Vikramajit Sen, J.— The Plaintiff has filed the present suit for the recovery of Rs. 10,33,875.02 against the General Manager, Eastern Railway, Calcutta and the Controller of Stores, Calcutta, being the Defendants herein. The Plaintiff had submitted its Tender dated 26.12.1992 The dispute that has arisen between the parties pertains to whether the Plaintiff's offer was inclusive of Excise Duly. On notice being issued to Defendants, an application purporting to be under Section 34 of the Arbitration Act, 1940 has been filed by them. In substance the application states that, although this Court has no territorial jurisdiction to entertain the suit since the cause of action had arisen in Calcutta, where the Defendants have their Office, the Agreement between the parties contained an Arbitration Clause. This Clause 2900 has been reproduced in the application itself.
Learned counsel for the Plaintiff has strenuously resisted the application. It is his contention that Section 34 of the Arbitration Act, 1940 is not applicable between the parties since the Arbitration and Conciliation Act, 1996 (hereinafter called ‘the 1996 Act’) is the statute that would govern the possible disputes between them. The second ground urged by way of opposition to the application is that it should have been accompanied by the original Arbitration Agreement or a duly certified copy thereof as envisaged in Section 8(2) of 1996 Act, and that this is a mandatory requirement as is obvious from a bare reading thereof. It has also been contended by learned counsel for the Plaintiff that correct interpretation of this Section would cast a compulsory obligation on the Defendants to set out the substance of the disputes between them in the application itself. Since none of these three requirements have been fulfilled the application deserves dismissal.
Learned counsel for the Applicant has denied that there is any substance in these contentions. Since that the Arbitration Clause on which the application is predicated has been duly reproduced verbatim and in extenso in the application itself, there has been substantial and sufficient compliance with provisions of the Section. Having incorporated the Arbitration Clause in the application itself, the Defendants are not required to file a copy of the Arbitration Clause or the Contract in which it is contained. Learned counsel for Defendants further contended that it is a settled position of law that even if a wrong provision has been mentioned in the application, this mistake would not preclude the Court from applying the correct provision of law. He has also disputed the correctness of the interpretation given to Section 8 of the 1996 Act by learned counsel for the Plaintiff and that the words “substance of dispute” does not mandate that the disputes that have arisen between the parties should be spelt out in the application itself. The purpose of the application is to draw the attention of the court to the fact that, since the parties have agreed to a resolution of their disputes through arbitration, the Plaintiff should not be allowed to invoke the civil jurisdiction of the Court for this very purpose.
Having considered the rival contentions of both the learned counsel for the parties I am of the view that the application is well founded and deserves to be allowed. A pedantic approach to statutory provisions, which approach would have the effect of defeating the purpose of law, is to be eschewed, Surely, the intent of Section 8 is to ensure that frivolous objections should not be raised. Having incorporated the Arbitration Clause in the application itself, it would serve no further purpose if the contract or a certified copy thereof is still to be additionally filed. In fact, greater sanctity is bestowed on the pleadings of the parties, especially where these are also supported by the affidavits. Greater reliance should be placed on them, rather than on documents which are yet to be admitted and/or proved. In my view the requirements of Section 8 of the 1996 Act have been substantially and sufficiently met in the present case. This is all the more so since the Agreement between the parties is what is loosely called a ‘Standard Form Agreement’. In this genre of contracts, the specific points pertaining to the particular contract at hand, are negotiated, spelt out and thereafter reduced to writing. There is, however, an overriding understanding that if an Agreement is arrived at between the parties, it would be subject to the ‘general terms’, applicable to all other contracts entered into between that party and other individuals. The Plaintiff has signed under the following clause:
“To the President of India.
Dear Sir,
In compliance with your request, the undersigned hereby tender(s) to supply the Eastern Railway Administration, the stores as specified herein. Further more, the undersigned herein certifies/certify, that he is/they are fully conversant with and agrees/agree to observe, fulfil and keep all the conditions setforth in the Ministry of Railways (Railway Board's) Standard Condition of Contract (Latest) and the instruction(s) for the Guidance of Contractors issued by the Stores Department of this Eastern Railway (which shall be deemed and taken to be a part of the contract as if the same has been fully setforth herein) in the event of this tender being accepted.
“This tender must hold good for 50 days from date of opening”, and if the undersigned fail(s) to take up the Contract within the said period, the Railway Administration shall be entitled to forfeit the Earnest Money mentioned in the Certificate hereunder without prejudice to and other rights and remedies of the Railway Administration.
For Jonson Rubber Industries.
…………………….
Signature of Intending Partner(s)
(Place)
Dated: 26/12/1992
CERTIFICATE TO BE SIGNED BY THE CONTRACTOR(S)
1. I/We hereby certify that we are conversant with the Ministry of Railways (Railway Board's) Standard Conditions of Contracts (Latest) and instructions for Guidance of the contracts issued by the Stores Dept. of E. Railway. Requested for exemption.
2. Please note that I/We hold Eastern Railway Chief Cashier's Receipt. No……dated………for the sum of Rs. 3000
being Earnest Money deposited by me/us in respect of this tender.
For Jonson Rubber Industries.
…………….
Signature of Contractor(s)/Partner
Dated: 26/12/1992
N.B—The attention of Tenderers is drawn to the rule that the rate unit must not under any circumstances be altered and quotations must be entered both in figures and in words. Any alterations made by the Tenderers in the unit column or other portion of the Tender form will be sufficient cause to throw out the tender.
The “invitation to tender” also contains the following declaration:
“The Contracts and the supply will be governed by the Indian Railways Standard Conditions of Contract (Latest) and Instruction for Guidance of the Contractors issued by the Stores Department of Eastern Railway”.
The Purchase Order, which has also been filed alongwith the Plaint similarly adverts to these conditions. It reads as under:
“With reference to the quotation No…… please deliver to the consignee mentioned below, the undermentioned articles, free on incidental charges, subject to Indian Railways Standard Condition of Contract, Latest Edition and General Condition of Contract for the Stores Department of the Railway and to addendum to the same subject, applicable to this contract”.
The Arbitration Clause 2900 is, therefore applicable. Apart from Clause 2900 learned counsel for the Defendants has also drawn attention to Clause 2703 in support of his contention that this Court has no territorial jurisdiction. Clause 2903 reads as under:
Jurisdiction of courts.—The Courts of the place from where the acceptance of tender has been issued shall alone have jurisdiction to decide any dispute arising out of or in respect of the contract”.
The challenge to the territorial jurisdiction is nut related only to the entertaining the suit for the recovery of money but also indicates which is the competent court whose jurisdiction is to be invoked in case of referral of disputes to Arbitration. On both these counts the argument of learned counsel for Defendants must be sustained.
I am also unable to accept the contention of the learned counsel for the Plaintiff that the disputes between the parties required to be spelt out at this stage under the mandate of Section 8 of the 1996 Act. What this Section requires is that an objection should be taken at the very threshold of the proceedings, as has been done in the present case. It has been consistently held that the filing of a Written Statement in the suit would amount to acting in, or defending the suit, and would preclude a subsequent challenge to the continuance/maintainability of the suit. There is no reason to depart from the old law. The interpretation given in the old law that an objection to the continuance of a civil suit, should be taken prior to the Defendant acting in the matter has been construed to mean the filing of a Written Statement. This is all that the Section states. The words ‘first statement on the substance of the dispute’ can have no other meaning.
The Court is duty bound to apply the correct law and merely because reference is made to inapplicable, incorrect on non-available provision of Statute whether by neglect, default or ignorance, the duty of the Court does not evaporate. The fact that the reference is made to Old Act whereas the Arbitration & Conciliation Act, 1996 applies, is no reason to reject the application.
In these circumstances the application is allowed and all further proceedings in the suit are stayed. As this Court has no territorial jurisdiction over the disputes, it would not be proper to refer the parties to Arbitration as has also been prayed for. Liberty is granted to the parties to approach the Court of competent jurisdiction for obtaining necessary orders for reference of their disputes to Arbitration.
The application is disposed of in these terms. There shall be no order as to costs.