JUDGMENT Dharam Chand Chaudhary, J. OMP No. 434 of 2012. This order shall dispose of the present application under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act’) filed by the defendants with a prayer to drop the proceedings in the main suit and refer the parties for arbitration in terms of the arbitration clause contained in the work order/agreement whereby the execution of civil works of Rouri project has been awarded to the defendant for approximate value of Rs.1.5 crores by the plaintiff/non-applicant. 2. The plaintiff-non-applicant has filed the suit for decree of Rs.18,81,735/-along with costs and interest pendentlite and future against the applicants-defendants in the main suit on the ground that they failed to execute the civil work at its cement manufacturing sites Suli and Rauri, P.O. Darlaghat, Tehsil Arki, District Solan in terms of the work orders No.ACL/civil/Rauri/2008/65, dated 14.10.2008, in respect of Rauri Project and No.ACL/CIVIL/Suli/2008, dated 14.10.2008, of Suli project. 3. The suit was initially filed in the Court of District Judge Delhi, which came to be assigned to the Court of Additional District Judge-03 South, District Saket, New Delhi. The defendants-applicants had put in appearance before District Court, Delhi in the suit and filed written statement of their defence and also an application under Order VII, Rule 11 read with Section 151 CPC with a prayer to reject the plaint and refer the parties to arbitrator in terms of arbitration clause. 4. This application came to be disposed of by learned Additional District Judge-03, South District, Saket, New Delhi vide order passed on 23.2.2012. Although, it was held that the Court at Delhi and Himachal Pradesh have the jurisdiction to try and entertain this suit, yet the parties mutually agreed to opt for the jurisdiction of competent Court in Himachal Pradesh and as such the application was returned for presentation before the competent court. The relevant portion of this judgment is extracted here as under:- “Therefore, it is held that there is concurrent jurisdiction with the Courts at Delhi and Court at Himachal Pradesh, with regard to work site at Suli and Rouri but the parties by their consensus and agreement, have chosen one of the Court, where site is located, exclusively as a competent Court. Thus, they have to honour their resolution/agreement and it is held that Court at Delhi has no territorial jurisdiction, with regard to the purchase orders dated 14.10.2008. Accordingly, the plaint is returned to the plaintiff under order VII Rule 10 CPC to enable the plaintiff to present it before the competent Court. In case, the plaintiff does not take back the plaint, it will be consigned to record room after 30 days.” 5. Since, in the application, one of the grounds for rejection of the plaint was that the suit is not maintainable in view of the fact that there exists arbitration clause in the work order/ agreement, therefore while dealing with that aspect, learned Additional District Judge, has further observed as follows, in the order cited supra:- “The defendants by way of their written statement, opposed the suit, while denying all the allegations vis-à-vis on the point of jurisdiction. Besides, the defendants also filed application under order VII Rule 11 CPC on various grounds amongst others for rejection of plaint. The defendants also took that there is an arbitration clause in the purchase order/ agreement. However, the defendants have already filed the written statement and by judicial order dated 31.01.2012, it was held that objection with regard to arbitration clause is not pressed by the defendant, therefore, it is not subject matter to be adjudicated in the present application also.” 6. The interim order passed in this application by learned Additional District Judge on 31.1.2012, for the sake of convenience, is also extracted hereinbelow:- “Plaintiff files reply to defendant’s application under order VII Rule 11 CPC besides replication to the written statement of defendants and fresh certificate of incorporation consequent upon change of name. Copies given to opposite side. Application under order VII Rule 11 CPC is heard in detail. There are twin aspect raised in the application, firstly, the Court at Delhi has no jurisdiction and secondly there are arbitration clause in the work order, however, in the phase of arguments, the second issue of arbitration clause is not pressed for since written statement have already been filed. The issue to be left is with regard to ‘whether the courts at Delhi has territorial jurisdiction to try the suit’.” 7. It is in this backdrop, the suit landed in this Court. The issue to be left is with regard to ‘whether the courts at Delhi has territorial jurisdiction to try the suit’.” 7. It is in this backdrop, the suit landed in this Court. This application came to be filed before this court by the defendants-applicants on the very first day of entering appearance i.e. 4.10.2012. The case as set out in the application reads as follows:- “5. That it is pertinent to mention here that at the time of issuing work order for the Rauri Project the plaintiff and the defendants had entered into a contract which contains an arbitration clause and under clause 30 of the General terms and conditions of the work order/ contract it was agreed to settle all of their dispute through arbitration. Arbitration clause 30 of the general terms and conditions of the work order/contract is reproduced herein for the king perusal of this Hon’ble Court: ‘Clause 30. Arbitration-Any dispute arising out of this work order shall be referred to the sole arbitration of the president of the company and his decision will be final and binding on both the parties.’ (Certified true copy of the work order/contract dated 14.10.2008 for Rauri Project is annexed herewith as Annexure-A) 6. That it is pertinent to mention here that at the time of issuing letter of intent for the Suli Project the plaintiff and the defendants had agreed to execute the work on the same terms and conditions as of Maratha Cements Work order for colony construction which contains an arbitration clause and under clause 37.0 of the Special terms and condition of the work order/ contract it was agreed to settle all of their dispute through arbitration. Arbitration Clause 37.0 of the Special terms and conditions of the work order/ contract is reproduced herein for the kind perusal of this Hon’ble Court: ‘Clause 37.0 RESOLUTION OF DISPUTES: The Employer and the Contractor shall make every effort to resolve amicably, by direct formal negotiations, any disagreement or dispute arising between them either under or in connection with the contract. If after 30 days of commencement of such informal negotiations, the Employer and the Contractor have been unable to resolve the dispute amicably, either party may refer the dispute for resolution to sole arbitration of the Managing Director of the Employer Company, whose decision shall be final, conclusive and binding on both the parties. If after 30 days of commencement of such informal negotiations, the Employer and the Contractor have been unable to resolve the dispute amicably, either party may refer the dispute for resolution to sole arbitration of the Managing Director of the Employer Company, whose decision shall be final, conclusive and binding on both the parties. The works and payments shall continue during the negotiations period and arbitration proceedings. The arbitration proceedings shall be governed by Arbitration Act, 1996.” (Certified true copy of the letter of intent dated 14.10.2008 for Suli Project along with work order Mazatha Cement Works Projects is annexed herewith as Annexure-B). 7. That it is respectfully submitted that the plaintiff intentionally and deliberately has not invoked the arbitration clause as agreed by them and misused the process of law by filing the false and frivolous civil suit before this Hon’ble Court.” 8. The response of the plaintiff-non-applicant as has come on record by way of preliminary submissions in the reply reads as follows:- “1. That the defendant is estopped from filing the present application on account of its acts, deeds, conduct and acquiescence. It is submitted that the suit was initially filed in the Court of Additional District Judge (3) South, District Saket, New Delhi on 09.08.2011 wherein the defendant-applicant has filed the written statement dated 15.11.2011, which is attached herewith as Annexure A-1, wherein also similar objections were raised. The defendant-applicant had also filed application under Order VII Rule 10 CPC on 31.01.2012 the objection of arbitration clause was not pressed and given up as written statement had already been filed and the objection of arbitration was also decided accordingly. The Additional District Judge (3) south, District Saket, New Delhi by an order dated 23.02.2012 held that there was concurrent jurisdiction of the Court at Delhi and Courts in H.P. with regard to the work done at Suli and Rouri but since the parties had by their consent and agreement chosen one of the courts where the site is located exclusively as competent court to try the matter, the plaint was ordered to be returned for presentation to the appropriate court and the plaint had now been re-presented before this Hon’ble Court in pursuance to the directions of the Additional District Judge (3) South, District Saket, New Delhi, dated 23.02.2012. As such, the objection that there is arbitration clause and the suit cannot be tried by the civil court is not maintainable, more particularly, when first statement of substance of the dispute has already been filed by the defendant in the Delhi court in the written statement and the defendant-applicant has also given up the plea of arbitration, as such the application is not maintainable and the suit deserves to be determined by this Court.” 9. In rejoinder, there is complete denial on behalf of the applicants-defendants of the contentions so raised in reply and the further case they set out and necessary for adjudication of the point in issue is that in this application needs to be dealt with more effectively and judiciously, reproduced hereinbelow for the sake of convenience:- “1. ……. It is wrong and denied that the objection of arbitration clause was given up as written statement had already been filed and the objection of the arbitration was also decided accordingly. It is submitted that the Hon’ble Additional District Judge (3) South, District Saket, New Delhi has only adjudicated the preliminary issue of jurisdiction and returned the plaint to the plaintiff hence the application under Order VII Rule 11 remained intact with the plaint for consideration and decision by the Court having the original and competent jurisdiction. It is wrong and denied that the defendant-applicant has also given up the plea of arbitration………….. It is submitted that the plaintiff has the efficacious remedy as per arbitration clause before the arbitrator hence this Hon’ble Court has jurisdiction to entertain, try and decide the present application. It is a settled position of law that a court which does not have any jurisdiction to try the matter would have no jurisdiction to pass any order which affect the rights of the parties. The orders which are passed by a court which has no jurisdiction to determine the matter, are without jurisdiction and, therefore, of no effect and purport. Hence the Delhi Court has no jurisdiction to decide the matter as such the arbitration clause was not adjudicated by the Court of Delhi being and incompetent court to decide the matter. Hence the plea of arbitration is open for the court of competent jurisdiction…” 10. On behalf of the applicants-defendants, Mr. Hence the Delhi Court has no jurisdiction to decide the matter as such the arbitration clause was not adjudicated by the Court of Delhi being and incompetent court to decide the matter. Hence the plea of arbitration is open for the court of competent jurisdiction…” 10. On behalf of the applicants-defendants, Mr. Anil Sharma, Advocate, while taking this court to the provisions contained under Section 8 of the Act and also the law laid down by the Apex Court by way of various judicial pronouncements has strenuously contended that the dispute may be referred to the arbitrator as provided under arbitration clause in the work order/agreement entered into between the parties to the suit. 11. On the other hand, Shri K.D. Sood, learned Senior Advocate assisted by Mr. Sanjeev Sood, Advocate while repelling the arguments addressed on behalf of the applicants-defendants has urged that the applicants-defendants have already submitted to the jurisdiction of the Court by filing the written statement during the pendency of the suit in the Court of Additional District Judge, Delhi. Consequently, a valuable right has accrued in favour of the plaintiff to get the dispute adjudicated by this Court, which according to Mr. Sood can not be allowed to be taken away on the grounds as raised in this application. It has also been pointed out that not only the written statement is filed but the defendants-applicants had even given up the plea as available in the arbitration clause also during the course of proceedings in the suit before the Court at Delhi. According to learned Senior Advocate since the plaint has been returned merely for its presentation before this Court, therefore, the defendants-applicants are now estopped by their conduct, deeds and acquiescence to raise the issue of arbitration clause and to seek a direction for referring the dispute in the main suit to the arbitrator. 12. Before coming to the claims and counter claims so laid, it is desirable to take note of Section 8 of the Act:- “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 so applies not latter than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. 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 so applies not latter than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (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. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, and arbitration may be commenced or continued and an arbitral award made.” 13. The conditions necessary for invoking the jurisdiction of the Court to exercise powers vested in it under Section 8 of the Act ibid and the scope of the provisions contained thereunder have been elaborated by the apex Court in P Anand Gajapathi Raju vs. P.V.G. Raju & Others, (2000) 4, SCC, 539, as follows:- “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 Court, once the other party has submitted his first statement of defence. 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. 6. In our view, the phrase "which is the subject of an arbitration agreement" does not, in the context, necessarily require that the agreement must be already in existence before the action is brought in the Court. The phrase also connotes an arbitration agreement being brought into existence while the action is pending. 6. In our view, the phrase "which is the subject of an arbitration agreement" does not, in the context, necessarily require that the agreement must be already in existence before the action is brought in the Court. The phrase also connotes an arbitration agreement being brought into existence while the action is pending. Black's Law Dictionary has defined the word 'is' as follows: "This word, although normally referring to the present, often has a future meaning, but is not synonymous with "shall have been". It may have, however, a past signification, as in the sense of "has been". 7. A further question arises whether the Court is in these circumstances obliged to refer the parties to arbitration and if so with what effect. 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 peremptory. 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 therefrom. 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 new 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(e) of the new Act. 9. We, therefore, allow the application and would refer the parties to arbitration. 9. We, therefore, allow the application and would refer the parties to arbitration. No further orders are required in this appeal and it stands disposed of accordingly.” 14. It is seen from the ratio of the judgment supra that the parties can even be referred to arbitration by the Court during the pendency of an appeal also, no doubt, in a situation where arbitration agreement is entered into during the pendency of the appeal and subject to the condition that the agreement so entered into meets the requirement of Section 7 of the Act. 15. In Hindustan Petroleum Corporation Ltd. vs. Pinkcity Midway Petroleums, (2003) 6, SCC, 503, their lordships of the apex Court has further held as under:- “14. This Court in the case of P. Anand Gajapathi Raju & Ors. v. P.V.G. Raju (Dead) & Ors. [ 2000(4) SCC 539 ] has held that the language of Section 8 is peremptory in nature. Therefore, in cases where there is an arbitration clause in the agreement, it is obligatory for the Court to refer the parties to arbitration in terms of their arbitration agreement and nothing remains to be decided in the original action after such an application is made except to refer the dispute to an arbitrator. Therefore, it is clear that if, as contended by a party in an agreement between the parties before the Civil Court, there is a clause for arbitration, it is mandatory for the Civil Court to refer the dispute to an arbitrator. In the instant case the existence of an arbitral clause in the agreement is accepted by both the parties as also by the courts below but the applicability thereof is disputed by the respondent and the said dispute is accepted by the courts below. Be that as it may, at the cost of repetition, we may again state that the existence of the arbitration clause is admitted. If that be so, in view of the mandatory language of Section 8 of the Act, the courts below ought to have referred the dispute to arbitration.” 16. Be that as it may, at the cost of repetition, we may again state that the existence of the arbitration clause is admitted. If that be so, in view of the mandatory language of Section 8 of the Act, the courts below ought to have referred the dispute to arbitration.” 16. It is thus seen that the provisions contained under Section 8 of the Act are mandatory in nature and it is obligatory for the Court to refer the parties to arbitration in terms of the arbitration clause in the agreement and nothing remains to be decided in the suit, on filing of an application of this nature. 17. Now coming to the point in issue, learned Senior Advocate representing the plaintiff-non applicant has made an effort to take this matter out of the purview of Section 8 of the Act, by canvassing that filing of written statement by the defendants-applicants in the Court at Delhi and giving up the plea of arbitration clause, this application is not maintainable, however, unsuccessfully for the reason that the issue settled in the suit by the Court at Delhi was relating to the territorial jurisdiction of the Court to entertain and try the same only. Otherwise also, no other issue including the suit being barred, in view of the arbitration clause in the agreement either could have been raised or entertained and decided by the Court unless and until the question of jurisdiction is decided. While arriving at such a conclusion, this Court is supported by a judgment of Delhi High Court in Mahesh Gupta vs. Ranjit Singh & others, 159 (2009) Delhi Law Times 624 (DB). Relevant portion of this judgment, reads as follows:- “7. The issue therefore is, can this application for amendment be allowed. It is trite that the Court which does not have jurisdiction to try the matter would have not jurisdiction to pass any order which affect the rights of the parties. The orders which are passed by a Court which has no jurisdiction to determine the matter, are without jurisdiction and, therefore, of no effect and purport. The court therefore which does not have pecuniary jurisdiction cannot pass any orders allowing an application seeking amendment of a plaint to bring the suit plaint within the pecuniary jurisdiction of a Court.” 18. The orders which are passed by a Court which has no jurisdiction to determine the matter, are without jurisdiction and, therefore, of no effect and purport. The court therefore which does not have pecuniary jurisdiction cannot pass any orders allowing an application seeking amendment of a plaint to bring the suit plaint within the pecuniary jurisdiction of a Court.” 18. The High Court of Delhi has again held in Khosla Machines Pvt. Ltd. versus Deepak Verma T/A B.M. Packaging, 2009 VI AD (Delhi) 517, that at the stage of consideration of question of maintainability of the suit, the court can not look into the written statement, but such question has only to be decided on the basis of the averments in the plaint. The relevant portion of this judgment also reads as follows:- “22. As regards the plea of estoppel, this Court is unable to appreciate how the plaintiff can seek to take advantage of the defendant’s averments in its written statement. The submission of Mr. Lal was that unless the defendant admitted the genuineness of the two documents which contained the ouster clause, the ouster clause cannot be used to estop the plaintiff from approaching the court. In the first place, this Court does not have to look into the written statement to see whether on the basis of the averments in the plaint, this Court has jurisdiction or not. The plaint has to be examined along with the documents for that purpose……” 19. To the similar effect is the ratio of the judgment again that of Delhi High Court in Dashmesh Mechanical Works versus Hari Singh & Another, 2010 (6) R.A.J. 173 (Del), which reads as follows:- “18. From the above said decisions given by the Supreme Court while examining the expression ‘cause of action’ the court has to see the factual situation that gives rise to an enforceable claim made by the plaintiff in the plaint which is to be read collectively to constitute a bundle of facts that from the basis of institution of the present suit filed by the plaintiff.” 20. True it is that the defendants-applicants had not only filed the written statement, but also an application under Order VII Rule 11 CPC with the prayer either to return the plaint for want of jurisdiction, in the Court at Delhi or rejection thereof on the ground that in view of the fact that there exists arbitration clause in the agreement, the suit is not maintainable. It is the plaint which was ordered to be returned under Order VII Rule 10 CPC and not rejected on the grounds including the existence of arbitration clause in the work order/ agreement under Order VII Rule 11 CPC. The orders dated 31.1.2012 and 23.2.2012 passed in the application under Order VII Rule 11 CPC reveal that the issue of arbitration clause raised by the defendants-applicant was not given up but rather it was not pressed. Therefore, in such a situation, coupled with the principles laid down in the judgments cited supra, the stand of the plaintiff/non-applicant that the defendants-applicants are estopped by their acts, deeds and conduct to raise this question in the present suit has no legal basis. 21. The judgment in Wankanner Jain Social Welfare Society versus Jugal Kishore Sapani, 2001 (3) Arb. LR 623 (Madras) relied upon by the plaintiff/non-applicant has no application to the given facts and circumstances of this case for the reason that in the case before the apex Court, the written statement was filed in that very court where the suit was instituted and tried. The position before this Court in the present case is altogether different because the present suit, no doubt on return of the plaint by the court at Delhi has been filed afresh, however, the applicants-defendants have not yet entered upon their defence and rather, instead of filing their written statement of defence opted for filing the present application on the very first date of their appearance. It is not a case where only written statement was filed in the court at Delhi but an application under Order VII Rule 11 CPC for rejection of the plaint on several grounds including the one that there being arbitration clause in the agreement, the parties should be referred to arbitrator, with further prayer to return the plaint under Order VII Rule 10 CPC was also filed. There is no dispute qua the existence of agreement and the provision qua referring the dispute, if any, between the parties for adjudication to the arbitrator therein as extracted in this order at the very outset. 22. Not only this, but in terms of Section 89 of the Code of Civil Procedure, arbitration is a recognized alternative disputes resolution technique i.e. settlement of dispute by alternative mode. The Hon’ble apex Court in Hindustan Petroleum Corporation Ltd. vs. Pinkcity Midway Petroleums cited supra has categorically and in unequivocal terms held that the existence of arbitration clause in the agreement casts a duty on the Court ceased of the matter to refer the parties to the arbitrator for adjudication of dispute. Not only this, but the provisions under Section 8 of the Act are also mandatory in nature. No doubt one of the conditions precedent to invoke the jurisdiction of the Court under Section 8 of the Act is that the opposite party should move the Court for referring the dispute to arbitrator for adjudication well before its first statement on the substance of the dispute is filed. However, in the case in hand the defendants-applicants have not yet filed the written statement to the suit and rather opted to invoke the jurisdiction of this Court under Section 8 of the Act on the very first day of entering appearance. 23. Above all, the Additional District Judge, Delhi has not decided the issue with respect to arbitration clause and referring of the dispute to the arbitrator and rightly so as in view of the question of territorial jurisdiction raised by the defendants-applicants, no other issue could have been taken up for consideration by the said court as per the settled legal principles discussed supra. Not only the defendants-applicants, but also plaintiff-non-applicant has agreed and opted for the jurisdiction of the Court in Himachal Pradesh and as a matter of fact, it is with the consent of both parties, the plaint was returned. These are certain factors, which bring the present application within the purview of Section 8 of the Act and not preclude the defendants-applicants from filing the same. 24. In view of the forgoing reasons, I find merit in this application and the same is accordingly allowed. These are certain factors, which bring the present application within the purview of Section 8 of the Act and not preclude the defendants-applicants from filing the same. 24. In view of the forgoing reasons, I find merit in this application and the same is accordingly allowed. Consequently, the parties are referred to the arbitrator for settlement of the dispute brought to this Court in the main suit through the process of arbitration. The application stands accordingly disposed of. Civil Suit No.73 of 2012. 25. As per the order of the day, passed in OMP No.434 of 2012, the parties are relegated to the arbitrator for adjudication of the dispute brought to this court in the present suit. There hardly remains anything to be adjudicated upon on merits; the suit is accordingly disposed of.