JUDGMENT
Mukul Mudgal, J.
1. This petition under Section 115 of the Code of Civil Procedure challenges the Order dated 23rd July, 2001 passed by the Additional Districit Judge, Delhi (hereinafter referred to as the `ADJ and the Trial Court’) in Suit No.297/99 titled “Amerjeet Singh Juneja v. Smt. Savita Sapru and Anr.” dismissing the petitioners/defendants’ application under Order VII Rule 11(d) CPC read with Sections 5 and 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the `1996 Act’) for staying the respondent’s suit.
2. The relevant Section 8(1) of the 1996 Act reads as follows:-
“8(1). The judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.”
3. The respondent filed a suit for specific performance of the Agreement dated 23rd January, 1998 said to be instituted on 28th April, 1999. The relevant Clause 10 of the Agreement relied upon by the petitioners/defendants reads as follows:-
“10. That in the eventuality of any dispute in between the parties on any matter relating to the said allocation/property which may be allotted against the said allocation/this agreement or any matter incidental thereto shall be referred to an Arbitrator appointed mutually and the decision of the arbitrator shall be final and binding in between the parties hereto.”
4. On 7th February, 2000 the petitioners filed a written statement and took a preliminary objection No.5 which reads as follows:-
“5. Without prejudice to above it is submitted that the purported agreement to sale, though denied, contains an arbitration clause. Section 5 of the Arbitration and Conciliation Act, 1996 proclaims that no judicial authority shall intervene in a matter governed by part I except where so provided in this part alone. Hence, this Hon’ble Court is precluded from having any jurisdiction, having been devoid of the same by above said Act of 1996.”
5. The Trial Court dismissed the application filed by the petitioners by seeking recourse to the analogy under Section 34 of the old Arbitration Act and to held that since the petitioners failed to make an application before submitting the first statement on the substance of the dispute cannot ask for a stay of the suit at the later stage and the application therefore which was the made more than 2 years later after the submission of the written statement was held to be not maintainable and therefore dismissed.
6. Mr. Sakesh Kumar, the learned counsel, appearing for the petitioners has challenged the above order and in reply while apart from relying upon the provisions of Section 8(1) of the 1996 Act has relied upon the position of law laid down by the Hon’ble Supreme Court in P. Anand Gajpati Raju and Ors. v. P.V. Raju (deceased) and Ors. reported as 2000 (4) SCC 539 wherein the Hon’ble Supreme Court laid down the following position of law:-
“5. The conditions which are required to be satisfied under sub-sections (1) and (2) of Section 8 before the court can exercise its powers are:
(1) there is an arbitration agreement;
(2) a party to the agreement brings an action in the court against the other party;
(3) subject-matter of the action is the same as the subject-matter of the arbitration agreement;
(4) the other party moves the court for referring the parties to arbitration before it submits his first statement on the substance of the dispute.
This last provision creates a right in the person bringing the action to have the dispute adjudicated by the court, once the other party has submitted his first statement of defense. But if the party, who wants the matter to be referred to arbitration applies to the court after submission of his statement and the party who has brought the action does not object, as is the case before us, there is no bar on the court referring the parties to arbitration.
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8. In the matter before us, the arbitration agreement covers all the disputes between the parties in the proceedings before us and even more than that. As already noted, the arbitration agreement satisfies the requirements of Section 7 of the new Act.
The language of Section 8 is pre-emptory. It is, therefore, obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement. Nothing remains to be decided in the original action or the appeal arising there from. There is no question of stay of the proceedings till the arbitration proceedings conclude and the award becomes final in terms of the provisions of the new Act. All the rights, obligations and remedies of the parties would now be governed by the new Act including the right to challenge the award. The court to which the party shall have recourse to challenge the award would be the court as defined in clause (e) of Section 2 of the new Act and not the court to which an application under Section 8 of the net Act is made. An application before a court under Section 8 merely brings to the court’s notice that the subject-matter of the action before it is the subject-matter of an arbitration agreement. This would not be such an application as contemplated under Section 42 of the Act as the court trying the action may or may not have had jurisdiction to try the suit to start with or be the competent court within the meaning of Section 2(2) of the new Act.”
7. The learned counsel for the respondent in reply to the pleas of the petitioner’s counsel contended inter alia as follows:-
(i) that the application for invoking arbitration clause was made on 23rd April, 2001 whereas the suit was filed on 22nd April, 1999;
(ii) and the case was fixed for recording the evidence of the respondent/plaintiff before the Additional District Judge after the issues were framed and the petitioner/defendant had not sought any referal of the disputes before the arbitrator.
8. The learned counsel for the respondent has also relied upon the plea that the defendants/petitioners took the following plea in its written statement filed on 4th February, 2000:-
“That it is submitted that the answering defendants 1 and 2 did not have any privity of contract jointly or severally with the plaintiff at all. The answering defendants have neither executed any Agreement or part of Agreement to Sell of the house in question to the plaintiff, nor received any consideration whatsoever from the plaintiff.”
Thus the petitioners/defendants themselves had denied the execution of the agreement to sell the house in question to the plaintiff. The respondent’s counsel has contended that since the petitioners themselves denied the execution of the agreement dated 23rd January, 1999 they cannot now seek to rely upon Clause 10 said to be contained in the said agreement which provides for the referal of the disputes to the arbitrator.
9. In my view without going into the position of law urged by the petitioners and after taking into account the crucial fact that the petitioners themselves have taken a plea that they have not signed the agreement to sell in which the arbitration clause No.10 is contained, they cannot now seek to rely on such an agreement to seek the referal of the disputes to arbitration. In my view the petitioners’ revision petition has to fail on this ground alone and it is held that without going into the question of law and the controversy raised in this petition that since the petitioners themselves questioned their signature on the agreement dated 23rd January, 1999 cannot now seek to rely upon the Clause 10 of the agreement containing arbitration clause and cannot, therefore, seek the stay of proceedings in the suit filed before the Trial Court. Consequently there is no cause made out for interference with the impugned order and the petition deserves to be dismissed.
10. Consequently the revision petition is dismissed in view of the above discussion.