TaxTMI 
TaxTMI 
2001 (7) TMI 1311
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....injunction restraining the petitioner from conducting the foreign tour referred to above. This application for interim injunction was I.A. No.20778 of 1998. The petitioner received notice in LA. on 22.12.1998, entered appearance and filed counter and also argued the matter on 23.12.1998. On 24.12.1998, the Court below dismissed the I.A. framed the preliminary issue and adjourned the matter till 18.1.1999 for trial of that preliminary issue. The preliminary issue was, "Whether the suit was maintainable or whether the parties should refer to arbitration". On 13.1.1999, the petitioner moved I.A.No.4348 of 1999 under Section 8 of the Act. The matter was argued on 22.1.1999. The first hearing of the suit was on 16.2.1999. The petitioner's application under Section 8 was rejected on 17.10.2000 and therefore, this revision has been filed. 2. Mr. Ashok Viswanath, learned counsel for the petitioner submitted that Section 8 of the Act provides that the Court before which proceedings are -pending shall refer the same to arbitration if the application under Section 8 is filed at any time before the first statement on the substance of the dispute is filed by the said application.....
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....e, the application under Section 34 of the old Act was made and it was dismissed. This Court confirmed the order on the ground that the party seeking stay of suit had not only taken steps in both the suits which bar them from filing the application under Section 34, but had also failed to refer the matters to arbitration. According to the learned Senior Counsel, in this matter, till date, the petitioner had not taken any steps to refer the matter to arbitration and therefore, he cannot be allowed to approach the Court for reference to arbitration. 4. The decision reported in M/s. Sundaram Finance Ltd. v. M/s NEPC India Ltd., clearly lays down the guidelines for deciding questions that arise under the new Act. In fact, it goes so far as to say that reference to the old Act may actually lead to misconstruction. Section 8 of the new Act reads thus: " 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 ....
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....right under the arbitration agreement to get the dispute resolved by arbitration. Realizing that such an interpretation was bringing about anomalous results and frustrating the laudable object of the arbitration law, the legislature has advisedly made a clear departure from the earlier position and, therefore, now a party is disentitled from getting stay of the suit only if the party has earlier submitted its statement on the substance of the dispute, that is, if earlier the defendant has filed its reply on merits." It is useful to bear this in mind while deciding the suit. 7. That there is an arbitration agreement is not denied by the parties. The arbitration clause reads thus: Arbitration: " All matters, disputes, claims, questions, doubts, clarifications, differences arising either in the course of the conduct of the society's affairs or arising in the course of or out of transaction/s the members inter se may have, in connection with their role and in consultation with and/or in connection with their relationship with the Society or in the course of any transaction, business in any manner whatsoever which the Society, may have with one or more of the members a....
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....able to traverse the same. Paragraph 7: The Defendant society in accordance with its objects as contained in its Registered Memorandum of Association is granting loans through the Loan Committee to its members for various purposes namely, Business Loan, Purchase Loan for buying domestic, office appliances etc., Vehicle Loan, Housing Loan, Education Loan, Foreign Travel Loan, Medical Loan, Marriage Loan etc. The Defendant Society is not conducting any foreign tour as alleged by the petitioner but is only granting Foreign Travel Loan to those members who have applied for such loan and such Travel Loan is being disbursed for travel through Recognised Travel Agency and Tour operators." 10. These averments in the counter are really not with reference to the averments in the affidavit alone but also appear to deny some of the allegations raised in the plaint. In any event, the petitioner has categorically stated in his counter that the grant of loan by the defendant Society is authorized by Memorandum of Association and there is no violation of the objects of the Association. They have also stated in the counter that the petitioner's application for business loan was sanction....