JUDGMENT
V.B. Bansal, J.
1. Manohar Singh and Sons have filed this first appeal against the order dated 19.8.1989 passed by Shri G. S. Dhaka, Additional District Judge, Delhi, holding that the proceedings in the suit filed by the appellant against Navketan Co-operative Group Housing Society Ltd. respondent/defendant, for the recovery of Rs. 46,000/- were liable to stayed under Section 34 of the Arbitration Act.
2. Briefly stated, the facts leading to the filing of the present appeal care that M/s. Manohar Singh and Sons is a firm carrying on business as contractors and engineers, duly registered under the Indian Partnership Act and Shri Manohar Singh is one of the partners conversant with the facts and competent to sign and verify the pleadings.
3. The plaintiff was awarded works by the defendant society for the construction and development of apartments for the members of the respondent society, regarding which an Agreement was executed between the parties. It was contemplated that the payments would be made by the defendant within 30 days from the date of verification of the bill by the architects, M/s. Kothari & Associates, New Delhi.
4. The plaintiff/appellant had submitted final bill to the architects, who after verification, issued certificate dated 1.11.1985 for a sum of Rs. 30,927.47, payable by the Society. This claim was submitted to the Society on which its Secretary, Shri Balkar Singh, made a note dated 18.11.1985 that there was shortage of funds with the Society and that the payment would be made as soon as the funds were available with the Society. The amount was not paid in spite of demands and, thus, a total sum of Rs. 46,000/- is stated to be due, which includes Rs. 14,844.96 p. as interest at the rate of 18 per cent per annum; Rs. 220.00 as notice fee; an Rs. 7.57 p. as postage and typing fee, which amount has not been paid and, thus, this Suit under Order xxxvII of the Civil Procedure, Code.
5. Summons under Order xxxvII of the Civil Procedure Code were ordered to be issued to the defendant for 19.8.1988, but the summons in the ordinary way for settlement of issues were issued and on appearing of counsel for the parties on 19.8.1988 the case was adjourned to 19.9.1988 for the filing of the written statement. An application under Section 34 of the Arbitration Act as filed by the defendant on 19.9.1988. This application was opposed by the plaintiff. However, after hearing the arguments of the learned counsel for the parties, the application was allowed and the proceedings were stayed under Section 34 of the Arbitration Act on account of the existence of a Clause for arbitration in the Agreement between the parties.
6. I have heard Mr. Anusuya Salwan, learned counsel for the appellant and Shri N. K. Thanani, learned counsel for the respondent. I have also gone through the record.
Learned counsel for the appellant has submitted that the work of construction of flats was awarded to the appellant by the defendant, regarding which an Agreement dated 29.1.1983 was executed and the conditions of contract were made part of this Agreement. It has further been submitted that Clause 37 related to the settlement of disputes and arbitration. It has further been submitted that it was a condition of the Agreement that the appellant would submit bills and the respondent would make the payment within 30 days of the issuance of a Certificate by the architects, M/s. Kothari & Associates. It has further been submitted that final bill was submitted by the appellant to the architects, who had issued a certificate dated 1.11.1985, which was presented to the Secretary of the respondent, who had made an endorsement dated 8.11.1985 that the payment would be made when funds would be available. It has further been submitted that on account of the Certificates having been issued by the Architects in compliance of the terms of the Agreement, there was no dispute between the parties about the payment being due and thus, the plaintiff had filed a suit for recovery. It has. thus, been submitted that there was no question of the matter being referred to Arbitrator and the learned Trial Court has gravely erred in allowing the application and staying the proceedings so that the parties may get matter adjudicated by the Arbitrator.
Learned counsel for the defendant has, on the other hand, submitted that the plaintiff/appellant had not completed any work, as claimed, and that the plaintiff colluded with the Secretary of the Society and obtained an endorsement subsequently. He has further submitted that the Society, in fact, had never been short of funds and the dispute having not been properly settled, the learned Trial Court has correctly stayed the proceedings so that the matter is adjudicated upon by the Arbitrator. He has also submitted that the respondent has always been ready and willing to refer the dispute to the named Arbitrator. He has thus, submitted that there is no force in this appeal and that the same should be dismissed.
7. It is admitted case of the parties that Shri Balkar Singh was the Secretary of the respondent Society on 8.11.1985. Learned counsel for the defendant/respondent has not disputed the writing on the margin of the letter of M/s. Kothari & Associates in the hand of the aforesaid Shri Balkar Singh. The only plea raised by the learned counsel for the respondent has been that this endorsement was obtained at a later stage and this document ought to have been in the custody of the respondent society. I do not find any force in this contention so as to hold that the proceedings before the Trial Court ought to have been stayed.
8. Learned counsel for the appellant has submitted that since this was a document on the basis of which the payment was to be claimed by the plaintiff, it was kept by the plaintiff so that the payment could be again asked for by showing this document. Apparently, the document shows that the accounts had already been settled and if that be the position, the only remedy available to the plaintiff/appellant was to file a suit for recovery. It would be open to the respondent Society to contest the suit and take the plea that no amount was due to the plaintiff or that the work which is claimed to have been carried out by the plaintiff/appellant was actually not carried out. I find support for this view from the case National Research Development Corporation of India v. Bhupal Mining Works etc. (1973 PLR 27).
9. Admittedly, the plaintiff had filed a suit for recovery under Order xxxvII of the Code of Civil Procedure. However, the summons issued to the defendant were for settlement of issues. It is also apparent that as against the provision in the Agreement that the plaintiff could claim interest at the rate of 12 per cent per annum for delayed payments, the interest claimed in the present case is 18 per cent. Considering all these facts, I am clearly of the view that the case has to be tried as an ordinary suit and not a suit under Order xxxvII.
10. In view of my aforesaid discussion, the appeal is allowed and the order dated 19.8.1989 is set aside. The Trial Court would take further proceedings in the matter in accordance with law. Parties are directed to appear before the Trial Court on 23.8.1993. The records of the case be returned immediately.
11. Appeal allowed.
