The Delhi High Court has dismissed a petition filed under Article 227 of the Constitution challenging a trial court order that refused to reject a plaint under Order VII Rule 11 CPC and closed the petitioner’s right to file a written statement. The case arose from a loan dispute where the petitioner sought dismissal of the suit on the ground that the underlying loan agreement contained an arbitration clause.
The Court held that mere reference to an arbitration clause without filing a formal application under Section 8 of the Arbitration and Conciliation Act does not bar a civil suit or justify rejection of the plaint. The Court reiterated that Order VII Rule 11(d) can only be invoked where the suit appears to be barred by law on the face of the plaint, and the Arbitration Act does not impose such a bar unless Section 8 is properly invoked.
On the issue of authorization, the Court upheld the trial court’s acceptance of a ratified board resolution filed after suit initiation, noting that procedural defects in corporate authorization are curable, especially where no prejudice is caused.
Further, the Court rejected the plea to reopen the petitioner’s right to file a written statement, finding no sufficient cause or application for condonation of delay especially when the matter was no longer being treated as a commercial suit with a strict 120-day limit. The petition was accordingly dismissed.
Advocates appearing the case:Â
Petitioner: Ms. Manpreet Kaur and Ms. Jaya Goyal, Advocates
Respondent: Mr. Gaurav Pachauri, Adv
Read the Order
