Arbitration  – Application under Section 8 of the AA read with Section 151 of CPC for dismissal of civil suit in view of arbitration clause –

The plaintiffs filed the civil suit for partition, possession, permanent and mandatory injunction in respect of property at Civil Lines, Delhi, by virtue of Memorandum of Family Settlement dated 7.6.2013 as modified on 24.11.2014.  The suit claims contain composite reliefs against defendant nos.1 to 5.

The plaintiffs had entered into agreement dated 22.11.2013 with defendant nos.1 and 3 in respect of 640 sq. yards of the said property. Clause 16 of the said agreement provided arbitration clause.

Defendant No.1 made application under section 8 of the AA to refer the disputes to arbitration.

HELD that there is no provision in AA for splitting of parties and referring part of subject matter of civil suit to arbitration. The substantive reliefs of the suit fall outside the arbitration clause. Moreover, there are substantial claims made against the defendant no.5 who is not a party to the agreement of sale including arbitration clause.  Similarly, Defendant No.1 issued the legal notice dated 4.8.2018 invoking arbitration but did not take steps.   However, section 8 application was filed on 8.5.2023 in the civil suit to refer the dispute to arbitration.   Hence, the application is barred by limitation.

Judgment dated 20.2.2024 in CS (COMM) No.266 of 2023 of Sharad Gupta and others  Vs. Shri Vinayak Infraland Pvt Ltd and others