Rajendra Prasad & Another vs Suraj Mukhi Singh Others

K.N. Misra, J.—This First Appeal From Order No. 32 of 1981 is directed against the judgment and order dated 29.11.80 passed by the Civil Judge, Bahraich, on an application moved by the plaintiffappellant (C224) which was filed on 31st August, 1979 in

Regular Suit No. 18 of 1958. Briefly stated, the facts of the case are as follows:

In respect of the properties situate at Lucknow, Kheri and Bahraich, an agreement was arrived at between the parties to refer the dispute to the named Arbitrator Sri Baij Nath Prasad Agrawal. An application under section 20 was filed by the respondents for reference to the Arbitrator which was registered as suit No. 18 of 1958. This application under section 20 of the Arbitration Act was filed in the Court of Civil Judge. Lucknow. It appears that prior to the filing of this suit under section 20 a Regular''Suit for partition (Suit No. 18 of 1958) was filed by the �plaintiffs Mangal Prasad and Rajendra Prasad. The learned Civil Judge. Lucknow, by his order dated 9.9.1961, made a reference of the dispute to the said named Arbitrator under Section 20 of the Act. Against this order an appeal (FAFO No. 57 of 1961) was filed in this Court. It appears that in the meantime an application, under section 34 was moved by the defendantsrespondents in the aforesaid Suit No. 18 of 1958 for staying proceedings in the suit, on the, ground that an agreement vas entered into between the parties for reference of dispute to the arbitrator and in pursuance of it reference petition under section 20 of the Act has been made and, as such, proceedings in the suit be stayed. This application was rejected by the Civil Judge by his order dated 19.9.1959. Aggrieved by that Order the respondents filed appeal (FAFO No. 35 of 1959) in this Court and further proceedings in the said suit were ordered to be stayed by this Court, The aforesaid appeals along with Appeal No. FAFO 48 of 1960 were heard and disposed of by this Court by judgment and order dated 14th December, 1977, and the order making reference to the Arbitrator under section 20 was upheld and the proceedings in the aforesaid regular suit for partition were stayed.

It appears that on 31.8.1979 an application (C224) was moved by the defendantappellants in the present Regular Suit No. 18 of 1958 for revoking the authority of the Arbitrator and for deciding the case on merits. This application was allowed exparte by the learned lower court by order dated 12.11.79 and the authority of the said Arbitrator was revoked and the ease was directed to proceed exparte against the respondents. Subsequently, by order dated 19.2.80 the plaintiffs were directed to propose the name of another Arbitrator within ten days and notices were directed to be sent to defendant Sukhbir Singh through registered cover and rest of the defendants were ordered, to be served by publication because it was observed that they are not interested It in proceeding with the suit and the steps by ordinary process would be futile.

It appears that Sri Raghubir Saran Srivastava, Advocate, whose name the plaintiffs proposed as an Arbitrator in this case, expressed his consent by noting on the margin of the order sheet of 19.5.80, but before the Arbitrator could be appointed, an objection (C239) was filed by the defendants on 7.10.80 wherein it was asserted that the authority of the Arbitrator could not be revoked by this Court and the exparte order dated 12.11.79 be recalled. The learned Civil Judge, Bahraich by the impugned order dated 29th November, 1980 set aside the aforesaid order and directed the proceedings to remain stayed in view of the decision of this Court dated 14.12.77 passed in the aforesaid appeals,and also in w FAFO No. 48 of 1960. Aggrieved by this order the plaintiffsappellants have preferred this appeal.

We have heard the learned counsel for the parties at some length and have perused the impugned orders as well as the relevant record.

Learned counsel for the respondent, Sri P.N. Mathur, urged that the application (C224) moved by the petitioner for the removal of the Arbitrator and for revocation of his authority, was not maintainable before the learned Civil Judge, ''in the aforesaid suit. His contention was that an application under Section 5 and 11 of the Arbitration Act could be filed only before the Court making reference to the Arbitrator. Placing reliance on sub clause (4) of Section 31, the learned counsel urged that since the reference was made by the learned Civil Judge, Lucknow, to the Arbitrator under Section 20 of the Act and as such no other court could entertain any application in the matter arising out of that reference. In reply, the learned counsel for the appellants, Sri H.S. Sahai, urged that the suit for partition was filed in the court of Civil Judge, Bahraich which is still pending. He has urged that since the application under Section 34 of the Arbitration Act was moved in the aforesaid suit, as such the application for the removal of the Arbitrator and for the revocation of his authority be filed before the learned Civil Judge, Bahraich under section 5 read with section 11 of the Act, He urged that since the Award could be filed by the Arbitrator in, the aforesaid pending suit before the Civil Judge, Bahraich, and as such, the application for removal of the Arbitrator could be filed in the said Court and that the said referred provision, subClause (4) of Section 31, would not operate to oust the jurisdiction of that Court, We have given our anxious consideration to the arguments advanced by the learned counsel for the appellants and we find much substance in the submissions made by the learned counsel for the respondents.

Section 31 relating to jurisdiction reads as follows;

�31 (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates.

(2) Notwithstanding anything contained in any other law for the time being in force and.save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be filed and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been or may be filed and to no other Court.

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

Subsection (1) of Section 31 provides that an award may be filed in any court having jurisdiction in the matter to which the reference relate (emphasis supplied by us).

Subsection (4) of Section 31 provides that notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent application arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court (Emphasis supplied by us).

These provisions do indicate that all subsequent applications arising out of that reference and the arbitration proceedings can only be filed in the Court making the reference and in no other court.

Section 11 of the Arbitration Act provides that the Court may, on tile application of any party to a reference remove an arbitrator who fails to use all reasonable dispatch in entering on and proceeding with the reference and making an award. It, thus, appears that an Arbitrator, who, id the absence of any reasonable cause and justification, fails to decide the case, within a reasonable time, can be removed on an application of any party to a reference by the court which had made reference to the Arbitrator. And the authority of the appointed arbitrator in proceeding with the reference and making the Award can be revoked only with leave of the Court making the reference as is envisaged by section 5 of the said Act. In the present case since reference under section 20 was made by the learned Civil Judge, Lucknow, and, as such, any party to that reference could move an application only in that Court for the revocation of the authority of the Arbitrator or for his removal on the grounds stated in section 11 of the Act. Section 31 (4) of the Act clearly bars the jurisdiction of other court in entertaining an application under sections 5 and 11 of the Arbitration Act.

In Harbans Singh v. Union of India (AIR 1961 Cal. 659) P.C. Mallick, J. expressed the view, with which we respectfully agree, that the two conditions must be fulfilled to give the Court exclusive jurisdiction under section 31 (4) of the Arbitration Act. First, an application must be made in the court under the Arbitration Act and, second, the application must be made �in any reference.� Application under Section 34 is, no doubt an application under the Arbitrator Act. But it is not an application under the Act in reference in a court competent to entertain itas contemplated by section 31 (4) of the Act.

In this view of the matter we find that although the application under Section 34 was moved in the aforesaid Regular Suit No. 18 of 1958 in the court of Civil Judge, Bahraich but that Court does not get jurisdiction to entertain application under sections 5 and 11 of the Act for the removal of the Arbitrator and for revocation of the arbitrator''s authority and for recalling the reference to the Arbitrator.

In Harbans Singh''s case (supra) a suit filed by the plaintiff in the Calcutta High Court was stayed under section 34, Arbitration Act at the instance of the defendant, Union of India, Thereafter the Government referred the dispute to the arbitration of ''M'' under the arbitration clause in the contract. The arbitrator could not make the award within the prescribed time owing to the delaying tactics adopted by the plaintiff. Extension of time to make the award was granted by the Dhanbad Court which had jurisdiction in relation to the subjectmatter of the reference. Before the expiry of the extended time the plaintiff filed an application in the Calcutta High Court to supersede the arbitration agreement, to revoke the authority of the arbitrator and to vacate the order of stay of suit.

On these facts it was held that the application insofar as it related to the prayer for superseding the arbitration agreement or revoking the authority of the arbitrator could not be entertained as the Calcutta High Court had no jurisdiction over the arbitration proceedings within the meaning of section 31 (4) of the Arbitration Act. It was only the Dhanbad Court which had exclusive jurisdictionfender section 31 (4) to entertain any application in respect of the reference.

In the present case it is not disputed that the reference was made under section 20 of the Act by the Civil Judge, Lucknow and as such the application for revocation of the authority of the Arbitrator and the removal of the Arbitrator could only be made before the learned Civil Judge, Lucknow and not in the aforesaid suit pending before the Civil Judge, Bahraich. The learned Civil Judge, Bahraich has, therefore, rightly recalled his earlier orders dated 12.11.79 and 19.2.80.

The learned counsel urged that since the Arbitrator has not completed arbitration proceedings which are pending ever since 1961 and, as such, the order staying proceedings under section 34 in, the aforesaid suit deserves to be recalled and the suit deserves to be decided on merits by revoking the authority of the Arbitrator. We are unable to agree with this contention.

So far as revoking the authority of the Arbitrator is concerned we have already observed that the learned Civil Judge, Bahraich could not consider that prayer as he had no jurisdiction to entertain the said application for revocation of the authority of the Arbitrator or for removal of the Arbitrator and appointing another one in his place.

So far as recalling the stay order passed under section 34 of the Arbitration Act is concerned, we find that this Court by order dated 14.12.77 has directed the proceedings in the aforesaid suit to remain stayed. The learned Civil Judge, therefore, could not proceed to decide the case oh merits by recalling the order of stay. The suit can be decided and disposed of on merits only if the arbitrationreference has been decided on merits and the Arbitrator files the Award before the competent court or the arbitration becomes infructuous. The proceedings in the aforesaid suit were ordered to be stayed by order of this Court dated 14.12.77 and, as such, the learned Civil Judge, in our opinion, committed no error in refusing the prayer of the plaintiffappellants.

In view of what has been stated above, we find that.the appeal is devoid of any merit and is accordingly dismissed. We however, make it clear that the plaintiffsappellants, may seek their remedy in the matter before the competent court, if they are so advised. In the circumstances of the case we direct the parties to bear their own costs.

(Appeal dismissed)