JUDGMENT
Vikramajit Sen, J.
1. The question to be answered at this juncture is whether a party is precluded and barred from filing an application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “1996 Act”) after having prayed for and obtained several adjournments in the suit for the purposes of filing a written statement.
2. The ubiquitous view of the High Court appears to be that even in circumstances where adjournments have been repeatedly granted for the purpose of filing a written statement the rights of a party who is privy to an arbitration clause, are not ousted or alienated by such conduct. In Vijay Anand and Associates Pvt. Ltd. v. Ashraf and Co. Pvt. Ltd. [2001] 7 AD (Delhi) 862 a learned single judge of this Court had highlighted the distinction in the language between Section 8 of the 1996 Act and the erstwhile Section 34 of the Arbitration Act, 1940, in arriving at the conclusion that the party seeking to enforce the arbitration clause is not stopped from making this plea. The same approach and view has been followed by the High Court of Gujarat in Varun Seacon Ltd. v. Bharat Bijlee Ltd. [1997] (Suppl.) Arb. LR 559. Independent of comparison between Section 8 of the 1996 Act and Section 34 of the 1940 Act the Punjab and Haryana High Court has observed in Union of India v. Lajwant Kaur, [2003] (2) Arb. LR 539 that such a plea can be raised at any time before making the first statement on the substance of a dispute, that is, the filing of a written statement. In Ajit Singh v. Shri Mata Vaishno Devi Shrine Board [2003] (1) Arb. LR 137 the High Court of Jammu and Kashmir has preferred the same view (see also Sports Authority of India v. Private Eye Investigation Security Services [2001] AIR Kant HCR 2805. The matter, however, is no longer res integra after the observations made by the hon’ble Supreme Court in Smt. Kalpana Kothari v. Smt. Sudha Yadav, . The court opined that (headnote): “In striking contrast to the said scheme underlying the provisions of the 1940 Act, in the new 1996 Act, there is no provision corresponding to Section 34 of the old Act and Section 8 of the 1996 Act mandates that the judicial authority before which an action has been brought in respect of a matter, which is the subject-matter of an arbitration agreement, shall refer the parties to arbitration if a party to such an agreement applies not later than when submitting his first statement . . . Similarly, having regard to the distinct purposes, scope and object of the respective provisions of law in these two Acts, the plea of estoppel can have no application to deprive the appellants of the legitimate right to invoke an all comprehensive provision of mandatory character like Section 8 of the 1996 Act to have the matter relating to the disputes referred to arbitration, in terms of the arbitration agreement”. The court had adverted to its earlier decision in P. Anand Gajapathi Raju v. P. V. G. Raju in observing that there is no bar to referral under Section 8 of the 1996 Act even where such an application had been filed after the first statement (written statement) on the substance of the dispute, on the plaintiff not objecting thereto.
3. The object of the Act is to ensure that where parties can agree to resolve their differences through recourse of arbitral proceedings, every endeavor should be made to make them to traverse this avenue rather than knock at the doors of the courts. In all such cases it is difficult to appreciate why the plaintiff has filed a suit when it was aware of the existence of an arbitration clause. In the event of the plaintiff’s ignorance of this position, no prejudice would be caused to it if the parties are referred to arbitration no sooner the position is learnt of.
4. Learned counsel for the plaintiff has relied on the decision of a learned single judge of this Court in Palinder Singh Bedi v. National Rifle Association of India [2002] (Suppl.) Arb. LR 565. A reading of the judgment discloses that the consistent view of the various High Courts had not been brought to the notice of the learned judge as also the diametrically opposite opinion of another learned single judge of this Court in the Vijay Anand’s case [2001] 7 AD (Delhi) 862. In any event this view cannot be followed after the pronouncement of the apex court in Smt. Kalpana Kothari’s case, .
5. Learned counsel for the plaintiff has justifiably expressed the agony of having to appear in this Court on several occasions, and face repeated adjournments on the ostensible ground of filing a written statement. While allowing an application under Section 8 of the 1996 Act the conduct of a party should not be ignored. Learned counsel for the plaintiff has also vehemently submitted that the Civil Procedure Code now mandates the filing of a written statement within ninety days. The matter had been placed before the court because of the failure of the defendant/applicant to file a written statement well beyond the outer limit of ninety days. The provisions pertaining to the filing of the written statement, however, cannot be applied to the initiation of an application under Section 8 of the 1996 Act which, in essence, hits at the root of the jurisdiction of the court to continue a civil action where the parties have themselves compacted to go to arbitration. Even if the Civil Procedure Code were to apply, at the highest, the right to file a written statement would stand closed. This, however, would in no manner dilute the provisions of Section 8 of the 1996 Act since there is indubitably no first statement on the merits of the case.
6. Keeping the conduct of the defendant in view there can be no gainsaying that there has been an inordinate and excruciating delay in filing the application under Section 8 of the 1996 Act. For this delay the plaintiff would arguably be compensated in the award itself. However, the ends of justice would be met if this application is allowed, subject to payment of Rs. 10,000 as costs payable by the defendant/applicant to the plaintiff through counsel. Costs to be paid to learned counsel for the plaintiff within thirty days.
7. The parties are accordingly referred to arbitration, for which requisite steps may be initiated by either of them as contemplated in law.
8. The petition as well as the application stands disposed of in the above terms.