M/S Gunshikha Marketing Co. vs. Awadhesh Prasad
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The Appellant, M/s Gunshikha Marketing Co., filed a suit on February 16, 2024, seeking recovery of Rs. 6,00,000/- along with interest at 18% per annum and applicable GST at 12% on the interest. The Respondent, Awadhesh Prasad, entered appearance and filed a written statement on April 6, 2024. The Appellant then amended the plaint, which was allowed on April 20, 2024. The Respondent filed a second written statement to the amended plaint on April 27, 2024. Crucially, the Respondent did not raise any objection regarding the existence of an arbitration agreement in his first written statement. Subsequently, the Commercial Court passed an order referring the parties to arbitration, finding a valid arbitration clause. The Appellant assails this order, contending that the objection was raised belatedly.
Held
The Court held that the Respondent failed to avail the opportunity to object to the continuation of the suit on the ground that the dispute was required to be adjudicated by an Arbitral Tribunal. This failure occurred because the Respondent filed his first written statement on the substance of the dispute on April 6, 2024, without raising any such objection. Section 8(1) of the Arbitration and Conciliation Act, 1996, mandates that a party seeking reference to arbitration must apply not later than the date of submitting their first statement on the substance of the dispute. Since the Respondent did not comply with this provision, he lost the right to seek arbitration. Consequently, the Commercial Court's impugned judgment, which referred the parties to arbitration, was set aside. The suit was restored to its original number, and the parties were directed to appear before the Commercial Court for further proceedings.
Key Issues
1. Whether the Respondent waived his right to seek reference to arbitration by failing to raise the objection regarding the arbitration agreement in his first written statement on the substance of the dispute, as mandated by Section 8(1) of the Arbitration and Conciliation Act, 1996? The Appellant argued that the Respondent failed to comply with the mandatory requirement of Section 8(1) of the Arbitration and Conciliation Act, 1996, by not raising the objection concerning the arbitration agreement in his first written statement. The Appellant contended that by filing a written statement on the substance of the dispute without such an objection, the Respondent implicitly waived his right to seek arbitration. The Respondent argued that the objection was raised in the subsequent written statement filed after the amendment of the plaint, and that the Commercial Court correctly identified a valid arbitration agreement and referred the parties to arbitration. The judgment does not explicitly record arguments from the Respondent regarding the interpretation or application of Section 8(1) beyond what is implied by the Commercial Court's decision.
Sections Cited
Section 8
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Cause title — parties, addresses and appearances
O R D E R %
2026
Through the present Appeal, the Appellant [Plaintiff before the Commercial Court] assails the correctness of the Judgment and decree dated 05.07.2024 [hereinafter referred to as „Impugned Judgment‟] passed by the learned District Judge, Commercial Court-08, Central, Tis Hazari Courts, Delhi in CS (COMM.) No.264/2024 captioned M/s Gunshikha Marketing Co. v. Awadhesh Prasad.
The Commercial Court has referred the parties to the Arbitrator after finding that there is an agreement containing an arbitration clause. The correctness of the Impugned Judgment is challenged by the Appellant on the ground that such objection was taken for the first time, much after the Respondent [Defendant before the Commercial Court] submitted the first written statement on the substance of the dispute.
Facts, in brief, are required to be noticed in order to comprehend the controversy involved in the present case.
The Appellant filed the suit on 16.02.2024 for recovery of This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 12:24:16
Rs.6,00,000/- along with interest @ 18% p.a. with applicable GST @ 12% on such interest.
Notice was issued in the suit and the Respondent entered appearance on 20.03.2024. The Respondent filed his written statement dated 05.04.2024 on 06.04.2024. At that stage, the Appellant filed an application for permission to amend the plaint, which was allowed on 20.04.2024. 6. Thereafter, the Respondent filed another written statement to the amended plaint on 27.04.2024. 7. It is an admitted position on the record that while filing written statement to the un-amended plaint, the Respondent did not object to the continuation of the suit on the ground that this matter is required to be adjudicated by the Arbitral Tribunal.
At this juncture, it is pertinent to refer to Section 8 of the Arbitration and Conciliation Act, 1996, which is reproduced hereinbelow:
“8. Power to refer parties to arbitration where there is an arbitration agreement.—1 [(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 This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 12:24:16
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.”
It is evident that the Respondent filed his first written statement on the substance of the dispute on 06.04.2024, but did not choose to object to the maintainability of the suit on the ground that the parties are required to get their dispute resolved through arbitration. Hence, this Court is of the considered opinion that the Respondent has failed to avail the opportunity, which was available to him at the first instance.
Consequently, the present Appeal is allowed and the Impugned Judgment is set aside. The suit is restored to its original number. The parties, along with their respective counsel, are directed to appear before the Commercial Court on 05.02.2026 for proceeding with the suit.
The Appeal stands disposed of.
ANIL KSHETARPAL, J
AMIT MAHAJAN, J JANUARY 22, 2026 s.godara/shah/ad
This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 27/01/2026 at 12:24:16
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