Choteylal Shamlal vs Cooch Behar Oil Mills Ltd.

Bachawat, J.—This is an application under Sections 30 and 33 of the Indian Arbitration Act for setting aside an award and for a declaration that there is no valid and legal arbitration agreement between the parties.

The parties entered into a contract dated August 18, 1952, whereby the Respondent agreed to buy certain goods from the Petitioner, delivery for Cooch Behar.

Disputes and differences arose under the contract and on December 2, 1950, there was a reference to the arbitration of the Bengal Chamber of Commerce pursuant to an arbitration clause contained in the contract.

On December 18, 1950, the Registrar of the Bengal Chamber of Commerce constituted a Tribunal of arbitration.

The Respondent claimed Rs. 10,000 as damages for non delivery of the goods and also refund of a sum of Rs. 700 advanced by him.

On January 2, 1951, the Petitioner instituted a suit in the court of the First Munsif, Cooch Behar, claiming a sum of Rs. 1,350 for damages on account of alleged breach of contract by the Respondent.

On March 15, 1951, the arbitrator held a meeting and the parties adduced evidence.

It appears that the Bengal Chamber came to know of the suit nstituted by the Petitioner in the Cooch Behar court. On April 4, 1951, the Respondent requested the Bengal Chamber of Commerce not to make an award until the hearing of the pending suit is stayed.

On June 5, 1951, an order for stay was made by the Cooch Behar court.

On June 27, 1951, the arbitrator held another meeting. The arties stated that they had no further evidence to adduce and on he same day, the arbitrator made an award directing the Petitioner to pay to the Respondent a sum of Rs. 2,025 on account of damages and Rs. 700 by way of refund of advance and also Section 300 on account of costs.

On November 29, 1951, notice of the filing of the award is given and on January 2, 1952, this application was made.

In para 6 of the petition, the grounds for impeaching be award are set out. In sub-paras, (a) and (b) of para. 6 the Petitioner contends that there were no concluded contract and no bitration agreement. During the hearing of this application (sic)r. Ginwalla, learned Counsel on behalf of the Petitioner, andoned the grounds set out in paras. 6(a) and (b).

In sub-para, (c) of para. 6 the Respondent also charged that the award is made out of time and, as such, is invalid in law. wiring the hearing Mr. Ginwalla also abandoned this contention 1 has not pressed this ground.

The petition does not set out any other ground for impeaching award.

Mr. Ginwalla, however, contends that this award cannot be and in this Court and that this Court has no jurisdiction to pass judgment according to the award. An application for stay had a made to the Cooch Behar court. According So Mr. Ginwalla, soon as that application was made, the Cooch Behar court same the exclusive forum for the filing of the award under 1(4) of the Arbitration Act and this Court cannot pass a Government according to the award.

The relevant sections of the Arbitration Act are Sections 2(c), 31 and 34. Section 2(c) reads thus:

Court means a Civil Court having jurisdiction to decide the questions forming the subject matter of the reference if the same had been the subject-matter of a suit but it does not, except for the purpose of arbitration proceedings u/s 21, include Small Cause Court.

Section 14 provides that the award may be filed in court.

Section 31(7) provides that an award may be filed in any court having jurisdiction in the matter to which the reference relates. Sections 31(5) and 31(3) provide that all questions regarding the validity, effect or existence of an award or an arbitration agreement shall be decided by and all applications regarding the conduct of and arising out of arbitration proceedings shall be made to the court where the award has been or may be filed and to no other court.

Section 31(4) reads thus:

Notwithstanding anything contained elsewhere in this Act or any other law for the time being in force where in any reference any application under this A has been made in a Court competent to entertain it, that Court alone shall has jurisdiction over the arbitration proceedings, and all subsequent application arising out of that reference and the arbitration proceedings shall be made that Court and in no other Court.

Section 34 provides for applications to the judicial authority before which a judicial proceeding is pending for stay of such proceeding if it is in respect of a matter agreed to be referred.

Mr. Ginwalla contends that the application for stay of the Cooch Behar suit is an application under the Act made in court competent to entertain it in a reference.

Various sections in the Act, such as Section 8, 11, 12, 33 and make express provisions for applications to the court. Certain other sections of the Act, such as Section 9, 15, 16, 18, 28, 30, 37, and 43 contain provisions which by implication also enable such applications.

Section 34 does not provide for an application to a court defined u/s 2(c). Section 34 provides for an application the judicial authority before whom a legal proceeding is pending for stay of that proceeding.

The section purposely uses the expression "judicial authority The application is made not to the court but to the judicial authority before whom a proceeding is pending.

In my judgment, an application for stay made to a judicial authority u/s 34 of the Act is not an application under the Act in a reference in a court competent to entertain if contemplated by Section 31(4) of the Act.

An application for stay of a legal proceeding to the judicial authority before whom it is pending is always an application under the Act to a judicial authority competent to entertain The judicial authority, however, need not necessarily be a co competent u/s 2(c) to decide the questions forming the subject-matter of the reference and it is impossible to hold that the judicial authority becomes the exclusive arbitration court on the making of the application for stay.

I therefore hold that the application for stay to the court of the 1st Munsiff, Cooch Behar, is not an application to a court under the Arbitration Act. I am also not satisfied that the munsiff had pecuniary jurisdiction to decide the claim of Rs. 11,700 which was the subject-matter of the reference. I may add that even if the munsiff had such jurisdiction that will not convert an application for stay u/s 34 into an application to the court as contemplated by Section 31(4).

Mr. Ginwalla next contends that the Cooch Behar suit is a legal proceeding upon the whole of the subject-matter of the reference between the parties to the reference that notice thereof had been given to the arbitrators and that no stay of that suit had been obtained and that therefore the award is void u/s 35 of the Arbitration Act. This ground of objection is not taken in the petition. The Petitioner is entitled to rely only upon the specific grounds of complaint set out in the petition. I am not satisfied on the present materials that the conditions laid Sown in Section 35 have been fulfilled.

The order for stay passed by the Cooch Behar court on June 5, 1951, was worded as follows:

I * * * stay the hearing of the suit till July 7, 1951. Parties are reacted to make all necessary tadbirs before the Bengal Chamber within the date.

A final order for stay u/s 34 ought not to be for a limited period of time and it may well be that the order dated June 5, 951 was an erroneous order. But I have no doubt that order is an order granting stay of proceedings u/s 34. Even if the order was an erroneous one it was passed u/s 34. and is not without jurisdiction. It was never appealed from and is a final and binding order. The award, therefore, is not void u/s 35.

No other point has been urged. The application is dismissed with costs. I pass judgment according to award. There will be interest on judgment and costs of filing the award and of obtaining judgment thereon.

judgment in terms of the award. Attorneys for the Petitioner: G. Bagaria and Co. Attorneys for the Respondent: Jalan and Co.