In the matter between M/s. Surya Pharmaceuticals Ltd Through Harvinder Kaur Jatana, Liquidator v. State Bank of India
2025-04-07
ABHAY AHUJA
body2025
DigiLaw.ai
ORDER. : 1. When the matter is called out, Mr. Utangale, learned Counsel appears for Applicant and submits that the objections have been removed and it has already been approved but registered number is yet to be obtained. 2. Registry to expeditiously award the registered number. 3. This Interim Application filed by the Defendant-State Bank of India is seeking to relegate the parties to the arbitration under the Arbitration and Conciliation Act, 1996 (the “said Act”). 4. Mr. Utangale, learned Counsel appears for the Applicant and draws this Court’s attention to page 43 of the Interim Application and in particular to sub-clause (m)(b)(i) of the Agreement between the parties which pertains to dispute resolution and submits that the said clause clearly provides that any claim, difference, dispute or controversy arising between the parties shall be referred to and settled by an Arbitrator and that therefore, under the provisions of Section 8 of the said Act, this Court refer the matter to the Arbitration. 5. On the other hand, Ms. Shah, learned Counsel appears for the Plaintiff and submits that the said Application is time barred and draws this Court’s attention to Section 8(1) of the said Act. Ms. Shah submits that the time period for filing of Application under Section 8 of the said Act should not be later than the date of submitting the first statement on the substance of the dispute. 6. Ms. Shah submits that in view of the decision of the Karnataka High Court in the case of Shri Thangavelu. R. Vs. Shri Santosh J. Joseph and Anr. , Civil Revision Petition No. 265 of 2022(IO) dated 12 th December, 2024, relying upon the decision of the Delhi High Court in the case of SSIPL Lifestyle Private Limited Vs. Vama Apparels (India) Private Limited and Anr. , [2020 SCC OnLine Del 1667.] , the words “the date of” means that the date of filing the written statement in the suit which should be considered as the limitation period for filing a Section 8 Application under the said Act, and submits that in the facts of the case the period for filing the same having expired, the application ought to be rejected. 7. Mr.
7. Mr. Utangale, learned Counsel appearing for the Applicant- Defendant submits that his client has already filed an Interim Application (L) No. 10528 of 2025 for setting aside the no written statement order, however, fairly submitting that the said Application has been filed after the filing of this Application under Section 8 of the said Act. 8. Mr. Utangale, however, submits that this Court may consider the Application under Section 8 of the said Act and relegate the parties to arbitration in view of the arbitration clause in the Agreement between the parties. 9. I have heard the learned Counsel and considered their submissions. 10. I have also perused the decisions of the Karnataka High Court in the case of Shri Thangavelu. R. Vs. Shri Santosh J. Joseph and Anr. (supra) and also the decision of the Delhi High Court in the case of SSIPL Lifestyle Private Limited Vs. Vama Apparels (India) Private Limited and Anr. (supra) and I am in agreement with the view taken by the said two High Courts on the interpretation of the Section 8 of the said Act with regard to the words “the date of” appearing in Section 8(1) of the said Act. 11. Section 8 of the said Act is usefully quoted as under:- “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 to the arbitration agreement or any person claiming through or under him, so applies not later than the date of submitting his first statement on the substance of the dispute, then, notwithstanding any judgment, decree or order of the Supreme Court or any Court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.
(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: Provided that where the original arbitration agreement or a certified copy thereof is not available with the party applying for reference to arbitration under sub-section (1), and the said agreement or certified copy is retained by the other party to that agreement, then, the party so applying shall file such application along with a copy of the arbitration agreement and a petition praying the Court to call upon the other party to produce the original arbitration agreement or its duly certified copy before that Court. (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.” (emphasis supplied) 12. The Delhi High Court in the case of SSIPL Lifestyle Private Limited Vs. Vama Apparels (India) Private Limited and Anr (supra) has interpreted the words “the date of” to mean the date of filing the written statement in the Suit and held that the same should be considered as the limitation period for filing an Application under Section 8 of the said Act. 13. In the said decision it has been held that if the statement of defence is filed by the party that would constitute a waiver of the arbitration clause and that the first statement on the substance of the dispute is the written statement. I agree. That when the time for filing the written statement has expired would also constitute a waiver and that if there was undue delay in filing the application, mandate of filing the reference application at the earliest, the arbitration clause could be deemed waived. 14. Further, earlier Section 8(1) of the said Act contained the language not later than “when submitting” his first statement, however, after the 2016 amendment to the said Act, the language is not later than “the date of submitting” his first statement, and therefore the limitation for filing the written statement applies to the filing of a section 8 application. 15.
Further, earlier Section 8(1) of the said Act contained the language not later than “when submitting” his first statement, however, after the 2016 amendment to the said Act, the language is not later than “the date of submitting” his first statement, and therefore the limitation for filing the written statement applies to the filing of a section 8 application. 15. Ergo, in view of the amended language in Section 8, the limitation for filing of written statement under the Code of Civil Procedure, 1908, for non-commercial suits and under the Commercial Courts Act for commercial suits would be applicable for filing of an Application under Section 8 of the said Act. The maximum period for non commercial suits would be 90 days and for commercial suits the same would be 120 days. 16. In the facts of the case, the Suit has been filed on 23 rd September, 2015. Writ of summons along with the Plaint has been served upon the Defendant on 27 th October, 2016. Since this is a commercial Suit, the limitation period of 120 days would be applicable. The 120 days’ period has expired on 24 th February, 2017. Accordingly, the date of submitting the written statement has expired on 24 th February, 2017. The interim Application for setting aside the no written statement order statedly has been filed on 8 th October, 2024, which is also way beyond the period of 120 days and therefore the arbitration clause in view of Booz Allen & Hamilton Inc. Vs. SBI Home Finance Ltd and Others , 2011 5 SCC 532 , deemed waived. Therefore, by no stretch of imagination it can be said that this application for reference to arbitration under Section 8 of the said Act is not later than the date of submitting the first statement by the Defendant. 17. In view of the aforesaid discussion, this Application under Section 8 of the said Act as far as prayer Clause (a) is concerned, being time barred deserves to be dismissed and is hereby dismissed, with liberty to the Applicant to take out appropriate application(s) with respect to the other prayers. 18. Interim Application (L) No. 1454 of 2025 accordingly stands disposed as above.