Calcutta High Court
Known As Indiabull Housing Finance … vs Jagannath Heights Pvt Ltd on 9 March, 2026
Author: Debangsu Basak
Bench: Debangsu Basak
2026:CHC-OS:74-DB
OC-9
IN THE HIGH COURT AT CALCUTTA
CIVIL APPELLATE DIVISION
COMMERCIAL DIVISION
ORIGINAL SIDE
APOT/27/2026
IA NO: GA-COM/1/2026
M/S SAMMAN CAPITAL LIMITED (FORMERLY
KNOWN AS INDIABULL HOUSING FINANCE LIMITED)
VS
JAGANNATH HEIGHTS PVT LTD
BEFORE:
The Hon'ble JUSTICE DEBANGSU BASAK
-AND-
The Hon'ble JUSTICE MD. SHABBAR RASHIDI
For the Appellants : Mr. Avishek Guha, Adv.
Mr. Shounak Mukhopadhyay, Adv.
Mr. Sourajit Dasgupta, Adv.
Ms. Sonal Agarwal, Adv.
Mr. Ankush Majumdar, Adv.
For the Respondents : Mr. Abhrajit Mitra, Sr. Adv.
Mr. Satadeep Bhattacharyya, Adv.
Mr. Samriddha Sen, Adv.
Mr. A. Kr. Roy, Adv.
Mr. Surajit Biswas, Adv.
Mr. Arijeet Bera, Adv.
HEARD ON : 09.03.2026
DELIVERED ON : 09.03.2026
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DEBANGSU BASAK, J.:-
1. Appeal is at the behest of the defendant in a suit for damages and
directed against the judgment and order dated January 9, 2026
passed in GA-COM/2/2025 in CS-COM/801/2024.
2. Learned Advocate appearing for the appellant submits that, the
respondent herein as the plaintiff accepted that there was a
contract between the parties which contained an arbitration
clause. In this regard, he draws the attention of the Court to
averments made in the plaint.
3. Learned Advocate appearing for the appellant submits that, the
appellant applied under Section 8 of the Arbitration and
Conciliation Act, 1996 by way of a Master’s Summons which was
dismissed by the impugned judgment and order. He submits that,
although, the Master’s Summons, did not contain any prayer for
referring the disputes in the suit to arbitration, nonetheless, the
averments in the affidavit in support of the Master’s Summons
stated that, the disputes were covered by the arbitration clause
and the same were to be referred to arbitration in terms of the
arbitration clause.
4. Learned Advocate appearing for the appellant relies upon (2025) 8
SCC 299 (K. Mangayarkarasi and Another Vs. N.J. Sundaresan
and Another) in support of the proposition that, where the Court
arrives at a finding that there is an arbitration clause, the issue
before the Court is whether the Court looses jurisdiction in view of
such arbitration agreement. He submits that, in the facts and
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circumstances of the present case, since, it is admitted that there
was an arbitration agreement in writing, between the parties to the
suit and the disputes in the suit were required to be referred to
arbitration.
5. Learned Advocate appearing for the appellant relies upon 2014
SCC Online Del 4015 (Sharad P. Jagtiani Vs. M/s. Edelweiss
Securities Ltd.) for the proposition that, the averments made in
the written statement is sufficient compliance under Section 8 of
the Act of 1996. He submits that, a fresh application under
Section 8 of the Act of 1996 is not required. He points out that, in
the facts and circumstances of the present case, the appellant filed
written statement, post-filing of the application under
consideration where, a point of reference under Section 8 of the
Act of 1996 was taken.
6. Learned Senior Advocate appearing for the respondent/plaintiff
submits that, the purported application under Section 8 of the Act
of 1996 is not in compliance of the provisions of Section 8 of the
Act of 1996. He draws the attention of the Court to the prayers
made in the application. He submits that, under Section 8 (2) of
the Act of 1996, the appellant was required to either annex the
original of the arbitration agreement or a certified copy thereof or
aver as to the location of such original arbitration agreement. In
the facts and circumstances of the present case, the appellant did
nothing of that sort. He submits that, the purported application
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cannot be construed to be one within the meaning of Section 8 of
the Act of 1996.
7. Relying upon a decision of the Co-ordinate Bench dated January
9, 2025 rendered in FAT No. 308 of 2023 (Smt. Gitarani Maity
Vs. 1A Mrs. Krishna Chakraborty and Others), learned Senior
Advocate appearing for the plaintiff submits that, the application
for rejection of plaint cannot construed to be one under Section 8
of the Arbitration and Conciliation Act, 1996. In support of such
contention, he relies upon 2022: APHC: 40172 (CA Goliakotwala
& Co. Vs. Sri Kailasandha Cotton Syndicate Pvt. Ltd.) and
2022: APHC: 10109 (Chunduru Visalakshi Vs. Chunduru
Rajendra Prasad and Ors.).
8. Relying upon 2020: DHC: 3745-DB (Alok Kumar Lodha and Ors.
Vs. Asian Hotels (North) Limited and Ors.), learned Senior
Advocate appearing for the plaintiff submits that, an oral
application under Section 8 of the Act of 1996 cannot be
entertained.
9. Plaintiff filed the suit claiming damages against the appellant.
Averments made in the plaint demonstrate that, there was a
contract between the appellant and the plaintiff by which, the
appellant lent and advanced money to the plaintiff. Plaintiff claims
it sufferred loss and damages in such transaction. Significantly,
the plaintiff averred in the plaint that, there was an arbitration
clause in the contract between the parties. The relevant portion of
the averments in paragraph 52 of the plaint is as follows:-
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“52)…. There is a purported arbitration clause in
the contract which does not cover the cause of
action forming subject matter of the present suit.
The said arbitration clause is also null and void.
As per the arbitration clause the defendant is to
appoint an arbitrator who as a persona
designate is the only person who as per
agreement would adjudicate the disputes arising
out of contract been the arbitrator. Such
provision is also null and void being contrary to
the provisions of the Arbitration & Conciliation
Act, 1996 as amended on 23rd October, 2015.”
10. Appellant applied for rejection of the plaint and/or its return by
way of a Master’s Summons resulting in the impugned judgment
and order. In the affidavit in support of the Master’s Summons,
the appellant, in paragraph 5 stated that, the disputes raised in
the suit, relate to the interpretation, implementation, validity and
the alleged breach of the loan agreement and that, the subject
matter of the suit is covered by the arbitration clause and that, the
suit ought to be referred to arbitration.
11. In the facts and circumstances of the present case, both the
parties before us, accept that there was a contract which contains
an arbitration clause. The arbitration clause is set out in the
affidavit in support of the Master’s Summons filed by the
appellant, resulting in the impugned judgment and order.
Averments in the plaint as noted previously, also refer to the same
arbitration clause. Existence of the arbitration clause is, therefore,
admitted between the parties.
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12. In view of such an admitted position with regard to the arbitration
clause, we find that, there is a substantial compliance with Section
8 (2) of the Act of 1996 by the appellant.
13. Prayers in the Master’s Summons are not happily drafted. In the
Master’s Summons, there are three substantial prayers. The first
prayer seeks dismissal of the suit; the second seeks rejection or
return of the plaint and the third seeks stay of the suit.
14. The request for referring the subject matter of the suit to
arbitration, in view of the arbitration agreement between the
parties, is not available for so many words in the prayer portion of
the Master’s Summons. However, prayer (c) of the Master’s
Summons, which seeks stay of the suit, can be construed to
incorporate a request for reference, in view of the averments made
in paragraph 5 of the affidavit in support of the Master’s
Summons. We hasten to add that, ideally, an application under
Section 8, must comply with the statutory provisions thereof
including a prayer made to refer the subject matter of the suit,
being covered by the arbitration agreement, to arbitration.
15. K. Mangayarkarasi (Supra) considered an application under
Section 8 of the Act of 1996 and the following issue;
“9. What would be the position
in case a suit is filed by the plaintiff and in the
said suit, the defendant files an application
under Section 8 of the 1996 Act questioning the
maintainability of the suit on the ground that the
party had agreed to settle the disputes through
the means of arbitration having regard to the
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them?”
16. K. Mangayarkarasi (Supra) answered such issue as follows;
“21. Once an application in due compliance with
Section 8 of the 1996 Act is filed, the approach of
the civil court should be not to see whether the
court has jurisdiction. It should be to see
whether its jurisdiction has been ousted. There is
a lot of difference between the two approaches.
22. Once it is brought to the notice of the court
that its jurisdiction has been taken away in
terms of the procedure prescribed under a
special statute, the civil court should first see
whether there is ouster of jurisdiction in term or
compliance with the procedure under special
statute. The general law should yield to the
special law – generalia specialibus non derogant.
In such a situation, the approach shall not be to
see whether there is still jurisdiction in the civil
court under the general law. Such approaches
would only delay the resolution of disputes and
complicate the redressal of grievance and of
course unnecessarily increase the pendency in
the court.
23. Once there is an arbitration agreement
between the parties, a judicial authority before
whom an action is brought covering the subject-
matter of the arbitration agreement is under a
positive obligation to refer parties to arbitration
by enforcing the terms of the contract. There is
no element of discretion left in the court or
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mandate of compelling parties to seek recourse
to arbitration.”
17. Applying the ratio laid out K. Mangayarkarasi (Supra) to the facts
of the present case, there is an arbitration agreement which covers
the subject matter of the disputes encompassed in the suit. Such
disputes are to be decided by the chosen forum by the parties.
Once the Court arrives at such a finding, then, it looses
jurisdiction. The Court is required to refer such disputes to
arbitration.
18. Smt. Gitarani Maity (Supra) was rendered prior to K.
Mangayarkarasi (Supra). In any event, in Smt. Gitarani Maity
(Supra), the learned Trial Judge simultaneously allowed an
application under Section 8 of the Act of 1996 and dismissed the
suit itself. In facts and circumstances of such case, the Court
found that, Section 8 application was not filed before or even
simultaneously with the written statement and therefore, the
learned Trial Judge erred in allowing the application under Section
8 of the Act of 1996 and dismissing the suit. Fact scenario
obtaining in the present case is different. As noted, the affidavit in
support of the Master’s Summons contained a request for
reference of the disputes to arbitration. The application containing
such request was filed prior to the filing of the written statement.
19. Sharad P. Jagtiani (Supra) is of the view that, if in the written
statement filed, it is brought to the notice of the Court that there is
an arbitration agreement between the parties which embraces the
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subject matter of the suit then, it would be in compliance with the
mandate of the law. Such view, in our estimation, is not sustained
from the language in Section 8 of the Act of 1996 which requires
an application, prior to filing of the first statement of defence in a
suit. Section 8 of the Act of 1996, in our view, permits the
defendant in a suit to raise the issue of the disputes being covered
by the arbitration agreement prior to filing written statement. A
defendant is entitled not to raise such objection of arbitrability of
the disputes of the suit by not filing any application under Section
8 of the Act of 1996.
20. In Alok Kumar Lodha (Supra), an oral application under Section
8 of the Act of 1996 was not entertained. Fact scenario in the
present case is different.
21. In 2022: APHC: 10109 Chunduru Visalakshi (Supra), an
application under Section 8 of the Act of 1996 was not filed as
noted in paragraph 45 thereof. Fact scenario in the present case is
different.
22. In 2022: APHC: 40172 CA Goliakotwala & Co (Supra), the Court
noted that, mere existence of an arbitration clause does not take
away the jurisdiction of the Civil Court. In the facts and
circumstances of that case, there was an application under Order
VII Rule 11 of the Code of Civil Procedure, 1908. Again the fact
scenario in the present case is different.
23. In view of the fact that there is an existing arbitration agreement
governing the subject matter of the suit, it would be appropriate to
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refer the disputes to arbitration in terms of such arbitration
agreement. Parties are at liberty to take appropriate steps in this
regard.
24. Impugned judgment and order is set aside. Since the subject
matter of the suit stands referred to arbitration, Department will
treat CS(COM)/801/2024 as disposed of.
25. APOT/27/2026 is disposed of, without any order as to costs.
(DEBANGSU BASAK, J.)
26. I agree.
(MD. SHABBAR RASHIDI, J.)
KB
AR(CR)