JUDGMENT
B.K. Rathi, J.
1. This revision has been preferred against the order dated 6.9.2000 passed by Civil Judge
(Senior Division), Bijnor recording findings on issue Nos. 3 and 5 against
the revisionists,
2. The fact giving rise to this revision are as follows :
“The Suit No. 142 of 1996 was filed by the respondent against the revisionists under Sections 8 and 20 of the Arbitration Act, 1940. The revisionists contested the suit. One of the plea taken was that the suit was filed on 6.9.1996, that the Arbitration and Conciliation Act, 1996, has been enforced from 25.1.1996 and the Indian Arbitration Act, 1940, has been repealed. Therefore, the suit is not maintainable and is liable to be dismissed. On this plea, issue No. 5 was framed. There was another plea raised in the written statement that the Court has no territorial jurisdiction to try the suit, regarding which issue No. 3 was framed. The trial court by the impugned order dated 6.9.2000 decided both the Issues against the revisionists. Aggrieved by it, the present revision has been preferred.”
3. I have heard Sri Vipin Sinha, learned counsel for the revisionists and Sri M. C. Gupta. learned counsel for the respondent.
4. During the arguments, the finding on issue No. 3 regarding territorial Jurisdiction has not been challenged before me. Therefore, I abstain from recording any finding on that point. Only the finding on issue No. 5 has been challenged during arguments before me. It is not disputed that the suit under Sections 8 and 20 of Indian Arbitration Act, 1940, was filed on 6.9.1996. It is also not disputed that the Indian Arbitration Act, 1940, was repealed on 25.1.1996 when the Arbitration and Conciliation Act, 1996, came into force by virtue of Section 85 of this Act. The trial court has referred to the provisions of Sections 85 and 21 of Arbitration and Conciliation Act, 1996 (hereinafter referred to as the “Act”). By Clause (1) of Section 85, the Indian Arbitration Act, 1940, has been repealed. Sub-clause (a) of
clause (2) which is material is as follows :
“the provisions of the said enactments shall apply in relation to arbitral proceedings which commenced before this Act came into force unless otherwise agreed by the parties but this Act shall apply in relation to arbitral proceedings which commenced on or after this Act comes into force.”
This clause, therefore, provides that for the proceedings commenced before this Act came into force, the old Act of 1940 shall continue to apply. Therefore, the question which is material is as to when the proceedings under Sections 8 and 20 of the Arbitration Act, 1940, shall be deemed to have commenced.
5. It is also not disputed that notice for appointment of arbitrator was served on 3.9.1994. Therefore, the question is whether the arbitral proceedings shall be deemed to have commenced from the date of the notice, i.e., 3.9.1994 or from the date the plaint was filed, i.e.. from 6.9.1996?
6. The learned counsel for the respondent has referred to the decision of this Court on this point of Shetty’s Constructions Co. Put. Ltd. v. Konkan Railway Construction and Anr., 1998 (5) SCC 599. This case does not apply to the facts of the present case. In this case, the claim was lodged with the respondent-authority on 6.3.1995 pursuant to the earlier demand dated 20.11.1994. An arbitration suit was filed in High Court of Bombay on 24.8.1995 under Sections 8 and 20 of the Arbitration Act, 1940. Therefore, in this case, the claim was lodged prior to the enforcement of the new Act and, therefore, it was held that by virtue of Clause (2) (a) of Section 85, the provisions of Arbitration Act. 1940, will continue to apply. This case has therefore, no application to the facts of the present case.
7. On the other hand, the decision of the Apex Court in Secretary to the Government of Orissa and Anr. v. Sarbeswar Rout. AIR
1989 SC 2259, is the direct decision on this point. The following observation of para 8 is material :
“So far an action in a court of law is concerned, it must be held that it commences on the filing of a proper claim in accordance with the prescribed procedure before the authority empowered to receive the same. If a plaint, drawn up in accordance with the prescribed law, is filed before a civil court, the suit must be deemed to have been instituted on that date, and not on a later date when the Court takes up the plaint and applied its mind. Ordinarily the plaint is examined by the stamp reporter of the Court who scrutinises whether proper court fee has been paid or not, and then makes a report. The Court generally takes up the plaint only later. Similar is the position with respect to other applications and memoranda of appeals. It must, therefore, be held that the proceeding is instituted when the claimant files his claim. We do not see any reason to apply a different approach in the case of an arbitration proceedings. As soon as the arbitrator Indicates his willingness to act as such, the proceeding must be held to have commenced.”
Therefore, in the present case, the arbitral proceedings shall be deemed to have commenced on 6.9.1996 when the plaint was filed in the Court. Therefore, the provision of old Act, 1940 cannot apply.
8. The other provision referred to is Section 21 of the Act, which reads as follows :
“Unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commence on the date on which a request for that dispute to be referred to arbitration is received by the respondent.”
9. This provision shall not apply to the proceedings started under Arbitration Act. 1940 and applies only to the proceedings under the new
Act. The lower court has wrongly placed reliance on this provision. This provision will apply only to the arbitral proceedings filed under the present Act.
10. In this connection, I may refer to a Division Bench decision in Union of India and Anr. v. Monoranjan Mondal and Ors., AIR 2000 Cal 148. It was observed :
“Applicability of Section 21 of 1996 Act is not relevant in our case for determining the commencement of arbitral proceedings because Section 21 of 1996 Act relates to and deal with the commencement of arbitral proceedings under 1996 Act. The definition of “commencement of arbitral proceedings” as occurring in Section 21 of 1996 Act will have a bearing only to a point of time after 1996 Act had come Into force and will have no relation to the commencement of arbitral proceedings at a point of time before 1996 Act had come into force. We are saying so because Section 21 does not deal with the scope of commencement of arbitral proceedings under Arbitration Act, 1940 on the other hand when Section 85 of 1996 Act talks about the commencement of arbitral proceedings before the coming into force of 1996 Act, it clearly means that the arbitral proceedings should have commenced before the coming into force of 1996 Act, in the manner such commencement is understood under the Arbitration Act, 1940.”
11. I, accordingly, find that the suit on 6.9.1996 could not be filed under Sections 8 and 20 of Arbitration Act, 1940 and is not maintainable. The findings on issue No. 5 recorded by the trial court is, therefore, reversed and it is held that the suit filed under Sections 8 and 20 of the Arbitration Act. 1940 is not maintainable.
12. The case is accordingly sent back to the trial court for passing proper orders in the case. In view of the above finding, the parties are directed to bear their own cost. Stay, if any, is vacated.