{"id":247068,"date":"1987-08-11T00:00:00","date_gmt":"1987-08-10T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/general-electric-company-vs-renusagar-power-company-on-11-august-1987"},"modified":"2015-06-21T17:16:03","modified_gmt":"2015-06-21T11:46:03","slug":"general-electric-company-vs-renusagar-power-company-on-11-august-1987","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/general-electric-company-vs-renusagar-power-company-on-11-august-1987","title":{"rendered":"General Electric Company vs Renusagar Power Company on 11 August, 1987"},"content":{"rendered":"
Supreme Court of India<\/div>\n
General Electric Company vs Renusagar Power Company on 11 August, 1987<\/div>\n
Equivalent citations: 1987 SCR (3) 858, \t 1987 SCC (4) 137<\/div>\n
Author: O C Reddy<\/div>\n
Bench: Reddy, O. Chinnappa (J)<\/div>\n
           PETITIONER:\nGENERAL ELECTRIC COMPANY\n\n\tVs.\n\nRESPONDENT:\nRENUSAGAR POWER COMPANY\n\nDATE OF JUDGMENT11\/08\/1987\n\nBENCH:\nREDDY, O. CHINNAPPA (J)\nBENCH:\nREDDY, O. CHINNAPPA (J)\nSHETTY, K.J. (J)\n\nCITATION:\n 1987 SCR  (3) 858\t  1987 SCC  (4) 137\n JT 1987 (3)   277\t  1987 SCALE  (2)257\n\n\nACT:\n    The\t Foreign Awards (Recognition and  Enforcement)\tAct,\n1961-S.\t 3--Stay  of  Proceedings in a Court  of  law  while\narbitration  proceedings  are  in  progress--The  expression\n\"before filing a written statement or taking any other\tstep\nin the proceedings\" should be construed in the light of\t the\nconstruction put upon that expression appearing in s. 34  of\nthe Indian Arbitration Act, 1940.\n\n\n\nHEADNOTE:\n    Section  3\tof the Foreign Awards (Recognition  and\t En-\nforcement)  Act,  1961, which is analogous to s. 34  of\t the\nIndian Arbitration Act, 1940, provides that, if any party to\nan agreement to which Art. 1I of the convention set forth in\nthe  Schedule thereto applies, commences any legal  proceed-\nings  in any court against any other party to the  agreement\nin  respect of any matter agreed to be referred to  arbitra-\ntion in such agreement, any party to such legal\t proceedings\nmay, at any time after appearance and before filing a  writ-\nten  statement or taking any other step in the\tproceedings,\napply  to the court to stay the proceedings and\t the  court,\nunless satisfied that the agreement is null and void,  inop-\nerative\t or  incapable of being performed or that  there  is\nnot, in fact, any dispute between the parties with regard to\nthe matter agreed to be referred, shall make an order  stay-\ning the proceedings.\n    The appellant (GEC), a multi-national company, which had\nentered into a contract with the respondent (Renusagar),  an\nIndian\tcompany, regarding sale of equipment for  a  thermal\nplant, submitted certain disputes between them for  arbitra-\ntion to the International Chamber of Commerce (ICC),  where-\nupon,  the respondent filed a suit in the Bombay High  Court\nfor  a\tdeclaration that the claims were not  arbitrable  in\nterms of the contract. On an application filed by the appel-\nlant, the High Court stayed further proceedings in the\tsuit\nin  terms  of s. 3 of the Foreign  Awards  (Recognition\t and\nEnforcement)  Act,  1961. Appeals filed\t by  the  respondent\nagainst\t that order were dismissed by the Division Bench  of\nthe  High Court and this Court holding that the claims\twere\narbitrable.  Meanwhile,\t the  appellant\t had  filed  a\tsuit\nagainst a bank in the Calcutta High Court for enforcement of\na bank\n 859\nguarantee  given  by it at the instance of  the\t respondent,\nfollowing  which, the respondent had also filed a  suit--the\nsuit  from which the present appeal arose--in the  Court  of\nCivil  Judge,  Mirzapur praying for a declaration  that\t the\nguarantee given by the bank stood discharged and had  become\nineffective and unenforceable.\n    A  number  of applications were filed by  the  appellant\nduring the proceedings of the suit. In application 7-C,\t the\nappellant  purported to put on record its complaint that  it\nhad not received the annexures to the plaint. In application\n8-C,  it  prayed for rejection of the plaint  and  the\tsuit\nunder  s.  20 and O.VII, r. 11 read with s.  151  C.P.C.  In\napplication 10-C, the appellant requested the court to\tcall\nupon the respondent to furnish a complete record of the suit\nand  annexures.\t On  the date fixed for\t filing\t of  written\nstatement,  the\t appellant filed applications 1c,  12-C\t and\n13-C:  11-C was an application under O.VIII r. 9 and s.\t 151\nC.P.C. seeking postponement of the striking of issues,\t12-C\nwas  an application under O.VIII, r.9 to grant leave to\t the\nappellant to file a subsequent pleading as written statement\non merits if the court rejected the objections taken in\t the\n'preliminary  written statement'; 13-C, which was,  referred\nto as the 'preliminary written statement' in 11-C and  12-C,\nwas an application styled as \"Objections by the defendant to\nthe  jurisdiction  of the Court to entertain this  suit\t for\ndeclaration  and injunction\" setting forth seven reasons  in\nsupport of the objections raised, the seventh ground assert-\ning  that the suit was liable to be stayed inter alia  under\ns.  3  of the Foreign Awards (Recognition  and\tEnforcement)\nAct, 1961 and\/or s. 34 of the Indian Arbitration Act,  1940.\nIn  application 30-C, the appellant requested the  court  to\ndecide the issues regarding maintainability of the suit\t and\nthe  jurisdiction  of the court before proceeding  with\t the\nsuit. In application 65-C, the appellant reiterated that the\ntwo  issues  referred to in 30-C should be heard  first\t and\ndecided\t before the case was proceeded upon on\tmerits.\t The\nCivil Judge rejected application 65-C commenting that such a\nrequest was being repeatedly made. The appellant  challenged\nthat order by a petition under Art. 227 which was  dismissed\nby  the\t High Court in limine with the\tdirection  that\t the\nappellant  should make a fresh application setting  out\t the\nrelevant  facts in the spirit of s. 3 of the Foreign  Awards\n(Recognition and Enforcement) Act and the Civil Judge should\ndispose of the same in accordance with law. Accordingly, the\nappellant  filed application 83-C 'praying for stay  of\t the\nsuit in terms of s. 3 of the said Act which was rejected  by\nthe  Civil Judge who held that the objection raised  on\t the\nbasis  of that provision must, in the circumstances  of\t the\ncase, be considered to have been abandoned and the appellant\nconsidered  to\thave elected to proceed with the  suit.\t The\nrevision application\n860\nfiled  against\tthat order was dismissed by the\t High  Court\nwhich  held that the plaint as initially presented had\tbeen\ncompletely  answered  by the appellant in  application\t13-C\nwhich  was clearly in the nature of a written  statement  in\nthe case.\nAllowing the appeal and staying the suit,\n    HELD:  Application 13-C contained a prayer for the\tstay\nof  the suit under s. 3 of the Foreign\tAwards\t(Recognition\nand Enforcement) Act, 1961 and it was made before the  writ-\nten statement was filed and before any step in the  proceed-\ning  was taken. Looking to the substance of the\t matter\t and\nignoring technicalities, we are firmly of the view that\t the\ndefendant sought a stay of the suit before filing a  written\nstatement  or taking any other step in the suit and that  he\nnever abandoned his right to have the suit stayed. [883A-C]\n    (i)\t While s. 34 of the Indian Arbitration Act vests  in\nthe Court the discretion to stay or not to stay the proceed-\nings,  s. 3 of the Foreign Awards (Recognition and  Enforce-\nment)  Act vests no such discretion in the Court. Under\t the\nlatter\tAct it is mandatory that the proceedings  should  be\nstayed\tif  the conditions prescribed  are  fulfilled.\tBut,\nwhether it is a defendant who invokes the discretion of\t the\nCourt  under s. 34 of the Indian Arbitration Act or  whether\nit is a defendant who seeks to enforce the right under s.  3\nof the Foreign Awards (Recognition and Enforcement) Act,  it\nis  necessary that he should not have  disentitled  himself,\nfrom  doing  so either by filing a written statement  or  by\ntaking any other step in the proceedings. His application to\nthe  Court, be it under s. 34 of the Indian Arbitration\t Act\nor s. 3 of the Foreign Awards (Recognition and\tEnforcement)\nAct  may  be  filed \"before filing a  written  statement  or\ntaking\tany other step in the proceedings.\" It is  competent\nthen only and not thereafter. [871G-H; 872A-C]\n    (ii) A step in the proceeding which would disentitle the\ndefendant from invoking s. 34 of the Arbitration Act  should\nbe  a step in aid of the progress of the suit or  submission\nto the jurisdiction of the court for the purpose of  adjudi-\ncation\tof  the merits of the controversy in the  suit.\t The\nstep must be such as to manifest the intention of the  party\nunequivocally  to  abandon the right under  the\t arbitration\nagreement and instead to opt to have the dispute resolved on\nmerits in the suit. The step must be such as to indicate  an\nelection  or affirmation in favour of the suit in the  place\nof  the arbitration. The election or affirmation may  be  by\nexpress choice or by necessary implication by  acquiescence.\nThe broad and general right of a person to seek redressal of\nhis grievance in a\n\t861\ncourt of law is subject to the right of the parties to\thave\nthe  disputes settled by a forum of mutual  choice.  Neither\nright  is insubstantial and neither right can be allowed  to\nbe defeated by any manner of technicality. The right to have\nthe  dispute adjudicated by a Civil Court cannot be  allowed\nto  be defeated by vague or amorphous mis-called  agreements\nto refer to 'arbitration'. On the other hand, if the  agree-\nment  to refer to arbitration is established, the  right  to\nhave the dispute settled by arbitration cannot be allowed to\nbe defeated on technical grounds. [879A-D]\n    (iii)  (a) In the present case, in application 7-C,\t GEC\npurported to put on record their complaint that they had not\nreceived  the  annexures  to the plaint. By  no\t stretch  of\nimagination  could  it possibly be said that  7-C  indicated\neither\tan abandonment of arbitration or an  affirmation  of\nthe  suit.  8-C was an application requesting the  court  to\nreject the plaint and the suit for the reasons set forth  in\nthe  application.  One\tof the grounds urged  was  that\t the\nMirzapur  Court\t had no\t territorial  jurisdiction.  Another\nground\twas that the plaint was insufficiently stamped.\t Yet\nanother\t ground\t was that the plaint disclosed no  cause  of\naction.\t Every one of the objections was in the nature of  a\npreliminary objection to the trial of the suit on the merits\nof the dispute between the parties. Every one of the  objec-\ntions  was what may be called a threshold objection  pleaded\nas  a  bar to any further hearing of the suit. None  of\t the\nobjections  invited  an adjudication on the  merits  of\t the\ncontroversy. [879E-G]\n    (b)\t The  expression 'merits of the controversy  in\t the\nsuit'  does not occur either under s. 34 of the\t Arbitration\nAct or s. 3 of the Foreign Awards (Recognition and  Enforce-\nment) Act. The words occur in the decision of this court  in\nState of Uttar Pradesh v. Janki Saran Kailash Chandra<\/a>  where\nthe court said, \"taking other steps in the suit\t proceedings\nconnotes the idea of doing something in aid of the  progress\nof  the suit or submitting to the jurisdiction of the  Court\nfor the purpose of adjudication of the merits of the contro-\nversy in the suit.\" The words \"adjudication of the merits of\nthe controversy in the suit\" were not used to take in  every\nadjudication  which brought to an end the proceeding  before\nthe  court in whatever manner but were meant to cover  only'\nsuch  adjudication as touched upon the real dispute  between\nthe  parties  which gave rise to the action.  Objections  to\nadjudication of the disputes between the parties, on whatev-\ner ground, are in truth not aids to the progress of the suit\nbut  hurdles to such progress. Adjudication of\tsuch  objec-\ntions cannot be termed as adjudication of the mertis of\t the\ncontroversy  in\t the  suit. An invitation to  the  court  to\nreject a plaint or\n862\ndismiss\t a suit on a ground not touching the merits  of\t the\ncontroversy  between  the parties, but on a ground  such  as\ninsufficiency  of  the court fee  paid,\t maintainability  of\nsuit,  territorial jurisdiction, etc., is really  to  enable\nthe  proceeding before the arbitrator to go on and far\tfrom\nan  election to abandon arbitration and continue  the  suit.\nEvery  threshold  bar to a suit set up by a defendant  is  a\nstep to allow the arbitration to go on. It is a step in\t aid\nof  arbitration and not in aid of the progress of the  suit.\nIn that view, 8-C can hardly be called an invitation to\t the\ncourt to\nadjudicate upon the merits of the controversy, when in\tfact\nit  is designed to prevent the court from touching upon\t the\nmerits of the controversy. [880B-G]\n    (c)\t Applications  11-C, 12-C and 13-C have to  be\tread\ntogether  and  reading them together it is  clear  that\t the\ndefendant  raised  objections to the trial of  the  suit  on\nmerits,\t which were loosely described as 'objections to\t the\njurisdiction  of the Court and objections to  the  maintain-\nability of the suit' and which were requested to be disposed\nof first, with a further request that if the objections were\nrejected the defendant may then be allowed to file a  proper\nwritten\t statement on merits and issues\t struck\t thereafter.\nThe invitation to the court was not to proceed with the suit\nbut  to\t refrain  from proceeding with the  suit  until\t the\npreliminary  objections were first decided. The\t preliminary\nobjections were set out by the defendant in 8-C and 13-C and\nthey  were not of such a nature as to make  adjudication  on\nmerits\tof any part of the real dispute between the  parties\nnecessary  for\tdeciding the preliminary  objections.  While\nelaborating  the  preliminary  objections,  particularly  in\norder  to  explain the contention that the  plaint  did\t not\ndisclose  a  cause of action, the defendant  did  choose  to\ncontrovert several factual averments made in the plaint.  We\ndo not think that the circumstance that the defendant  chose\nto deny in his application inviting decision on his prelimi-\nnary  objections the allegations of material facts  made  by\nthe  plaintiff\tin the plaint changes the character  of\t the\napplications into a written statement any more than a  reply\nto  a  notice  of motion seeking an  ad\t interim  injunction\nacquires the character of a written statement merely because\nfactual\t allegations made in the plaint are also dealt\twith\nin the reply. A defendant may consider it necessary to\tdeny\nthe  averments of fact in the plaint with a view to  explain\nthe preliminary objections raised by him or he may deny\t the\naverments of fact by way of abundant caution so as not to be\nunderstood  as having admitted (by not denying)\t the  plaint\naverments. [881E-H; 882A-C]\n    State  of Uttar Pradesh v. Janki Saran Kailash  Chandra,<\/a>\n[1974] 1 S.C.R. 31, referred to.\n 863\n    Food  Corporation of India v. Yadav Engineer,<\/a>  [1983]  1\nS.C.R. 95, relied on.\n\n\n\nJUDGMENT:\n<\/pre>\n
    CIVIL  APPELLATE JURISDICTION: Civil Appeal No. 2319  of
\n1986.\n<\/p>\n
    From  the  Judgment\t and Order dated 7.3.  1986  of\t the
\nAllahabad High Court in Revision Petition No. 454 of 1985.
\n    Shanti Bhushan, S. Dastur, J.J. Bhatt, A. Dayal and K.J.
\nJohn for the Appellant.\n<\/p>\n
    L.M. Singhvi, Depanker Gupta, P.L.’ Dubey, N.R. Khaitan,
\nA.M. Singhvi, U.K. Khaitan, Ajay Jain, Praveen Kumar and  C.
\nMukhopadhya for the Respondent.\n<\/p>\n
 The Judgment of the Court was delivered by
\n    CHINNAPPA  REDDY,  J. The  appellant,  General  Electric
\nCompany, a multi-national, entered into a contract with\t the
\nrespondent,  Renusagar\tPower  Company\tLimited,  an  Indian
\nCompany,  agreeing to sell equipment for a Thermal  Electric
\ngenerating plant to be erected at Renukoot on the terms\t and
\nconditions  set forth in the contract. For the\tpurposes  of
\nthis  case,  it is unnecessary to set out the terms  of\t the
\ncontract and the details of what was envisaged to be done by
\nthe  parties. It is also unnecessary to set out the  various
\nevents\tthat  took place subsequently. It is  sufficient  to
\nstate  that  on\t March 2, 1982, the  GEC  submitted  certain
\ndisputes  between the GEC and Renusagar for  arbitration  to
\nthe  International Chambers of Commerce. On June  11,  1982,
\nRenusagar  filed  a  suit in the Bombay High  Court  .for  a
\ndeclaration  that  the claims purported to  be\treferred  to
\narbitration by GEC to ICC were beyond the scope and  purview
\nof  the arbitration agreement contained in the contract\t and
\nsought\tan  injunction to restrain the GEC from\t taking\t any
\nfurther\t steps\tpursuant to their  request  for\t arbitration
\naddressed to ICC on March 2, 1982. In Renusagar’s suit, GEC,
\non  August 11, 1982 filed a petition under s. 3 of the\tFor-
\neign Awards (Recognition and Enforcement) Act, 196 1 seeking
\na stay of the suit. On August 19, 1982 GEC also filed a suit
\nin  the\t Calcutta High Court against the  United  Commercial
\nBank  to enforce a bank guarantee given by the bank  at\t the
\ninstance of Renusagar. On November 25, 1982, Renusagar filed
\na suit No. 127 of 1982 in the Court of Civil Judge, Mirzapur
\npraying\t for a declaration that the guarantee given  by\t the
\nUnited\tCommercial Bank for and on behalf of  the  plaintiff
\nstood
\n864<\/span>
\ndischarged  and had become ineffective and  unforceable\t and
\nfor  a\tmandatory injunction against the GEC  directing\t and
\nordering  them to settle the plaintiff’s claim regarding  75
\nMVA  Transformers  and\tto satisfy  validly  the  settlement
\narrived at of the plaintiff’s claim as mentioned in para  12
\nof the plaint.\n<\/p>\n
    It\tis useful to refer at this juncture to some  of\t the
\nhappenings  in the proceedings in the Bombay High Court.  On
\nApril  20, 1983, a learned single Judge of the\tBombay\tHigh
\nCourt dismissed the notice of motion taken out by  Renusagar
\nfor  stay  of the arbitration proceedings  and\tallowed\t the
\napplication  of GEC for stay of further proceedings  in\t the
\nBombay High Court. Appeal filed by Renusagar to the Division
\nBench of the High Court were dismissed on October 21,  1983.
\nFurther appeals filed by Renusagar to the Supreme Court were
\nalso  dismissed on August 16, 1984. The Supreme\t Court\theld
\nthat the claims of GEC were arbitrable and that the decision
\nof  the\t court was conclusive on that issue  and  would\t not
\narise before the court of arbitration of ICC.
\n    On\tJanuary\t 17, 1983, GEC filed  an  application  (7-C)
\npurporting  to put on record their complaint that  annexures
\nto  the\t plaint had not been received by them. On  the\tsame
\nday, the Civil Judge made an order: “Copy of the plaint\t has
\nbeen given to the defendant (GEC) so that the defendant\t may
\nfile  a written statement.” On the same day,  the  defendant
\nGEC  also filed another application (8-C) purporting  to  be
\n‘under\ts.  20 and Order VII r. 11 read with s. 151  of\t the
\nCode  of  Civil\t Procedure’ praying that the  court  may  be
\npleased to reject the plaint and the suit. In this  applica-
\ntion, it was stated that the suit was in abuse of the  proc-
\ness  of the court and an attempt to harass  the\t defendants.
\nThe  court was requested to dismiss the plaintiff’s suit  on
\nthat  ground as also on other grounds which were  thereafter
\nmentioned.  It was stated that the defendant did not  reside
\nand no cause of action arose within the local limits of\t the
\njurisdiction  of  the court. There was a  violation  of\t the
\nstipulation  laid down in s. 20 of the Code of Civil  Proce-
\ndure  resulting in an abuse of the process of the court.  It
\nshould\tentail\ta dismissal of the suit. The suit  had\tbeen
\nfradulently  instituted\t on insufficient court-fee  and\t for
\nthat  reason  also the suit deserved to\t be  dismissed.\t The
\ndefendant  then\t proceeded to state that they  reserved\t the
\nright  to take further objections as preliminary  objections
\nto  the maintainability of the suit and craved leave to\t add
\nto  or\talter or amend the application\twhenever  necessary.
\nWhat  is important to be noticed here is that there  was  no
\nprayer\tat this juncture for a stay of the suit. On  January
\n19,  1983,  GEC filed an application (10-C)  requesting\t the
\nCourt to call upon Renusagar to furnish a complete record of
\nthe suit and annex-\n<\/p>\n
 865<\/span><\/p>\n
ures. The Civil Judge passed an order:’ “The case is  called
\nout.  Shri J.P. Singh, present for the plaintiff, Shri\tR.S’
\nDhawan, Advocate for the defendant. 10-C by the defendant to
\ndirect\tthe plaintiff to give copies of complete  record  so
\nthat  the  defendant may plead preliminary  objections.\t The
\ncopies\tof  papers have been given. Now\t the  defendant\t may
\nfile_W.S.  by  March 4, 1983. Put up on March  7,  1983\t for
\nissues. Preliminary objections like 7-C and 8-C can be heard
\nand  disposed of after filing of written statement when\t the
\nissues\tmay be framed.” On March 4, 1983 which was the\tdate
\nfixed by the Civil Judge for the filing of a written  state-
\nment by GEC, GEC filed three applications before the  Mirza-
\npur  Court: 11-C, 12-C and 13-C. 13-C was styled as  “objec-
\ntions  by the defendant to the jurisdiction of the court  to
\nentertain  this\t suit for declaration and  injunction.”\t The
\ndocument began with the statement: “The Hon’ble court has no
\njurisdiction to entertain this suit because of the following
\nreasons.”  Seven reasons were set forth. The first  and\t the
\nfourth\tgrounds related to the territorial  jurisdiction  of
\nthe court. The second ground stated that the plaint did\t not
\ndisclose  any cause of action and, therefore, was liable  to
\nbe  rejected  under Order VII CPC. The third  ground  stated
\nthat from the statements in the plaint, the suit was  barred
\nby  limitation.\t The  plaint was, therefore,  liable  to  be
\nrejected  under Order VII r. 11 D. The fifth ground  was  to
\nthe effect that the reliefs claimed were untenable on  their
\nface and the suit was liable to be straightaway dismissed on
\nthat account. The sixth ground was that the suit was  liable
\nto be stayed under s. 10 or s. 15 1 of the CPC. The  seventh
\nground\twas: “Similarly the suit is liable to be  stayed  as
\nregards the second relief claimed by the plaintiff under  s.
\n3 of the Arbitration (Protocol and Convention) Act, 1937 and
\nForeign Awards (Recognition & Enforcement) Act, 1961  and\/or
\ns.  34 of the Indian Arbitration Act, 1940 or under  all  of
\nthem”.\tThereafter  the document proceeded  to\tamplify\t the
\nseven  grounds by detailed reference to the  allegations  in
\nthe  plaint and by further traversing those allegations.  In
\nregard to the seventh ground that the suit was liable to  be
\nstayed\tunder  s. 3 of the Foreign Awards  (Recognition\t and
\nEnforcement) Act, 1961, it was stated:\n<\/p>\n
\t\t     “The  present  claim arises out  of  the
\n\t      only contract between the parties entered into
\n\t      in 1964. Disputes arising out of or related to
\n\t      this contract have to be settled, after  being
\n\t      unable  to resolve such disputes\tby,  sincere
\n\t      negotiation by arbitration under the rules  of
\n\t      the International Chamber of Commerce Court of
\n\t      Arbitration because of the provisions of\tArt.
\n\t      XVIII  of the said contract. The defendant  is
\n\t      ready and willing to have the present  dispute
\n\t      raised by the
\n\t      866<\/span>
\n\t      plaintiff\t in  this plaint to  be\t settled  by
\n\t      arbitration  without prejudice to the  defence
\n\t      of want of cause of action, the bar of limita-
\n\t      tion  and all other defenses. This Hon.  Court
\n\t      is  therefore “bound to stay the present\tsuit
\n\t      under s. 3 of the Foreign Awards\t(Recognition
\n\t      and Enforcement) Act, 1961.”\n<\/p><\/blockquote>\n
\t      The final prayer made in the application\t(13-
\n\t      C) was:\n<\/p><\/blockquote>\n
\t      “For  the above reasons it is prayed that\t the
\n\t      plaint  be  either  rejected  for\t failure  to
\n\t      disclose\tthe  cause  of action  or  as  being
\n\t      barrred  for limitation on the face of it,  or
\n\t      it  be returned to be plaintiff for  presenta-
\n\t      tion  to a proper forum. Further, the suit  is
\n\t      also  liable to be dismissed  because  reliefs
\n\t      claimed  by  the plaintiff  are  untenable  on
\n\t      their  face. Again, alternatively the suit  is
\n\t      liable to be stayed under s. 10 and\/or s.\t 151
\n\t      CPC in respect of first relief and under s.  3
\n\t      of  the  Foreign Awards (Recognition  and\t En-
\n\t      forcement) Act, 1961 in respect of the  second
\n\t      relief   claimed\tby  the\t plaintiff  in\t the
\n\t      plaint.”\n<\/p><\/blockquote>\n
    11-C  was an application under Order VIII Rule 9 and  s.\n<\/p><\/blockquote>\n
151 CPC seeking postponement of the striking of issues\tfrom
\nMarch 7, 1983 to 4th or 5th of April, 1983. In the course of
\nthe  application it was recited: “That in keeping  with\t the
\ntime schedule fixed by this Hon’ble Court in effect, that  a
\nwritten\t statement be filed on March 4, 1983, the  defendant
\nis  filing  objections to the jurisdiction of the  court  to
\nentertain this suit for declaration and injunction to file a
\nsubsequent  pleading as written statement on merits  in\t the
\nevent  of  the objections taken in the\tpreliminary  written
\nstatement  dated  21st February, 1983 being  rejected”.\t The
\nreference to the objections to the jurisdiction of the court
\nand  the preliminary written statement dated 21st  February,
\n1983  was obviously to 13-C which was verified at  Singapore
\non February 21, 1983.\n<\/p>\n
    12-C was an application to grant leave to the  defendant
\nto file a subsequent pleading as written statement on merits
\nif  the court rejected the objections taken in the  prelimi-
\nnary  written  statement. This application was\tfiled  under
\nOrder VIII Rule 9.\n<\/p>\n
    On March 7, 1983, the court adjourned the case to  April
\n5,  1983 and from time to time thereafter. On May 31,  1983,
\nGEC  filed  their written statement raising their  pleas  in
\ndefence to Renusagar’s suit. However, in the first paragraph
\nit was stated:\n<\/p>\n
 867<\/span><\/p>\n
\t\t\t“The  defendant\t has filed  in\tthis
\n\t      Hon’ble  Court an application under s. 20\t and
\n\t      Order  VIII Rule 9 read with s. 15 1  CPC\t for
\n\t      rejection of the plaint with special costs  to
\n\t      the defendant on January 15, 1983. The defend-
\n\t      ant  has also placed on record on January\t 17,
\n\t      3983  that a copy of the plaint  was  supplied
\n\t      without  annexures and documents\tand  without
\n\t      the  injunction application said to have\tbeen
\n\t      filed. The defendant has filed its preliminary
\n\t      written statement contesting the\tjurisdiction
\n\t      of this Hon’ble Court to try and entertain the
\n\t      suit  as no cause of action has arisen to\t the
\n\t      plaintiff\t to sue this defendant on  March  4,
\n\t      1983.  An appropriate application under
\n\t      Order  VIII  Rule 9 read with s. 151  CPC\t was
\n\t      also filed for leave to file subsequent plead-
\n\t      ings  as\twritten statement on merits  in\t the
\n\t      event of the preliminary written statement and
\n\t      the pleas being rejected was also filed on the
\n\t      same date.”\n<\/p><\/blockquote>\n
\t      In the second paragraph, it was added,
\n\t      “This  defendant craves leave of this  Hon’ble
\n\t      Court  to incorporate the\t preliminary  objec-
\n\t      tions taken hithertofore by this defendant  in
\n\t      its applications and pleadings and preliminary
\n\t      written  statement as if the same are set\t out
\n\t      herein extenso. ”\n<\/p><\/blockquote>\n
\t      Later  in\t paragraph 6 and 7  of\tthe  written
\n\t      statement, it was stated as follows:
\n\t\t     “6.  The plaintiff states\tand  submits
\n\t      that the preliminary objections are sufficient
\n\t      to  dispose  of the entire claim\tin  suit  on
\n\t      issues  of law alone which go to the  root  of
\n\t      the  Jurisdiction aspect of the suit  and\t its
\n\t      apparent non-\t  maintainability and  these
\n\t      sought  to be decided as\tprelimi-\tnary
\n\t      questions of law.”\n<\/p><\/blockquote>\n
\t      “7.  Without  prejudice  of  the\t preliminary
\n\t      objections referred to hereinabove and  deemed
\n\t      to  be  incorporated  herein  as\tstated\tthis
\n\t      defendant shall now deal with the plaint para-
\n\t      wise and on merits  ………..  ”\n<\/p><\/blockquote>\n
    The plaintiff objected to the presentation of the  writ-\n<\/p><\/blockquote>\n
ten statement on the ground that it was filed outside  court
\nhours. The plaintiff also filed an application for postpone-
\nment of the date of settlement of
\n 868<\/span>
\nissues.\t On August 4, 1983, the defendant filed an  applica-
\ntion  (19-C), requesting the court to settle the  issues  on
\nAugust 18, 1983 itself without further postponement.  There-
\nafter  the case was adjourned from time to time. On  October
\n19, 1983, the plaintiff filed an application (2c) requesting
\nthe court to set the defendant ex parte as not having  filed
\nany  written statement and to decree the suit. On August  1,
\n1984,  the Plaintiff, Renusagar filed an application,  25-A,
\nfor amendment of the Plaint. The amendment sought included a
\nprayer for a decree in a sum of Rs.62,72,272. After contest,
\nthe  application  for amendment was allowed on\tOctober\t 15,
\n1984  and GEC was given time to file an\t additional  written
\nstatement.  A  few  days earlier, the  defendant  had  filed
\napplication (30-C) requesting the court to decide the issues
\nregarding maintainability and jurisdiction and stating\tthat
\nthe  suit  may proceed after decisions on these\t issues.  On
\nthis  application,  the court made an order on\tOctober\t 15,
\n1984  to the effect that a similar request had earlier\tbeen
\nrejected  by  the Court on January 19, 1983 and it  was\t not
\ntherefore, open to the Court to reopen the matter.
\n    On\tNovember 31, 1984, GEC filed an\t application  (34-D)
\nseeking time to file a written statement “if so advised” and
\npostponement  of settlement of issues. Time was granted.  On
\nJanuary\t 5,  1985, GEC filed an application  (65-C)  stating
\nthat they had consistently pleaded that the issues  relating
\nto the jurisdiction of the court and maintainability of\t the
\nsuit  should  be heard first and  reiterating  that  request
\nprayed that two issues may be struck and decided before\t the
\ncase was proceeded upon on merits. The two issues  suggested
\nwere:\n<\/p>\n
“(1)  whether the Hon’ble Court had jurisdiction to try\t and
\nentertain the suit and
\n(2)  Whether  the present suit is maintainable\tagainst\t the
\ndefendantapplicant who neither resides nor carries on  busi-
\nness in India.”\n<\/p>\n
On February 2, 1985, the Mirzapur Court rejected the  appli-
\ncation, commenting that such a request was being  repeatedly
\nmade. Against the order of the Mirzapur Court rejecting\t the
\napplication 65-C, GEC filed a petition under Art. 227 before
\nthe Allahabad High Court for quashing the proceedings in the
\nsuit.  In ground eight of the petition, it was\tstated\tthat
\nGEC had already raised the plea that the suit was liable  to
\nbe  stayed under s. 3 of the Foreign Awards  (Recognition  &
\nEnforcement)  Act,  1961. It was also stated in\t ground\t no.
\ntwelve\tthat the question of arbitrarbility of the  disputes
\nhad  already been decided by the Supreme Court. On April  4,
\n1985, the Allahabad High Court
\n       869<\/span>
\ndismissed the petition in limine observing as follows:-\n<\/p>\n
\t      “We  have considered the matter carefully\t and
\n\t      we  are of the view that so far as  the  court
\n\t      below  has not been called upon to  apply\t its
\n\t      mind  to the provisions contained in s.  3  of
\n\t      the  Act. Shri R.S. Dhawan who appears  along-
\n\t      with Shri V.N. Deshpande has stated at the bar
\n\t      that amongst other contentions advanced before
\n\t      the  learned  Civil Judge,  he  had  pointedly
\n\t      pressed  that in view of the aforesaid  provi-
\n\t      sions  further proceedings in the suit  should
\n\t      be  stayed.  We  have no doubt  that  such  an
\n\t      argument\tmust have advanced by him.  Nonethe-
\n\t      less,  the learned Civil Judge had  not  given
\n\t      any  decision  on this point.  We,  therefore,
\n\t      consider\tit appropriate that  the  petitioner
\n\t      should  make a fresh application\tsetting\t out
\n\t      the  relevant facts in the spirit of s.  3  of
\n\t      the  Act.\t This  application  should  be\tmade
\n\t      within  a\t fortnight from today.\tIf  such  an
\n\t      application is made within the time  specified
\n\t      by us, the learned Civil Judge will dispose of
\n\t      the same on merits and in accordance with\t the
\n\t      law. Till the learned Civil Judge disposes  of
\n\t      this application he shall not proceed  further
\n\t      with  the hearing of the suit. No other  order
\n\t      is necessary at this stage. With these  obser-
\n\t      vations  the writ petition is  dismissed\tsum-
\n\t      marily.”\n<\/p><\/blockquote>\n
    Consequent on the order of the High Court in the  appli-\n<\/p><\/blockquote>\n
cation under Art. 227, GEC filed another application  (83-C)
\nbefore\tthe Mirzapur Court on April 15, 1985 expressly\tset-
\nting forth their objection under s. 3 of the Foreign  Awards
\n(Recognition  & Enforcement) Act and praying for a  stay  of
\nthe  suit under that provision. Reference was also  made  to
\ntheir  earlier applications made on March 4, 1983. The\tcon-
\ntentions  raised in 13-C were reiterated.  This\t application
\n(83C)  was rejected by the learned Civil Judge, Mirzapur  by
\nan  order dated July 9, 1985. The learned Civil\t Judge\ttook
\nthe  view that the objection raised on the basis of s. 3  of
\nthe  Foreign  Awards Act must, in the circumstances  of\t the
\ncase, be considered to have been abandoned and the defendant
\nconsidered  to\thave elected to proceed with the  suit.\t The
\nrevision  application referred by GEC to the High  Court  of
\nAllahabad against the order dated July 9, 1985 was dismissed
\nby the High Court on March 7, 1986.\n<\/p>\n
    The High Court referred to the contents of 13-C in great
\ndetail\tand  concluded, “The plaint as\tinitially  presented
\nappears\t to  have been completely answered  by\tthe  General
\nElectric Company in its applica-\n<\/p>\n
870<\/span><\/p>\n
tion 13-C which it may be remembered was also verified as  a
\npleading,  because in the written statement 16-Ka which\t was
\nundoubtedly  filed  on May 31, 1983, no\t further  facts\t are
\nreferred  to   …………   13-C is clearly  in  nature  a
\nwritten\t statement  in the case, raising  such\tpleas  which
\nconstitute  the defence of the General Electric\t Company  to
\nthe case set-up in plaint as it stood then”. The High  Court
\nalso observed that it was apparent to them that the emphasis
\nin  13-C was on the other objections and not on\t the  objec-
\ntions under sec. 3 of the Foreign Awards Act. The High Court
\nalso rejected the further contentions advanced on behalf  of
\nthe  General Electric Company that a fresh right to make  an
\napplication under sec. 3 of the Foreign Awards\t(Recognition
\n&  Enforcement) Act accrued on the plaint being\t amended  by
\nRenusagar. Stay of the Suit was, therefore, refused. General
\nElectric  Company has preferred the present  appeal  against
\nthe  judgment of the High Court of Allahabad under Art.\t 136
\nof the Constitution.\n<\/p>\n
    Shri Shanti Bhushan, on behalf of the appellant  General
\nElectric Company and Dr. L.M. Singhvi, on behalf of  Renusa-
\ngar  addressed\telaborate arguments covering indeed  a\twide
\nrange of facts and law. They also cited before us a host  of
\ncases  Indian,\tEnglish and Canadian. We do not\t propose  to
\nexamine\t the several side issues and non-issues\t which\thave
\nargued\tbefore\tus. We propose to confine ourselves  to\t the
\nbasic  questions  which were argued before  us\tnamely,\t (a)
\nwhether either 8-C or 13-C could be considered to be a\tstep
\nin the suit so as to disentitle the defendant from seeking a
\nstay of the suit under sec. 3 of the Foreign Awards  (Recog-
\nnition\t&  Enforcement)\t Act, (b) whether 13-C\twas  in\t the
\nnature of a written statement, the filing of which precluded
\nthe  defendant from seeking a stay and (c) whether  the\t de-
\nfendant could be said to have abandoned the right to seek  a
\nstay in the circumstances of the case.\n<\/p>\n
    The\t Foreign Awards (Recognition & Enforcement) Act\t was
\nenacted\t ‘to enable effect to be given to the Convention  on
\nthe  Recognition  & Enforcement of Foreign  Arbitral  Awards
\ndone  at  New York, on the th day of June,  1958,  to  which
\nIndia is a party and for purposes connected therewith’.\t The
\nConvention  is set-forth in the Schedule to the Act  and  s.
\n4(i) of the Act provides that a foreign award shall, subject
\nto the provisions of the Act, be enforceable in India as  if
\nit were an award made on a matter referred to arbitration in
\nIndia. Except s. 3, we are not concerned with the  remaining
\nprovisions of the Act. Section 3 is as follows:\n<\/p>\n
\t      “Stay of proceedings in respect of matters  to
\n\t      be refer-\n<\/p><\/blockquote>\n
\t\t       871<\/span><\/p>\n
\t      red  to arbitration:-Notwithstanding  anything
\n\t      contained in the Arbitration Act, 1940, or  in
\n\t      the  Code\t of Civil Procedure,  1908,  if\t any
\n\t      party  to an agreement to which Article II  of
\n\t      the  Convention  set  forth  in  the  Schedule
\n\t      applies,\tor  any person claiming\t through  or
\n\t      under  him commences any legal proceedings  in
\n\t      any  Court  against  any other  party  to\t the
\n\t      agreement\t or any person claiming\t through  or
\n\t      under  him in respect of any matter agreed  to
\n\t      be referred to arbitration in such  agreement,
\n\t      any  party to such legal proceedings  may,  at
\n\t      any time after appearance and before filing  a
\n\t      written statement or taking any other step  in
\n\t      the  proceedings, apply to the Court  to\tstay
\n\t      the  proceedings and the Court, unless  satis-
\n\t      fied  that  the agreement is  null  and  void,
\n\t      inoperative or incapable of being performed or
\n\t      that  there is not, in fact, any\tdispute\t be-
\n\t      tween  the parties with regard to\t the  matter
\n\t      agreed  to  be referred, shall make  an  order
\n\t      staying the proceedings.”\n<\/p><\/blockquote>\n
\t\t  Section 3 of the Foreign Awards  (Recogni-
\n\t      tion & Enforcement) Act is analogous to s.  34
\n\t      of  the  Indian Arbitration Act  which  is  as
\n\t      follows:-\n<\/p><\/blockquote>\n
\t\t       “Agreement  or  any  person  claiming
\n\t      under  him in respect of any matter agreed  to
\n\t      be referred, any party to such legal  proceed-
\n\t      ings may, at any time before filing a  written
\n\t      statement\t or  taking any other steps  in\t the
\n\t      proceedings,  apply to the judicial  authority
\n\t      before  which the proceedings are\t pending  to
\n\t      stay  the proceedings; and if  satisfied\tthat
\n\t      there  is no sufficient reason why the  matter
\n\t      should not be referred in accordance with\t the
\n\t      arbitration  agreement and that the  applicant
\n\t      was,  at\tthe time when the  proceedings\twere
\n\t      commenced, and still remains, ready and  will-
\n\t      ing  to do all things necessary to the  proper
\n\t      conduct of the arbitration, such authority may
\n\t      make an order staying the proceedings.”<\/p><\/blockquote>\n
    It\tmay be straightaway noticed that while s. 34 of\t the
\nIndian Arbitration Act vests in the Court the discretion  to
\nstay  or  not to stay the proceedings, s. 3 of\tthe  Foreign
\nAwards (Recognition & Enforcement) Act vests no such discre-
\ntion  in the Court. Under the Foreign Awards (Recognition  &
\nEnforcement) Act it is mandatory that the proceedings  could
\nbe  stayed if the conditions prescribed are fulfilled.\tBut,
\nwhether it is a defendant who invokes the discretion of\t the
\nCourt
\n872<\/span>
\nunder s. 34 of the Indian Arbitration Act or whether it is a
\ndefendant  who seeks to enforce the right under s. 3 of\t the
\nForeign Awards (Recognition & Enforcement) Act, it is neces-
\nsary that he should not have disentitled himself, from doing
\nso  either  by filing a written statement or by\t taking\t any
\nother step in the proceedings. His application to the Court,
\nbe it under s. 34 of the Indian Arbitration Act. or s. 3  of
\nthe  Foreign Awards (Recognition & Enforcement) Act  may  be
\nfiled “before filing a written statement or taking any other
\nstep in the proceedings.” It is competent then only and\t not
\nthereafter.  The  question is when may a  written  statement
\nsaid  to have been filed or when may any other step said  to
\nhave been taken in the proceedings?\n<\/p>\n
    On\tthe question of the meaning of the expression  ‘step
\nin the proceedings’, on the question of the proper  approach
\nto  the solution of the problem and on allied questions,  we
\nwere  referred by the learned counsel for GEC and  Renusagar
\nto  decisions  of  the *English\t Courts,  decisions  of\t the
\n**Canadian Courts and ***passages from textbooks. We do\t not
\npropose to refer to them in our judgment–not because we  do
\nnot find them instructive; indeed we read them carefully and
\nfound  them helpful, but because we think that reference  to
\nsuch  persuasive authority is justified only if there is  no
\nguidance  from binding authority. The time has\tperhaps\t ar-
\nrived to discourage uninhibited reference to and extravagant
\nuse  of\t foreign precedents, though indeed we  welcome\tsuch
\nprecedents when they explore virgin territory and expand the
\nhorizons of legal thought. The setting of a foreign judgment
\nis  the\t foreign  country’s past and  present  history,\t its
\neconomic  relations,  its social relations,  its  trade\t and
\ncommerce, its traditions, its values, its needs, the  stages
\nof the development of its people, its legal
\n* 1. Ford’s Hotel Company Ltd. v. Bartlett (1896(I) AC 1)\n<\/p>\n
  2. Ochs v. Ochs Brothers ( 1909 (II) Ch. Dvn. 121)\n<\/p>\n
  3. Parker, Gaines & Co. v. Turpin ( 1918 (I) KB 358)\n<\/p>\n
  4.  Henry v. Geopresco International Ltd. ( 1975  (2)\t All
\nEng. LR 702)\n<\/p>\n
5.  Tracomin  SA v. Sudan Oil Seeds ( 1983 (I) All  Eng.  LR\n<\/p>\n
404)\n<\/p>\n
6. In re. The Tuyuti (1984 (2) All Eng. LR 545)
\n**1. Raymond v. Adrema Ltd. (37 DLR (2d) 9)\n<\/p>\n
 2.  Fathers  of Confederation Bldgs. Trust v.\tPigott\tCon-
\nstruction Company Limited 44 DLR (3d) 265)
\n* * * 1. Russell on Arbitration (20th Edition)\n<\/p>\n
2. Commercial Arbitration by Mustil & Boyd.\n<\/p>\n
     873<\/span><\/p>\n
ideology,  its constitutional direction and  strategies\t and
\nits  statutes and precedents. Foreign precedents are  to  be
\nread  and remembered in their setting, out never to be\tele-
\nvated to the level of binding precedents and, therefore,  to
\nbe avoided from frequent and needless question.
\n    Section  34 of the Indian Arbitration Act  has  received
\nthe  consideration of the Supreme Court in State of U.P\t .v.
\nJanki  Saran  Kailash Chander, [1974 (I) SCR  31]  and\tFood
\nCorporation of India v. Yadav Engineer,<\/a> [1983 (I) SCR 95].
\n    In State of Uttar Pradesh v. Janki Saran Kailash Chandra<\/a>
\n(supra), the facts were that the summons in a suit institut-
\ned  against  the State of Uttar Pradesh were served  on\t the
\nDistrict  Government  Counsel.\tOn September  2,  1966,\t the
\nDistrict  Government Counsel entered his appearance  in\t the
\nsuit  and  also\t filed a formal application  praying  for  a
\nmonth’s time for filing a written statement. Time was grant-
\ned  as prayed for. On October 1, 1966, the District  Govern-
\nment  Counsel filed an application under s. 34 of the  Arbi-
\ntration Act pleading that there was an arbitration clause in
\nthe agreement between the parties, that the State was  will-
\ning to have the matter referred to arbitration and that\t the
\nsuit should therefore, be stayed. The Trial Court stayed the
\nsuit. But, on appeal, the High Court took the view that\t the
\napplication for time for filing the written statement was  a
\nstep  in the proceedings within the meaning of that  expres-
\nsion  in s. 34 of the Arbitration Act and the defendant\t was
\ntherefore,  disentitled\t to claim that the  suit  should  be
\nstayed. The Supreme Court affirmed the decisions of the High
\nCourt observing, “In our view there is no serious  infirmity
\nin the impugned judgment of the High Court and we are unable
\nto find any cogent ground for interfering under Art. 136  of
\nthe  Constitution.” The Court then proceeded to discuss\t the
\nscope  and meaning of s. 34 of the Arbitration Act and\twent
\non to observe:\n<\/p>\n
\t      “To  enable  a defendant to  obtain  an  order
\n\t      staying the suit, apart from other  conditions
\n\t      mentioned in s. 34 of the Arbitration Act,  he
\n\t      is required to present his application praying
\n\t      for  stay before filing his written  statement
\n\t      or  taking any other step in the\tproceedings.
\n\t      In the present case the written statement\t was
\n\t      indisputably not filed before the\t application
\n\t      for stay was presented. The question is wheth-
\n\t      er any other step was taken in the  proceeding
\n\t      as contemplated by s. 34 and it is this  point
\n\t      with  which we are directly concerned  in\t the
\n\t      present case. Taking other steps in the suit
\n\t      874<\/span>
\n\t      proceedings  connotes the idea of doing  some-
\n\t      thing  in aid of the progress of the  suit  or
\n\t      submitting  to the jurisdiction of  the  Court
\n\t      for the purpose of adjudication of the  merits
\n\t      of the controversy in the suit.”<\/p><\/blockquote>\n
    Thereafter,\t the Court also noticed that the  State\t had
\ntaken  benefit\tof the appearance of the  District  Standing
\nCounsel\t and  his successful prayer for adjournment  of\t the
\ncase  by  one month for the purpose of\tfiling\tthe  written
\nstatement. Dealing with the question whether the High  Court
\nhad  interfered with the discretion of the Trial  Court,  it
\nwas observed,
\n\t      “If  the appellants’ application was  for\t ad-
\n\t      journment for the purpose of filing a  written
\n\t      statement,  then there is no question  of\t any
\n\t      exercise of the discretion by the Trial Court.
\n\t      Discretion with regard to stay under s. 34  of
\n\t      the  Arbitration Act is to be  exercised\tonly
\n\t      when  an\tapplication under  that\t Section  is
\n\t      otherwise\t competent. Incidentlly it is  worth
\n\t      noting that even the order of the trial  Court
\n\t      is not included by the appellant in the  paper
\n\t      book and we do not know the reasoning of\tthat
\n\t      Court for granting stay. But on the view\tthat
\n\t      we  have\ttaken  that omission  is  of  little
\n\t      consequence.”\n<\/p>\n
\t      The Court then added,
\n\t      “Keeping\tin  view the long  delay  after\t the
\n\t      institution of the suit and the fact that\t the
\n\t      suit  is\tfor a very heavy amount\t by  way  of
\n\t      damages  for breach of contract, it  will,  in
\n\t      our opinion, be more satisfactory on the whole
\n\t      to have the suit tried in a competent court of
\n\t      law in the normal course rather than by a\t lay
\n\t      arbitrator who is not bound either by the\t law
\n\t      of evidence or by the law of procedure.”\n<\/p>\n
    In Food Corporation of India ,,,. Yadav Engineer (supra)
\nthe  question arose whether the appearance of the  defendant
\nand  his  prayer for time to reply to the notice  of  motion
\ntaken  out by the plaintiff for an interim injunction  could
\nbe  said  to  amount to a step in the proceeding  so  as  to
\ndisentitle the defendant from seeking a stay of the proceed-
\ning under sec. 34 of the Arbitration Act. First interpreting
\nsec. 34 without the aid of authority, Desai, J. speaking for
\nthe court, observed that if a party to an arbitration agree-
\nment  sought to enforce the agreement by seeking a  stay  of
\nthe suit, he was obliged to disclose his unequivocal  inten-
\ntion to abide by the agreement by asking for stay
\n 875<\/span>
\nbefore\ttaking\tany step which\tmay  unequivocally  indicate
\notherwise, that is, a step which may unequivocally  indicate
\nthe intention to waive the benefit of the arbitration agree-
\nment.\n<\/p>\n
\t\t       “Abandonment  of\t a  right  to\tseek
\n\t      resolution  of  dispute  as  provided  in\t the
\n\t      arbitration  agreement must be  clearly  mani-
\n\t      fested by the’ step taken by such party.\tOnce
\n\t      such  unequivocal\t intention  is\tdeclared  or
\n\t      abandonment of the fight to claim the  benefit
\n\t      of  the  agreement becomes manifest  from\t the
\n\t      conduct, such party would then not be entitled
\n\t      to  enforce the arbitration agreement  because
\n\t      there  is\t thus a breach of the  agreement  by
\n\t      both  the parties disentitling both  to  claim
\n\t      any  benefit  of\tthe  arbitration  agreement.
\n\t      Section  34 provides that a party\t dragged  to
\n\t      the court as defendant by another party who is
\n\t      a party to the arbitration agreement must\t ask
\n\t      for stay of the proceedings before filing\t the
\n\t      written  statement or before taking any  other
\n\t      step  in\tthe  proceedings.  That\t party\tmust
\n\t      simultaneously show its readiness and willing-
\n\t      ness to do all things necessary to the  proper
\n\t      conduct of the arbitration. The legislature by
\n\t      making  it  mandatory  on\t the  party  seeking
\n\t      benefit of the arbitration agreement to  apply
\n\t      for stay of the proceedings before filing\t the
\n\t      written  statement or before taking any  other
\n\t      steps in the proceedings unmistakably  pointed
\n\t      out  that\t filing\t of  the  written  statement
\n\t      discloses\t such  conduct on the  part  of\t the
\n\t      party  as would unquestionably show  that\t the
\n\t      party  has  abandoned  its  rights  under\t the
\n\t      arbitration  agreement  and has  disclosed  an
\n\t      unequivocal  intention to accept the forum  of
\n\t      the  court  for resolution of the\t dispute  by
\n\t      waiving its right to get the dispute  resolved
\n\t      by  a  forum contemplated by  the\t arbitration
\n\t      agreement. When the party files written state-
\n\t      ment  to\tthe suit it discloses  its  defence,
\n\t      enters into a contest and invites the court to
\n\t      adjudicate upon the dispute. Once the court is
\n\t      invited  to adjudicate upon the dispute  there
\n\t      is  no question of then enforcing an  arbitra-
\n\t      tion  agreement  by  forcing  the\t parties  to
\n\t      resort to the forum of their choice as set out
\n\t      in the arbitration agreement. This flows\tfrom
\n\t      the  well\t settled principle  that  the  court
\n\t      would normally hold the parties to the bargain
\n\t      (see Ramaji Dayawala & Sons (P) Ltd. v. Invest
\n\t      Import,<\/a> [ 1981] (I) SCR 399.”\n<\/p><\/blockquote>\n
Posing\tnext the question what other steps  the\t legislature
\ncontemplated as disentitling a party from obtaining stay  of
\nthe proceedings, the
\n876<\/span>
\nlearned Judges applied the principle of ejusdem generis\t and
\nheld:\n<\/p>\n
\t\t\t“That  some other step\tmust  indis-
\n\t      putably  be  such\t step  as  would  manifestly
\n\t      display  an unequivocal intention\t to  proceed
\n\t      with the suit and to give up the right to have
\n\t      the  matter disposed of by  arbitration.\tEach
\n\t      and every step taken in the proceedings cannot
\n\t      come  in the way of the party seeking  to\t en-
\n\t      force  the arbitration agreement by  obtaining
\n\t      stay of proceedings but the step taken by\t the
\n\t      party  must be such step as would clearly\t and
\n\t      unmistakably indicate an intention on the part
\n\t      of such party to give up the benefit of  arbi-
\n\t      tration  agreement  and to  acquiesce  in\t the
\n\t      proceedings commenced against the party and to
\n\t      get the dispute resolved by the court. A\tstep
\n\t      taken  in the suit which would disentitle\t the
\n\t      party  from obtaining stay of proceeding\tmust
\n\t      be  such step as would display an\t unequivocal
\n\t      intention\t to  proceed with the  suit  and  to
\n\t      abandon the benefit of the arbitration  agree-
\n\t      ment or the right to get the dispute  resolved
\n\t      by arbitration.”\n<\/p><\/blockquote>\n
The  learned judges then proceeded to consider the  question
\nwhether an appearance in the suit to contest an interlocuto-
\nry  application, such as, an application for appointment  of
\nreceiver  or  ex parte ad interim injunction,  disclosed  an
\nunequivocal  intention to proceed with the suit and give  up
\nin  the benefit of the arbitration agreement.  The  question
\nwas answered as follows:\n<\/p>\n
\t\t       “Incidental proceedings for  appoint-
\n\t      ment of receiver or for interim injunction are
\n\t      for  the protection either of the property  or
\n\t      the  interests  of the parties. Now,  when  ex
\n\t      parte  orders are obtained on ex\tparte  aver-
\n\t      ments the other party cannot be precluded from
\n\t      coming  and pointing out that no case is\tmade
\n\t      out  for granting interim relief. It would  be
\n\t      too  cumbersome to expect the party  first  to
\n\t      apply for stay and then invite the court under
\n\t      s.  41(2) of the Act to vacate the  injunction
\n\t      or  to  discharge\t the  receiver.\t Giving\t the
\n\t      expression  ‘taking  any other  steps  in\t the
\n\t      proceedings’  such wide connotation as  making
\n\t      an  application  for any purpose in  the\tsuit
\n\t      such  as vacating stay, discharge of  the\t re-
\n\t      ceiver  or even modifying the  interim  orders
\n\t      would work hardship and would be inequitous to
\n\t      the  party  who  is willing to  abide  by\t the
\n\t      arbitration  agreement  and yet be  forced  to
\n\t      suffer the inequity of ex parte orders. There-
\n\t      fore, the expression tak-\n<\/p><\/blockquote>\n
\t\t       877<\/span><\/p>\n
\t      ing  any other steps in the proceedings’\tmust
\n\t      be  given\t a narrow meaning in that  the\tstep
\n\t      must  be taken in the main proceeding  of\t the
\n\t      suit and it must be such step as would clearly
\n\t      and  unambiguously manifest the  intention  to
\n\t      waive the benefit of the arbitration agreement
\n\t      and to acquiesce in the proceedings. Interloc-
\n\t      utory  proceedings are incidental to the\tmain
\n\t      proceedings. They have a life till the dispos-
\n\t      al of the main proceeding. As the suit or\t the
\n\t      proceedings is likely to take some time before
\n\t      the dispute in the suit is finally  adjudicat-
\n\t      ed, more often interim orders have to be\tmade
\n\t      for  the protection of the rights of the\tpar-
\n\t      ties.  Such  interlocutory  proceedings  stand
\n\t      independent  and\taloof of  the  main  dispute
\n\t      between the parties involved in the suit. They
\n\t      are steps taken for facilitating the just\t and
\n\t      fair disposal of the main dispute. When  these
\n\t      interlocutory  proceedings  are  contested  it
\n\t      cannot be said that the party contesting\tsuch
\n\t      proceedings   has\t displayed  an\t unequivocal
\n\t      intention to waive the benefit of the arbitra-
\n\t      tion agreement or that it has submitted to the
\n\t      jurisdiction  of\tthe  court.  When  ex  parte
\n\t      orders  are made at the back of the party\t the
\n\t      other party is forced to come to the court  to
\n\t      vindicate\t its right. Such  compulsion  cannot
\n\t      disclose\tan unambiguous intention to give  up
\n\t      the  benefit  of\tthe  arbitration  agreement.
\n\t      Therefore,  taking  any  other  steps  in\t the
\n\t      proceedings  must be confined to taking  steps
\n\t      in  the  proceedings  for\t resolution  of\t the
\n\t      substantial dispute in the suit. Appearing and
\n\t      contesting  the interlocutory applications  by
\n\t      seeking  either vacation thereof or  modifica-
\n\t      tion  thereof cannot be said to be  displaying
\n\t      an  unambiguous intention to acquiesce in\t the
\n\t      suit and to waive the benefit of the  arbitra-
\n\t      tion  agreement. Any other view would both  be
\n\t      harsh  and  inequitous  and  contrary  to\t the
\n\t      underlying  intendment of the Act.  The  first
\n\t      party which approaches the court and seeks  an
\n\t      ex  parte interim order has obviously come  to
\n\t      the court in breach of the arbitration  agree-
\n\t      ment.  By\t obtaining an ex parte order  if  it
\n\t      forces  the  other party to the  agreement  to
\n\t      suffer  the order or by merely  contesting  be
\n\t      imputed  the intention of waiving the  benefit
\n\t      of  arbitration agreement, it would  enjoy  an
\n\t      undeserved  advantage. Such could not  be\t the
\n\t      underlying purpose of s. 34. Therefore, in our
\n\t      opinion, to effectuate the purpose  underlying
\n\t      s.  34 the narrow construction of the  expres-
\n\t      sion  ‘taking any other steps in the  proceed-
\n\t      ings’  as hereinabove set out appears  to\t ad-
\n\t      vance the
\n\t      878<\/span>
\n\t      object  and purpose underlying s. 34  and\t the
\n\t      purpose for which the Act was enacted.”\n<\/p><\/blockquote>\n
The  court then referred to various decisions on  the  ques-
\ntion.  Thereafter the case of State of U. P.  v.  Jankisaran
\nKailashchandra,\t (supra)  was  discussed  in  detail.  After
\nquoting\t from  the judgment of Justice Dua,  the  court\t ob-
\nserved:\n<\/p>\n
\t\t       “The view herein taken not only\tdoes
\n\t      not run counter to the view we have taken\t but
\n\t      in fact clearly supports the view because\t the
\n\t      pertinent\t observation is that taking step  in
\n\t      the proceeding which would disentitle a  party
\n\t      to  obtain  a stay of the suit must  be  doing
\n\t      something\t in aid of the progress of the\tsuit
\n\t      or submitting to the jurisdiction of the court
\n\t      for the purpose of adjudication of the  merits
\n\t      of  the  controversy  in the  suit.  In  other
\n\t      words, the step must necessarily manifest\t the
\n\t      intention of the party to abandon or waive its
\n\t      right to go to arbitration or acquiesce in the
\n\t      dispute  being decided by court. In fact,\t the
\n\t      view  taken in this case should  have  quelled
\n\t      the controversy but it continued to figure  in
\n\t      one form or the other and that is why we\thave
\n\t      dealt with the matter in detail.”
\n\t      The Court finally concluded the discussion  as
\n\t      follows:\n<\/p><\/blockquote>\n
\t\t\t“Having\t thus  critically   examined
\n\t      both on principle and precedent the meaning to
\n\t      be  given to the expression ‘taking  steps  in
\n\t      the  proceedings’, we are clearly of the\tview
\n\t      that  unless  the step alleged  to  have\tbeen
\n\t      taken by the party seeking to enforce arbitra-
\n\t      tion  agreement  is such as would\t display  in
\n\t      unequivocal intention to proceed with the suit
\n\t      and  acquiesce in the method of resolution  of
\n\t      dispute  adopted by the other  party,  namely,
\n\t      filing  of the suit and thereby indicate\tthat
\n\t      it has abandoned its right under the  arbitra-
\n\t      tion agreement to get the dispute resolved  by
\n\t      arbitration, any other step would not disenti-
\n\t      tle the party from seeking relief under s. 34.
\n\t      It  may be clearly emphasised that  contesting
\n\t      the application for interim injunction or\t for
\n\t      appointment  of  a  receiver  or\tfor  interim
\n\t      relief  by itself without anything more  would
\n\t      not  constitute such step as would  disentitle
\n\t      the party to an order under s. 34 of the\tAct.<\/p><\/blockquote>\n
\t      ‘ ‘
\n\t\t  879<\/span>
\nThus we see that it is the view of this court that a step in
\nthe  proceeding\t which would disentitle the  defendant\tfrom
\ninvoking sec. 34 of the Arbitration Act should be a step  in
\naid of the progress of the suit or submission to the  juris-
\ndiction of the court for the purpose of adjudication of\t the
\nmerits of the controversy in the suit. The step must be such
\nas  to manifest the intention of the party unequivocally  to
\nabandon\t the right under the arbitration agreement  and\t in-
\nstead  to opt to have the dispute resolved on merits in\t the
\nsuit.  The step must be such as to indicate an\telection  or
\naffirmation in favour of the suit in the place of the  arbi-
\ntration.  The  election\t or affirmation may  be\t by  express
\nchoice\tor  by necessary implication  by  acquiescence.\t The
\nbroad and general right of a person to seek redressal of his
\ngrievances in a court of law is subject to the right of\t the
\nparties\t to have the disputes settled by a forum  of  mutual
\nchoice. Neither right is insubstantial and neither right can
\nbe allowed to be defeated by any manner of technicality. The
\nright  to  have\t the dispute adjudicated by  a\tcivil  court
\ncannot be allowed to be defeated by vague or amorphous\tmis-
\ncalled\tagreements to refer to ‘arbitration’. On  the  other
\nhand,  if  the agreement to refer to arbitration  is  estab-
\nlished, the right to have the dispute settled by arbitration
\ncannot be allowed to be defeated on technical grounds.
\n    What do we have in the present case? We mentioned at the
\noutset that GEC filed two applications on January 17,  1983,
\n7-C  and 8-C. In 7-C, GEC purported to put on  record  their
\ncomplaint  that they had not received the annexures  to\t the
\nplaint.\t By no stretch of imagination could it\tpossibly  be
\npaid that 7-C indicated either an abandonment of arbitration
\nor  an affirmation of the suit. 8-C was an  application\t re-
\nquesting the court to reject the plaint and the suit for the
\nreasons\t set  forth in the application. One of\tthe  grounds
\nurged was that the Mirzapur Court had no territorial  juris-
\ndiction.  Another  ground was that the plaint  was  insuffi-
\nciently\t stamped.  Yet another ground was  that\t the  plaint
\ndisclosed  no cause of action. Every one of  the  objections
\nwas in the nature of a preliminary objection to the trial of
\nthe  suit on the merits of the dispute between the  parties.
\nEvery one of the objections was what may be called a thresh-
\nold objection pleaded as a bar to any further hearing of the
\nsuit. None of the objections invited an adjudication on\t the
\nmerits of the controversy. It was said that the return of  a
\nplaint\tunder Order VII r. 10 and the rejection of a  plaint
\nunder  Order VII r. 11 put an end to the controversy so\t far
\nas  the court where the proceedings had been instituted\t and
\nthat  the rejection of a plaint under Order VII r. 11 was  a
\ndecree within the definition of that expression in Order  II
\nr.  2  of the Civil Procedure Code. It was argued  that\t the
\nrejection  of  a  plaint for non-disclosure of\ta  cause  of
\naction was also an
\n880<\/span>
\nadjudication  of the merits of the controversy in  the\tsuit
\nand  reliance was placed on decisions under the\t Representa-
\ntion  of People Act. We do not think that we can accept\t the
\nargument  nor are we able to derive any assistance from\t the
\ncases  cited. In the first place, the expression ‘merits  of
\nthe  controversy  in the suit’ does not occur  either  under
\nsec.  34  of the Arbitration Act or sec. 3  of\tthe  Foreign
\nAwards (Recognition and Enforcement) Act. The words occur in
\nthe  decision of this court in State of U.P .v. Janki  Saran
\nKailash Chandra (supra) where the court said, “Taking  other
\nsteps  in  the suit proceedings connotes the idea  of  doing
\nsomething  in aid of the progress of the suit or  submitting
\nto the jurisdiction of the Court for the purpose of  adjudi-
\ncation\tof  the merits of the controversy in the  suit.”  As
\noften  enough pointed out by us, words and expressions\tused
\nin a judgment are not to be construed in the same manner  as
\nstatutes or as words and expressions defined in statutes. We
\ndo  not have any doubt that when the words “adjudication  of
\nthe merits of the controversy in the suit” were used by this
\ncourt  in  State  of U.P .v.  Janki  Saran  Kailash  Chandra
\n(supra), the words were not used to take in every  adjudica-
\ntion which brought to an end the proceeding before the court
\nin whatever manner but were meant to cover only such adjudi-
\ncation\ttouched\t upon the real dispute between\tthe  parties
\nwhich gave rise to the action. Objections to adjudication of
\nthe disputes between the parties, on whatever ground, are in
\ntruth  not aids to the progress of the suit but\t hurdles  to
\nsuch  progress.\t Adjudication of such objections  cannot  be
\ntermed\tas adjudication of the merits of the controversy  in
\nthe  suit. As we said earlier, a broad view has to be  taken
\nof  the principles involved and narrow and technical  inter-
\npretation  which tends to defeat the object of the  legisla-
\ntion must be avoided. We are of the view that an  invitation
\nto  the\t court\tto reject a plaint or dismiss a\t suit  on  a
\nground\tnot touching the merits of the\tcontroversy  between
\nthe parties, but a ground such as insufficiency of the court
\nfee paid, maintainability of suit, territorial\tjurisdiction
\netc. is really to enable the proceeding before the  arbitra-
\ntor to go on and far from an election to abandon arbitration
\nand continue the suit. Every threshold bar to a suit set  up
\nby a defendant is a step to allow the arbitration to go\t on.
\nIt  is\ta step in aid of arbitration and not in aid  of\t the
\nprogress  of the suit. In that view, we think that  8-C\t can
\nhardly\tbe called an invitation to the court  to  adjudicate
\nupon  the  merits  of the controversy, when in\tfact  it  is
\ndesigned to prevent the court from touching upon the  merits
\nof the controversy.\n<\/p>\n
    The\t next set of events relied upon by the plaintiff  to
\ndeny  the defendant’s right to obtain stay in the filing  by
\nGEC  of the applications 1c, 12-C and 13-C in  the  Mirzapur
\nCourt on March 4, 1983.4th
\n    881<\/span>
\nMarch  and 7th March were the dates which had been fixed  by
\nthe  Court  for\t filing the written statement  and  for\t the
\nstriking  of the issues. The defendant, on March 4,  instead
\nof filing the written statement, filed 11-C, 12-C and  13-C.
\n13-C,  as already mentioned, was styled “objections  by\t the
\ndefendant  to the jurisdiction of the Court to\tentertain  a
\nsuit  for  declaration and injunction”. It  began  with\t the
\nstatement, “the Hon’ble Court has no jurisdiction to  enter-
\ntain the suit for the following reasons” and ended with\t the
\nprayer:\n<\/p>\n
\t      “for  the above reasons it is prayed that\t the
\n\t      plaint  may be either rejected for failure  to
\n\t      disclose a cause of action or as being  barred
\n\t      by  limitation  on the face of it,  or  it  be
\n\t      returned to the plaintiff for presentation  to
\n\t      a\t proper\t forum.\t Further the  suit  is\talso
\n\t      liable to be dismissed because reliefs claimed
\n\t      by the plaintiff are untenable on their  face,
\n\t      Again, alternatively the suit is liable to  be
\n\t      stayed  under  s.\t 10 and\/ or s.\t151  CPC  in
\n\t      respect  of first relief and s. 3 of the\tFor-
\n\t      eign  Awards (Recognition &  Enforcement)\t Act
\n\t      196  1 in respect of second relief claimed  by
\n\t      the plaintiff in the suit.”<\/p><\/blockquote>\n
    11-C  was  an application seeking  postponement  of\t the
\nstriking  of the issues from March 7 to a later date in\t the
\nevent of the preliminary objections being rejected. 12-C was
\nan application to grant leave to file a subsequent  pleading
\nas written statement in the event of the preliminary  objec-
\ntions being rejected. Obviously ll-C, 12-C and 13-C have  to
\nbe read together and reading them together, it appears to us
\nto  be\tclear that the defendant raised\t objections  to\t the
\ntrial of the suit on merits, which were loosely described as
\n‘objections to the jurisdiction of the Court and  objections
\nto the maintainability of the suit’ and which were requested
\nto be disposed of first, with a further request that if\t the
\nobjections-were\t rejected the defendant may then be  allowed
\nto  file  a proper written statement on\t merits\t and  issues
\nstruck\tthereafter. The invitation to the Court was  not  to
\nproceed\t with the suit but to refrain from  proceeding\twith
\nthe suit until the preliminary objections were first  decid-
\ned. The preliminary objections were set out by the defendant
\nin  8-C\t and  13-C and we have set them\t out  earlier  while
\nnarrating  the facts. We notice that the preliminary  objec-
\ntions raised were not of such a nature as to make  adjudica-
\ntion  on merits of any part of the real dispute between\t the
\nparties\t necessary for deciding the preliminary\t objections.
\nWhile  elaborating the preliminary objections,\tparticularly
\nin  order to explain the contention that the plaint did\t not
\ndisclose  a  cause of action, the defendant  did  choose  to
\ncontrovert several factual averments made in the plaint.  We
\ndo not think that the
\n882<\/span>
\ncircumstances that the defendant chose to deny in his appli-
\ncation inviting decision on his preliminary objections,\t the
\nallegations  of material facts made by the plaintiff in\t the
\nplaint\tchanges\t the character of the  applications  into  a
\nwritten\t statement  any\t more than a reply to  a  notice  of
\nmotion seeking an ad interim injunction acquires the charac-
\nter  of a written statement merely because  factual  allega-
\ntions made in the plaint are also dealt with in the reply. A
\ndefendant may consider it necessary to deny the averments of
\nthe  fact in the plaint with a view to explain the  prelimi-
\nnary  objections raised by him or he may deny the  averments
\nof  fact by way of abundant caution so as not to  be  under-
\nstood  as having admitted (by not denying) the plaint  aver-
\nments.\n<\/p>\n
    In\tsuch a situation, the question to be  considered  is
\ndid the defendant intend it to be a written statement or was
\nthe  document  capable\tof being construed  as\tsetting\t out
\nunreservedly  the  case which the defendant  wished  to\t put
\nforward? Was it meant to answer the plaint? We do not  think
\neither 8-C or 13-C is capable of being so construed. Neither
\nthe  title of the documents nor the prayer in the  documents
\nwould  justify their being dubbed as written statements.  We
\nhave  referred\tto  their contents and we do  not  think  it
\npossible to view 8-C or 13-C as meant to answer the  plaint.
\nThey  were objections and not answer to the Plaint.  We\t are
\nunable\tto  hold  that either of them can be  treated  as  a
\nwritten\t statement. It is of interest to note here that\t the
\nplaintiff  himself filed an application 21-C requesting\t the
\ncourt  to set the defendant ex parte on the ground  that  he
\ndid not file any written statement. Obviously the  plaintiff
\nnever considered 13-C to be a written statement. We are also
\nunable to hold that either of them can be said to be a\tstep
\nin the proceeding. We have already explained why 8-C  cannot
\nbe  treated  as a step in the proceeding. The  same  reasons
\napply  to 13-C also. 13-C invited the court to consider\t the
\npreliminary  objections amongst which was a prayer  to\tstay
\nthe  suit  under s. 3 of the Foreign Awards  (Recognition  &
\nEnforcement)  Act. An invitation to the court to decide\t the
\npreliminary  objections was in fact a request to  the  court
\nnot to proceed with the trial of the suit on merits. We\t are
\nunable\tto hold that 13-C was an invitation to the court  to
\nadjudicate upon the merits of the controversy, when in\tfact
\nas  we said in the case of 8-C, it was designed\t to  prevent
\nthe court from touching upon the merits of the\tcontroversy.
\nIt  was argued that the defendant himself sought  permission
\nfor  filing additional pleadings if  preliminary  objections
\nwere rejected and, therefore, the defendant himself  thought
\nthat  13-C was a pleading, namely, a written statement.\t Our
\nattention was also invited to the written statement filed on
\nMay  31,  1983\tin which the  preliminary  objections  filed
\nearlier were referred to as preliminary
\n     883<\/span>
\nwritten\t statement. We do not think we will be justified  in
\nharping upon a word here or a word there. As we said  earli-
\ner,  we propose to look at the substance of the\t matter\t and
\nignore the chaff. Looking to the subStance of the matter, we
\nfind  that before May 31, 1983, that is, the date  on  which
\nthe written statement was filed, the defendant did not\ttake
\nany step in the suit. The applications filed by him were not
\nin aid of the progress of the suit, but to request the court
\nto  refrain from proceeding with the suit. 13-C contained  a
\nprayer\tfor the stay of the suit under s. 3 of\tthe  Foreign
\nAwards (Recognition & Enforcement) Act and we hold that,  in
\nterms  of  that provision, it was made\tbefore\tthe  written
\nstatement  was filed and before any step in  the  proceeding
\nwas taken.\n<\/p>\n
    An\targument which was presssed before us was  that\t the
\nconduct of the defendant was such that he must be considered
\nto have abandoned his right to have the suit stayed under s.
\n3 of the Foreign Awards (Recognition & Enforcement) Act.  We
\ndo  not think there is any substance in the  submission.  On
\nthe one hand, we have the outstanding circumstances that the
\ndefendant was proceeding with the arbitration. On the  other
\nhand, we have also the circumstance that the defendant filed
\n13-C  one  of the prayers of which was a stay  of  the\tsuit
\nunder  s. 3 of the Act. The argument was that the  defendant
\ndid not press his application and did not seek the orders of
\nthe  court on 13-C. This would not be a correct\t picture  of
\nthe events since we find that even on January 19, 1983,\t the
\ncourt made an order that preliminary objections like 7-C and
\n8-C  could be heard and disposed of after filing of  written
\nstatement  when the issues may be framed. We also find\tthat
\nat every stage the defendant kept referring to his  prelimi-
\nnary objections and never for a moment abandoned them.\t30-C
\nwas another application filed by him requesting the court to
\ndecide the preliminary objections regarding jurisdiction and
\nmaintainability\t of the suit. On this the order was that  it
\nwas  not competent for the court to reopen the\torder  dated
\nJanuary\t 19,  1983. It was therefore,  not  the\t defendant’s
\nfault  that  the preliminary objections\t were  not  decided.
\nLater again the defendant filed 34-C requesting the court to
\nframe preliminary issues and try them on the question of the
\njurisdiction  of  the court and the maintainability  of\t the
\nsuit.  This application was also rejected by the court\twith
\nthe  comment that the request was being repeatedly made.  It
\nwas  against this order that the defendant went to the\tHigh
\nCourt with the application 65-C. The High Court directed the
\ndefendant  to file an application for the trial\t court\tspe-
\ncially requesting that court to apply its mind to the provi-
\nsions of s. 3 of the Foreign Awards (Recognition &  Enforce-
\nment) Act and pointedly pressing the contention relating  to
\nthat  provisions. Pursuant to this direction, the  defendant
\nfiled 83-C
\n884<\/span>
\nbefore the trial court and it is on the orders made on\tthis
\napplication that the present appeal has come before us.\t The
\nsubmission of the learned counsel for the plaintiff was that
\nthe  appeal before us arose directly from the order made  on
\nthe application 83-C not on the application 13-C.  According
\nto the learned counsel, 13-C must be considered to have been
\ngiven  up and since 83-C was filed long after the filing  of
\nthe written statement, it was incompetent. We are unable  to
\nagree.\t13-C  was never abandoned by the defendant.  On\t the
\nother  hand  83-C also expressly refers to 13-C. 83-C  is  a
\nreiteration and revival of 13-C with emphasis on the  objec-
\ntion  relating to s. 3 of the Foreign Awards (Recognition  &
\nEnforcement) Act.\n<\/p>\n
    Looking  to\t the substance of the  matter  and  ignoring
\ntechnicalities, we are firmly of the view that the defendant
\nsought a stay of the suit before filing a written  statement
\nor  taking  any\t other step in the suit and  that  he  never
\nabandoned  his right to have the suit stayed.  The  appeals,
\ntherefore allowed with costs and the suit No. 127 of 1982 in
\nthe  court  of\tMirzapur stayed under s. 3  of\tthe  Foreign
\nAwards (Recognition & Enforcement) Act. In the view that  we
\nhave  taken  we do not think it necessary  to  consider\t the
\nfurther\t question  raised  by the learned  counsel  for\t the
\nappellant  that\t the amendment of the plaint  introducing  a
\nsubstantially new cause of action gave the defendant a fresh
\nright under s. 3 of the Foreign Awards Act.\n<\/p>\n
H.L.C.\t\t\t\t\t\t      Appeal\nallowed.\n885<\/span>\n\n\n\n<\/pre>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India General Electric Company vs Renusagar Power Company on 11 August, 1987 Equivalent citations: 1987 SCR (3) 858, 1987 SCC (4) 137 Author: O C Reddy Bench: Reddy, O. Chinnappa (J) PETITIONER: GENERAL ELECTRIC COMPANY Vs. RESPONDENT: RENUSAGAR POWER COMPANY DATE OF JUDGMENT11\/08\/1987 BENCH: REDDY, O. CHINNAPPA (J) BENCH: REDDY, O. CHINNAPPA […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-247068","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nGeneral Electric Company vs Renusagar Power Company on 11 August, 1987 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/general-electric-company-vs-renusagar-power-company-on-11-august-1987\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"General Electric Company vs Renusagar Power Company on 11 August, 1987 - 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