Sri Lakshmi Narayan Padhi vs Sri B. Baskar Panda

S. Acharya, J.—The Plaintiff in Title Suit No. 187 of 1971 in the Court of the Subordinate Judge, Cuttack is the Appellant in this appeal.

The suit was one u/s 20 of the Arbitration Act with a prayer to refer certain disputes to the arbitrator.

The Court below on its own interpretation of the provisions of Section 69(3)(a) of the Indian Partnership Act (hereinafter referred to at the ''Act'') has arrived at the finding that the prayer and the reliefs claimed in this suit are clearly barred u/s 69(3) of the said Act and as such the suit is not maintainable, and on that finding it has dismissed this suit without costs.

Mr. Mohanty, the learned council for the Appellant, contended that the view of the provisions of Section 69(3) of the Act taken by the Court below is entirely wrong and has caused a miscarriage of justice in this suit.

The Court on a reading of Sub-section (3), Clause (a) of Section 69 of the Act found that the provisions in the two Clauses (a) and (b) of Sub-section (3) are not general exceptions to the rule laid down in Sub-sections (1) and (2) of Section 69. The Court also holds that a matter of this nature initiated on an application u/s 20 of the Indian Arbitration Act being a suit and not being a proceeding, exceptions in Clauses (a) and (b) of Sub-section (3) will not apply to this matter. The reasoning and the interpretation on which the Court holds as above are entirely wrong. The Court below has completely lost sight of and has not given due weight to the words "but shall not effect" appearing in Sub-section (3) of that section. Because of these words, all such matters, which specially come within Clauses (a) and (b) of Sub-section (3), are certainly excepted from the general provisions made u/s 69, and such matters are saved from the purview of the bar put on the institutions of suits and/or proceedings as per Sub-sections (1)(2) and (3) of Section 69. The words "other proceedings" in Sub-section (3) do not certainly govern the cases of (a) and (b) in Sub-section (3) because of the express words "but shall not affect" in the said Sub-section. The reasonings given by the court below for arriving at its conclusion are not very clear and lucid, but from a reading of the impugned order it is evident that the Court below gives an unwarranted wide interpretation to the words "other proceedings" in Sub-section (3) so as to include matters wring within Clauses (a) and (b) of Sub-section (3). Matters coming within Clauses (a) and (b) of that Sub-section may be agitated as suits or proceedings whichever course is permitted by law. If an application u/s 20 of the Indian Arbitration Act lies under that Act and on the facts of that particular case, then that case is to be registered, as a suit as provided under that section, and if that matter comes within Clause (a) or (b) of Sub-section (3) of the Indian Partnership Act, then that suit will not be affected by the bar provided under Sub-section (1), (2) or (3) of Section 69 because of the words "but shall not affect" in Sub-section (3) thereof.

Mr. Patnaik, appearing for the Respondent, fairly concedes that the grounds and reasonings on which the Court has found that the suit is not maintainable cannot be supported.

On the above considerations and the concession made by Mr. Patnaik, the finding of the Court below that the suit is not maintainable cannot be upheld. Hence the impugned order is set aside.

The matter should go back to the Court below for proper adjudication of all disputes arising between the parties including any question of maintainability of this suit if raised on any other ground. The Court below should dispose of the suit in accordance with law as early as possible.

The appeal accordingly is allowed. Each party to bear his own costs of this appeal.