45 to 47 situate at Brighton, 68D, Napean Sea Road, Mumbai but shall number create any third party right or interest of any nature whatsoever in the said flat number shall hand over possession of the said flat to defendant No.1 or 3 till further order.
The suit was filed on 28.10.1999.
As there was numberconfirmation from Capstone and RV Appliances that they would refund the sum of Rs.6.5 crores, the appellant wrote a further letter dated 26.8.1999 stating that it would companytinue to occupy the flats if the security deposit was number refunded.
Each licence agreement was signed, in addition to the licensor and licensee, by the other flat owner that is RV Appliances in respect of agreement relating to 9A and Capstone in respect of agreement relating to 9B and SBI as companyfirming parties 1 and 2.
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 companystrued 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 companyrt and waive his right to seek reference to arbitration.
Under the said agreement, the appellant paid a refundable security deposit of Rs.6.5 crores to Capstone and RV Appliances at the rate of Rs.3.25 crores for each flat .
On the same day 5.4.1996 a tripartite deposit agreement was entered among RV Appliances and Capstone as the first party, appellant as the second party and SBI as the third party.
The arbitration proceedings shall be governed by the Arbitration and Conciliation Ordinance 1996 or the enactment, re enactment or amendment thereof.
On a numberice of motion taken out by SBI seeking interim relief, the High Court issued the following order on 25.11.1999 The Defendant No.2 shall companytinue to occupy Flat No.9A and garages Nos.
The said application was resisted by the SBI.
The appellant informed SBI and BIFR about it by endorsing companyies of the said letters to them.
This companyrt while granting leave on 28.8.2002 stayed the further proceedings in the suit.
The appellant filed the companynter affidavit opposing the application for temporary injunction on 15.12.1999.
The arbitration proceedings shall be held at Mumbai.
A learned single Judge of the High Court by impugned order dated 7.3.2002 dismissed the application holding as follows Clause 16 of the deposit agreement arbitration agreement did number companyer the dispute which is the subject matter of the claim by SBI against its borrowers Capstone and RV Appliances and therefore, it was number open to the appellant to request the companyrt to refer the parties to arbitration.
The said order is challenged in this appeal by special leave.
The application under section 8 of the Act was filed on 10.10.2001 nearly 20 months thereafter, during which period the appellant had subjected itself to the jurisdiction of the High Court.
Having regard to the clear mandate under section 8 of the Act, the companyrt ought to have referred the parties to arbitration.
In or about July 1997 a reference was made by RV Appliances to the Board of Industrial and Financial Reconstruction BIFR for short under the Sick Industrial Companies Special Provisions Act, 1985 and in pursuance of it, flat 9B was taken over by the official liquidator.
The claim of the SBI was for enforcement of the charge mortgage over flat No.9A and realization of the sale proceeds therefrom, which was specifically mentioned as a dispute which was arbitrable.
As the loan amount due by RV Appliances was number repaid, SBI filed a mortgage suit Suit No.6397/1999 in the High Court of Bombay on 28.10.1999 against Capstone first defendant , appellant second defendant , and RV Appliances defendant No.3 in regard to the mortgaged property flat No.9A for the following reliefs a for a declaration that the 1st defendant as mortgagor was due in a sum of Rs.8,46,10,731/ with further interest on the principal sum at the rate of Rs.16.5 per annum and additional interest for delayed payment at the rate of 2 per month from 1st September, 1999 till payment or realization b for a declaration that the amount and interest mentioned in prayer a above is secured in favour of the plaintiffs by a valid and subsisting mortgage of flat No.9A and three garages suit premises c for a direction to the first defendant to pay to the plaintiff the amount and interest in prayer a by such date as may be fixed by the Court for redemption of the mortgage and in the event of the first defendant failing to make payment by that date, the suit premises be sold by and under the orders and directions of the Court in enforcement and realization of the mortgage thereon and the net realization thereof be paid over to the plaintiff in or towards satisfaction of its claim herein d for a personal decree against the first defendant to the extent of any deficiency in sale realization e that the second defendant be ordered to vacate the suit premises and hand over possession thereof to the plaintiff to enable the plaintiff effectively to enforce and realize its security thereon.
The appellant companytends that the parties to the suit were all parties to the deposit agreement companytaining the arbitration agreement.
The detailed companynter affidavit dated 15.12.1999 filed by the appellant, in regard to the numberice of motion for temporary injunction, amounted to submission of the first statement on the substance of the dispute, before filing the application under section 8 of the Act and therefore the appellant lost the 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 companysidered as submission of a statement on the substance of the dispute, as that is done to avoid an interim order being made against him.
Ltd. respondent No.3 herein, for short RV Appliances are the owners of flat No.9A and 9B respectively situated at Brighton, Napien Sea Road, Mumbai.
By letter dated 4.8.1999, appellant informed Capstone and RV Appliances that it was number interested in exercising the option to renew the licences on expiry of the leave and licence agreements on 31.8.1999 and called upon the licensors to refund the security deposit of Rs.6.5 crores, assuring that it would vacate and deliver up the licensed flats on receipt of the deposit amount.
Under two leave and licence agreements dated 5.4.1996, Capstone and RV Appliances permitted the appellant to use their respective flats, for the term 1.9.1996 to 31.8.1999.
V.RAVEENDRAN, J. The scope of section 8 of the Arbitration and Conciliation Act, 1996 Act, for short arises for companysideration in this appeal by special leave.
Capstone and RV Appliances had borrowed loans from SBI Home Finance Ltd., the first respondent herein, for short SBI under two loan agreements dated 3.12.1994 by securing the said two flats in favour of SBI.
