Introduction:

In Jagannath Heights Pvt Ltd v M S Sammaan Capital Limited, IA No GA COM 2 of 2025 in CS COM 801 of 2024, decided on 9 January 2026, the Calcutta High Court through Justice Aniruddha Roy delivered an important ruling clarifying the strict procedural requirements for invoking arbitration under Section 8 of the Arbitration and Conciliation Act 1996, holding that a party seeking reference of a dispute to arbitration cannot do so indirectly through a Master’s Summons seeking rejection or return of plaint under the Code of Civil Procedure 1908, and must necessarily file a specific and independent application under Section 8 with a clear prayer for reference to arbitration, the case arising out of a commercial dispute between Jagannath Heights Pvt Ltd as plaintiff and M S Sammaan Capital Limited formerly known as Indiabulls Housing Finance Limited as defendant, where despite the existence of an arbitration clause in the contract between the parties, the defendant attempted to halt the civil proceedings by filing a Master’s Summons under the CPC rather than invoking the statutory mechanism prescribed under the Arbitration Act, thereby raising fundamental questions regarding the interplay between civil procedural law and arbitration law, the scope of judicial discretion in construing pleadings, and the mandatory nature of statutory procedure when a party seeks to oust the jurisdiction of a civil court in favour of arbitral adjudication.

Arguments:

The defendant M S Sammaan Capital Limited contended that since the underlying contract admittedly contained an arbitration clause, the civil court ought not to proceed with the commercial suit instituted by Jagannath Heights Pvt Ltd, and accordingly filed a Master’s Summons praying for dismissal of the suit either by rejection of the plaint or by returning it or by staying further proceedings, although the prayers were couched entirely in the language of the CPC, the supporting affidavit expressly asserted that the dispute was arbitrable and that the court should give effect to Section 8 of the Arbitration and Conciliation Act 1996, the defendant argued that courts should not adopt a narrow or hyper technical approach and instead should look at the substance of the application as a whole rather than the form of the prayers, and that once it is evident from the affidavit that the intention of the applicant is to seek reference to arbitration, the court should treat the application as one under Section 8, especially when the application was filed at the earliest stage before submission of the written statement, thereby satisfying the temporal requirement under Section 8, the defendant further argued that insisting on a separate formal application would elevate form over substance and defeat the pro arbitration policy underlying the Arbitration Act, while also contending that the Master’s Summons mechanism under the CPC is a recognized procedural device and should be read harmoniously with the Arbitration Act to avoid multiplicity of proceedings, on the other hand the plaintiff Jagannath Heights Pvt Ltd strongly opposed the application and argued that Section 8 of the Arbitration and Conciliation Act is a special statutory provision that prescribes a specific procedure and conditions for reference of disputes to arbitration, including the requirement of a clear and unequivocal application seeking such reference, the plaintiff submitted that a prayer for rejection of plaint under Order VII Rule 11 of the CPC or for dismissal of the suit cannot be equated with a prayer for reference to arbitration, as rejection of plaint is a substantive adjudicatory relief resulting in termination of the suit, whereas reference to arbitration merely transfers the forum of adjudication while keeping the dispute alive, the plaintiff further contended that allowing indirect invocation of Section 8 through ambiguous or procedurally improper applications would create uncertainty, dilute statutory safeguards, and undermine the discipline imposed by Parliament in requiring arbitration to be invoked in a precise and timely manner, and it was emphasized that the Arbitration Act being a self contained code, its provisions must be strictly complied with, particularly when a party seeks to deprive the civil court of its jurisdiction.

Court’s Judgment:

The Calcutta High Court after carefully examining the pleadings, prayers, and statutory scheme, dismissed the Master’s Summons filed by the defendant and held that the application was not maintainable as it failed to meet the mandatory requirements of Section 8 of the Arbitration and Conciliation Act 1996, the Court categorically held that dismissing or rejecting a plaint under the CPC is fundamentally different from referring parties to arbitration, and that the two remedies operate in distinct legal spheres, the Court emphasized that Section 8 casts a statutory obligation on the judicial authority to refer parties to arbitration only when a proper application is made in accordance with law, and such obligation cannot be triggered by implication, inference, or liberal interpretation of pleadings, the Court relied on the well settled principle that when a statute prescribes that a particular act must be done in a particular manner, it must be done in that manner alone or not at all, and all other modes are necessarily forbidden, Justice Aniruddha Roy observed that although the defendant had not waived its right to seek arbitration since the application was filed before filing the written statement, the manner in which the right was sought to be exercised was legally defective, as none of the prayers in the Master’s Summons sought reference of the dispute to arbitration under Section 8, the Court rejected the argument that substance should prevail over form in this context, holding that liberal construction would defeat legislative intent and blur the clear procedural boundaries consciously drawn by Parliament, the Court further clarified that the relevance of Section 8 does not depend on whether the issue of arbitration has been raised in the written statement or affidavit, but on whether a valid and specific application invoking Section 8 has been made, and in the absence of such an application, the court is neither empowered nor obligated to refer the dispute to arbitration, the judgment underscored that arbitration being a consensual yet statutorily regulated mechanism, its invocation must strictly adhere to statutory requirements, especially because it results in exclusion of the civil court’s jurisdiction, and consequently the Court dismissed the Master’s Summons and allowed the commercial suit to proceed in accordance with law.