JUDGMENT
Avadh Behari, J.
(1) This is a revision petition against the order of the Subordinate Judge dated October 4, 1972.
(2) The respondent, Rathi Steels, made an application under s. 33 of the Arbi
(3) In their application Rathi Steels alleged that they had indent with M/s Hindustan Steel Limited Calcutta which was rejected sometimes in March or April 1970. In September 1970 Rathi Steels approached Rosha and suggested to him that since he had good contacts with Hindustan Steel Ltd. he should get the rejected indent revived and a sale order issued in pursuance thereof. It was agreed between the parties that if Rosha gets the indent revived and the sale order issued Rathi Steels shall pay him Rs. 20.00 per tonne on the quantity of the goods received.
(4) Further it is the case of Rathi Steels that they gave four blank letter heads duly signed to Rosha for making a representation on their behalf to Hindustan Steel Limited and one of these blank forms an agreement has been written by Rosha in order to make a claim against them. A declaration is sought that there is no arbitration agreement between the parties. Rathi Steels valued the application under S. 33 for purposes of jurisdiction at Rs. 500.00 and filed the same in the court of the Subordinate Judge.
(5) Rosha contested the petition. He raised a preliminary objection. He said that the pecuniary jurisdiction of the dispute between the parties is Rs. 66,000/. which is the subject-matter of the reference and therefore this petition under S. 33 was exclusively friable by High Court and not by the subordinate judge. The following issue was framed :
“WHETHER this court has no jurisdiction to try the suit ? OPD”
(6) The learned subordinate judge following Municipal Board v. E.U.P.E. Supply Co. Ltd., held that since the relief claimed in the application was merely a declaration about the existence of the arbitration agreement and its validity Rathi Steels were entitled to put their own valuation for purposes of jurisdiction. She decided that she had jurisdiction to try the suit. Rosha has come now in revision.
(7) By his letter dated December 27, 1971, Rosha wrote to Rathi Steels that he had spent a sum of Rs. 66,000.00 on the work entrusted to him and that he wanted this amount to be paid to him. Rosha said this :-
“DISPUTES thus have arisen on your failure to pay the sum of Rs. 66,000.00 under the agreement of reference dated 15th September, 1970. I now call upon you to join in reference and get the disputes adjudicated upon through the Sole Arbitrator, Shri G R. Chopra Advocate, 45, Darya Ganj, Delhi. If you do not take any step.. within 2 weeks from date of receipt of this letter, the necessary steps will be taken under the Arbitration Act for enforcing the agreement of reference.”
(8) This letter gave rise to the necessity of filing the application under S. 33. It is referred to in para 8 in the application and is marked as annexure A to it.
(9) Now it is clear that the subject matter of the reference is Rs. 66,000.00 . This is the claim of Rosha against Rathi Steels which he wants to be adjudicated upon in arbitration agreement as is now alleged by Rosha there can be no doubt that the only remedy for him was to file a suit for the recovery of Rs. 66,000.00 . In my opinion the subject- matter of the reference, namely, the sum of Rs. 66,000.00 will determine the pecuniary jurisdiction of the court. S. 2(e). Arbitration Act, says :
“”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;”
(10) Applying this definition of “Court” to the facts of the present case it is clear that the civil court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of the suit will be the proper court in which the application under S. 33 ought to be made. Mr.V.P. Chaudhary on behalf of the respondent does not dispute that if the suit had been instituted for the recovery of Rs. 66,000.00 it would have lain in this court.
(11) In my opinion the definition given in s. 2(e) is a clear answer to the question raised in this case. Applying this definition I find that the subject-matter of the suit if there had been no arbitration agreement would have been the sum of Rs. 66,000.00 . The same would be the subject- matter of the reference. The High Court in that case will be the proper forum.
(12) In a division bench ruling of the Madras High Court Balakrishna Ayyar J. said :
“IN order to determine which is the Court having jurisdiction in the matter, you should “first of all ascertain what the questions are, which form the subject-matter of the reference to arbitration. “You then proceed to ask; supposing these questions had arisen in a suit, which is the Court which would have jurisdication to entertain the suit ? That Court would be the Court having jurisdiction under the Arbitration Act also.”
(13) This is an admirable statement of the law. Falshaw J. In Inder Chand v. Pooron Chand, followed it. I am in respectful agreement with the exposition.
(14) Mr. Chaudhary, counsel for Rathi Steels, has referred me to Municipal Board v. E.U.P.E. Supply Co. Ltd, His submission is that ail that has to be seen is the prayer in the petition. He says that he has claimed a declaration simplicitor and the learned judges in the Allahabad decision have held that a petitioner or a plaintiff is free to value a claim for a declaration at any amount he likes.
(15) I cannot accept this submission. In most cases under s. 33 of the Act the claim will always be for a declaration that the arbitration agreement does not exist. This is the common denominator. But the test laid down by s. 2(e) is not this common denominator. The test is the subject- matter of the reference, to use the words of the statute. In order to find out the subject-matter of the reference the court asks itself the question: If the question forming the subject-matter of the reference had been the subject-matter of the suit which will be the court to entertain that suit ? Therefore, to say that because a simple declaration has been sought the party is free to value it at any amount he likes for purposes of jurisdiction is to fly in the face of the statute. I would, therefore, prefer to follow the Madras and Punjab decisions to the Allahabad decision.
(16) For these reasons I set aside the order of the Subordinate Judge dated October 4,1972, and allow the revision petition. I would uphold the preliminary objection and rule that the subordinate judge has no jurisdiction to entertain the application. The parties are left to bear their own costs.
(17) The parties are directed to appear before the trial court on February 16,1976.