# M/S Hapur Roller Flour Mills & Anr v. M/S Shri Vardhman Roller Flour Mills & Ors

- **Citation:** (2026) 4 ILRA 2272
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2026-04-29
- **Case number:** First Appeal From Order No. 2226 of 2025
- **Bench:** Abdul Shahid
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-hapur-roller-flour-mills-anr-v-m-s-shri-vardhman-roller-flour-mills-ors-54498
- **Pages:** 9

## Text

2272 INDIAN LAW REPORTS ALLAHABAD SERIES
(Rs.15,000X60/100) X 205.95=Rs.18,53,550/-

26. The claimant shall also be entitled to Rs.3,38,103/- towards reimbursement of medical
expenses, together with interest @ 12% per annum on both amounts from the date of accident, i.e.,
14.10.2021, till actual payment.

27. Accordingly, the impugned order dated 24.10.2025 passed by the Commissioner is
modified to the aforesaid extent.

28. FAFO No. 69 of 2026 preferred by the insurer stands dismissed, whereas FAFO
No. 42 of 2026 preferred by the claimant for enhancement of compensation is hereby allowed.

29. Interim order, if any, stands vacated.

30. The insurance company is directed to deposit the enhanced amount of compensation
before the Commissioner within a period of two months after adjusting the amount already
deposited.
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(2026) 4 ILRA 2272
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 29.04.2026

BEFORE

THE HON'BLE ABDUL SHAHID, J.

First Appeal From Order No. 2226 of 2025

M/S Hapur Roller Flour Mills & Anr. ...Appellants
Versus
M/S Shri Vardhman Roller Flour Mills & Ors. ...Respondents

Issue for Consideration
(i) Whether the trial court was justified in exercising powers under Section 319 Cr.P.C. to summon the
unmarried sisters of the husband as additional accused on the basis of general allegations contained in the
F.I.R. and the depositions of prosecution witnesses?

(ii) Whether reiteration during trial of allegations already available before the Investigating Officer and found
insufficient for prosecution constitutes fresh evidence warranting exercise of powers under Section 319
Cr.P.C.?
(iii) Whether the trial court could invoke Section 319 Cr.P.C. by relying upon the F.I.R. and statements
recorded under Section 161 Cr.P.C. instead of the evidence adduced during trial?

Headnotes
Arbitration and Conciliation Act, 1996 - Section 8 - Reference to arbitration - Stage for
invoking arbitration agreement - Application filed beyond prescribed period for filing written
statement - Maintainability.
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2273
HELD: The right to seek reference of the parties to arbitration under Section 8 of the Arbitration and
Conciliation Act, 1996 must be exercised with due diligence and before submission of the first statement on
the substance of the dispute. Where the defendants, despite entering appearance, neither filed the written
statement nor invoked Section 8 within the prescribed period of ninety days, the application seeking reference
to arbitration was rightly held to be belated and not maintainable. The trial court committed an error in
entertaining such application after expiry of the statutory period. [Paras 22 to 30]

Arbitration and Conciliation Act, 1996 - Section 8 - Arbitration agreement - Participation in
civil proceedings - Filing of interlocutory applications - Effect.

HELD: Mere existence of an arbitration clause does not entitle a party to seek reference to arbitration at any
stage of the proceedings. Where the defendants actively participated in the suit by filing an application under
Order XXXIX Rule 4 CPC and other interlocutory applications, while failing to invoke Section 8 of the Act within
the prescribed time, such conduct disentitled them from seeking reference to arbitration at a belated stage. A
party cannot invoke the arbitral process at its own convenience after having participated in the proceedings
before the civil court without due diligence. [Paras 23 to 30]

Arbitration and Conciliation Act, 1996 - Section 8 - Reference to arbitration - Due diligence -
Requirement.

HELD: The statutory right to seek reference to arbitration is conditioned upon timely invocation of the
arbitration agreement. A litigant who continues to participate in the civil proceedings and omits to invoke
Section 8 within the period contemplated by law cannot subsequently seek dismissal of the suit on the basis
of the arbitration clause. Due diligence is an essential requirement for exercise of the statutory remedy under
Section 8 of the Act. [Paras 26 to 30]

Arbitration and Conciliation Act, 1996 - Section 8 - "First statement on the substance of the
dispute" - Meaning and scope - Written statement - Participation in proceedings - Effect.

HELD: The expression "first statement on the substance of the dispute" occurring in Section 8(1) of the
Arbitration and Conciliation Act, 1996 ordinarily refers to the written statement filed by the defendant.
However, where the defendant, after entering appearance, continuously participates in the proceedings by
filing applications under various provisions of law and yet neither files the written statement within the
prescribed period nor invokes Section 8 within such period, the right to seek reference to arbitration cannot be
preserved indefinitely. The expression cannot be interpreted so as to permit a party to delay invocation of the
arbitration agreement while simultaneously prosecuting proceedings before the civil court. [Paras 22 to 30]

Arbitration and Conciliation Act, 1996 - Sections 8(1) and 8(2) - Application for reference to
arbitration - Compliance with statutory requirements - Failure to produce arbitration
agreement and invoke jurisdiction within prescribed time - Effect.

HELD: Compliance with the requirements of Sections 8(1) and 8(2) of the Arbitration and Conciliation Act,
1996 is mandatory. Where the application seeking reference to arbitration was filed beyond the stipulated
period and the defendants failed to establish compliance with the statutory requirements contemplated under
Section 8(2), no case for reference to arbitration was made out. The appellate court rightly set aside the order
of the trial court referring the parties to arbitration and restored the suit to its original number. [Paras 29
and 30]

Code of Civil Procedure, 1908 - First Appeal From Order - Order restoring civil suit after setting
aside reference to arbitration - Appellate interference.

HELD: The appellate court rightly found that the trial court had acted contrary to the settled principles
governing Section 8 of the Arbitration and Conciliation Act, 1996 in entertaining the defendants' application
2274 INDIAN LAW REPORTS ALLAHABAD SERIES
after considerable participation in the suit proceedings and beyond the permissible stage. The impugned
judgment restoring the civil suit did not suffer from any illegality or irregularity warranting interference in
appeal. [Paras 30 and 31]

Appeal dismissed. (E-14)

Case Law Cited
Rashtriya Ispat Nigam Ltd. and Another v. Verma Transport Co., (2006) 7 SCC 275 - relied on;
Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. and Others, (2011) 5 SCC 532 - relied
on; Krishan Radhu v. Emaar MGF Construction Pvt. Ltd., CS (OS) No. 3281 of 2014, decided on
21.12.2016 (Delhi High Court) - relied on; SSIPL Lifestyle Private Limited v. Vama Apparels
(India) Private Limited and Another, 2020:DHC:1211 - relied on.

List of Acts/Statutes
Arbitration and Conciliation Act, 1996; Code of Civil Procedure, 1908; Indian Partnership Act, 1932.

List of Keywords
Arbitration agreement; Reference to arbitration; First statement on the substance of the dispute; Written
statement; Waiver; Participation in proceedings; Tenancy agreement; Due diligence; Arbitration clause.

Case Arising From
Judgment and order dated 15.07.2025 passed by the Additional District Judge-I, Hapur in Civil Appeal No.
24 of 2025, M/s Vardhman Roller Flour Mills v. Rajendra Sharma and Others

Appearance for Parties
For the Appellant: Ms. Akanksha Gaur.
For the Respondents: Sri Anurag Sharma and Sri Rahul Sahai

(Delivered by Hon'ble Abdul Shahid, J.)

1. Heard learned counsel for the defendants/appellants and learned counsel for the
plaintiffs/respondent nos. 1 and 2.

2. The present appeal has been filed against the impugned judgement and order dated
15.07.2025 passed by Additional District Judge, Ist, Hapur, in Civil Appeal No. 24 of 2025 (M/S
Vardhman Rollers Flour Mills Vs. Rajendra Sharma and others).

3. Learned counsel for the appellants/defendants has submitted that, as per Clause 19 of the
Tenancy Agreement dated 07.03.2024, it has been clearly stated and agreed between the appellants
and the respondents that, in case of any change in the partnership, such change shall be
incorporated only after obtaining prior approval of the appellants. She has further submitted that
Clause 25 of the Tenancy Agreement dated 07.03.2024 clearly stipulates that, in the event of any
dispute between the parties to the agreement, the matter shall be referred to an arbitrator, who shall
be appointed with the consent of the parties, and the proceedings shall be governed in accordance
with the Arbitration and Conciliation Act, 1996.

4. Learned counsel for the appellants has further submitted that, by way of a notarized
partnership deed/agreement dated 21.10.2024, a new partner, namely Shri Ashish Jain, S/o Shri
Ashok Kumar Jain, has been inducted by the respondents (first set), and Smt. Amita Jain, with
4 All. M/S Hapur Roller Flour Mills & Anr. Vs. M/S Shri Vardhman Roller Flour Mills & Ors.
2275
whom the appellants had entered into the tenancy agreement dated 07.03.2024, has retired from the
partnership firm of the respondents. The respondents failed to inform the appellants about the
aforesaid development, inasmuch as such addition is in clear violation of Clause 19 of the Tenancy
Agreement dated 07.03.2024.

5. Therefore, in view of Clause 19 of the Tenancy Agreement, Respondent No. 2, who has
been inducted as a partner and has been granted power of attorney pursuant to the deed dated
10.09.2024, does not have any locus to file the instant original suit, since Respondent Nos. 2 and 3
did not inform the appellants about the said change in the partnership or the appointment of
Respondent No. 2 as the power of attorney holder. She has relied upon Section 8 of the Arbitration
and Conciliation Act, 1996, which is quoted hereinbelow:

 "8. Power to refer parties to arbitration where there is an arbitration agreement.-(1) A
judicial authority, before which an action is brought in a matter which is the subject of an
arbitration agreement shall, if a party to the arbitration agreement or any person claiming through
or under him, so applies not later than the date of submitting his first statement on the substance of
the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any
Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement
exists.

 (2) The application referred to in sub-section (1) shall not be entertained unless it is
accompanied by the original arbitration agreement or a duly certified copy thereof:

 Provided that where the original arbitration agreement or a certified copy thereof is not
available with the party applying for reference to arbitration under sub-section (1), and the said
agreement or certified copy is retained by the other party to that agreement, then, the party so
applying shall file such application along with a copy of the arbitration agreement and a petition
praying the Court to call upon the other party to produce the original arbitration agreement or its
duly certified copy before that Court.

 (3) Notwithstanding that an application has been made under sub-section (1) and that the
issue is pending before the judicial authority, an arbitration may be commenced or continued and
an arbitral award made."

6. Learned counsel for the appellants has further submitted that the first statement on the
substance of dispute does not include; (i) applications relating interim application, (ii) jurisdictional
objections or (iii) procedural matters as relied upon by her on law laid down by the Hon'ble
Supreme Court in Rashtriya Ispat Nigam Limited and another Vs. Verma Transport Co.
(2006) Volume 7 SCC 275 wherein it is held that the first statement needs the written statement
and not every application or reply filed prior thereto. She has further submitted that in view of
Booz Allen and Hamilton Inc. Vs. SBI Home Finance Ltd. and others (2011) Volume 5 SCC
532, the court clarified that if a defendant wants to seek reference to the arbitration under Section 8
of the Arbitration and Conciliation Act, the application must be filed before or at the time of filing
the written statement. She has further submitted that the partnership firm of the respondent is a
unregistered firm and therefore in view of the Section 9 of the Indian Partnership Act, 1932; (1) no
2276 INDIAN LAW REPORTS ALLAHABAD SERIES
suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any
court by or on behalf of any person suing as a partner in the firm against the firm or any person
alleged to be or to have been a partner in the firm unless the firm is registered and the person suing
is or has been shown in the register of firms as a partner in the firm. No suit to enforce a right
arising from a contract shall be instituted in any court by or on behalf of a firm against any third
party unless the firm is registered and the person suing are or have been shown in the register of
firms as partners in the firm.

7. Learned counsel for the appellants has submitted that the judgment and order passed by
the learned Additional District Judge in Civil Appeal No. 24 of 2025 (M/s Sri Vardhman Roller
Flour Mills and another v. Rajendra Sharma and others), decided on 15.07.2025, is not in
accordance with law and is liable to be set aside, and that the appeal deserves to be allowed.

8. The said civil appeal has arisen from the proceedings of Original Suit No. 174 of 2024
(M/s Vardhman Roller Flour Mills and others v. Rajendra Sharma and others). The learned
appellate court has held that the appellant/defendant filed his first statement on the substance of the
dispute in Application No. 15-C under Order XXXIX Rule 4 CPC, seeking modification of the ex
parte injunction order. Hence, the application under Order XXXIX Rule 4 CPC, which was
submitted on 07.10.2024 before the learned trial court, constituted his first statement on the
substance of the dispute.

9. Thereafter, the application under Section 8 of the Arbitration and Conciliation Act, 1996
could not have been presented. The learned appellate court has further held that the
appellant/defendant filed the application under Section 8 of the Act, 1996 on 23.10.2025. It has also
been noted that the learned trial court, contrary to the settled principles of law, not only entertained
the said application but also allowed it and dismissed the suit in violation of the provisions of law.
Accordingly, the said order was set aside, and Original Suit No. 174 of 2024 was restored to its
original number vide judgment and order dated 15.07.2025. Hence, the present appeal has been
filed.

10. Original Suit No. 174 of 2024 was filed before the Civil Judge (Senior Division)-II,
Hapur by M/s Vardhman Roller Flour Mills as plaintiff no. 1 and Ashok Kumar Jain as plaintiff no.
2 against defendant no. 1, Rajendra Sharma; defendant no. 2, Balvir Sharma; and defendant no. 3,
M/s Hapur Roller Flour Mills, seeking the relief of permanent injunction to the effect that the
plaintiffs shall not be evicted from the premises in question and that the defendants shall not
interfere with their functioning except in accordance with due process of law.

11. The tenancy agreement relied upon by learned counsel for the appellants/defendants,
dated 07.05.2024, was executed between Rajendra Sharma (defendant no. 1) and M/s Shree
Vardhman Roller Flour Mills (plaintiff no. 1) through its partner, Amit Jain. The said tenancy
agreement is for a period commencing from 01.03.2024 to 28.02.2033.

12. Learned counsel for the appellants has relied upon Clause 25 of the said tenancy
agreement, which is a registered document, stipulating that in the event of any dispute arising
between the parties, an arbitrator shall be appointed with the consent of both parties, and the award
4 All. M/S Hapur Roller Flour Mills & Anr. Vs. M/S Shri Vardhman Roller Flour Mills & Ors.
2277
passed by the arbitrator shall be binding upon them. The entire process shall be conducted in
accordance with the Arbitration and Conciliation Act, 1996.

13. Learned counsel for the appellants has also filed a supplementary affidavit stating that
the respondents have vacated the disputed premises; however, they are not permitting the
appellants to enter the premises under the garb of the interim order dated 17.09.2024 passed by the
learned Civil Judge-II, Hapur, allegedly with a view to extract money from the appellants.

14. It is further submitted by learned counsel for the appellants that the respondents have
failed to pay the electricity dues to the electricity department, due to which the electricity
connection was disconnected. Upon becoming aware of these facts, the appellants deposited the
entire outstanding dues on behalf of the respondents in order to prevent disconnection of the
electricity supply.

15. Learned counsel for the respondents has filed objections and submitted that, on
07.03.2024, a registered tenancy agreement was executed between Rajendra Sharma, partner of
M/s Hapur Roller Flour Mills (defendant-appellant/owner of the property), and M/s Shri Vardhman
Roller Flour Mills through its partner, Smt. Amita Jain (tenant). The aforesaid tenancy agreement
was registered, and the tenancy was valid for a period of nine years, w.e.f. 01.03.2024 to
28.02.2033, at a monthly rent of Rs. 1,00,000/- plus GST. A total sum of Rs. 19,00,000/- (Rs.
14,00,000/- and Rs. 5,00,000/- as security) was paid to the defendants/appellants, and the rent was
to be increased by 15% after three years. After execution of the agreement, the plaintiffs took
possession of the flour mill and carried out maintenance and repairs of the plant and machinery. In
order to maintain the quality and standard of their products, the plaintiffs spent Rs. 27,00,000/-,
which was to be adjusted towards rent payable to the defendants/owners. The rent was accordingly
paid till July, 2024.

16. It is further submitted that, on 14?15 August, 2024, defendant no. 1 restrained the
plaintiffs and attempted to forcibly evict them and their workers in order to stop their
manufacturing business. Again, on 20.08.2024, the defendant created pressure and attempted to
evict the plaintiffs from the flour mill. On 25.08.2024, the defendants and their agents allegedly
used criminal force to restrain the plaintiffs from continuing their manufacturing activities and
attempted to evict them forcibly. These facts giving rise to the cause of action have been set out in
paragraph 9 of the civil suit filed on 17.09.2024.

17. In the meantime, a letter dated 08.08.2024 was issued to the defendants/appellants by
the State Bank of India, Hapur Main Branch, regarding renewal of the credit facility and setting out
various compliances/directions for sanction of a credit facility to the tune of Rs. 10 crores for the
purchase of plant and machinery. The bank directed defendant no. 2 (Rajendra Sharma) to cancel
the registered lease agreement bearing Serial No. 3175 dated 07.03.2024, executed by M/s Hapur
Roller Flour Mills in favour of Shri Vardhman Roller Flour Mill.

18. The State Bank of India further stated that the renewal of the credit facility had been
due since 30.03.2024 and that nearly five months had elapsed; as per RBI guidelines, the account
would be classified as a non-performing asset (NPA) on 26.09.2024. The property/flour mill in
2278 INDIAN LAW REPORTS ALLAHABAD SERIES
dispute had already been mortgaged/hypothecated to the bank against the credit facility availed,
and the defendants were directed to furnish a non-encumbrance certificate by cancelling the lease
deed.

19. Thus, the property forming the subject matter of the tenancy agreement dated
07.03.2024 had been mortgaged against the credit facility availed by the defendants, and the bank
had directed them to cancel the said agreement. This fact has been stated in paragraph 12 of the
civil suit.

20. The defendant/appellant has committed fraud by executing the tenancy agreement and
concealing the material fact that the property was mortgaged against the credit facility availed by
the defendant. The defendant/appellant has also used criminal force to restrain and evict the
plaintiff from his peaceful possession. Accordingly, the plaintiff has rightly filed the civil suit
before the competent court.

21. He has further submitted that the well recognized examples of non-arbitral disputes are:
(i) disputes relating to rights and liabilities which give rise to or arise out of criminal offences; (ii)
matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child
custody; (iii) guardianship matters; (iv) insolvency and winding up matters; (v) testamentary
matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or
tenancy matters governed by special statutes where the tenant enjoys statutory protection against
eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the
disputes. The present appeal lacks merit and is liable to be dismissed.

22. Learned counsel for the appellants/defendants has relied on paragraph 14 of Krishan
Radhu v. Emaar MGF Construction Pvt. Ltd., decided by the High Court of Delhi at New
Delhi in CS (OS) No. 3281/2014, IA No. 7709/2015 (under Section 8 of the Arbitration and
Conciliation Act), and OA No. 210/2015, dated 21.12.2016 that there is no dispute as to the
meaning of the words "first statement on the substance of the dispute" used in Section 8 (1) of the
Act, either before or after amendment. In the context of civil suit, such expression obviously would
mean the "written statement" required to be filed in terms of the provision contained in Order 8
Rule 1 of the Code of Civil Procedure, 1908 (CPC). But, for the purposes of proceedings before
other judicial authorities or forums where the Code of Civil Procedure may not strictly apply, it
would mean and include the response (or reply) filed by the party against whom action is brought
to explain his defences. In Rashtriya Ispat Nigam (supra), the Supreme Court observed that this
expression must be contra-distinguished with the expression 'written statement'. It implies
submission of the party to the jurisdiction of the judicial authority and, therefore, what is needed is
a finding on the part of judicial authority that the party has waived his right to invoke the
arbitration clause. If an application is filed before filing the first statement on the substance of the
dispute, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction
of the court.

23. Learned counsel for the plaintiffs/respondent nos. 1 and 2 has submitted that the
appellants/defendants put in appearance on 04.10.2024 and has relied upon the supplementary
affidavit filed by the appellants/defendants. Thereafter, the appellants/defendants consistently
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participated in the proceedings of the original suit on 07.10.2024, 08.10.2024, 10.10.2024,
11.10.2024, 18.10.2024, 24.10.2024, 29.10.2024, 07.11.2024, 14.11.2024, 26.11.2024, and
28.11.2024. The appellants/defendants filed an application under Order XXXIX Rule 4 CPC for
modification of the ex parte injunction and also filed an application under Section 8(1) of the Act
on 23.01.2025.

24. Learned counsel for respondent nos. 1 and 2 has submitted that the
appellants/defendants first put in appearance on 04.10.2024; therefore, the period of limitation for
filing the written statement expired on 04.01.2025. However, the appellants/defendants did not file
the written statement within the stipulated period and instead filed the application under Section
8(1) of the Act on 23.01.2025.

25. Learned counsel for respondent nos. 1 and 2 has relied upon the law laid down by the
High Court of Delhi at New Delhi in SSIPL Lifestyle Private Limited v. Vama Apparels (India)
Private Limited and another, 2020:DHC:1211, wherein paragraph 22 it is held as follows:...

 "22. Thus, as per the above decision, in view of the amended language in Section 8, the
limitation for filing of the written statement under CPC for non-commercial suits and under the
Commercial Courts Act for commercial suits would be applicable for filing of an application under
Section 8. In view thereof, the Court concluded that the maximum period would be 90 days for
ordinary civil suits and 120 days for commercial suits."

26. It is admitted that the appellants/defendants first put in appearance before the learned
trial court in the original suit on 04.10.2024. Thereafter, the appellants/defendants filed an
application under Order XXXIX Rule 4 CPC for modification of the interim injunction and also
filed applications under other provisions of law, thereby consistently participating in the
proceedings of the original civil suit. However, within the stipulated period of 90 days, the
appellants/defendants did not file a written statement before the learned trial court.

27. The appellants/defendants have taken the plea that they had not yet filed their first
statement on the substance of the dispute, and that the aforesaid applications cannot be be
considered as such, as only the written statement is to be treated as the first statement on the
substance of the dispute. The appellants/defendants have, however, consistently participated in the
matter and filed various applications, including an application under Order XXXIX Rule 4 CPC.
Despite the expiry of the stipulated period of 90 days for filing the written statement, the
appellants/defendants did not file any application under Section 8 of the Arbitration and
Conciliation Act, 1996.

28. The submission of the appellants/defendants that the period of 90 days is directory and
not mandatory cannot be accepted in the present case. Such relaxation may be considered where the
defendants have failed to submit the written statement within the stipulated period despite due
diligence. However, in the present case, the appellants/defendants consistently participated in the
proceedings and filed applications under various provisions of law, yet neither submitted a written
statement within 90 days nor filed an application under Section 8 of the Act within the said period.
2280 INDIAN LAW REPORTS ALLAHABAD SERIES
29. The appellants/defendants have also failed to satisfy the Court that they complied with
the provisions of Section 8(2) of the Act. It is an admitted position that the application under
Section 8(1) of the Act was filed on 23.01.2025, which is clearly beyond the stipulated period of 90
days. The appellants/defendants cannot be permitted to invoke the process of law at their
convenience and without due diligence.

30. In view of the facts and circumstances of the case, and the nature of the dispute
between the parties in Original Suit No. 963 of 2025, this Court is of the view that there is neither
any illegality nor irregularity in the impugned order dated 15.07.2025 passed by the Additional
District Judge-I, Hapur, in Civil Appeal No. 24 of 2025 (M/s Vardhman Rollers Flour Mills v.
Rajendra Sharma and others), arising out of Original Suit No. 174 of 2024.

31. Accordingly, the appeal is liable to be dismissed and is hereby dismissed.
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