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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 1ST DAY OF JULY, 2015

BEFORE

THE HON'BLE MR.JUSTICE B.S.PATIL

C.R.P.No.326/2014

BETWEEN

Mr.Dominic D.R.Rebellow S/o late Mr.Ronala T.A.Rebello Aged about 41 years r/at No.203, Green Residency Apartments, No.14, Kensington Road Cross Bangalore 560 008. ... PETITIONER

(By Sri.A.Madhusudhana Rao, Adv.)

AND

Mr.Cerdric P.A.Lobo S./o late S.L.Lobo Aged about 65 years Coffee Planter, r/o Siddarabetta Estate, Bagamane Village, Avathi Hobli, Chikmagalur Taluk, Also at Lobo Monor, Sturrock Road, Falnir, Mangalore 570 001. ... RESPONDENT

(By Sri A.C.Balaraj, Adv.)

This Civil Revision Petition is filled under Sec.115 CPC., against the order dated 30.6.2014 passed on IA No.3 in O.S.80/2012 on the file of the I Addl.Sr.Civil Judge & JMFC., Chikmagalur, allowing IA No.3 filed under Sec.8(1) of Arbitration and Conciliation Act, 1996 and etc.

This petition coming on for Admission this day, the Court made the following:

ORDER

1. This revision petition is filed aggrieved by the order dated 30.06.2014 passed by the Trial Court thereby allowing the application filed by the defendant under Section 8(1) of the Arbitration and Conciliation Act, 1996 (for short 'the Act') and referring the matter for arbitration to get the dispute resolved.

2. Petitioner is the plaintiff in the Trial Court. He has filed the suit for specific performance of the Agreement of Sale dated 10.06.2011. His case is that as per the said agreement, defendant has agreed to sell the suit schedule property for sale consideration of Rs.39 lakhs and has received by way of advance through cheque a sum of Rs.13 lakhs on the date of agreement. His further assertion is that the defendant illegally and unjustly terminated the agreement by writing a letter dated 28.06.2011. Contending that plaintiff was always ready and willing to perform his part of the contract, he instituted the suit by paying Court fee of Rs.1,74,125/- on the memorandum of plaint.

3. The respondent appeared and filed his written statement. Along with the written statement, he filed an application under Section 8 of the Act contending interalia that there was a clause in the agreement to refer the matter to Arbitration and hence, the Court may be pleased to refer the matter for arbitration.

4. This application was objected by the plaintiff by filing objections. In the objections, plaintiff brought to the notice of the Court that before filing the suit, several attempts were made for fair settlement, but the defendant did not responded to the same. The plaintiff however, did not dispute the existence of the arbitration clause or for reference of the dispute for arbitration. The Trial Court, having held that defendant having already filed his written statement, strictly speaking, in terms of Section 8(1) of the Act was not entitled to seek reference of the matter to the arbitration, has proceeded to refer the matter for arbitration on the ground that plaintiff himself agreed for such reference.

5. Learned counsel appearing for the petitioner – plaintiff contends that the submission made by the plaintiff was under a mistaken notion and the concession shown by the counsel for the plaintiff, in the instant case has the effect of depriving the plaintiff of his valuable right to have his dispute adjudicated before the Civil Court, particularly when he has paid huge sum of Rs.1,74,125/- towards Court fee and after litigating the matter for nearly two years.

6. Learned counsel for the respondent supports the order passed.

7. Having heard the learned counsel for both parties and on careful perusal of the materials on record, I find that the suit has been instituted on 24.05.2012 seeking specific performance of the Agreement of Sale dated 10.06.2011 by paying Court fee of Rs.1,74,125/-. Defendant filed written statement meeting all the contentions urged on merits. Along with the written statement, he filed application under Section 8(1) of the Act. His conduct, therefore, discloses that he has contested the case before the Civil Court. He was not sure whether he should go for arbitration as per the clause contained in the agreement in that regard or to proceed with the matter. Therefore, he loses his right to request the Court to refer the matter for arbitration. The Trial Court has rightly come to this conclusion. Indeed in terms of Section 8(1) of the Act, duty to refer the parties for arbitration is contemplated only when the party applies before submitting his first statement on the substance of the dispute seeking for reference to arbitration. Thereafter, there is no mandatory duty cast on the Court to refer the matter once written statement was filed. The Court ought to have found out keeping in mind the ends of justice, nature of the dispute and the other attendant circumstances whether the matter should be referred. In the instant case, the circumstances such as payment of huge sum of Court fee by the plaintiff, waiver of right by the defendant by filing written statement at the first instance and the pendency of the proceedings for a period of two years and the nature of the suit being one for specific performance ought to have been taken into consideration before the impugned order was passed. Had the Trial court taken into consideration these relevant factors, it would not have passed the order under challenge referring the dispute to arbitration. In my view, the Court below has committed serious illegality in mechanically referring the parties to arbitration. Defendant having waived his right by filing written statement and contesting the suit, in the context of the circumstances adverted to above, the Court below ought to have proceeded with the suit.

8. Hence, this revision petition is allowed. Impugned order is set aside. The Court below is directed to proceed with the trial of the suit in accordance with law.

Sd/- JUDGE

VP