ORDER
Dubagunta Subrahmanyam, J.
1. This revision petition is filed against the order dated 1.12.2000 in I.A. No. 1401 of 1999 in O.S. No. 1554 of 1997 on the file of VII Senior Civil Judge, City Civil Court, Hyderabad.
2. The plaintiff filed the suit for recovery of a sum of Rs. 40,00,000=00 with future interest and costs and also for a decree for cancellation of the mortgage deed executed by the guarantor directing the defendant to return the original title deeds and for a decree for arrears of rent at the rate of Rs. 20,000=00 per month. The defendant entered his appearance in the court and on the same day, he filed a petition under Section 8 of the Arbitration & Conciliation Act, 1996, requesting the trial court to refer the matter to the appointed Arbitrator and consequently stay proceedings of the suit pending decision of the Arbitrator. According to the defendant there is an agreement between the parties as evident from the letter dated 25.2.1992 to refer the dispute to an Arbitrator. In the counter affidavit filed by the revision petitioner, it is pleaded that clause No.8 of the so called letter is not applicable to the present matter in dispute and the said letter cannot be treated as an agreement to refer the matter to arbitration. Various other objections are also taken by the revision petitioner opposing the petition filed by the defendant in the suit. The trial court found that there is an arbitration agreement between the parties to refer any dispute to the Arbitrator mentioned in the letter dated 25.2.1992. On the facts and circumstances of the present case, I do not see any reason not to accept the said finding of fact recorded by the trial court in the impugned order.
3. I would now consider the other objections raised by the revision petitioner. According to the revision petitioner the defendant shall be ready and willing not only on the date of the arbitration agreement but also on the date of filing of the petition to refer the dispute for arbitration and when such readiness and willingness is not established by the defendant, the petition filed by him is liable to be dismissed. He relied upon the decisions in SRIVENKATESWARA CONSTRUCTIONS v. UNION OF INDIA, AIR 1974 AP 278 and M. VENKATESWARA RAO v. N. SUBBARAO, AIR 1984 AP 200. These two decisions have been rendered on applications filed under Section 34 of the Arbitration Act, 1940. In my considered opinion those two decisions have no application to the petitions filed under Section 8 of the New Act. There is significant difference between the two provisions. To make the position clear, I extract hereunder the provision in Section 34 of the Old Act and Section 8 of the New Act.
SECTION 34, ARBITRATION ACT, 1940:
' Power to stay legal proceedings where there is an arbitration agreement:- Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred to in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings'.
SECTION 8, ARBITRATION & CONCILIATION ACT, 1996:
' Power to refer parties to arbitration where there is an arbitration agreement:- (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration.
(2) The application referred to in sub-section (1) shall be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof.
(3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made'.
4. As per Section 34 of the Old Act, before staying legal proceedings where there is an arbitration agreement, the court must be satisfied that the applicant was, at the time when the proceedings were commenced and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration. Such a condition is not laid down in Section 8 of the New Act. Therefore, there is no need for the court to consider whether the defendant was ready and willing to do all things necessary to the proper conduct of the arbitration.
5. The learned counsel for the revision petitioner further contended that before the suit was filed, plaintiff issued a notice to the defendant and at that time, the defendant did not take steps to refer the dispute to arbitration and hence the present application is not maintainable. In this regard, he placed reliance on a decision of the Supreme Court in STATE OF PUNJAB Vs . GEETA IRON & BRASS WORKS, : [1978]1SCR746 . In that case Section 80 notice was issued before filing the suit. The defendant was silent on receipt of the said notice. It was held that Section 80 C.P.C., notice is intended to alert the State to negotiate a just settlement or at least have the courtesy to tell the potential outsider why the claim is being resisted. In the above decision itself it is categorically stated that as a matter of law mere silence on the part of the defendant when a notice under Section 80 C.P.C., is sent to him may not, without more, disentitle him to move under Section 34 of the Arbitration Act, 1940, and seek a stay. This decision also does not help the plaintiff in the present suit.
6. It is contended on behalf of the revision petitioner that the defendant had asked for time in the suit to file the written statement and therefore this petition is not maintainable. He placed reliance on a judgment of Nagpur High Court in ABDUL QUDDOOS v. ABDUL GANI, AIR 1954 Nagpur 332. This decision was rendered on an application filed under Section 34 of the Old Act. The Nagpur High Court held that making an oral application for time to file a written statement is undoubtedly taking a step in the proceedings. This decision also has no application to the facts of the present case. Section 34 of the Old Act envisaged that an application under the said provision is to be filed at any time before filing written statement or taking any other steps in the proceedings. There are some decisions wherein it was held that a request for time to file the written statement is also taking a step in the legal proceedings and such a step will disentitle the party concerned in filing the petition under Section 34 of the said Act. The provision in Section 34 of the Old Act was already extracted supra. Similarly the provision in Section 8 of the New Act was already extracted supra. There is a distinction between the two provisions. In the new provision ' any step in the legal proceedings' is omitted. The new provision envisages that a party shall make the application not later than when submitting his first statement on the substance of the dispute. Undoubtedly the defendant has not filed any written statement or any other application in the suit. As already pointed out on the day of his making his appearance in the trial court, he filed the application under Section 8 of the New Act. Therefore, the above decision relied upon is not applicable to the facts of the present case.
7. The next contention advanced on behalf of the revision petitioner is that though the suit was filed in the year 1997, the defendant evaded the summons and made appearance in the court in the year 1999 and therefore he is not entitled to file the present petition. There is no material to show that the defendant evaded to receive the summons issued by the court. Summons were ordered to him only once. The court was ordering await of return of the summons from the Madras as the defendant is a resident of Madras. Thereafter the court ordered substituted service by publication in newspaper and immediately thereafter the defendant made appearance in the trial court. There is no material to show that he evaded to receive the summons at any time. Even otherwise that is not a ground envisaged under Section 8 of the New Act disentitling the defendant from filing the present petition.
8. Another contention seriously argued on behalf of the revision petitioner is to the effect that present petition is barred by limitation. According to the learned counsel for the revision petitioner that notice by the plaintiff was given to the defendant in June, 1996, and the present application was filed in the trial court on 27.11.1999 and that Article 137 of the Limitation Act applies and as the present petition is not filed within three years from the date of issuance of the notice by the plaintiff to the defendant, the present petition is barred by limitation. Absolutely there is no force in that contention. No period of limitation is prescribed under the New Act for filing a petition under Section 8 of the New Act. Further, the said provision itself permits a party to a suit to file an application requesting the Civil Court to refer the matter to the Arbitrator before the party concerned files his first written statement in the Court. Therefore, the party can invoke the provision under Section 8 of the New Act only after a suit is filed against him. It is thus clear that there is no question of any limitation prescribed for filing the said petition and there is no further question of the said petition being barred by Article 137 of Limitation Act of 1963. It is thus clear that various objections taken by the revision petitioner regarding the relief asked for by the defendant are untenable in law.
9. The other contention advanced on behalf of the revision petitioner is that in the suit a relief regarding the cancellation of mortgage deed is asked for and it is not under the purview of the arbitration agreement and therefore the petition is liable to be dismissed. I find no force in that contention.
10. The learned counsel for the respondent relied upon two decisions in the present case. The first decision is a judgment of a learned single Judge of this Court in LAKSHMI GENERAL FINANCE LTD. v. ANANTHA RAJA RAO, 2002(1) LS. 173. In that case the plaintiff denied very existence of the arbitration agreement. In the present case also there is a partial denial of existence of the arbitration agreement. This court held that under Section 16 of the New Act the Arbitrator has got ample power to go into all questions including the existence and validity of the agreement. The trial court dismissed the application on the ground that the Arbitrator cannot give finding with regard to fabrication of document and alleged fraud. That order of the trial court was set aside by this court.
11. Another decision relied upon is a judgment of the Supreme Court in KALPANA KOTHARI v. SUDHA YADAV, 2001 AIR SCW 5214. The said decision was rendered after comparing the provisions contained in Section 34 of the Arbitration Act, 1940, and Section 8 of the Arbitration & Conciliation Act, 1996. I am of the opinion that it is necessary to extract hereunder the relevant passage in the head note.
' Section 34 of the 1940 Act provided for filing an application to stay legal proceedings instituted by any party to an arbitration agreement against any other party to such agreement, in derogation of the arbitration clause and attempts for settlement of disputes otherwise than in accordance with the arbitration clause by substantiating the existence of an arbitration clause and the judicial authority concerned may stay such proceedings on being satisfied that there is no sufficient reason as to why the matter should not be referred to for decision in accordance with the arbitration agreement, and that the applicant seeking for stay was at the time when the proceedings were commenced and still remained ready and willing to do all things necessary to the proper conduct of the arbitration. This provision under the 1940 Act had nothing to do with actual reference to the arbitration of the disputes and that was left to be taken care of under Ss. 8 and 20 of the Act. In striking contrast to the said scheme underlying the provisions of the 1940 Act, in the new 1996 Act, there is no provision corresponding to S. 34 of the old Act and S. 8 of the 1996 Act mandates that the Judicial Authority before which an action has been brought in respect of a matter, which is the subject-matter of an arbitration agreement, shall refer the parties to arbitration if a party to such an agreement applies not later than when submitting his first statement. The provisions of the 1996 Act do not envisage the specific obtaining of any stay as under the 1940 Act, for the reason that not only the direction to make reference is mandatory but notwithstanding the pendency of the proceedings before the Judicial Authority or the making of an application under Section 8(1) of the 1996 Act, the arbitration proceedings are enabled, under Section 8(3) of the 1996 Act to be commenced or continued and an arbitral award also made unhampered by such pendency. That being so that the fact that the earlier application under the 1940 Act was got dismissed as not pressed in the teeth of the repeal of the said Act cannot, constitute any legal impediment for having recourse to and avail of the avenues thrown open to parties under the 1996 Act. Similarly, having regard to the distinct purposes, scope and object of the respective provisions of law in these two Acts, the plea of estoppel can have no application deprive the party of the legitimate right to invoke an all comprehensive provision of mandatory character like S. 8 of the 1996 Act to have the matter relating to the disputes referred to arbitration, in terms of the arbitration agreement'.
12. The principle of law laid down by the Supreme Court in the above decision makes it clear that the order passed by the trial court is not liable to be set aside on any of the grounds urged by the revision petitioner. I see no merits in the revision petition.
13. In the result, the revision petition is dismissed. No costs.