ORDER
V.G. Sabhahit, J.
1. This revision is directed against the order dated 29-9-2000 passed by the XXVI Additional City Civil Judge, Mayo Hall, Bangalore, in O.S. No. 10503 of 1995 on I.A. No. II filed by the defendant-respondent herein, directing the parties to the suit to the arbitration for due adjudication of the issues in dispute between the plaintiff and defendant and staying the proceeding of the suit in the meanwhile. The facts of the case in brief leading to this revision are as follows.–
The parties would be referred with reference to their rank before the Trial Court.
2. The plaintiff filed the suit O.S. No. 10503 of 1995 on the file of the XXVI Additional City Civil Judge, Bangalore, on 31-5-1995 seeking for recovery of Rs. 17,75,498/- with costs, averring that, there is an agreement between the plaintiff and the defendant on 10-8-1992 and defendant represented to the plaintiff that they would supply 50 cubic metres of granite blocks every month for a period of six months subject to the plaintiff giving to the defendant an interest free advance of Rs. 5,00,000/- and, further the defendants have also agreed to furnish suitable security to the plaintiff for the said sum. However, since defendant did not comply with the agreement and did not supply the granite as per the agreement, the plaintiff filed the suit for recovery of Rs. 17,75,498/-alleging that the defendant instead of refunding the amount which had been advanced by the plaintiff, did not supply the granite nor refunded the amount in reply to the notice. The defendant entered appearance and sought for time to file written statement and before the written statement was filed, he filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking for referring the matter to the Arbitrator in view of Clause 15 of the agreement dated 10-8-1992. The said application was filed on 12-8-1997. The application was resisted by plaintiff lay filing objections contending that the application is not maintainable and that the agreement is rescinded by the plaintiff and the application is filed belatedly for about more than two years after the filing of the suit. It was also averred in the objections statement that the arbitration clause is not meant to be strictly followed, but, it is inserted by way of routine affair, and the agreement was executed at Bangalore wherein the plaintiff has its branch office and the defendant has its office at Bangalore and also the residence of proprietrix, but, strangely enough under Clause 15 of the agreement, the venue of arbitration was fixed at Madras obviously with mala fide intention and therefore, sought for dismissal of the application. The Trial Court by its order dated 27-5-1999 rejected the application filed by the defendant by holding that the defendant cannot take the benefit of the Arbitration and Conciliation Act, 1996, and seek directions from the Court to refer the parties to the suit for arbitration. Being aggrieved by the said order dated 27-5-1999, the defendant preferred C.R.P. No. 2355 of 1999 on the file of this Court and this Court set aside the order dated 27-5-1999 and remitted the matter to the Trial Court for fresh consideration in accordance with law. The Trial Court after remand, passed an order after hearing the Counsels appearing for the parties on 29-9-2000 and allowed I.A. No. II filed under Section 8(1) of the Arbitration and Conciliation Act, 1996, and parties to the suit were referred to arbitration for due adjudication of the disputes between the plaintiff and the defendant, and till then, the further proceedings were stayed. Being aggrieved by the said order dated 29-9-2000, the plaintiff has preferred this revision petition.
3. I have heard the learned Counsel appearing for the plaintiff-petitioner and the learned Counsel appearing for the respondent.
4. The learned Counsel for the petitioner submitted that, the agreement is dated 10-8-1992 and the suit was filed on 31-5-1995. The provisions of the Arbitration and Conciliation Act, 1996 have come into effect from 25-1-1996. The defendant was served with notice of the suit and he appeared before the Court. The suit was filed prior to the 1996 Act came into force and therefore, the defendant ought to have availed the remedy under Section 34 of the 1940 Act and could not have filed an application under Section 8(1) of the Arbitration and Conciliation Act, 1996. The learned Counsel appearing for the respondent submitted that the Arbitration Act, 1940, has been repealed by the Arbitration and Conciliation Act, 1996, which has come into effect from 25-1-1996 and therefore, the provisions of the 1996 Act would be applicable and the application filed under Section 8(1) of the Arbitration and Conciliation Act, 1996, is maintainable and therefore, the impugned order does not call for interference in this revision.
5. I have given my anxious consideration to the contentions of the learned Counsels appearing for the parties and perused the application filed by the defendant under Section 8(1) of the Arbitration and Conciliation Act. 1996 and also the objections filed by the defendants in the impugned proceedings with reference to lower Court records which has been secured. Having regard to the contentions urged, the points that arise for determination is:
(1) Whether the application filed under Section 8(1) of the Arbitration and Conciliation Act, 1996, is maintainable? and (2) Whether the impugned order suffers from any error of jurisdiction, illegality or material irregularity as to call for interference in this revision? and I answer the above points as follows: (1) in the affirmative ; (2) in the affirmative as per the following reasons:
The admitted facts are that, the agreement is dated 10-8-1992. The suit was filed on 31-5-1995. The defendant appeared in the suit and had not filed written statement. The Arbitration and Conciliation Act, 1996 which has come into effect on 25-1-1996 has repealed the Arbitration Act, 1940, and while repealing the 1940 Act, the saving clause provides that the provisions of the old Act are applicable to the pending Arbitral proceedings. Admittedly, no arbitral proceedings were pending pertaining to the subject-matter when the 1996 Act came into force and when the provisions of the Arbitration Act, 1940, have been repealed with effect from 25-1-1996. The question of making an application under Section 34 of the 1940 Act does not arise as the Act itself has been repealed. A similar question had arisen for consideration before the Gujarat High Court in Varun Seacon Limited v. Bharat Bijlee Limited, AIR 1998 Guj. 99 wherein the Gujarat High Court has held that, having regard to the provisions of Section 85 of the 1996 Act and the provisions of the General Clauses Act, the application filed under Section 8 in respect of a proceeding which had commenced before the 1996 Act came into force, is maintainable, In the said case, the decision of the Supreme Court in Gajraj Singh v. The State Transport Appellate Tribunal, has been referred by the Gujarat High Court and at para 23 of the said judgment, the Supreme Court has held as follows:
” “Whenever an Act is repealed it must be considered, except as to transactions past and closed, as if it had never existed. The effect thereof is to obliterate the Act completely from the record of the Parliament as if it had never been passed it, it never existed except for the purpose of those actions which were commenced, prosecuted and concluded while it was existing law….”.
However Section 6 of the General Clauses Act, 1897, provides, inter alia, that where the Act repeals any enactment, unless a different intention appears, the repeal shall not, (a) revive anything not in force or existing at the time at which the repeal takes effect; or (b) affect the previous operation of any enactment so repealed of anything duly done or suffered thereunder; or (c) effect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed, and any such investigation, legal proceedings or remedy may be instituted, continued or enforced". The Supreme Court further observed as follows at para 25 of its judgment:
“When there is a repeal and simultaneous re-enactment, Section 6 of the General Clauses Act would apply to such a case unless contrary intention can be gathered from the repealing Act. Section 6 would be applicable in such cases unless the new legislation manifests intention inconsistent with or contrary to the application of the section. Such incompatibility would have to be ascertained from all relevant provisions of the new Act. Therefore, when the repeal is followed by a fresh legislation on the same subject, the Court would undoubtedly have to look to the provisions of the new Act only for the purpose of determining whether the new Act indicates different intention. The object of repeal and re-enactment is to obliterate the repealed Act and to get rid of certain obsolete matters”.
In view of the above said reasons, I hold that the application filed by the defendant under Section 8(1) of the Arbitration and Conciliation Act, 1996 is maintainable. It is not disputed that there is an Arbitral clause in the agreement dated 10-8-1992. Clause 15 deals with the arbitration clause and the existence of the said clause is admitted by the plaintiff in the objections filed to the application. However, it is the contention of the plaintiff that the said clause has been inserted in the routine manner without any intention of being acted upon. The said contention cannot be accepted as the plaintiff admits the existence of the agreement and the arbitration clause in the agreement and the suit is also filed on the basis of the said agreement and there is no averment in the plaint that the clause regarding arbitration was never intended to be acted upon and therefore, parties are bound by the arbitration clause contained in the agreement dated 10-8-1992. Therefore, the order passed by the Trial Court allowing the application filed under Section 8(1) of the Arbitration and Conciliation Act, 1996 does not suffer from an error of jurisdiction, illegality or material irregularity nor call for interference in this revision. Accordingly, I answer point 2 in the affirmative and pass the following order:
The revision is dismissed. No order as to costs. The lower Court records shall be transmitted to the Trial Court.
