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IN THE HIGH COURT OF MADHYA PRADESH

AT INDORE

MP No. 1033 of 2023

(GANGA INFRATECH THROUGH ITS PARTNER MR. PALASH RAJANI AND OTHERS Vs M/S

JOHARI LAND AND FINANCE THROUGH ITS PARTNER RAJENDRA SONI AND OTHERS )

Dated : 20-01-2026

Shri Vijay Kumar Asudani, Advocate for the petitioners.

Ms. Deepanshi Ishar- Advocate, with Shri Prabuddha Singh –

Advocate for the respondent(s).

1] Heard on I.A. No.4485/2025, which is an application for

clarification of the common final order dated 10.02.2025, passed by

this Court in the present petition, whereby, this Court had allowed the

petition, as also Arbitration Case No.56/2023, and the application filed

by the petitioner under Section 8 of the Arbitration and Conciliation

Act, 1996 (hereinafter referred to as ‘the Act of 1996’) in the Trial

Court has also been allowed, and the parties have been directed to

refer the matter to the arbitration, and simultaneously, in A.C.

No.56/2023, the Arbitrator has also been appointed.

2] The present application has been filed seeking clarification of the

said order, on the ground that although the effect of the order dated

10.02.2025, passed in M.P. No.1033/2023 is that of disposing of the

civil suit bearing No.RCSA-200/2022, as the application under Section

8 of the Act of 1996 was allowed by this Court, but the Civil Court is

still proceeding with the suit.

3] Shri Vijay Kumar Asudani, learned counsel for the petitioner has

submitted that even as per the mandate of Section 8 of the Act of 1996,

once an application under Section 8 is decided in favour of the

applicant, the parties are referred to the Arbitrator, and the civil suit

becomes redundant, as all the grounds are to be raised before the

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Arbitrator only. It is also submitted that the aforesaid order passed by

this Court was also challenged by the other side in the Supreme Court

in Special Leave to Appeal (c) No(s).12104-12105/2025, which was

disposed of with the further observation that the observations made by

the High Court in the impugned order are restricted only to the

consideration of the application under Section 8 of the aforesaid Act,

and are not on the merits of the case.

4] A reply to the application has also been filed. Ms Deepanshi

Ishar, learned counsel for the respondent has submitted that although,

it is true that Section 8 application has been allowed by this Court, and

the parties are required to refer all their disputes before the Arbitrator,

however, the contesting respondents have also filed an application

under Section 16 of the Act of 1996, challenging the jurisdiction of the

Arbitrator to decide the dispute, and if the aforesaid application is

allowed, the matter would be relegated to the Civil Court. Hence, the

proceedings before the Civil Court may be kept pending.

5] Counsel for the respondent has also drawn the attention of this

Court to the arbitration proceedings dated 23.07.2025, wherein, the

learned Arbitrator has also taken note of the fact that the civil suit

No.RCSA-200/2022 is still pending, and also that the claimant has

also filed an application before this Court for clarification of the order

dated 10.02.2025. Counsel has also drawn the attention of this Court to

the order dated 13.08.2024 to submit that in the aforesaid proceedings

of arbitration, learned Arbitrator has also raised some doubt whether

the disputes in RCSA-200/2022 have been referred to it in its entirety

or merely the disputes between the parties have been referred.

6] Heard. Having considered the rival submissions, on perusal of

the documents filed on record, as also the order passed by this Court

on 10.02.2025, it is found that unnecessary confusion has been created

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by the Civil Court by keeping the matter pending, despite the fact that

the Section 8 application was already allowed by this Court. It must

be kept in mind that the mandate of Section 8 is that if an application

under the same is allowed, the Court is required to refer the parties to

arbitration, and becomes functus officio to decide any further dispute

between the parties, as has also been held by the Supreme Court in the

case of P. Anand Gajapathi Raju Vs. P.V.G. Raju (Dead), reported as

2000 (4) SCC 539.

7] So far as Section 8 of the Act of 1996 is concerned, the same reads

as under:-

8. 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 to the arbitration agreement or any

person claiming through or under him, so applies not later than the

date of submitting his first statement on the substance of the

dispute, then, notwithstanding any judgment, decree or order of the

Supreme Court or any Court, refer the parties to arbitration unless

it finds that prima facie no valid arbitration agreement exists.]

(2) The application referred to in sub-section (1) shall not be

entertained unless it is accompanied by the original arbitration

agreement or a duly certified copy thereof:

[Provided that where the original arbitration agreement or a

certified copy thereof is not available with the party applying for

reference to arbitration under sub-section (1), and the said

agreement or certified copy is retained by the other party to that

agreement, then, the party so applying shall file such application

along with a copy of the arbitration agreement and a petition

praying the Court to call upon the other party to produce the

original arbitration agreement or its duly certified copy before that

Court.]

(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.

(Emphasis Supplied)

8] A perusal of the s.8 would clearly reveal that the very purpose of

filing an application u/s.8 is to ensure that if the parties have already

entered into an agreement to refer their disputes to an arbitrator, they

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should not be allowed to pursue the civil suit and should be relegated

to refer their disputes to the arbitrator only.

9] In view of the same, in order to clarify, it is directed that the

further proceedings before the civil Court shall stand concluded, and

no further order shall be passed by the civil Court in the pending civil

suit.

10] Needless to say, since the civil suit has already been disposed of,

as a necessary corollary of allowing the s.8 application, all the disputes

are required to be decided by the Arbitrator only, in accordance with

law.

11] So far as the contention raised by the counsel for the respondent

that they have also filed an application under Section 16 of the Act of

1996, this Court finds that the law would take its own course, and once

an application under Section 8 is already allowed, the civil suit cannot

be kept pending in anticipation of any further order passed by the

Arbitration Tribunal, on an application filed under Section 16 of the

Act of 1996.

12] Accordingly, the application, I.A. No.4485/2025 stands allowed,

and disposed of with the observations as aforesaid.

(SUBODH ABHYANKAR)

JUDGE

Bahar