# U.O.I v. M/s Bharat Construction

- **Citation:** (2022) 12 ILRA 722
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2022-11-09
- **Case number:** Act 1996 Defective No. 121 of 2022
- **Bench:** Manoj Kumar Gupta, Jayant Banerji
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/u-o-i-v-m-s-bharat-construction-47980
- **Pages:** 8

## Headnote

Act, 1996 - Section 37 - Delay condonation
in filing Appeal u/s 37 - delay beyond the
prescribed period can only be condoned
'by way of exception and not by way of
rule' - In the instant case appeal reported
to be beyond time by 258 days - Held -
explanation proffered by the applicant/
appellant to demonstrate sufficient cause
for delayed filing of the appeal is no
explanation in the eyes of law - averments
are vague and do not reflect any specific
dates in support of the averments - delay
seemingly occurred because the appellant
could not decide whether it had to
challenge the impugned order or not,
despite being aware of the limitation
prescribed - appellant miserably failed to
demonstrate diligence and bonafide to
make out 'sufficient cause' for condoning
the delay - delay condonation application
rejected. (Para 7, 10)

Dismissed. (E-3)

List of Cases cited:

## Text

722 INDIAN LAW REPORTS ALLAHABAD SERIES
Appeal. Accordingly, the impugned order
dated
12.09.2022
passed
by
the
Commercial court, Lucknow in Arbitration
Case No. 57/2022 (M/s Sahakar Global
Company
Ltd.
Vs
U.P
Expressway
Industrial development Authority) is setaside. There shall be no order as to cost.
----------
(2022) 12 ILRA 722
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 09.11.2022

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE JAYANT BANERJI, J.

Appeal U/s 37 of Arbitration and Conciiliation
Act 1996 Defective No. 121 of 2022

U.O.I. ...Appellant
Versus
M/s Bharat Construction ...Respondent

Counsel for the Appellant:
Sri Manoj Kumar Singh

Counsel for the Respondent:
Sri Sanjay Kumar Pandey, Sri Sujeet
Kumar, Sri Sunil Kumar Upadhyay

Arbitration and Conciliation Application
Act, 1996 - Section 37 - Delay condonation
in filing Appeal u/s 37 - delay beyond the
prescribed period can only be condoned
'by way of exception and not by way of
rule' - In the instant case appeal reported
to be beyond time by 258 days - Held -
explanation proffered by the applicant/
appellant to demonstrate sufficient cause
for delayed filing of the appeal is no
explanation in the eyes of law - averments
are vague and do not reflect any specific
dates in support of the averments - delay
seemingly occurred because the appellant
could not decide whether it had to
challenge the impugned order or not,
despite being aware of the limitation
prescribed - appellant miserably failed to
demonstrate diligence and bonafide to
make out 'sufficient cause' for condoning
the delay - delay condonation application
rejected. (Para 7, 10)

Dismissed. (E-3)

List of Cases cited:

1. N.V. International Vs St. of Assam & ors.
(2020) 2 SCC 109

2. Government of Maharashtra Vs M/s Borse
Brothers Engineers & Contractors Pvt. Ltd,
(2021) 6 SCC 460

3. CIT Vs Hindustan Bulk Carriers (2003) 3 SCC 57

4. Ajmer Kaur Vs St. of Pun. (2004) 7 SCC 381

5. Brahampal Vs National Insurance Comp.
(2021) 6 SCC 512

(Delivered by Hon'ble Manoj Kumar
Gupta, J.
&
Hon'ble Jayant Banerji, J.)

1. Heard Shri Manoj Kumar Singh,
counsel for the appellant and Shri Sujeet
Kumar, counsel for the respondents.

2. The instant appeal under Section 37 of
the Arbitration and Conciliation Act, 19961
has been filed challenging the order dated
23.11.2021 passed by the Presiding Officer,
Commercial Court, Moradabad, dismissing an
application under Section 34 of the Act of
1996 in Arbitration Case No. 3 of 2021 (Union
of India Vs. M/S Bharat Construction and
another). The appeal is reported to be beyond
time by 258 days. The appeal has been filed
along with a delay condonation application
supported by an affidavit, which application is
first being taken up for consideration.

Delay Condonation Application No.
1 of 2022
12 All. U.O.I. Vs. M/s Bharat Construction
723

3. When the matter was listed on
20.10.2022,
learned
counsel
for
the
respondent relied upon a judgement of the
Supreme Court in the case of N.V.
International Vs. State of Assam and
others2 to contend that the delay in filing
the aforesaid appeal cannot be condoned.
He contended that the present appellate
proceeding is in continuation of the original
proceeding and the delay in filing this
appeal would defeat the overall statutory
purpose of arbitration proceedings which
require that the proceedings be decided
expeditiously. Learned counsel appearing
for the appellant sought time to ascertain
whether the aforesaid judgement of the
Supreme Court still holds the field or not.

4. Today, learned counsel for the
appellant has relied upon a judgement of
the Supreme Court in the case of
Government of Maharashtra Vs. M/s
Borse
Brothers
Engineers
and
Contractors Private Limited3 to contend
that the aforesaid judgement in N.V.
International has been overruled. Learned
counsel has referred to paragraph no. 52 of
the judgement in Borse Brothers in support
of his contention.

5. A perusal of judgement in Borse
Brothers reveals that though the judgement
of
the
Supreme
Court
in
N.V.
International was held to have been
wrongly decided and therefore, overruled,
the question further posed by the Supreme
Court related to the application of Section 5
of the Limitation Act to appeals which are
governed by a uniform 60-day period of
limitation. The Supreme Court observed
that it would have to steer a middle course
between the two extremes; one being the
judgement in N.V. International which
does not allow condonation of delay
beyond 30 days, and, the other, being an
open-ended provision in which any amount
of time can be condoned, provided
sufficient cause is shown. While referring
to its judgement in CIT Vs. Hindustan
Bulk Carriers4 regarding harmonious
construction of statutes, the Supreme Court,
while reading Section 37 of the Act of 1996
with either Article 116 or 117 of the
Limitation Act, or Section 13 (1A) of the
Commercial Courts Act, observed that the
object and context provided by the
aforesaid statutes, read as a whole, is the
speedy disposal of appeals filed under
Section 37 of the Act of 1996. The
Supreme Court observed as follows:

"55. Reading the Arbitration Act
and the Commercial Courts Act as a whole,
it is clear that when Section 37 of the
Arbitration Act is read with either Article
116 or 117 of the Limitation Act or Section
13(1-A) of the Commercial Courts Act, the
object and context provided by the
aforesaid statutes, read as a whole, is the
speedy disposal of appeals filed under
Section 37 of the Arbitration Act. To read
Section 5 of the Limitation Act consistently
with the aforesaid object, it is necessary to
discover as to what the expression
"sufficient cause" means in the context of
condoning delay in filing appeals under
Section 37 of the Arbitration Act."

6. The Supreme Court further referred
to the judgement in Ajmer Kaur Vs. State
of Punjab5 and Brahampal Vs. National
Insurance Company6 and observed as
follows:

"58. Given the object sought to be
achieved under both the Arbitration Act and
the Commercial Courts Act, that is, the
speedy
resolution
of
disputes,
the
expression "sufficient cause" is not elastic
enough to cover long delays beyond the
724 INDIAN LAW REPORTS ALLAHABAD SERIES
period provided by the appeal provision
itself. Besides, the expression "sufficient
cause" is not itself a loose panacea for the
ill of pressing negligent and stale claims.
This
Court,
in
Basawaraj
v.
LAO
[Basawaraj v. LAO, (2013) 14 SCC 81] ,
has held : (SCC pp. 85-88, paras 9-15)

"9. Sufficient cause is the cause
for which the defendant could not be
blamed for his absence. The meaning of the
word
"sufficient"
is
"adequate"
or
"enough", inasmuch as may be necessary to
answer the purpose intended. Therefore, the
word "sufficient" embraces no more than
that which provides a platitude, which
when the act done suffices to accomplish
the purpose intended in the facts and
circumstances existing in a case, duly
examined
from
the
viewpoint of
a
reasonable standard of a cautious man. In
this context, "sufficient cause" means that
the party should not have acted in a
negligent manner or there was a want of
bona fide on its part in view of the facts
and circumstances of a case or it cannot be
alleged that the party has "not acted
diligently"
or
"remained
inactive".
However, the facts and circumstances of
each case must afford sufficient ground to
enable the court concerned to exercise
discretion for the reason that whenever the
court exercises discretion, it has to be
exercised judiciously. The applicant must
satisfy the court that he was prevented by
any "sufficient cause" from prosecuting his
case, and unless a satisfactory explanation
is furnished, the court should not allow the
application for condonation of delay. The
court has to examine whether the mistake is
bona fide or was merely a device to cover
an ulterior purpose. (See Manindra Land &
Building Corpn. v. Bhutnath Banerjee
[Manindra Land & Building Corpn. v.
Bhutnath Banerjee, AIR 1964 SC 1336] ,
Mata Din v. A. Narayanan [Mata Din v. A.
Narayanan, (1969) 2 SCC 770] , Parimal v.
Veena [Parimal v. Veena, (2011) 3 SCC 545
: (2011) 2 SCC (Civ) 1] and Maniben
Devraj Shah v. Municipal Corpn. of Brihan
Mumbai
[Maniben
Devraj
Shah
v.
Municipal Corpn. of Brihan Mumbai,
(2012) 5 SCC 157 : (2012) 3 SCC (Civ) 24]
.)

10. In Arjun Singh v. Mohindra
Kumar [Arjun Singh v. Mohindra Kumar,
AIR 1964 SC 993] this Court explained the
difference between a "good cause" and a
"sufficient cause" and observed that every
"sufficient cause" is a good cause and vice
versa. However, if any difference exists it
can only be that the requirement of good
cause is complied with on a lesser degree
of proof than that of "sufficient cause".

11. The expression "sufficient
cause"
should
be
given
a
liberal
interpretation to ensure that substantial
justice is done, but only so long as
negligence, inaction or lack of bona fides
cannot be imputed to the party concerned,
whether or not sufficient cause has been
furnished, can be decided on the facts of a
particular case and no straitjacket formula
is possible. (Vide Madanlal v. Shyamlal
[(2002) 1 SCC 535] and Ram Nath Sao v.
Gobardhan Sao [(2002) 3 SCC 195] .)

12. It is a settled legal proposition
that law of limitation may harshly affect a
particular party but it has to be applied with
all its rigour when the statute so prescribes.
The court has no power to extend the
period of limitation on equitable grounds.
''A result flowing from a statutory provision
is never an evil. A court has no power to
ignore that provision to relieve what it
considers a distress resulting from its
operation.' The statutory provision may
cause hardship or inconvenience to a
particular party but the court has no choice
but to enforce it giving full effect to the
same. The legal maxim dura lex sed lex
12 All. U.O.I. Vs. M/s Bharat Construction
725
which means "the law is hard but it is the
law", stands attracted in such a situation. It
has
consistently
been
held
that,
"inconvenience is not" a decisive factor to
be considered while interpreting a statute.

13. The statute of limitation is
founded on public policy, its aim being to
secure peace in the community, to suppress
fraud and perjury, to quicken diligence and to
prevent oppression. It seeks to bury all acts of
the past which have not been agitated
unexplainably and have from lapse of time
become stale. According to Halsbury's Laws
of England, Vol. 28, Para 605 p. 266:

''605. Policy of the Limitation Acts.--
The courts have expressed at least three
differing reasons supporting the existence of
statutes of limitation, namely, (1) that long
dormant claims have more of cruelty than
justice in them, (2) that a defendant might
have lost the evidence to disprove a stale
claim, and (3) that persons with good causes of
actions should pursue them with reasonable
diligence.'

An unlimited limitation would lead
to a sense of insecurity and uncertainty, and
therefore, limitation prevents disturbance or
deprivation of what may have been acquired in
equity and justice by long enjoyment or what
may have been lost by a party's own inaction,
negligence or laches. (See Popat & Kotecha
Property v. SBI Staff Assn. [(2005) 7 SCC 510]
, Rajender Singh v. Santa Singh [(1973) 2 SCC
705] and Pundlik Jalam Patil v. Jalgaon
Medium Project [ (2008) 17 SCC 448] .)

14. In P. Ramachandra Rao v.
State of Karnataka [(2002) 4 SCC 578] this
Court
held
that
judicially
engrafting
principles
of
limitation
amounts
to
legislating and would fly in the face of law
laid down by the Constitution Bench in
Abdul Rehman Antulay v. R.S. Nayak
[(1992) 1 SCC 225] .

15. The law on the issue can be
summarised to the effect that where a case
has been presented in the court beyond
limitation, the applicant has to explain the
court as to what was the "sufficient cause"
which means an adequate and enough reason
which prevented him to approach the court
within limitation. In case a party is found to
be negligent, or for want of bona fide on his
part in the facts and circumstances of the
case, or found to have not acted diligently or
remained inactive, there cannot be a justified
ground to condone the delay. No court could
be justified in condoning such an inordinate
delay by imposing any condition whatsoever.
The application is to be decided only within
the parameters laid down by this Court in
regard to the condonation of delay. In case
there was no sufficient cause to prevent a
litigant to approach the court on time
condoning the delay without any justification,
putting any condition whatsoever, amounts to
passing an order in violation of the statutory
provisions and it tantamounts to showing
utter disregard to the legislature."

7. In the said judgement, the Supreme
Court also considered the submission that in
cases
involving
Government
and
its
instrumentalities, a liberal approach should be
adopted. The delay in filing the appeal was of
131 days beyond the prescribed period of 60
days. The contention was repelled, holding
that the explanation furnished is nothing but
the usual ''file-pushing and administrative
exigencies'. It is held that having regard to the
object of the Commercial Courts Act, any
delay beyond the prescribed period can only
be condoned ''by way of exception and not by
way of rule'. It is apposite to quote some
more paragraphs from the judgement dealing
with the issue -

59. Likewise, merely because the
Government
is
involved,
a
different
yardstick for condonation of delay cannot
be laid down. This was felicitously stated in
726 INDIAN LAW REPORTS ALLAHABAD SERIES
Postmaster General v. Living Media (India)
Ltd. [(2012) 3 SCC 563] ["Postmaster
General"], as follows : (SCC pp. 573-74,
paras 27-29)

"27. It is not in dispute that the
person(s) concerned were well aware or
conversant
with
the
issues
involved
including
the
prescribed
period
of
limitation for taking up the matter by way
of filing a special leave petition in this
Court. They cannot claim that they have a
separate period of limitation when the
Department was possessed with competent
persons familiar with court proceedings. In
the absence of plausible and acceptable
explanation, we are posing a question why
the delay is to be condoned mechanically
merely because the Government or a wing
of the Government is a party before us.

28. Though we are conscious of
the fact that in a matter of condonation of
delay when there was no gross negligence
or deliberate inaction or lack of bona fides,
a liberal concession has to be adopted to
advance substantial justice, we are of the
view that in the facts and circumstances,
the Department cannot take advantage of
various earlier decisions. The claim on
account of impersonal machinery and
inherited bureaucratic methodology of
making several notes cannot be accepted in
view of the modern technologies being
used and available. The law of limitation
undoubtedly binds everybody, including the
Government.

29. In our view, it is the right time
to inform all the government bodies, their
agencies and instrumentalities that unless
they have reasonable and acceptable
explanation for the delay and there was
bona fide effort, there is no need to accept
the usual explanation that the file was kept
pending for several months/years due to
considerable degree of procedural red tape
in
the
process.
The
government
departments are under a special obligation
to ensure that they perform their duties with
diligence and commitment. Condonation of
delay is an exception and should not be
used as an anticipated benefit for the
government departments. The law shelters
everyone under the same light and should
not be swirled for the benefit of a few."

8. Thereafter, the Supreme Court also
referred to various other judgements where
the Supreme Court deprecated inordinate
delay in filing appeals. The Supreme Court
further held as follows:

"62. Also, it must be remembered
that merely because sufficient cause has
been made out in the facts of a given case,
there is no right in the appellant to have
delay condoned. This was felicitously put
in Ramlal v. Rewa Coalfields Ltd. [AIR
1962 SC 361] as follows : (SCR p. 771 :
AIR p. 365, para 12)

"12. It is, however, necessary to
emphasise that even after sufficient cause has
been shown a party is not entitled to the
condonation of delay in question as a matter
of right. The proof of a sufficient cause is a
condition precedent for the exercise of the
discretionary jurisdiction vested in the court
by Section 5. If sufficient cause is not proved
nothing further has to be done; the
application for condoning delay has to be
dismissed on that ground alone. If sufficient
cause is shown then the Court has to enquire
whether in its discretion it should condone
the delay. This aspect of the matter naturally
introduces the consideration of all relevant
facts and it is at this stage that diligence of the
party or its bona fides may fall for
consideration; but the scope of the enquiry
while exercising the discretionary power after
sufficient cause is shown would naturally be
limited only to such facts as the Court may
regard as relevant. It cannot justify an enquiry
12 All. U.O.I. Vs. M/s Bharat Construction
727
as to why the party was sitting idle during all
the time available to it. In this connection we
may point out that considerations of bona
fides or due diligence are always material and
relevant when the Court is dealing with
applications made under Section 14 of the
Limitation Act. In dealing with such
applications the Court is called upon to
consider
the
effect
of
the
combined
provisions of Sections 5 and 14. Therefore, in
our opinion, considerations which have been
expressly made material and relevant by the
provisions of Section 14 cannot to the same
extent and in the same manner be invoked in
dealing with applications which fall to be
decided only under Section 5 without
reference to Section 14."

63. Given the aforesaid and the
object of speedy disposal sought to be
achieved both under the Arbitration Act and
the Commercial Courts Act, for appeals filed
under Section 37 of the Arbitration Act that
are governed by Articles 116 and 117 of the
Limitation Act or Section 13(1-A) of the
Commercial Courts Act, a delay beyond 90
days, 30 days or 60 days, respectively, is to
be condoned by way of exception and not by
way of rule. In a fit case in which a party has
otherwise acted bona fide and not in a
negligent manner, a short delay beyond such
period can, in the discretion of the court, be
condoned, always bearing in mind that the
other side of the picture is that the opposite
party may have acquired both in equity and
justice, what may now be lost by the first
party's inaction, negligence or laches."

9. Coming to the facts of the instant
case, a perusal of the affidavit filed in
support
of
the
delay
condonation
application reads as follows:

"1.
That,
the
deponent
is
presently posted as Senior Divisional
Engineer, Head Quarter, Moradabad in the
office of DRM, Moradabad and has been
duly authorize by the competent authority
to swear this affidavit on behalf of the
Applicants in the above noted Review
petition and as such the deponent is fully
acquainted with the facts deposed to below.

2. That, after obtaining the
certified copy of the impugned order dated
23.11.2021 passed by Presiding Officer,
Commercial
Court,
Moradabad
in
Arbitration Case no.03 of 2021 (Union of
India Vs. M/s Bharat Construction and
Another) same was served in the office of
Senior
Divisional
Engineer
Northern
Railway, D.R.M. office, Moradabad.

3. That, thereafter after going
through
the
impugned
order
dated
23.11.2021 passed by learned Prescribed
Officer, Commercial Court, Moradabad in
Arbitration Case no.03 of 2021 (Union of
India Vs. M/s Bharat Construction and
Another) as well as the record, the matter
was sent for legal opinion in respect of
taking any further action in the matter.

4. That, after obtaining the legal
opinion from the Railway Counsel, entire
document pertaining to the aforesaid case
was forwarded to the Headquarter Northern
Railway, Delhi for further action.

5. That, earlier, the Railway
Authorities at D.R.M. Office, Moradabad,
were of opinion that the award passed by
the Arbitrator award may be complied with
after getting the same affirm by the
impugned judgment dated 23.11.2021 of
Prescribed Officer, Commercial Court,
Moradabad in Arbitration Case no.03 of
2021 (Union of India Vs. M/s Bharat
Construction
and
Another).
However
considering the legal opinion of the railway
counsel,
the
higher
authorities
at
headquarter, N.R. Railway has decided to
take another legal opinion from the
Additional Solicitor General of India at
Allahabad.
728 INDIAN LAW REPORTS ALLAHABAD SERIES

6. That, after taking legal opinion
from Additional Solicitor General of India
at Allahabad, all the documents along with
legal opinion was sent to the Headquarter
of Northern Railway, Delhi for taking
further action.

7. That, thereafter, the competent
authority after considering the facts and
law, has decided to file an appeal before
this Hon'ble Court as such all documents
pertaining to the same was sent to the office
of Additional Solicitor General of India at
Allahabad with the request to entrust any
Central Govt. Counsel for drafting an
appeal u/s 37 Arbitration and Conciliation
Act.

8.
That
thereafter,
learned
Additional Solicitor General of India at
Allahabad entrusted Sri Manoj Kumar
Singh, Central Govt. counsel to prepare and
filed the present Appeal against the
impugned
judgment
dated
23.11.2021
passed by learned Prescribed Officer,
Commercial
Court,
Moradabad
in
Arbitration Case no.03 of 2021 (Union of
India Vs. M/s Bharat Construction and
Another) and Award Dated 04.03.2020
passed by the sole Arbitrator.

9.
That
thereafter,
relevant
documents were handed over to the counsel
for the appellant however, the certified
copy of impugned order dated 23.11.2021
was not available as such the counsel of the
appellant requested concern officer to get
the same so that the appeal may be
prepared and filed forthwith.

10. That thereafter, on the basis of
documents provided by Department the
present appeal has been drafted by counsel
for the appellant and was sent for vetting to
the competent authority at Headquarter
Northern Railway Delhi.

11. That after taking any
necessary approval from the competent
authority, deponent has been authorized to
swear and sign the present affidavit so that
the appeal may be filed before this Hon'ble
Court.

12. That on 10.10.2022 the
deponent after taking necessary permission
has signed the affidavit as such without any
further the present appeals is being filed
before this Hon'ble Court.

13. That delay in filing the
present appeal is not intentional but the
same is procedural, as the department has
to take various sanctions at different level
for filing the present appeal.

14. That, therefore in view of the
facts and reasons stated above, it would be
expedient in the interest of justice that this
Hon'ble Court may graciously be pleased to
condone the delay, if any, in filing the
present arbitration appeal filed against the
impugned order dated 23.11.2021 passed
by learned Prescribed Officer, Commercial
Court, Moradabad in Arbitration Case
no.03 of 2021 (Union of India Vs. M/s
Bharat Construction and Another) and
award dated 04.03.2020 passed by the sole
arbitrator and treat the same as filed within
time, otherwise the appellant shall be put to
irreparable loss and hardship."

10.

The
aforesaid
explanation
proffered by the applicant/ appellant to
demonstrate sufficient cause for delayed
filing of the appeal is no explanation in the
eyes of law. The averments are vague and
do not reflect any specific dates in support
of the averments. The only date that has
been mentioned in paragraph no. 12 which
is 10.10.2022 on which date the deponent is
said to have signed the affidavit after taking
necessary permission. The delay seemingly
occurred because the appellant could not
decide whether it had to challenge the
impugned order or not, despite being aware
of the limitation prescribed. The appellant
12 All. M/s L.R. Print Solutions Vs. M/s Exflo Sanitation Pvt. Ltd.
729
has miserably failed to demonstrate diligence
and bonafide to make out 'sufficient cause' for
condoning the delay. Therefore, it is held that
delay in filing this appeal has not been
sufficiently explained and there exists no
sufficient cause for condoning the delay in
filing the aforesaid appeal. Under the facts
and circumstances, the delay condonation
application is rejected.

Order on Appeal

11. Since, the delay condonation
application has been rejected, the present
appeal also stands dismissed.
----------
(2022) 12 ILRA 729
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 06.12.2022

BEFORE

THE HON'BLE MANOJ KUMAR GUPTA, J.
THE HON'BLE JAYANT BANERJI, J.

Appeal U/S 37 of Arbitration & Conciliation Act
1996 Defective No. 46 of 2022

M/s L.R. Print Solutions
 ...Defendant/Appellant
Versus
M/s Exflo Sanitation Pvt. Ltd.
 ...Plaintiff/Respondent

Counsel for the Appellant:
Sri Ashish Kumar Singh, Sri Ishwar Kumar
Upadhyay, Sri Rakesh Pande, Sr. Advocate

Counsel for the Respondents:
Sri Ishir Sripat

Civil Law - Arbitration and Conciliation
Application Act, 1996 - Section 8 - Power to
refer parties to arbitration where there is an
arbitration agreement - A judicial authority,
before which, an action is brought, in a
matter,
which
is
the
subject
of
an
arbitration
agreement,
shall
refer
the
parties to arbitration unless it finds that
prima facie no valid arbitration agreement
exists - Notwithstanding that an application
has been made u/s 8(1) and that the issue
is pending before the judicial authority, an
arbitration may be commenced or continued
and an arbitral award made - i.e. there is no
embargo for a party to approach the arbitral
tribunal for getting the dispute decided
during pendency of the suit - It would be an
ideal scenario if the parties themselves
respect their contractual commitment &
approach the arbitrator without the judicial
authority compelling them to do so under
Section 8 of the Act. (Para 15)

Civil Law -Arbitration and Conciliation
Application Act, 1996 - Section 8 - Order 7
Rule 11 C.P.C. - Appellant, a proprietorship
concern, entered into an agreement of
tenancy with the respondent in respect of
an industrial property - clause 14 of the
lease deed provided that in the event of any
dispute or difference arising out of lease
agreement, the same was to be referred to
an arbitrator appointed by the lessor - As
the appellant failed to vacate the tenanted
premises, the respondent instituted a suit -
trial court rejected the plaint in exercise of
power under Order 7, Rule 11 (d) CPC
holding that the suit is barred by S. 8 of the
Act - Court simply rejected the plaint and
did not make reference of the dispute u/s 8
of the Act - Appellant contended that unless
the court refers the parties to arbitration,
the parties themselves cannot invoke the
arbitral machinery nor the arbitral tribunal
gets jurisdiction to decide the dispute and
differences between the parties - Held -
although the trial court while deciding the
issue relating to bar u/s 8 had rejected the
plaint without referring the parties to
arbitration and to that extent it's order is
erroneous, but that in no manner was an
impediment in invoking the mechanism of
redressal viz. arbitration agreed to by the
parties themselves - Court held that the
submission of learned counsel for the
appellant is inherently contrary to the
legislative
intent
and
cannot
be
countenanced and hence rejected (Para 15)