Akash Financiers Pvt. Ltd. vs Ram Singh Kapur

Rajendra Nath Mitial, J.—This is a revision petition against the order of the Additional District Judge, Amritsar dated 19th March, 1982.

Briefly, the facts are that the Defendant was carrying on the business of chit fund at Amritsar. The Plaintiff became a member of group ''S'' with a subscription of Rs. 300/- per month on 1st February, 1972 for 60 months with a condition that in case he was declared lucky, he would be paid Rs. 18,000/- in Chit No. S-56 allotted to him He regularly subscribed in the said group upto October, 1975 and thus paid a sum of Rs 13,500/-. The Scheme matured on 31st January, 1977 It is alleged that the Defendant did not pay the amount with interest subscribed by him to which he was entitled according to the terms of the agreement. Consequently, he filed a suit for recovery of Rs. 17,900/-.

The Respondent filed an application u/s 34 of the Arbitration Act on 1st December, 1978 pleading that there was an arbitration agreement dated 29th March, 1972 between the parties and the Respondent was always ready and willing to refer the matter to arbitration but the Plaintiff failed to do so. Consequently, it was prayed that the proceedings be stayed and the matter be referred to arbitration.

The application was opposed by the Plaintiff who inter alia pleaded that there was no agreement between the parties to refer the matter to arbitration and, therefore, the application was liable to be dismissed. The learned trial Court held that there was an agreement between the parties to refer the matter to arbitration and the Defendant was ready and willing to refer the matter in dispute to the arbitrator, and therefore, the suit was liable to be stayed. The Plaintiff went up in appeal before the Additional District Judge who reversed the finding of the trial Court and held that the Defendant did not give the correct date of arbitration agreement; that the application has not been filed by a properly authorised person and that in a suit filed by the Defendant against the Plaintiff an application u/s 34 of the Indian Arbitration Act had been dismissed on the ground that there was no arbitration agreement. Consequently, he accepted the appeal and dismissed the application. The Defendant has come up in revision against the order of the Additional District Judge to this Court.

Mr. Sarin, Learned Counsel for the Appellant has vehemently urged that the arbitration agreement was of 29th March, 1972. However, through inadvertence the date in the application u/s 34 was given as 27th September, 1975. Later an application for amendment was filed which was accepted and the Petitioner was allowed to rectify the date in the said application. He urges that in that situation the Additional District Judge erroneously held that the Petitioner did net come with a clear case.

I have duly considered the argument and find substance in it. The facts are not disputed. It is well settled that if an amendment of the pleadings is allowed, the original pleadings cannot be taken into consideration In the present case even the agreement between the parties has been produced which bears the date as 29th March, 1972. In this situation it cannot be held that the Petitioner did not come with a clear case. Consequently I reverse the finding of the learned Additional District Judge in this regard-

The next contention of Mr. Sarin is that the application u/s 34 was signed by Guroharan Singh who was the secretary and a Director of the Petitioner-company. According to him, he could sign and verify the pleadings. He also submits that no issue was framed in that regard and, therefore, the Plaintiff could not be allowed to raise the objection that there was no proper application before the Court in appeal.

I find substance in this contention of the Learned Counsel too. Order XXIX of the CPC provides that in suits by or against the corporation any pleading can be signed and verified on behalf of the corporation by the Secretary or by any Director or other principal officer of the corporation who is able to depose to the facts of the case Gurcharaa Singh appeared in the witness box and deposed that he was Secretary and one of the Directors of the Petitioner-company. That part of the statement was not challenged in cross-examination. Even the Learned Counsel for the Respondent did not contend that the said statement is not correct. Thus Gurcharan Singh was entitled to sign and verify the application. The second part of the argument that the point could not be raised at the time of arguments in appeal has also substance. In case the Respondent challenged the authority of Gurcharan Singh to present the application u/s 34, he should have claimed an issue so that the other party could not be taken by surprise. The question is not one of law but a mixed question of law and fact. In cape an issue bad been framed that Gurcharan Singh was not authorised to file the application, the Petitioner could have led evidence for that purpose. Such an objection cannot be allowed to be raised in appeal. I consequently upset the finding of the learned Additional District Judge on this point also.

The last contention of Mr. Sarin is that if an application u/s 34 of the Plaintiff-respondent in another suit between the parties has been dismissed, that cannot be a ground for dismissal of the present application in this suit. I find force in the submission of Mr. Sarin The application u/s 34 in the present suit cannot be dismissed on the ground that in another suit between the parties an application under the said section moved by the Plaintiff-respondent had been dismissed. The view taken by the learned Additional District Judge is not correct.

For the aforesaid reasons I accept the revision petition, set aside the order of the Additional District Judge and stay the proceedings u/s 34 of the Arbitration Act The Respondent may move an application for appointment of the Arbitrator as agreed to between the parties in the agreement dated 29th March, 1972. (Exhibit A. 1). No order as to costs.

Petition accepted.