent No. 1 to the application of the petitioner under Section 8 of the new Arbitration Act, the said respondent has clearly admitted the contents of Exhibit P-1.
12. In the rejoinder arguments Mr. Minocha submitted that in para 25 of the application seeking leave of the Court of defend the suit, the defendants had stated that the suit was not maintainable and deserves to be dismissed.
13. I have given may thoughtful consideration to the submissions made by the learned counsel for the parties and have perused the records. The point to be examined in this case is as to whether in a suit under Order 37, C.P.C. an application under Order 37, Rule 3(5) seeking leave of the court to defend the suit, amounts to “statement on the substance of the disputes” as mentioned in para 8 of the new Arbitration Act. In this connection, it will be relevant to refer to order 37 Rule 3(5) which reads as under :
“3. Procedure for the appearance of defendant –
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(5) The defendant may, at any time within ten days from the service of such summons for judgment, by affidavit or otherwise disclosing such facts as may be deemed sufficient to entitle him to defend, apply on such summons for leave to defend such suit, and leave to defendant may be granted to him unconditionally or upon such terms as may appear to the court or judge to be just :
Provided that leave to defend shall not be refused unless the court is satisfied that the facts disclosed by the defendant do not indicate that he has a substantial defence to raise or that the defence intended to be put up by the defendant is frivolous or vexatious;
Provided further that, where a part of the amount claimed by the plaintiff is admitted by the defendant to be due from him leave to defend the suit shall not be granted unless the amount so admitted to be due is deposited by the defendant in Court.”
14. From the above provision, it is clear that the defendant may file an affidavit or otherwise disclose such facts as may be deemed sufficient to entitled him to defend the suit. In other words, the defendants is required to disclose all substantial and relevant facts to defend the suit. In the present case, from the application for leave to defend the suit filed by the petitioner-defendants, I find that they have mentioned all the facts in support of their case in that application. There are as many as 19 paragraphs with regard to preliminary submissions and 25 paragraphs on merits. Even in the prayer clause, the petitioner-defendants have prayed that they should be granted unconditional leave to defend the suit. From these facts it is clear that in this application, the petitioners have made the statement on the substance of the dispute and had expressed an unequivocal intention that the matter should be heard by the Civil Court. It may be relevant to note here that in case the application filed by the petitioners seeking leave to defend the suit is dismissed, the suit of the respondent No. 1 itself shall stand decreed. Admittedly, the application seeking the leave to defend the suit was filed on 4-4-1997 and after the reply to this application had been filed by the respondent No. 1 May 1997, the application for referring the dispute to arbitration was filed much thereafter on 30-8-1997. Since the petitioners have submitted their statement on the substance of the dispute in the earlier application, seeking leave of the court to defend the suit, filed on 4-4-1997, the application filed by the petitioners on 30-8-1997 under Section 8 of the new Arbitration Act is not maintainable in view of the language of Section 8 of the new Arbitration Act, itself. The view, I have taken finds full support from the judgment of the Bombay High Court in the case of Jadavji Narsidas Shah & Co. (supra). The facts in the present case are similar to the facts of the said case. In that case, it was observed :
“Therefore it is clear that by filing this affidavit the defendants expressed an unequivocal intention that the matter should be heard by the Civil Court and gave clear effect to that intention by asking the Court to give them leave to defend so that they should resist the plaintiff’s claim.”
15. The judgments of the Supreme Court in Food Corporation of India (supra); M/s. Sadhu Singh Ghuman (supra) and General Electric Company (supra) are not of any assistance to the petitioners as the facts of the present case are quite different from the facts of those cases. In all those cases the defendants had not stated the entire defence in those proceedings whereas in the application seeking leave to defend the suit as stated hereinabove, the petitioners had given all the facts in defence of the suit. Further from the prayer clause it is manifest that the petitioners expressed an intention to waive the benefit of arbitration agreement.
16. Since I have taken the view that the application filed by the petitioners under Section 8 of the New Arbitration Act, is not maintainable as they had submitted the statement on the substance of the dispute in the earlier application filed under Order 37, Rule 3(5) C.P.C., I do not deem it necessary to decide the point raised by the learned counsel for the respondent No. 1 that the application of the petitioners was also not maintainable as the original arbitration agreement or duly certified copy thereof was not annexed therewith.
17. For the reasons recorded herein above, I do not find any merit in this petition. Accordingly the petition is dismissed. The parties are, however, left to bear their own costs.
18. Petition dismissed.