Pran Nath Panjan vs State of Jammu and Kashmir

Mian Jalaluddin, J.—The learned District Judge, Srinagar, has dismissed an application u/s 20 of the Jammu and Kashair Arbitration Act

filed by the appellant against the State of Jammu and Kashmir. The appellant alleged that he in the year 1960 obtained a contract from the

Irrigation Department for excavation of earth and also for the construction of a drainage in New Partap Canal, Akhnoor, Eventually the Chief

Engineer of the Department issued a demand notice calling upon the appellant to pay a sum of Rs. 5913.00 which was alleged to be due from him.

Steps were taken to enforce the claim by recovering it as arrears of land revenue. The petitioner appellant denied his liability to pay the amount,

and he by means of the application sought the arbitration of the Chief Engineer on the matter. He called in question the power of the Chief Engineer

to have arbitrarily modified the rates to his disadvantage. This petition was resisted by the respondent on various grounds.

The maintainability of the petition was inter alia objected to on the ground that the petitioner appellant had brought a suit in the court of the Sub-

Registrar, Srinagar, in which he had made the same averments as in the present petition and had claimed relief from the court by way of issuing an

injunction against the Chief Engineer. That suit was, however, dismissed on 16-3-1970. Meanwhile the petitioner filed an application on 18-8-69

u/s 20 of the Arbitration Act. The learned Judge was of the opinion that the petition was not maintainable as in his view, Sec- 34 of the Arbitration

Act delimits the stage upto which reference to arbitration might be sought in a matter touching an arbitration agreement about which legal

proceedings have already been taken. The stage lasts upto the filing of the written statement or taking of any other steps in the proceedings.

According to the learned Judge that stage was over and therefore the right of the petitioner to invoke the arbitration clause had become extinct and

it could not be held to survive for purposes of Sec. 20 of the Act. He therefore, dismissed the petition, Aggrieved by this order the petitioner

appellant has come up in appeal before this court.

We have heard the arguments in the case.

On a perusal of the civil file No. 57 entitled Pran Nath v. Chief Engineer Irrigation decided by the Sub Registrar. Srinagar, on 16-3-70 it would

appear that the appellant had brought a civil suit with the same allegations. He made similar averments in the plaint as in the petition. In the suit he

disputed the power of the Chief Engineer to have modified the rates. He therefore, asked the civil court to consider this matter quash the notice of

demand, and grant a decree for perpetual injunction against the Chief Engineer. Now the matter upon which the petitioner appellant sought

arbitration by means of an application u/s 20 of the Arbitration Act was precisely the same as in the civil suit which was pending before the civil

court. That suit was, however, dismissed by the civil court. In fact it was during the continuance of the proceedings of the civil suit that the appellant

filed an application u/s 20 of the Arbitration Act. In the said application he did not make any mention of the pendency of the civil suit in the Civil

court. This fact he suppressed in the petition before the District Judge.

Now u/s 9 of the C. P. C. all suits are triable by civil courts unless their cognizance is expressly barred by any statute. The ordinary rule is that

civil courts do possess jurisdiction to try all kinds of suits which those courts are competent to try and decide Should however, there be an

arbitration agreement between the parties that would not necessarily oust the jurisdiction of the civil courts but the arbitrator being a judge of the

choice of the parties priority to decide the case is his, By conduct if the parties decide to refer the case to the arbitrator and are willing to do all

things necessary for this purpose, and also are prepared to abide by the decision of the arbitrator, then the civil court should stay its hands, in order

to enable the arbitrator to give his award in the case. But where the party himself chooses to invoke the jurisdiction of the civil court, submits to it.

does not avail of the arbitration clause, files a regular suit in which the defendant appears and contests the suit and ultimately the suit is dismissed he

cannot afterwards claim the benefit of the arbitration clause and ask the court to enforce the said clause against the second party. Having once

submitted to the jurisdiction of the civil court he cannot file a subsequent application making the same averments therein as he had made in the

plaint. The authorities Abdul Kadir Shamsuddin Bubere Vs. Madhav Prabhakar Oak, and Ramvallabh Tibrewalla Vs. Dwarkadas and Co., relied

upon by the counsel for the appellant have got no application to the facts of the present case and they are distinguishable Neither in Abdul Kadir

Shamsuddin Bubere Vs. Madhav Prabhakar Oak, nor in Ramvallabh Tibrewalla Vs. Dwarkadas and Co., was there any question involved relating

to the pendency or dismissal of a suit by a party to an arbitration agreement. The ratio as laid down in Abdul Kadir Shamsuddin Bubere Vs.

Madhav Prabhakar Oak, , is that where parties enter into an arbitration agreement knowing full well that there is another person who is interested

but leave such person out, the court may send the parties to the forum of arbitrator chosen by them, even if the other person who might be

interested and whose share is not in dispute cannot be made party before the arbitrator. That was an application made under Sec. 20 of the

Arbitration Act for filing of agreement to refer the dispute to arbitration. In order to be more precise about the defence in that case it is worthwhile

to know the objections raised in that case. The grounds on the basis of which the petition was resisted and arbitration was sought to be avoided

were as under:-

(1) That the widow (interested in the case) admittedly had a share in the forest and as she was not a party to the application there could be no

reference to arbitration as the whole dispute as to the forest would not be before the arbitrators.

(2) The respondents only desired in their application that the disputes arising out of the agreements of October, 22, 1948 and February 27, 1953

be referred to arbitration but did not include the agreement of May 5, 1952, and therefore no reference could be made as it would be piecemeal

reference resulting in splitting up the cause of action.

(3) The dispute sought to be referred was not covered by the arbitration clause.

(4) The respondents had made allegations of fraud against the appellant in their application and that was also a ground for not referring the dispute

to arbitration.

From the above it is clear that the points raised and decided in the said authority were altogether different from those that are involved in the

case before us. Again, in Ramvallabh Tibrewalla Vs. Dwarkadas and Co., the facts were that by an arbitration agreement while the suit was

pending the parties intended to withdraw it 60 that the disputes might be resolved without recourse to the litigation. The suit was withdrawn

accordingly on the same date. Their Lordships before whom the point relating to the maintainability of the petition was debated held that the

agreement could be filed u/s 20 even though it was signed by the parties while the suit was pending. The essential condition upon which the

arbitration agreement became operative was the withdrawal of the suit. The agreement had been entered into while no suit with respect to the

subject-matter was pending before reference to arbitration was valid. It is obvious that that is not the case before us. Here no suit was withdrawn

by the parties in order to refer the dispute to the arbitrator. In fact the suit was pending and was contested by the parties at the time when the

application under Sec. 20 of the Arbitration Act was made by the appellant. The suit was dismissed. Such an application could hardly lie.

We are, therefore, of the opinion that the order of the learned District Judge dismissing the application of the appellant does not suffer from any

legal flaw and the same is upheld. The appeal is dismissed but leaving the parties to bear their own costs.

Appeal dismissed.