Dismissed

M/s. Shreya Homes v. Kondakal Sai Reddy

Telangana HC11 Jan 2024CRP/712/2023

Case brief

AI extract

What is this about?

The High Court dismissed a civil revision petition challenging the Trial Court's rejection of an application to reject a plaint on the ground of an arbitration clause. The Court held that Section 8 of the Arbitration Act does not bar a plea under Order VII Rule 11 CPC, as rejecting a plaint is distinct from referring parties to arbitration. Since the respondent filed a written statement raising no

What did the court decide?

The Civil Revision Petition was dismissed with no order as to costs; pending miscellaneous applications were closed.

M/s. Shreya Homes Vs Kondakal Sai Reddy — Contract and Commercial Disputes | Telangana HC (2024)

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[³³⁸⁵¹

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tN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD

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THURSDAY, THE ELEVENTH DAY OF JANUARY TWO THOUSAND AND TWENry FOUR

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PRESENT

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THE HON'BLE SMT JUSTICE K. SUJANA

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crvtL REvtsloN PET|TION No: 712 ol 2023

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Petition under Article 227 ot the Constitution of^{lndia, against the order dated} 23-01-2023 passed in l.A. No.621 ot 2021^{in O.S.No.441ot 2022on the file of} the Court of the Senior Civil Judge, at Chevella,^{Ranga Reddy District.}

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Between:

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M/s. Shreva Homes, Rep by Sridhar Goud^{S/o G. Dayanand,Age:42 years, Occ:} Business iVo Plot No. 4i, Huda Enclave,^{Road No. 70, JournalistColony, Jubilee} tlills' Shaikpet' Hyderabad'

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...petitioner

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AND

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Kondakal Sai Reddy, S/o K. Shanker Reddy, Age: 58 years, Occ: Agriculture^FVo Manikonda Mllage Ranga Reddy District.

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...ResPondent

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lA NO: 1 OF 2023

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Petition under Section 151 CPC^{prayingthat in the circumstances stated in} the affidavit filed in support of the^petition, the^{High Court maybe pleasedto stay} all further proceedings in o.s.No.441 of^{2022 on the file of senior civil Judge at} Chevella, Ranga Reddy District.

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Counsel for the Petitioner: SRI CHETLURU^SREENIVAS

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Counsel for the Respondent None Appeared

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The Court made the following: ORDER

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THE HoN'BLE sMT.rIsncp K. SUJANA

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CTVIL REVISION PETITIO N NO.712 0F 2023

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ORDER:

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This revision petition is trled by the revision petitioner/ defendant aggrieved by the order dated 23.01.2023 passed in LA.No.621 of 2O2I (sic., i.e., I.A.No.62t of 20221 io O.S.No.441 of 2022 (old No.O.S.No. 186 of 2Otal by the learned Senior Civil Judge at Chevella, wherein the petitioner herein filed the said I.A., under Order VII Rule 11 of Code of Civil procedure (CPC) pralng the Court to reject the plaint on the ground that there is arbitration clause in the Development agreement-cumGPA. As such, the suit is not maintainable.

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The petitioner herein filed the said I.A., stating that the suit was instituted by the respondent/plaintiff praying the Court to pass decree for cancellation of registered Development agreementcum-GPA dated 17.O9.2O12. Clause 35 of the said development agreement contains Arbitration clause wherein the parties agreed to settle their disputes through arbitration, if any dispute arises. In view of Section 8 of the Arbitration and Conciliation Act, 1996 (for short, 'the Act, 1996'J, the Civil Court has no jurisdiction to decide the dispute. As such, prayed the Court to reject the plaint.

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The respondent/ plaintiff hled counter stating that though petitioner frled written statement, he could not take the defence of suit being bad in view of Section 8 of the Act, 1996 and for the hrst time in the present petition, the defense of arbitration clause is taken and further submitted that plaint cannot be rejected on the ground of existence of arbitration clause in the agreement between the parties. The other contents of counter relates to the dispute and material facts between the parties. Therefore, prayed the Court to dismiss the petition.

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Considering the averments of petition, counter and after hearing both sides, the trial Court dismissed the said application.

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Heard Sri Chetluru Sreenivas, learned counsel for the petitioner and none appeared for the respondent.

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The contention of learned counsel for the petitioner is that the trial Court dismissed the petition filed under Order VII Rule 1l of CPC without considering the fact that the Development agreement-cum-GPA which is sought to be cancelled is having arbitration clause. Section 8 of the Act, 1996 empowers the judge to refer the case to the arbitration. He also submits that the lirst statement appearing in Section 8 is not to be taken as written

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statement filed by the defendant. The triar court fa ed to see that the defendant did not submit to the jurisdiction of learned Senior civil Judge. As such, prayed the court to set aside the order of trial Court by allowing this revision.

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None appeared on behalf of the respondent, even after receiving the notice.

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Having regard to the submissions made by the petitioner and the material on available on record it is seen that I.A.No.621 of 2022 was filed under Order VII Rule I I ol CpC praying the court to reject the plaint on the ground that there is an arbitration clause in the Development Agreement_cum_GpA. As seen from the record the suit is hled in the year 2Ol4 and, the defendant has filed written statement in the year 2O2l and. he did not take the defense that suit is being bad in law. Section g of the Act, 1996, says that if the party so applies not rater than when submitting, his frrst statement on the substance of the dispute refer the parties to the arbitration. Further the High Court of Delhi in MI2C Security Facilities M. Ltd., Vs Itorth Delhi Munlcipal Corporation w.P.(Cl aL97lzot7 & CM.NO.gg@al2Ot7, observed that if the party has filed its first statement without any intimation of the arbitration clause before the Judicial authority then it would be

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presumed that the party has waived off its right to invoke the arbitration clause as per Section g of the Act, 1996.

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Though the learned counsel for the petitioner has contended that written statement is not the first statement, Section g of the Act, 1996, does not come into pray as he filed written statement, whereas in Section g of the Act, 1996, it is clear that whatever it is first statement on the substance of the dispute and when he filed the written statement, he has not taken the defense even though suit is filed in the year 2Ol4 and written statement is fited in the year 2027. petitioner filed I.A.No.62 I of 2022 after filing the written statement.

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lO. As observed in Chuaduru Visalakshi Vs Chunduru Rajeadra prasadr, Section g of the Act, 1996 only empowers the Court to refer the parties to the arbitration but does not give the Court an option to reject the plaint. Order VII Rule I I of CpC empowers the court to reject the praint, when there is bar to the suit because of any law. Section g of the Act was not a bar to the Civil Court. It provides an alternative to the defendant against whom a civil suit is initiated to submit to the jurisdiction of the

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'2022 SCC online Ap 888

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Civil Court or to make an application at appropriate time under Section 8 of the Act, 1996 seeking an order to refer the parties to arbitration. The power under Section 8 of the Act cannot be considered as a bar to the civil suit to entertain petition under Order VII Rule 11 of CPC. As such there is no illegality in the order of the trial Court and Order VII Rule 11 of CPC does not apply to the present petition. Hence, there are no merits in this revision and the same is liable to be dismissed.

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I1. Accordingly, the Civil Revision Petition is dismissed. There shall be no order as to costs.

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Miscellaneous applications, if any, pending shall stand

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closed.

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SD'.V. HARI PRASAD ASSISTANT REGISTRAR

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/,TRUE COPY"

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To,