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2014 (11) TMI 1247 - HC - Indian LawsDishonor of Cheque - defendants have not paid the valid dues of the plaintiff inspite of due service of the legal notice - territorial jurisdiction - jurisdiction to intervene where there is an arbitration clause/ agreement - presumption in favour of the plaintiff or not - Order XXXVII CPC - HELD THAT:- No evidence of any oral agreement or statement can be admitted when the terms of any such contract have been reduced in the form of a document. Thus, the grounds mentioned in the application for leave to defend as defence, it is merely a moonshine defence. The said grounds have no application in law. The present case is clearly covered in guiding principles of (d) and (e) of the judgment of MECHELEC ENGINEERS AND MANUFACTURERS VERSUS M/S. BASIC EQUIPMENT CORPORATION [1976 (11) TMI 194 - SUPREME COURT]. The defendants have no defence who are not entitled for leave to defend. It is stated that as per Section 5 of the Act, no Court shall have jurisdiction to intervene where there is an arbitration clause/ agreement. Further as per Section 8 of the Act, it is clear that a judicial authority before which, an action is brought in a matter, which is the subject matter of an Arbitration Agreement shall be referred to the Arbitration - there is an existence of arbitration clause as per the settled law and conditions between the parties and the dispute raised in the suit relates to the subject matter of the Arbitration and the dispute be referred to arbitration. Having considered the undertaking/affidavit executed by the defendant No.2 as well as the dishonouring of the cheques issued by the said defendant, since the presumption is that the defendants have admitted their liability of the outstanding amount of the plaintiff, thus there is no dispute between the parties whereby the defendants have to pay the amount to the plaintiff - In the present case, since there are written documents raising presumption against the defendants with regard to the undertaking and dishonouring of the cheques, no ground has been made out by the defendants to grant the leave to defend in the present case. The application for leave to defend as well as the application under Sections 5 and 8 of the Act are dismissed.
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