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2014 DIGILAW 781 (HP)

Ram Transport Finance Co. Ltd. v. Thakur Dutt

2014-06-23

RAJIV SHARMA

body2014
JUDGMENT Rajiv Sharma, Judge. This petition is directed against the order dated 21.2.2013 rendered by the Civil Judge (Senior Division), Court No .1, Kasauli in C.M.A. No. 159-VI/12 in Civil Suit No. 138/1 of 2012. 2. “Key facts” necessary for the adjudication of this petition are that respondent-plaintiff (hereinafter referred as the “plaintiff” for convenience sake) has filed a Civil Suit against the petitioner-defendant (hereinafter referred to as the “defendant” for convenience sake) under section 38 of the Specific Relief Act for permanent prohibitory injunction by restraining the defendant from taking forcible possession of the vehicle in question. The plaintiff has also filed an application under order 39 rule 1 and 2 of the Code of Civil Procedure for the grant of adinterim injunction. 3. Defendant was directed to be summoned for 14.8.2012 and Dasti summons were also ordered to be issued in the main civil suit on 4.8.2012. Fresh summons were ordered to be issued to the defendant for 25.9.2012 vide order dated 14.8.2012. Memo of appearance on behalf of defendant was filed on 25.9.2012 in the main suit and time was prayed for filing regular power of attorney and written statement. The prayer was allowed and the matter was listed for 19.10.2012. Time was again sought for filing written statement on 19.10.2012 and the written statement was permitted to be filed in the main civil suit on 1.11.2012. On 1.11.2012, Sh. Amrik Lal Attri, G.P.A. of defendant appeared in person. An application under section 8 read with section 5 of the Arbitration and Conciliation Act was filed. The copy was supplied to the opposite site. Reply was ordered to be filed vide order 1.11.2012 on 16.11.2012. Reply was filed by the plaintiff on 22.11.2012 and the application was ordered to be listed for consideration on 10.1.2013 vide order dated 22.11.2012 and it was again ordered to be listed for consideration vide order dated 10.1.2013 on 21.2.2013. 4. The Civil Judge (Senior Division) ordered to issue notice in an application under section 39 rule 1 and 2 of the Code of Civil Procedure on 4.8.2012. Fresh summons were issued to defendant for 25.9.2012 vide order dated 14.8.2012. Memo of appearance was filed on behalf of respondent on 25.9.2012 and the matter was ordered to be listed for filing reply on 19.10.2012 vide order dated 25.9.2012. Time was again prayed for filing reply vide order dated 19.10.2012. Fresh summons were issued to defendant for 25.9.2012 vide order dated 14.8.2012. Memo of appearance was filed on behalf of respondent on 25.9.2012 and the matter was ordered to be listed for filing reply on 19.10.2012 vide order dated 25.9.2012. Time was again prayed for filing reply vide order dated 19.10.2012. Thereafter, on 1.11.2012 Amrik Lal Attri, G.P.A. of respondent stated that defendant will not take possession of the vehicle in question till final decision of the case. His statement was recorded separately. Civil Judge (Senior Division) allowed the application under order 39 rule 1 and 2 of the Code of Civil Procedure and the defendant was restrained from taking possession of truck Eicher bearing registration No.HP-63-2209 till the final decision of the case. Civil Judge (Senior Division) dismissed the application filed by the defendant under section 8 read with section 5 of the Arbitration and Conciliation Act, 1996 on 21.2.2013. According to the Civil Judge (Senior Division) defendant has voluntarily given statement on 1.11.2012 before the Court and in view of this, the Court has the jurisdiction to try the suit under section 9 of the Code of Civil Procedure. It is in these circumstances, present application has been filed. 5. It is necessary for the completion of facts of the case to note that the written statement was filed by the defendant on 8.3.2013. Defendant has specifically averred in the application filed under section 8 read with section 5 of the Arbitration and Conciliation Act, 1996 that in view of clause 15 of the agreement entered into between the parties, matter was required to be referred to the Arbitrator. Application was contested by the plaintiff. Defendant has prayed for filing of the written statement on 25.9.2012. Similar request was also made on 19.10.2012. In the meantime, Sh. Amrik Lal Attri, G.P.A. of defendant has made a statement in CMA No. 72-VI/12 on 1.11.2012. 6. Civil Judge (Senior Division) has erred in law by construing the statement made by Mr. Amrik Lal Attri, G.P.A. of defendant on 1.11.2012 that defendant has acceded to the jurisdiction of the civil court. Civil Judge (Senior Division) after the passing of order on 21.2.2013 has also framed issues on 8.3.2013 and the plaintiff has produced two affidavits of witnesses, namely, Thakur Dutt and Kamlesh on 20.6.2013. These witnesses were permitted to be cross-examined on 30.10.2013. Civil Judge (Senior Division) after the passing of order on 21.2.2013 has also framed issues on 8.3.2013 and the plaintiff has produced two affidavits of witnesses, namely, Thakur Dutt and Kamlesh on 20.6.2013. These witnesses were permitted to be cross-examined on 30.10.2013. However, PWs were not cross-examined on 30.12.2013 and the matter was ordered to be listed for 10.12.2013. 7. Their Lordships of the Hon'ble Supreme Court in Kalpana Kothari (Smt) vs. Sudha Yadav (Smt) and others, (2002) 1 SCC 203 have held that section 8 of the Arbitration and Conciliation Act, 1996 mandates that the judicial authority before which an action has been brought in respect of a matter, which is the subject matter of an arbitration agreement, shall refer the parties to arbitration if a party to such an agreement applies not later than when submitting his first statement. Their Lordships have held as under : 8. The first respondent herein has filed the civil suit for dissolution of the partnership and for accounts and also filed applications for the appointment of Receiver and for injunction. The defendants have initially filed applications in the suit before the Trial Court invoking the provisions contained in Section 34 of the Arbitration Act, 1940 and not only the applications filed by the first respondent before the Trial Court were rejected but the applications under Section 34 of the Arbitration Act by the appellants came to be allowed and further proceedings in the suit filed by the first respondent came to be stayed. No doubt, at the appellate stage, after filing a written application for dismissal of the applications filed by the appellants under Section 34 of the Arbitration Act, 1940, as not pressed in view of the repeal of the 1940 Act and coming into force of the 1996 Act and getting orders thereon, the appellants herein have once again moved the High Court under Section 8 of the Act, with a request for stay of proceedings before the High Court as well as the Trial Court, but the application came to be rejected by the learned Judge in the High Court that no such application could be filed, once the application earlier filed under 1940 Act was got dismissed as not pressed and also on the ground of estoppel, based on the very fact. We are of the view that the High Court did not properly appreciate the relevant and respective scope, object and purpose as also the considerations necessary for dealing with and disposing of the respective applications envisaged under Section 34 of the 1940 Act and Section 8 of the 1996 Act. Section 34 of the 1940 Act provided for filing an application to stay legal proceedings instituted by any party to an arbitration agreement against any other party to such agreement, in derogation of the arbitration clause and attempts for settlement of disputes otherwise than in accordance with the arbitration clause by substantiating the existence of an arbitration clause and the judicial authority concerned may stay such proceedings on being satisfied that there is no sufficient reason as to why the matter should not be referred to for decision in accordance with the arbitration agreement, and that the applicant seeking for stay was at the time when the proceedings were commenced and still remained ready and willing to do all things necessary to the proper conduct of the arbitration. This provision under the 1940 Act had nothing to do with actual reference to the arbitration of the disputes and that was left to be taken care of under Sections 8 and 20 of the 1940 Act. In striking contrast to the said scheme underlying the provisions of the 1940 Act, in the new 1996 Act, there is no provision corresponding to Section 34 of the old Act and Section 8 of the 1996 Act mandates that the Judicial Authority before which an action has been brought in respect of a matter, which is the subject-matter of an arbitration agreement, shall refer the parties to arbitration if a party to such an agreement applies not later than when submitting his first statement. The provisions of the 1996 Act do not envisage the specific obtaining of any stay as under the 1940 Act, for the reason that not only the direction to make reference is mandatory but not withstanding the pendency of the proceedings before the Judicial Authority or the making of an application under Section 8 (1) of the 1996 Act, the arbitration proceedings are enabled, under Section 8 (3) of the 1996 Act to be commenced or continued and an arbitral award also made unhampered by such pendency. We have to test the order under appeal on this basis. 9. We have to test the order under appeal on this basis. 9. On the ground of estoppel and the conduct of the appellants in getting their earlier application made under Section 34 of the 1940 Act dismissed as not pressed that the applications under Section 8 of the 1996 Act were not countenanced by the High Court. The fact that the earlier application under the 1940 Act was got dismissed as not pressed in the teeth of the repeal of the said Act cannot, in our view, constitute any legal impediment for having recourse to and avail of the avenues thrown open to parties under the 1996 Act. Similarly, having regard to the distinct purposes, scope and object of the respective provisions of law in these two Acts, the plea of estoppel can have no application to deprive the appellants of the legitimate right to invoke an all comprehensive provision of mandatory character like Section 8 of the 1996 Act to have the matter relating to the disputes referred to arbitration, in terms of the arbitration agreement.” 8. Their Lordships of the Hon'ble Supreme Court in Hindustan Petroleum Corpn. Ltd. vs. Pinkcity Midway Petroleums, (2003) 6 SCC 503 have held that where arbitration clause exists, court has a mandatory duty to refer dispute arising between the contracting parties to arbitrator. Civil court has no jurisdiction to continue with the suit once an application under section 8 has been filed. Their Lordships have 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. 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. 15. The question then would arise: what would be the role of the Civil Court when an argument is raised that such an arbitration clause does not apply to the facts of the case in hand ? Learned counsel for the appellant contends that it is a matter which should be raised before the arbitrator who is competent to adjudicate upon the same and the Civil Court should not embark upon an inquiry in regard to the applicability of the arbitration clause to the facts of the case. While learned counsel appearing for the respondent contends that since the applicability of the arbitration clause to the facts of the case goes to the very root of the jurisdiction of the reference to arbitration, this question will have to be decided by the Civil Court before referring the matter to arbitration even in cases where there is admittedly an arbitration clause. The answer to this argument, in our opinion, is found in Section 16 of the Act itself. It has empowered the Arbitral Tribunal to rule on its own jurisdiction including rule on any objection with respect to the existence or validity of the arbitration agreement. That apart, a Constitution Bench of this Court in Konkan Railway (supra) with reference to the power of the arbitrator under Section 16 has laid down thus : "It might also be that in a given case the Chief Justice or his designate may have nominated an arbitrator although the period of thirty days had not expired. That apart, a Constitution Bench of this Court in Konkan Railway (supra) with reference to the power of the arbitrator under Section 16 has laid down thus : "It might also be that in a given case the Chief Justice or his designate may have nominated an arbitrator although the period of thirty days had not expired. If so, the Arbitral Tribunal would have been improperly constituted and be without jurisdiction. It would then be open to the aggrieved party to require the Arbitral Tribunal to rule on its jurisdiction. Section 16 provides for this. It states that the Arbitral Tribunal may rule on its own jurisdiction. That the Arbitral Tribunal may rule "on any objections with respect to the existence or validity of the arbitration agreement" shows that the Arbitral Tribunal's authority under Section 16 is not confined to the width of its jurisdiction, as was submitted by learned counsel for the appellants, but goes to the very root of its jurisdiction. There would, therefore, be no impediment in contending before the Arbitral Tribunal that it had been wrongly constituted by reason of the fact that the Chief Justice or his designate had nominated an arbitrator although the period of thirty days had not expired and that, therefore, it had no jurisdiction." (emphasis supplied) 16. It is clear from the language of the Section, as interpreted by the Constitution Bench judgment in Konkan Railway (supra) that if there is any objection as to the applicability of the arbitration clause to the facts of the case, the same will have to be raised before the concerned Arbitral Tribunal. Therefore, in our opinion, in this case the courts below ought not to have proceeded to examine the applicability of the arbitration clause to the facts of the case in hand but ought to have left that issue to be determined by the Arbitral Tribunal as contemplated in Clause 40 of the Dealership Agreement and as required under Sections 8 and 16 of the Act. 24. This brings us to consider the last question involved in this appeal, namely, the maintainability of the revision petition before the High Court under Section 115 of the CPC. 24. This brings us to consider the last question involved in this appeal, namely, the maintainability of the revision petition before the High Court under Section 115 of the CPC. The High Court by the impugned order has come to the conclusion that its jurisdiction to entertain a revision petition would only be available if the order impugned is such that if it is allowed to stand, it would occasion failure of justice or cause an irreparable injury to a party against whom the said order is made. In support of this finding, the High Court has relied upon certain judgments of this Court. Having perused the said judgments, we are of the opinion that the findings given in those judgments do not apply to the facts of this case at all. We have come to the conclusion that the Civil Court had no jurisdiction to entertain a suit after an application under Section 8 of the Act is made for arbitration. Therefore, we are of the opinion that the trial court failed to exercise its jurisdiction vested in it under Section 115 of the C.P.C. when it rejected the application of the appellant filed under Sections 8 and 5 of the Act. In such a situation, refusal to refer the dispute to arbitration would amount to failure of justice as also causing irreparable injury to the appellant. For the said reason, we are of the opinion that the High Court has erred in coming to the conclusion that the appellant was not entitled to the relief under Section 115 CPC.” 10. Their Lordships of the Hon'ble Supreme Court in Rashtriya Ispat Nigam Limited and another vs. Verma Transport Co. (2006) 7 SCC 275 have held that the expression “first statement on the substance of the dispute” contained in section 8(1) of the 1996 Act must be contradistinguished with the expression “written statement”. Their Lordships have further held that it implies submission of the party to the jurisdiction of the judicial authority. Their Lordships have further held that if an application is filed before actually filing the first statement on the substance of the dispute, the party cannot be said to have waived its right or acquiesced itself to the jurisdiction of the court. Their Lordships have further held that if an application is filed before actually filing the first statement on the substance of the dispute, the party cannot be said to have waived its right or acquiesced itself to the jurisdiction of the court. Their Lordships have further held that in view of the changes brought about by the 1996 Act, what is necessary is disclosure of the entire substance in the main proceeding itself and not taking part in the supplemental proceedings. Their Lordships have further held that waiver of a right on the part of a defendant to the lis must be gathered from the fact situation obtaining in each case. In the case before the Hon’ble Supreme Court, the court had already passed an ad interim ex parte injunction and the appellants were bound to respond to the notice issued by the Court and while doing so, they raised a specific plea of bar of the suit in view of the existence of an arbitration agreement. Their Lordships have further held that filing of a reply to the injunction application could not have been a ground to refuse to entertain the plea taken by the appellants that the suit should be referred to the Arbitral Tribunal. Their Lordships have held as under : “33. Filing of a reply to the injunction application could also not have been a ground to refuse to entertain the plea taken by the Appellants that the suit should be referred to arbitral tribunal particularly when in its reply to injunction application, the appellant categorically stated : "1. That the present application under Order 39 Rules 1 and 2 read with Section 151 CPC is liable to be dismissed on the short ground that the plaintiff has himself admitted the existence of the arbitration clause and therefore, the present application under Order 39 Rules 1 and 2 read with Section 151 CPC is not maintainable and consequently the order of this Hon'ble Court is liable to be vacated." 36. The expression 'first statement on the substance of the dispute' contained in Section 8(1) of the 1996 Act must be contra-distinguished with the expression 'written statement'. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, is needed is a finding on the part of the judicial authority that the party has waived his right to invoke the arbitration clause. It employs submission of the party to the jurisdiction of the judicial authority. What is, therefore, is needed is a finding on the part of the judicial authority that the party has waived his right to invoke the arbitration clause. If an application is filed before actually filing the first statement on the substance of the dispute, in our opinion, the party cannot be said to have waived his right or acquiesced himself to the jurisdiction of the court. What is, therefore, material is as to whether the petitioner has filed his first statement on the substance of the dispute or not, if not, his application under Section 8 of the 1996 Act, may not be held wholly unmaintainable. We would deal with this question at some details, a little later. 38. In Janki Saran Kailash Chandra (supra), an application for time to file written statement was considered to be a step in the proceedings. We have noticed hereinbefore the respective scope of Section 34 of the 1940 Act vis-a-vis the scope of Section 8 of the 1996 Act. In view of the changes brought about by the 1996 Act, we are of the opinion that what is necessary is disclosure of the entire substance in the main proceeding itself and not taking part in the supplemental proceeding. 39. By opposing the prayer for interim injunction, the restriction contained in sub-section (1) of Section 8 was not attracted. Disclosure of a defence for the purpose of opposing a prayer for injunction would not necessarily mean that substance of the dispute has already been disclosed in the main proceeding. Supplemental and incidental proceeding are not part of the main proceeding. They are dealt with separately in the Code of Civil Procedure itself. Section 94 of the Code of Civil Procedure deals with supplemental proceedings. Incidental proceedings are those which arise out of the main proceeding. In view of the decision of this Court in Food Corporation of India (supra), the distinction between the main proceeding and supplemental proceeding must be borne in mind. 40. We may notice that a distinction has been made between supplemental proceedings and incidental proceedings by one of us in Vareed Jacob v. Sosamma Geevarhese and others [(2004) 6 SCC 378]. 11. 40. We may notice that a distinction has been made between supplemental proceedings and incidental proceedings by one of us in Vareed Jacob v. Sosamma Geevarhese and others [(2004) 6 SCC 378]. 11. Their Lordships of the Hon'ble Supreme Court in Agri Gold Exims Limited vs. Sri Lakshmi Knits and Wovens and others, (2007) 3 SCC 686 have held that where there exists an arbitration agreement, the court is under an obligation to refer the parties to arbitration in terms of the arbitration agreement. Their Lordships have held as under : “22. Section 8 of the 1996 Act is peremptory in nature. In a case where there exists an arbitration agreement, the court is under obligation to refer the parties to arbitration in terms of the arbitration agreement. [See Hindustan Petroleum Corpn. Ltd. v. Pinkcity Midway Petroleums (2003) 6 SCC 503 and Rashtriya Ispat Nigam Limited (supra)] No issue, therefore, would remain to be decided in a suit. Existence of arbitration agreement is not disputed. The High Court, therefore, in our opinion, was right in referring the dispute between the parties to arbitration.” 12. In the instant case, the execution of the agreement is not disputed. The only explanation given by the plaintiff in the reply filed to application under section 8 read with section 5 of the Arbitration and Conciliation Act is that the contents of the agreement have not been read over to him and he being rustic could not read the contents of the agreement. 13. Their Lordships of the Hon’ble Supreme Court in Branch Manager, M/s Magma Leasing & Finance Ltd. & Anr. V. Potluri Madhavilata & Anr. AIR 2010 SC 488 while interpreting clause 22 of the Higher Purchase Agreement have held that once the pre-requisite under section 8 of the Arbitration and Conciliation Act is satisfied there would no option left to the Court except to refer the matter to arbitration. Their Lordships have held as under : 19. In the instant case, clause 22 of the hire purchase agreement that provides for arbitration has been couched in widest possible terms as can well be imagined. It embraces all disputes, differences, claims and questions between the parties arising out of the said agreement or in any way relating thereto. Their Lordships have held as under : 19. In the instant case, clause 22 of the hire purchase agreement that provides for arbitration has been couched in widest possible terms as can well be imagined. It embraces all disputes, differences, claims and questions between the parties arising out of the said agreement or in any way relating thereto. The hire purchase agreement having been admittedly entered into between the parties and the disputes and differences have since arisen between them, we hold, as it must be, that the arbitration clause 22 survives for the purpose of their resolution although the contract has come to an end on account of its termination. 20. The next question, an incidental one, that arises for consideration is whether the trial court must refer the parties to arbitration under Section 8 of the Act, 1996. 21. Section 8 reads thus : "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 later 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, an arbitration may be commenced or continued and an arbitral award made." 22. An analysis of Section 8 would show that for its applicability, the following conditions must be satisfied: (a) that there exists an arbitration agreement; (b) that action has been brought to the court by one party to the arbitration agreement against the other party; (c) that the subject matter of the suit is same as the subject matter of the arbitration agreement; (d) that the other party before he submits his first statement of the substance of the dispute, moves the court for referring the parties to arbitration; and (e) that along with the application the other party tenders the original arbitration agreement or duly certified copy thereof. 23. 23. Section 8 is in the form of legislative command to the court and once the pre-requisite conditions as aforestated are satisfied, the court must refer the parties to arbitration. As a matter of fact, on fulfillment of conditions of Section 8, no option is left to the court and the court has to refer the parties to arbitration. 24. There is nothing on record that the pre-requisite conditions of Section 8 are not fully satisfied in the present case. The trial court, in the circumstances, ought to have referred the parties to arbitration as per arbitration clause 22. 25. In the result, appeal must succeed and is allowed. The impugned order dated April 30, 2007 passed by the High Court affirming the order dated December 4, 2006 passed by the First Additional Senior Civil Judge, Vijayawada is set aside. I.A.No.490/2006 in O.S.No.19/2006 is restored to the file of the First Additional Senior Civil Judge, Vijayawada for passing an appropriate order in the light of the observations made hereinabove. Since the respondent has not chosen to appear, no order as to costs.” 14. Their Lordships of the Hon'ble Supreme Court in Booz Allen and Hamilton Inc. vs SBI Home Finance Limited and others, (2011) 5 SCC 532 have held that filing of objections/counter affidavit opposing application for interim relief does not amount to a statement on substance of dispute. Their Lordships have held as under : “25. Not only filing of the written statement in a suit, but filing of any statement, application, affidavit filed by a defendant prior to the filing of the written statement will be construed as 'submission of a statement on the substance of the dispute', if by filing such statement/application/affidavit, the defendant shows his intention to submit himself to the jurisdiction of the court and waive his right to seek reference to arbitration. But filing of a reply by a defendant, to an application for temporary injunction/attachment before judgment/appointment of Receiver, cannot be considered as submission of a statement on the substance of the dispute, as that is done to avoid an interim order being made against him. 28. 18. But filing of a reply by a defendant, to an application for temporary injunction/attachment before judgment/appointment of Receiver, cannot be considered as submission of a statement on the substance of the dispute, as that is done to avoid an interim order being made against him. 28. 18. In this case, the counter affidavit dated 15.12.1999, filed by the appellant in reply to the notice of motion (seeking appointment of a receiver and grant of a temporary injunction) clearly stated that the reply affidavit was being filed for the limited purpose of opposing the interim relief. Even in the absence of such a disclaimer, filing a detailed objection to an application for interim relief cannot be considered to be submission of a statement on the substance of the dispute resulting in submitting oneself to the jurisdiction of the court.” 15. In the present case also, notice was issued in the main civil suit and also in the application under order 39 rule 1 and 2 of the Code of Civil Procedure. Statement has been made by the G.P.A. on behalf of defendant in an application under section 39 rule 1 and 2 of the Code of Civil Procedure. The application itself was disposed of, as noticed above, on the basis of statement made on 1.11.2012. The statement made by the G.P.A. on behalf of the defendant in proceedings under order 39 rule 1 and 2 of the Code of Civil Procedure cannot be termed as disclosure of statement on substance of the dispute. It could only be termed at the most as incidental proceedings. Defendant has never disclosed the substance of the dispute in the main proceedings. Supplemental and incidental proceeds are not part of main proceedings. 16. It is evident from clause 15 of the hypothecation agreement entered into between the parties that the matter was required to be referred to the Arbitrator for resolving the disputes. Defendant has also placed on record certified copy of main agreement entered into between the parties by way of CMA No. 159/VI/12. In view of loan-cum-hypothecation agreement entered into between the parties, the matter is required to be referred to the Arbitrator. The civil court could not proceed with the matter. 17. Accordingly, in view of the analysis and discussion made hereinabove, the petition is allowed. In view of loan-cum-hypothecation agreement entered into between the parties, the matter is required to be referred to the Arbitrator. The civil court could not proceed with the matter. 17. Accordingly, in view of the analysis and discussion made hereinabove, the petition is allowed. Order dated 21.2.2013 passed in CMA No. 159-VI/12 in Civil Suit No. 38/1 of 2012 is set aside. The trial court is directed to refer the dispute to the arbitrator, as prayed for by the defendant in application under section 8 read with section 5 of the Arbitration and Conciliation Act, 1996. The parties through their counsel are directed to appear before the learned Civil Judge (Senior Division), Court No.1, Kasauli, Solan on 14.7.2014. Pending application(s), if any, also stands disposed of. No costs.