A Statement Made At The Stage Of Interim Injunction Is Not A First Statement For Section 8 Of The A&C Act: P&H High Court

The Single Bench of Justice Rajbir Sherawat held that any statement made at the stage of and for the purpose of opposition to the application under Order 39 Rules 1 & 2 or to prevent any interim order being passed by the court, could not be taken as a statement on the subject matter of the dispute.

The Court further held that the respondent cannot be presumed to have submitted to the jurisdiction of the Court and waived its right to arbitration when it had reserved its right to take appropriate legal proceedings against the plaintiff.

Facts

The petitioner/plaintiff filed a suit for injunction against dispossession against the respondent/defendant. Therein, at the preliminary stage when the Court was considering the application of the plaintiff for an interim injunction, the respondent made a statement that it would not disturb the possession of the plaintiff except in accordance with the law. Admittedly, the parties had an arbitration agreement between themselves.

Thereafter, the Court referred the parties to Lok Adalat for an amicable settlement. The parties failed to reach any compromise and the matter was referred back to the trial court. Thereafter, on the date of filing of the written statement, the respondent filed an application under Section 8 of the A&C Act and the matter was referred to arbitration.

The petitioner filed an appeal against the order of the trial court referring the parties to arbitration. The appellate court dismissed the application and affirmed the order of the trial Court.

Aggrieved by the decision of the appellate court and the trial court, the petitioner filed a writ petition.

Contention Of The Parties

The petitioner challenged the decision of the trial court and the appellate court on the following grounds:

• The respondent had submitted its first statement on the issue, therefore, the petition under Section 8 of the A&C was not maintainable.
• The respondent had submitted before the trial court that it would not dispose the petitioner from the suit premises and it was also the main prayer of the petitioner, therefore, the respondent had submitted to the jurisdiction of the court.

The respondent countered the submissions of the petitioner on the following grounds:

• The respondent never submitted to the jurisdiction as it had asserted his right to take action against the petitioner, in accordance with law, including the agreement relating to the arbitration.
• The statement was made at the stage of consideration of the application for interim measures, therefore, the same would not amount to submission of first statement on the substance of the dispute. (Reliance placed on Booz Allen Hamilton Inc. v. SBI Homes Finance Ltd, (2011) 5 SCC 322).
• The stage of submission of statement of defence had not arrived, therefore, the statement could not be a bar to an application under Section 8 of the A&C Act.

Analysis By The Court

The Court observed that on a perusal of the statement made by the respondent before the trial court, it becomes clear that it had never submitted to the jurisdiction of the court but merely made a statement that it would not dispossess the petitioner from the subject property except in accordance with law including arbitration proceedings.

The Court placing reliance on Booz Allen (supra) held that a statement made to avoid interim injunction cannot be considered as submission of statement on substance of the dispute within the meaning of Section 8 of the A&C Act.

The Court held that any statement made at the stage of and for the purpose of opposition to the application under Order 39 Rules 1 & 2 or to prevent any interim order being passed by the court, could not be taken as a statement on the subject matter of the dispute.

The Court further held that the respondent cannot be presumed to have submitted to the jurisdiction of the Court and waived its right to arbitration when it had reserved its right to take appropriate legal proceedings against the plaintiff.

Accordingly, the Court dismissed the writ petition as without merit.

Case Title: Chat Aroma v. Hamir Real Estate Pvt. Ltd. C.R. No 574 of 2022

Citation:2022 LiveLaw (PH) 167

Date: 24.02.2022

Counsel for the Petitioner: Ms. Priyanka Kansal

Counsel for the Respondent: Mr. Sumeet Mahajan, Senior Advocate with Mr. Saurabh Gautam, Mr. Saksham Mahajan, Mr. Rohit Khanna, & Mr. Abhiudai Singh, Advocates.

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