Chada Motor Transport Co. vs Mis Bharat Glass Co. on 31 July, 1972

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Delhi High Court
Chada Motor Transport Co. vs Mis Bharat Glass Co. on 31 July, 1972
Author: P S Safeer
Bench: P S Safeer

JUDGMENT

Pritam Singh Safeer, J.

(1) This petition is directed against the order passed on the 16th November, 1971, by Shri B.K. Agnihotri, Sub Judge First Class, Delhi, by which on accepting the application preferred under section 28 of the Arbitration Act (hereafter called “the Act”), the time for filing the Award was extended till the 16th of December, 1971. It is contended that the Court of Shri B.K. Agnihotri had no jurisdiction to entertain the application.

(2) The circumstances which require to be noticed are that a suit was filed on 21st July, 1965, by the respondents for the recovery of Rs. 5,000.00 against the present petitioners. The Senior sub-Judge assigned the suit for trial to the court of Shri V.P. Bhatnagar, Sub-Judge First class, Delhi. The petitioners made an application under section 34 of the Act before the sub- Judge and after hearing the parties, he passed an order on 19th December, 1966 staying the suit directing that the file be consigned to the record. The parties thereafter made reference to arbitration outside the court.

(3) The impugned order was secured on preferring the application under section 28 of the Act directly before the learned sub-Judge who had succeeded Shri V.P. Bhatnagar. The stand taken was that since the application preferred earlier under section 34 of the Act had been disposed of by Shri V.P. Bhatnagar his successor in the chair had the jurisdiction to deal with the application filed under section 28 of the Act. Accepting that contention the application was allowed.

(4) Mr. Sawhney appearing for the petitioners contends that the application under section 34 of the Act was not one which could attract section 31(4) thereof. The counsel urges that at the stage when the application under section 34 was disposed of, there were no proceedings in “any reference” and the court which disposed of the application ‘under section 34 of the Act could not confine to itself the jurisdication for all subsequent applications to be preferred under the Act. The learned counsel has cited . Appreciating the scheme of the Act and taking into consideration the relevant provisions it was observed therein :- “THERE are different sections in the Arbitration Act whereby an application is to be made even before any reference has been made. Section 8, for instance, provides for an application to invoke the power of the court, when the parties fail to concur in the appointment of an arbitrator to whom the reference can be made. So also section 20 provides for an application to file the arbitration agreement in court so that an order of reference to an arbitrator can be made. These are clearly applications anterior to the reference but they lead to a reference. Such applications are undoubtedly applications “in the matter of a reference” and may fall within the purview of section 31(4) of the Act even though these applications are made before any reference has taken place. But an application under section 34 is clearly not an application belonging to the same category. It has nothing to do with any reference. It is only intended to make an arbitration agreement effective and prevent a party from going to court contrary to his own agreement that the dispute is to be adjudicated by a private tribunal. We do not, therefore, consider that an application for stay of suit under section 34 is an application in a reference even within the wider meaning given to that phrase by this court in Kumbha Mawji’s case .”

The position in law, therefore, is that the disposal of an application filed under section 34 of the Act will not determine that the court making such disposal will be the only forum under the Act before which subsequent applications may be preferred. The word “Court” has been given a special meaning by Section 2(C) of the Act, which is :- “‘Court’ means a civil court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court.”

(4) In case a party wants to move under the Act it must move the court having the jurisdiction to decide a suit if filed in respect of the subject- matter which parties may have agreed would be decided through arbitration. The “Small Cause Court” is included in the definition only for purposes of section 21 of the Act. The suit which was consigned to the Record by Shri V. P. Bhatnagar was filed in Delhi. The applicants could have moved their application under section 28 of the Act on the basis that the Civil Courts in Delhi were the courts within section 2(c) of the Act. In that case, the application under section 29 would have been filed in the court of the senior Sub-Judge, Delhi. The court below was in error in assuming jurisdiction in the matter.

(5) It is submitted by the learned counsel appearing for the respondents that if the application had been filed in the court of the Senior Sub-Judge he would have sent the same to the very court which as successor to the court of Shri V, P. Bhatnagar has dealt with it. In my view the Senior Sub-Judge was not under any obligation to assign the application to a particular court on the basis that its predecessor had disposed of the application filed under section 34 of the Act. The counsel for the respondents submits that they will file a fresh application under section 28 of the Act. While setting aside the. impugned order, it is expressly reserved to the respondents that they may file a fresh application under section 28 of the Act in the court of the Senior Sub- Judge, if they are so advised.

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