{"id":262278,"date":"1991-03-13T00:00:00","date_gmt":"1991-03-12T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/r-mcdill-and-company-pvt-ltd-vs-gouri-shankar-sarda-and-others-on-13-march-1991"},"modified":"2018-07-01T12:05:58","modified_gmt":"2018-07-01T06:35:58","slug":"r-mcdill-and-company-pvt-ltd-vs-gouri-shankar-sarda-and-others-on-13-march-1991","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/r-mcdill-and-company-pvt-ltd-vs-gouri-shankar-sarda-and-others-on-13-march-1991","title":{"rendered":"R. Mcdill And Company Pvt. Ltd vs Gouri Shankar Sarda And Others on 13 March, 1991"},"content":{"rendered":"
Supreme Court of India<\/div>\n
R. Mcdill And Company Pvt. Ltd vs Gouri Shankar Sarda And Others on 13 March, 1991<\/div>\n
Equivalent citations: 1991 SCR (1) 809, 1991 SCC (2) 548<\/div>\n
Author: N Kasliwal<\/div>\n
Bench: Kasliwal, N.M. (J)<\/div>\n
           PETITIONER:\nR. MCDILL AND COMPANY PVT. LTD.\n\n\tVs.\n\nRESPONDENT:\nGOURI SHANKAR SARDA AND OTHERS\n\nDATE OF JUDGMENT13\/03\/1991\n\nBENCH:\nKASLIWAL, N.M. (J)\nBENCH:\nKASLIWAL, N.M. (J)\nRAMASWAMY, K.\n\nCITATION:\n 1991 SCR  (1) 809\t  1991 SCC  (2) 548\n JT 1991 (1)   645\t  1991 SCALE  (1)431\n\n\nACT:\n     Arbitration Act<\/a>, 1940: ss. 34<\/a>, 41-<\/a>-Application for stay\nin  a suit--Provisions of Code of  Civil  Procedure--Whether\napplicable.\n     Code  of  Civil  Procedure,  1908:\t Order\t XXIII--Suit\npending\t  before  High\tCourt--Joint  application   by\t two\ndefendants  under  s. 34 of Arbitration\t Act--Permission  to\nwithdraw  with\tliberty\t to make  a  fresh  application--Two\nseparate stay applications moved--Maintainability of.\n\n\n\nHEADNOTE:\n     In a suit filed by plaintiff-respondent no.1 before the\nHigh  Court defendant-appellants filed a  joint\t application\nunder  s. 34<\/a> of the Arbitration Act for staying\t proceedings\nof the suit and referring the matter to arbitration. In view\nof  some formal defects in the said  application,  the\tHigh\nCourt  on 25.2.1966 without mentioning the defects  ordered.\n\"Application   withdrawn  with\tliberty\t to  make  a   fresh\napplication\".  on  21.3.1966  the appellants  submitted\t two\nseparate applications for staying  the suit in so far as  it\nrelated to them or in the alternative for stay of the entire\nsuit. The plaintiff-respondent resisted the applications  as\nnot  being in terms of the order dated 25.2.1966.  Upholding\nthe  objection,\t Learned Single Judge refused  to  stay\t the\nsuit.\n     On\t appeal, the Division bench of the High\t Court\theld\nthat  the liberty was granted to 'make a fresh\tapplication'\nand  as such, under the provisions or Order  XXIII,  C.P.C.,\nthe   appellants   had\tno  right  to  move   two   separate\napplications to stay the suit.\n     In\t appeal\t by  special  leave to\tthis  Court  it\t was\ncontended  that provisions or Order  XXIII, C.P.C. were\t not\napplicable  to\tapplications  filed  under  s.\t34<\/a>  of\t the\nArbitration Act; and that the High Court committed an  error\nin  taking  a technical view that  as liberty was  given  to\nwithdraw   the\tapplication  in\t order\tto  make   a   fresh\napplication,  the  appellants  were  not  entitled  to\tmake\nseparate  stay applications. Respondent no. 1 supported\t the\nimpugned judgment.\n     Allowing the appeals, this Court,\n\t\t\t\t\t\t       810\n     HELD: 1. In view of s. 41<\/a> of the Arbitration Act, 1940,\nsubject to provisions of  the Act, Code of Civil  Procedure,\n1908 apply to all proceedings before the Court No. provision\nin  the Arbitration Act<\/a> takes away the provisions  of  Order\nXIII,  C.P.C. from being applied to applications filed under\ns. 34 of the Arbitration Act<\/a> in a suit. [814F, 816B]\n     Hakam Singh v. M\/S Gammon (India) Ltd<\/a>, [1971] 3 SCR 314\nrelied on.\n     Nawab  Usman Ali Khan  v. Sagarmal<\/a>, [1965] 3  SCR\t201,\nheld inapplicable.\n     Munshi  Ram  v. Banwari Lal<\/a> [1962] Supp; (2)  SCR\t477;\nHansraj\t Gupta\tv.  Officlal  Liquidator   Dehradun-Musoorie\nElectric Tramway Co<\/a>, [1932] L.R. 60 I.A. 13; Union of  India\nv.  Mohinder Singh & Co<\/a>., AIR 1971 JK 10; Union of India  v.\nRup Kishore<\/a>, [1957] All. 504; Executive Engineer v.  Thingom\nIboyaima  Singh,  AIR 1970 Bom. 250; Ram bharosey  v.  Peary\nLal, AIR 1957 All. 265; Shrinath Bros. v. Century Spinning &\nWvg.  Co. AIR 1968 Bom 443; India Minerals Co.\tv.  Northern\nIndia  Lime Making Association<\/a>, AIR 1958 All. 69;  Ganeshmal\nv. Keshoram Cotton Mills<\/a>, AIR 1952 Cal. 10; Governor-General\nin  Council v. Associated Live Stock Farm (India) Ltd.,\t AIr<\/a>\n948  Cal. 230; Soorajmull Nagarmull  v. Sagar Mal, AIR\t1978\nCal. 239; Ramchand v. Governor General in Council, AIR\t9147\nSind.  147  and Scotish Union of National Insurance  Co.  v.\nSaraswati Sajnani, Air<\/a> 1960 Cal. 22, referred to.\n     2.\t In  the  instant  case, apart from  s.\t 41<\/a>  of\t the\nArbitration Act providing  for application of Code of  Civil\nProcedure   and\t there\tbeing  no  provision   taking\taway\nprovisions  of order XXIII,  C.P.C.  from being\t applied  to\nthe  applications  for\tstay  filed  under  s.\t 34<\/a>  of\t the\nArbitration Act, the proceeding started on a plaint filed by\nthe  plaintiff\tand in such a suit if  any  application\t was\nfiled  under  the  Arbitration Act<\/a>, the\t same  ought  to  be\ngoverned  by the provisions of the Code of Civil  Procedure.\n[816A-c]\n     3.1   The\tHigh Court was not right in  dismissing\t the\napplications  on the ground that two applications  were\t not\nmaintainable  as the same were not covered within its  order\ndated 25.2.1966. [820E-F]\n     3.2  The term 'a fresh application' in the order  dated\n25.2.1966 used in singular had no more significance than the\nfact that as both the\n\t\t\t\t\t\t       811\nappellants had submitted one joint application, liberty\t was\ngiven  to  make\t a fresh application, The  main\t purpose  of\nmoving\tthe applications under s. 34<\/a> of the Arbitration\t Act\nwas  to stay the suit proceeding. The intention and  purpose\nof moving two such separate applications was also the  same.\nThe  explanation given by the appellants was that they\twere\ngiven  a legal advice to move two separate  applications  as\nthere were two different agreements between appellants no. 1\nand  2\tand the respondent no. 1 There being no\t element  of\nmala  fide  in the two applications  having  been  submitted\nwithin\t30 days of the order dated 25.2.1966, the same\twere\nmaintainable . [820A-c]\n\n\n\nJUDGMENT:\n<\/pre>\n
     CIVIL  APPELLATE JURISDICTION: Civil Appeal Nos.  2012-
\n2013 of 1974.\n<\/p>\n
     From  the\tJudgement and Order dated  2.2.1973  of\t the
\nCalcutta High Court in Appeal No. 211 of 1966.\n<\/p>\n
     B.\t Sen, Mrs. Geetanjali Mohan and Bishan Lal  for\t the
\nAppellant.\n<\/p>\n
     Dr.  Shanker Ghosh, Darshan Singh, Praveen Kumar,\tI.B.
\nGaur and Ms. Shaifali Khanna (NP) for the Respondents.\n<\/p>\n
     The Judgement of the Court was delivered by
\n     KASLIWAL,\tJ.  These  appeals  by\tspecial\t leave\t are
\ndirected against the order of the Calcutta High Court  dated
\nFebruary   2,\t1973.\tBrief  facts   necessary   for\t the
\ndetermination\tof these appeals are that Shri Gouri  Sankar
\nSarda (hereinafter referred to as Respondent No. 1) filed  a
\nSuit No. 1783 of 1965 in the Calcutta High Court against  R.
\nMcDill\tand  Company Pvt. Ltd. (in short Appellant  No.\t 1),
\nMirilal\t Dharamchand (Pvt.) Ltd. (in short Appellant No.2  )
\nand  Shri Misrilal Jain for the recovery of some amounts  as
\nwell  as for some other reliefs. On or about 15th  December,
\n1965  both  the\t appellant  Nos. 1  and\t  2  who  were\talso
\ndefendants in the suit submitted a joint application in\t the
\nHigh  Court for staying proceedings of the  aforesaid  suit,
\nunder  Section 34<\/a> of the Arbitration Act, 1940\t(hereinafter
\nreferred to as ‘the Act’). In view of some formal defect  in
\nthe application the High Court by order dated 25th  February
\n1966 gave permission to\t withdraw the said application\twith
\nliberty\t to  file a fresh application. As  the\tentire\tcase
\nhinges\ton  the above order dated 25th Feb.  1966,  relevant
\nportion of the said order is reproduced as under:\n<\/p>\n
\t\t\t\t\t\t       812<\/span><\/p>\n
\t  :Application\twithdrawn  with liberty\t to  make  a
\n\t  fresh\t  application.\tCost  to  be  paid  by\t the
\n\t  applicant.”<\/p><\/blockquote>\n
     Though  the above order does not make a mention of\t the
\nformal\t defect,  but  according  to  the   appellants\t the
\npermission  to withdraw was sought as no copy of the  plaint
\nwas annexed with such application. Thereafter, on March\t 21,
\n1966  the appellant Nos. 1 and 2 instead of making  a  joint
\napplication submitted two separate applications for  staying
\nthe  suit  against  the respective  appellants\tand  in\t the
\nalternative  for  stay\tof  the\t suit  as  a  whole.   These
\napplications were resisted by the plaintiff-respondent No. 1
\non  the ground that separate applications were not in  terms
\nof  the\t order dated 25.2.1966 and hence no stay  should  be
\ngranted. Learned Single judge upheld the objection raised by
\nthe  plaintiff and refused to stay the suit. On\t appeal\t the
\nDivision bench of the Calcutta High Court by order dated 2nd
\nFebruary, 1973 dismissed the appeal. The Division Bench took
\nthe   view  that  liberty  was\tgranted\t to  make  a   fresh
\napplication  and as such under the provision of Order  XXIII
\nof the Code of Civil Procedure, the appellants had no  right
\nto move two separate applications for staying the suit.\n<\/p>\n
     Aggrieved against the aforesaid Order of the High Court
\ndated  2nd  February, 1973 the appellants have\tfiled  these
\nappeals by the grant of special leave. order XXIII C.P.C. as
\nit existed at the relevant time is reproduced as under:\n<\/p>\n
\t  ORDER XIII: WITHDRAWAL AND ADJUSTMENT OF SUITS\n<\/p><\/blockquote>\n
\t  1.  Withdrawal of suit or abandonment of  part  of
\n\t  claim:\n<\/p><\/blockquote>\n
\t  (1)  At any time after the institution of a  suit,
\n\t  the  plaintiff  may as against all or any  of\t the
\n\t  defendants  abandon his suit or abandon a part  of
\n\t  his claim.\n<\/p><\/blockquote>\n
\t  (2) Where the Court is satisfied-\n<\/p><\/blockquote>\n
\t  (a)  That  a\tsuit must fail by  reason  for\tsome
\n\t  formal defect or\n<\/p><\/blockquote>\n
\t  (b)  That there are other sufficient\tgrounds\t for
\n\t  allowing  the plaintiff to institute a fresh\tsuit
\n\t  for  the  subject  matter of a suit  or   part  of
\n\t  claim.\n<\/p><\/blockquote>\n
\t\t\t\t\t\t       813<\/span><\/p>\n
\t  It may, on such terms as it thinks fit, grant\t the
\n\t  plaintiff permission to withdraw from such suit or
\n\t  abandon  such\t part  of a claim  with\t liberty  to
\n\t  institute  a fresh suit in respect of the  subject
\n\t  matter of such suit or such part of claim.
\n\t  (3) Where the plaintiff withdraws from a suit,  or
\n\t  abandon  part of a claim, without  the  permission
\n\t  referred  to\tin sub-rule he shall be\t liable\t for
\n\t  such\tcosts as the Court may award and  shall\t  be
\n\t  precluded  from  instituting\tany  fresh  suit  in
\n\t  respect of such subject matter or such part of the
\n\t  claim.\n<\/p><\/blockquote>\n
\t  (4)  Nothing\tin  this rule  shall  be  deemed  to
\n\t  authorise  the  Court\t to permit  one\t of  several
\n\t  plaintiffs  to   withdraw  the  consent   of\t the
\n\t  others”.<\/p><\/blockquote>\n
     It\t was contended on behalf of the appellants that\t the
\nprovisions or Order XXIII were not applicable in the  matter
\nof  applications filed under Section 34<\/a> of  the\t Arbitration
\nAct.  It  was contended that the provisions of\tOrder  XXIII
\ncould  only apply  to the proceedings of a suit and  not  in
\nrespect\t of any applications filed  under  the Act.  It\t was
\nsubmitted that the High Court committed an error in taking a
\nhighly\ttechnical view of the matter that initially a  joint
\napplication was submitted for stating the suit and   liberty
\nwas  given  to\twithdraw  the  same  and  to  make  a  fresh
\napplication and as such the appellants were not entitled  to
\nsubmit\ttwo  separate  applications  though  for  the\tsame
\npurpose. It was contended in this regard that there were two
\nseparate  agreements between the plaintiffs  and  appellants
\nNos. 1 or 2 containing an arbitration clause and as such the
\nappellants were given a legal advice to submit\ttwo separate
\napplications for staying the suit and the High Court  should
\nnot  have  dismissed  the applications on  the\tground\tthat
\nliberty\t to file fresh application was given in\t respect  of
\none application only. Learned counsel for the appellants  in
\nsupport of this contention placed reliance on Nawab  Usmanli
\nKhan v. Sagarmal<\/a>, [1965] 93) SCR\n<\/p>\n
201.
\n     On\t the  other  hand it was argued\t on  behalf  of\t the
\nrespondent No. 1 that provisions or Order  XXIII C.P.C. were
\napplicable  in respect of an application under\tthe Act.  It
\nwas  contended that basically the proceeding had  arisen  on
\naccount\t of a suit filed by the plaintiff-respondent and  in
\nthat suit an application was submitted for staying the\tsuit
\nand referring the matter to Arbitrator\tunder Section 34<\/a>  of
\nthe Act. The Order as such passed by the High Court on\t25th
\nFebruary, 1966 would be governed by the provisions of  order
\nXXIII of the Code of Civil
\n\t\t\t\t\t\t       814<\/span>
\nProcedure and fresh application could only lie in accordance
\nwith  the  terms  and  conditions imposed  at  the  time  of
\npermitting  the withdrawal of the first application. It\t was
\ncontended  that\t it was an admitted position  that  a  joint
\napplication   was  filed  for  staying\tthe  suit  and\t the
\npermission was granted to withdraw the same with liberty  to
\nmake  a fresh application and the defendants-appellants\t had
\nno right to submit two separate applications in violation of
\nthe  order of the Court dated 25th February, 1966.  Reliance
\nin support of the above contention was placed on Munshi\t Ram
\nv. Banwari Lal<\/a>, [1962] Supp. (2) SCR 477 and Hakam Singh  v.
\nM\/s Gammon (India) Ltd<\/a>., [1971] 3 SCR 314.\n<\/p>\n
     We\t would\tfirst  deal with the  question\twhether\t the
\nprovisions  of\tOrder  XXIII  C.P.C.  apply  or\t not  to  an
\napplication  for stay of suit filed under Section 34<\/a> of\t the
\nAct. Section 41<\/a> of the Act reads as under:\n<\/p>\n
\t  41 Procedure and powers of Court.\n<\/p><\/blockquote>\n
\t  “Subject  to\tthe provisions of this\tAct  and  of
\n\t  rules made thereunder-\n<\/p><\/blockquote>\n
\t  (a) The provisions of the Code of Civil Procedure,
\n\t  1908,\t shall apply to all proceedings\t before\t the
\n\t  Court, and to all appeals, under this Act, and\n<\/p><\/blockquote>\n
\t  (b) The Court shall have, for the purpose of,\t and
\n\t  in relation to, arbitration proceeding  before the
\n\t  Court.\n<\/p><\/blockquote>\n
\t  Provided that nothing in clause (b) shall be taken
\n\t  to prejudice\tany power which may be vested in  an
\n\t  arbitrator  or  umpire  for  making  orders\twith
\n\t  respect to any of such matters”.<\/p><\/blockquote>\n
     According to the above provision the provisions of\t the
\nCode of Civil Procedure, 1908 shall apply to all proceedings
\nbefore\tthe  Court subject course to the provisions  of\t The
\nArbitration  Act<\/a>  and of any rules made thereunder.  it\t has
\nbeen  laid down in various decisions from time to time\tthat
\nthe  following\tprovisions of the Code\tof  Civil  Procedure
\nshall  apply  to proceedings under the Act. In the  ‘Law  of
\nArbitration’ by R.S. Bachawat (2nd 1987 Ed., 585) under\t the
\nHeading ‘Applicability of Code of Civil Procedure  to  court
\nproceeding’ it has been mentioned as under:\n<\/p>\n
\t\t\t\t\t\t       815<\/span><\/p>\n
\t Subject to the provisions of the Act and the  Rules
\n\t made thereunder the provisions of the code of civil
\n\t procedure   aplply  to all proceddings\t before\t the
\n\t Court\tand  to all appeals under the  Act,  Section
\n\t 41(a)<\/a>.\n<\/p>\n
     The following provisions of the Code of Civil Procedure
\nhave  been  held to apply to certain proceedings  under\t the
\nAct:\n<\/p>\n
\t (1) Section 20 Hakam Singh v. Gammon (India<\/a>)  ltd.,
\n\t AIR 1971 SC 740: (1971) 1 SCC 286.\n<\/p>\n
\t (2) Section 96(3) Union  of India v. Mohinder Singh
\n\t & Co<\/a>., AIR 1971 JK 10.\n<\/p>\n
\t (3)  Section 24 Union of India v. Rup Kishore<\/a>,\t AIR
\n\t 1957 All 504.\n<\/p>\n
\t (4)  Section  114<\/a>  read  with\tOrder  47  Executive
\n\t Engineer  v.  Thingom\tIboyaima  Singh,  AIR\t1970
\n\t Manipur 76.\n<\/p>\n
\t (5)  Order  1\tRule  8\t  Abdul\t Gani  v.  Reception
\n\t Committee<\/a>,  AIR 1936 Bom. 250: ILR 60 Bom. 645:  39
\n\t Bom.\t   LR 380.\n<\/p>\n
\t (6) Order 3 Rule 5 Ram Bharosey v.  Peary Lal<\/a>,\t AIR
\n\t 1957 All 265.\n<\/p>\n
\t (7)  Order 5 Shrinath Bros. v. Century\t Spinning  &
\n\t Wvg. Co., AIr 1968 Bom. 443.\n<\/p>\n
\t (8) Order 6 Rule 17 Indian Minerals Co. v. Northern
\n\t India Uime Marketing Association<\/a>, AIR 1958 All 69.
\n\t (9)  Order 9 Rule 13 Ganeshmal v.  Keshoram  Cotton
\n\t Mills<\/a>, AIR 1952 Cal 10: ILR (1951) Cal. 196.
\n\t (10)  Order 23 Rule, 3 Munshi Ram v.  Banwari\tLal<\/a>,
\n\t AIR 1962 SC 903.\n<\/p>\n
\t (11) Order 30 Rule 3 Governor-General in Council v.
\n\t Associated  Live Stock Farm (India) Ltd<\/a>., AIR\t1948
\n\t Cal. 230: 52 CWN 288.\n<\/p>\n
\t (12) Order 30 Rule 4 Soorajmull Nagarmull v.  Sagar
\n\t Mal, AIR 1978 Cal. 239.\n<\/p>\n
A  proceeding under Section 14 Section 17 under the  Act  is
\nnot  a suit and the provisions of Section 86(1) C.P.C.\tread
\nwith Section 87 C.P.C. does not apply  to such a  proceeding
\n(Usman Ali Khan) v. (Sagar Mal,) AIR 1965 SC 1798. Nor\tdoes
\nthe  provision\tof Section 80 C.P.C. apply to  a  proceeding
\nunder\tSection\t 20  (Ramchand)\t v.   (Governor-General\t  in
\nCouncil,) AIR 1947 sind 147. The following provisions of the
\nCode Civil Procedure apply to appeals under the Act:\n<\/p>\n
\t\t\t\t\t\t       816<\/span><\/p>\n
     (1) Section 96(3) (Union of India) v. (Mohinder Singh &
\n     Co<\/a>.,)  AIR\t 1971 JK 10; (2) Order 41  Rule\t 5 (Scottish
\n     Union   of\t National  Insurance  Co.)   v.\t  (Saraswati
\n     Sajnani<\/a>,) AIR 1960 Cal. 22:63 CWN 800.<\/p><\/blockquote>\n
     Apart from the above cases Section 41<\/a> of the Act itself
\nprovides that the provisions of the Code of Civil  Procedure
\nshall apply to all proceedings before the  Court. We do\t not
\nfind  any  provision  in  the Act so as\t to  take  away\t the
\nprovisions  or\tOrder  XXIII C.P.C. from  being\t applied  to
\napplications  filed under Section 34<\/a> of the Act, in a  suit.
\nThat apart the case before us has started on a plaint  filed
\nby  the plaintiff and in such a suit if any  application  is
\nfiled  under the Act, the same ought to be governed  by\t the
\nprovisions of the Code of Civil Procedure.\n<\/p>\n
     In\t (Munshi  Ram) v. (Banwari Lal<\/a>,) (supra)  the  facts
\nwere that the Arbitrator gave an award. The award was  filed
\nin  the\t court\tby  the\t  Arbitrator.  The  appellants\tmade
\napplication for setting aside the award and the\t respondents
\nfiled  their  replies to the  application.  Thereafter,\t the
\nparties came to terms and asked for a decree to be passed in
\naccordance    therewith. The court passed  a decree  on\t the
\naward\tmodified  by  the  compromise.\tIn  execution,\t the
\nappellant contended that the decree was nullity as the Court
\nhad  no jurisdiction to modify the  award by compromise.  It
\nwas argued that after a\t dispute is referred to\t arbitration
\nand an award has been obtained and filed in Court, it is not
\nopen  to  the Court to record the  compromise\tunder  Order
\nXXIII  Rule   3 of the Code of Civil Procedure,\t because  an
\naward  can  be\tset aside or modified as laid  down  in\t the
\nArbitration  Act<\/a>, there is no provision in  the\t Arbitration
\nAct<\/a>  for recording the compromise, the above contention\t was
\nnot accepted and it was held as under:\n<\/p>\n
\t “When an award is given,  the parties cannot, under
\n\t the Act challenge it except as laid down there. The
\n\t powers of the Court are indicated by the Act.\tThey
\n\t are limited to accepting the award, if there be  no
\n\t objection  and\t passing  a  decree  in\t  accordance
\n\t therewith, or superseding the reference or revoking
\n\t or modifying the award or remitting it for  further
\n\t consideration,\t as laid down in the Act.  But,\t the
\n\t Act  does not disable the parties from\t terminating
\n\t their dispute in a different way, and if they do it
\n\t could not be intended by law that a dispute,  which
\n\t had  been  successfully  terminated,  should  again
\n\t become\t the subject of litigation. If\tthe  parties
\n\t are   dissatisfied  with the  award  and  want\t  to
\n\t substitute  it\t by a compromise  involving  matters
\n\t alien to the original dispute
\n\t\t\t\t\t\t       817<\/span>
\n\t  which are inseparable, the Court may supersede the
\n\t  submission,  and  leave the parties  to  work\t out
\n\t  their\t agreement  in\taccordance   with  the\t law
\n\t  outside the Arbitration Act<\/a>“.\n<\/p>\n
     In\t  (Nawab  Usmanali Khan) v. (Sagarmal<\/a>,)\t (supra)  on
\nwhich  reliance has been placed by learned counsel  for\t the
\nappellant  it  was held that a proceeding under\t Section  14<\/a>
\nread  with   Section  17<\/a> of the Act for\t the  passing  of  a
\nJudgement  and decree on an award does not commence  with  a
\nplaint\tor a petition in the nature of a plaint, and  cannot
\nbe  regarded as a suit and   the parties to whom the  notice
\nof  the\t filing of the award is given  under  Section  14(2)<\/a>
\ncannot\tbe  regarded  as  “suit\t  in  any  Court   otherwise
\ncompetent  to  try the suit” within the meaning\t of  Section
\n86(1)<\/a>  read with section 87B<\/a>, Civil Procedure Code.  In\t the
\nabove case the appellant was the Ruler, or the former Indian
\nState  of Jaora. The had money dealing with the\t respondent.
\nThe  respondent\t after obtaining a decree in  terms  of\t the
\naward  started execution proceedings against the  appellant.
\nThe  Central  Government gave a\t certificate  under  Section
\n86(3)<\/a>  read  with Section 87B of the Code  Civil  Procedure,
\n1908 consenting to the execution of the decree against\t the
\nproperties of the appellant. The Executing Court passed\t the
\nprohibitory  order  under Order XXI Rule 46 of the  Code  of
\nCivil Procedure in respect of sums payable to the  appellant
\non account of the privy purse. On an objection raised by the
\nappellant  by order dated March 15, 1958, the Court recalled
\nthe  decree and cancelled the certificate as prayed for,  on
\nthe  ground that the amount receivable by the  appellant  on
\naccount\t  of  his  privy  purse\t was  not  attachable.\t The
\nrespondent  preferred appeal before the High Court. The High
\nCourt  allowed\tthe  Appeal No. 33 of  1958.  Usmanali\tKhan
\n(appellant)  filed an appeal before this Court.\t This  Court
\nheld as under:\n<\/p>\n
\t  “Section  86(1)<\/a> read with s. 87B<\/a> confers upon\t the
\n\t  Rulers  of former Indian State substantive  rights
\n\t  of   immunity\t from  suits.  Section\t 141<\/a>   makes
\n\t  applicable   to  other  proceedings\tonly   those
\n\t  provisions  of the Code which deal with  procedure
\n\t  and not those which deal with substantive  rights.
\n\t  Nor  does s. 41(a)<\/a> of the Indian Arbitration\tAct,
\n\t  1940\tcarry  the  matter  any\t further.  By\tthat
\n\t  section,  the\t provisions  of the  Code  of  Civil
\n\t  Procedure,   1908  are  made\tapplicable  to\t all
\n\t  proceedings  before the Court under the Act.\tNow,
\n\t  by  its  own language s. 86(1)<\/a>  applies  to  suits
\n\t  only, and s. 141<\/a>, Code of Civil procedure does not
\n\t  attract the provisions of s. 86(1)<\/a> to\t proceedings
\n\t  other\t than  suits. Accordingly, by  the  conjoint
\n\t  application of s. 41(a)<\/a> of the Indian Arbitration
\n\t\t\t\t\t\t       818<\/span>
\n\t  Act  and ss.\t86(1) and 141 of the Code  of  Civil
\n\t  Procedure,  the  provisions of s.  8691<\/a>)  are\t not
\n\t  attracted to a proceeding under s.14 of the Indian
\n\t  Arbitration  Act<\/a>, 1940. It follows that the  Court
\n\t  was  competent to entertain the proceedings  under
\n\t  s. 14<\/a> of the\tIndian Arbitration Act, 1940 and  to
\n\t  pass\ta  decree  against the\tappellant  in  those
\n\t  proceedings, though no consent to the\t institution
\n\t  of those proceedings had been given by the Central
\n\t  Government”.\n<\/p><\/blockquote>\n
     The  following  observations  in  (Hansraj\t Gupta)\t  v.\n<\/p><\/blockquote>\n
(Official Liquidator, Dehra Dun–Mussorrie Electric  Tramway
\nCo.)  [1932]  L.R. 60 I.A. 13, 19 made by  Lord\t Russell  of
\nKillowen were quoted.\n<\/p>\n
\t  “The word ‘suit’ ordinarily means, and apart\tfrom
\n\t  some\tcontext\t must  be  taken  to  mean  a  civil
\n\t  proceeding  instituted  by the presentation  of  a
\n\t  plaint”.<\/p><\/blockquote>\n
     The following observations made by Shah, J. in (Bhagwat
\nSingh)\tv. (State of Rajasthan<\/a>,) AIR 1964 SC 444  were\talso
\nquoted with approval:\n<\/p>\n
\t  “The\tappellant  is recognised under Art.  366(22)<\/a>
\n\t  of the Constitution as a Rule of an Indian  State,
\n\t  but  s.  86<\/a> in terms protects a Ruler\t from  being
\n\t  ‘sued’  and  not against the\tinstitution  of\t any
\n\t  other\t proceeding which is not in the nature of  a
\n\t  suit. A proceeding which does\t not commence with a
\n\t  plaint  or petition in the nature of\tplaint,\t  or
\n\t  where\t the  claim  is not in\trespect\t of  dispute
\n\t  ordinarily  triable in a Civil Court, would  prima
\n\t  facie not be regarded as falling within s. 86 Code
\n\t  of Civil Procedure”.<\/p><\/blockquote>\n
     The above observation made by Lord Russell of  Killowen
\nand  Shah,  J.\tgo  to\tshow  that  for\t a  suit  the  civil
\nproceedings  is instituted by the presentation of a  plaint.
\nIn  the aforesaid background it was held that  a  proceeding
\nwhich  does  not commence with a plaint or petition  in\t the
\nnature\tof plaint, or where the claim is not in\t respect  of
\ndispute\t ordinarily  triable in a civil court,\twould  prima
\nfacie  not be regarded as falling with Section 86<\/a>,  Code  of
\nCivil procedure. In the\t case before us as already mentioned
\nabove  a suit by presenting a plaint was instituted  by\t the
\nrespondent  No. 1 and thereafter it was sought to be  stayed
\nby  submitting application under s. 34<\/a> of the Act.  Thus  we
\nare  clearly  of the view that the above case  of  (Usmanali
\nKhan) v. (Sagarmal<\/a>,) (supra) is clearly distinguishable\t and
\ndoes  not help the appellants in the case before us. It\t may
\nbe  noted  that Bachawat, J. who delivered the\tJudgment  in
\n(Usmanali Khan) v. (Sagarmal<\/a>,) (supra) has himself in his
\n\t\t\t\t\t\t       819<\/span>
\nbook   on  the\t‘law  of  Arbitration’\tunder  the   heading
\n‘Applicability\t of  Code  of  Civil  Procedure\t  to   Court
\nProceeding’ has mentioned a number of decisions wherein\t the
\nprovisions  of\tCode of Civil Procedure have  been  held  to
\napply  to  proceedings\t under\tthe  Act.  We  have  already
\nextracted the above passage from the book of Bachawat, j.\n<\/p>\n
     In\t (Hakam Singh) v (M\/s Gammon (India) Ltd.,)  (supra)
\nit was held that the Code of Civil Procedure in its entirety
\napplies\t to proceedings under the Arbitration Act<\/a> by  Virtue
\nof  Section  41<\/a> of the later Act. The  jurisdiction  of\t the
\nCourts\tunder the Arbitration Act<\/a> to entertain a  proceeding
\nfor   filing  an  award\t is  accordingly  governed  by\t the
\nprovisions  of\tthe  Code  of  Civil  Procedure\t read\twith
\nExplanation  (II) thereto, the respondent company which\t had
\nits principal place of business at Bombay, was liable to  be
\nsued at Bombay. Thus in the above case dispute arose between
\nthe  parties and the appellant submitted a petition  to\t the
\nCourt  of  the Subordinate Judge at Varanasi  for  an  order
\nunder  Section 20<\/a> of the Indian Arbitration Act, 10 of\t1940
\nthat  the  agreement be filed and an order of  reference  be
\nmade to an Arbitrator or Arbitrators appointed by the  Court
\nto settle the  dispute between the parties in respect of the
\nconstruction  works done by him. In order to  determine\t the
\nplace  of suing, it was held that Section 20 of the Code  of
\nCivil Procedure would govern the case.\n<\/p>\n
     Thus we do not find any force in the submission made by
\nlearned\t counsel  for  the appellants  before  us  that\t the
\nprovisions  or\tOrder XXIII of the Code of  Civil  Procedure
\nwill not apply to the Order passed by the High Court on 25th
\nFebruary, 1966.\n<\/p>\n
     We\t would,\t now, consider the scope and effect  of\t the
\norder  dated 25th February, 1966 considering that  the\tsaid
\norder would be governed by the provisions of Order XXIII  of
\nthe  Code of Civil Procedure. Admittedly, appellant  Nos.  1
\nand 2 were defendants in the suit filed by respondent No. 1.
\nA  joint  application  was submitted on\t  their\t behalf\t for
\nstaying\t the proceedings of the\t suit, under Section  34<\/a>  of
\nthe Act, Though the order dated 25th February, 1966 does not
\nmake a mention of the formal defect on account of which\t the
\nsaid  application   was withdrawn, but the  appellants\thave
\ncategorically stated that the same was withdrawn on  account
\nof  the\t fact that copy of the plaint was not  annexed\twith
\nsuch  application and in the absence of any counter made  by
\nthe respondent, we take that  the reason for withdrawing the
\napplication was that copy of the plaint was not annexed with
\nsuch  application.  The said application was allowed  to  be
\nwithdrawn with liberty to
\n\t\t\t\t\t\t       820<\/span>
\nmake  a\t fresh application. To our mind, the term  ‘a  fresh
\napplication’ used in singular  had no more significance than
\nthe  fact  that as  both the appellants\t had  submitted\t one
\njoint  application as such the liberty was given to  make  a
\nfresh\tapplication.   The  main  purpose  of\tmoving\t the
\napplication by the appellant was to stay the proceedings  of
\nthe suit under Section 34<\/a> of the Act  the intention and\t the
\npurpose\t of  moving two separate applications is  also\t  to
\nstay  the  proceedings of the suit under Section 34<\/a>  of\t the
\nAct. The explanation given by the appellants for moving\t two
\nseparate applications is that they were given a legal advice
\nto  move  two  seperate\t applications  as  there  were\t two
\ndifferent agreements between the appellant Nos. 1 and 2\t and
\nthe  respondent No. 1. There was no element of mala fide  in
\ndoing  so  and the two applications were also  submitted  on
\nMarch  21,  1966  i.e.\twithin 30 days of  the\torder  dated
\n25.2.66. Learned counsel for the respondent No. 1  submitted
\nthat there was no merit in the applications submitted by the
\nappellants  under Section 34<\/a> of the Act and the\t proceedings
\nof the suit have already remained stayed for nearly 15 years
\nin  this  Court\t and  now there\t is   no  justification\t for
\nfurther\t staying  the suit. So far as the pendency  of\tthis
\nappeal in this Court is concerned, no party is at fault\t and
\nit   would  have been proper if\t the  respondent   had\tbeen
\nadvised not to take such objection of non maintainability of
\ntwo  applications  before  the High  Court  and\t would\thave
\ncontested  the applications on merits. We are  not  deciding
\nthe  question of maintainability of the\t applications  under
\nSection\t 34<\/a> of the Act on merits and we make it\t clear\tthat
\nrespondent  No. 1 would be free\t to take all  objections  as
\nhe likes against the grant of such application and the\tsame
\nwould  be decided by the High Court on merits in  accordance
\nwith law. We are, however, clearly of the view that the High
\nCourt was not correct in dismissing  the applications on the
\nground\tthat two applications were not maintainable  as\t the
\nsame  were not covered within the order passed by  the\tHigh
\nCourt  dated 25th February, 1966. In view of  the fact\tthat
\nit is an old matter, we request the High Court to dispose of
\nthe applications filed by the appellants Nos. 1 and 2  under
\nSection 34<\/a> of the Act. At the earliest.\n<\/p>\n
     In the result, these appeals are allowed, the order  of
\nthe High Court dated 2nd February, 1973 is set aside and the
\ncase  would now be decided by the High court in the   manner
\nindicated  above.  The parties are left to  bear  their\t own
\ncosts.\n<\/p>\n
R.P.\n<\/p>\n
\t\t\t\t\t    Appeals Allowed.\n<\/p>\n
\t\t\t\t\t\t       821<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India R. Mcdill And Company Pvt. Ltd vs Gouri Shankar Sarda And Others on 13 March, 1991 Equivalent citations: 1991 SCR (1) 809, 1991 SCC (2) 548 Author: N Kasliwal Bench: Kasliwal, N.M. (J) PETITIONER: R. MCDILL AND COMPANY PVT. LTD. Vs. RESPONDENT: GOURI SHANKAR SARDA AND OTHERS DATE OF JUDGMENT13\/03\/1991 BENCH: […]<\/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-262278","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nR. Mcdill And Company Pvt. 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