Reference To Arbitration Requires Independent Application, Cannot Be Inferred From Plea To Reject Plaint: Calcutta High Court

The Calcutta High Court recently rejected a Master's summons application filed by M/s Samman Capital Limited, that sought stay of a commercial suit on the grounds of an existing arbitration clause.Master's summons under the Code of Civil Procedure (CPC) refers to a court order (summons) compelling a party to appear, often to provide documents or information relevant to an insolvency proceeding or specific case issues.The Court emphasised that for a dispute to be referred to arbitration, the law mandatorily necessitates the party to file an independent application for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 (the Act), rather than merely seeking the plaint to be rejected. Section 8 of the Act mandates that a judicial authority refer parties to arbitration if a dispute falls under a valid arbitration agreement, provided the application is made by a party at the earliest stage (before submitting the first statement on the dispute's substance).The dispute arose between M/S Sammaan Capital Limited, formerly known as Indiabulls Housing Finance Limited (Defendant) and Jagannath Heights Pvt Ltd (Plaintiff), out of a contract that admittedly contained an arbitration clause. Following the institution of a commercial suit by Jagannath owing to disputes, the defendant filed a Master's Summons requesting the matter to be dismissed by either rejecting or returning the said plaint or halting the proceedings.Although the prayers in the summons claimed for procedural dismissal under the Civil Procedure Code (CPC), 1908, the defendant contended in its underlying affidavit that the matter ought to be referred to arbitration under Section 8 of the Act since there was an arbitration agreement.The defendant argued that the Court should take into account the "substance of the application as a whole" as opposed to piecemeal. They contended that the objective stated in the supporting affidavit was evidently to invoke Section 8, despite the prayers' ambiguous formulation.On the other hand, the plaintiff contended that Section 8 is a specific statutory provision that requires a clear and formal application for reference. Additionally, their stand was based on the argument that petitions for "rejection of plaint" is not the same as a reference to arbitration and are subject to Order VII Rule 11 of the CPC.On perusal of the submissions, the Single Bench led by Justice Aniruddha Roy, on 9th January, 2026, siding with Jagannath Heights, ruled that Section 8 mandates that the legislative procedures be strictly followed and stated that dismissing or rejecting a plaint cannot be equated to "referring" parties to arbitration, but rather, it is an independent relief under the CPC.Emphasizing the need for a specific prayer, the Court held that "the age old settled legal principle is that when a statute prescribes to do certain thing in a certain manner, the thing has to be done in the same manner or not at all. All other modes are expressly forbidden."The Court clarified that although the defendant had not waived its right to seek arbitration since the application was filed before the written statement, the application itself was inadequately submitted.It held that as none of the prayers in the Master's Summons sought reference to arbitration under Section 8, it deemed the application untenable. The Judge additionally stressed that liberal construction is not permitted in this context, as it would "defeat the legislative intent" behind the enactment.The Bench clarified that the “provision under Section 8 being a specific statutory provision has to be applied strictly by way of a separate application with specific prayer and it would be of no relevance whether in the written statement, the defendant has raised the issue or not”.Firmly ruling that the application did not meet the mandatory criteria contained under Section 8, the Court dismissed the defendant's Master's summons, thereby allowing the commercial litigation to proceed.Case Title: Jagannath Heights Pvt Ltd v. M/S Sammaan Capital LimitedCase No: IA NO. GA-COM/2/2025 In CS-COM/801/2024Coram: Justice Aniruddha RoyDate of Decision: January 9, 2026Appearances: Advocates Abhrajit Mitra, Satadeep Bhattacharyya, Samriddha Sen, Arijeet Bera (For Plaintiff); Avishek Guha, Shounak Mukhopadhyay, Ankush Majumdar, Sonal Agarwal, Rayani Bhattacharyya (For Defendant)Click Here To Read/Download Order

Reference To Arbitration Requires Independent Application, Cannot Be Inferred From Plea To Reject Plaint: Calcutta High Court

Shivani PS

Tags