Decided on December 10,1979



D.H.SHUKLA, M.K.SHAH - (1.) AN important question which arises in this appeal is as to whether the plaintiffs who filed a suit for dissolution and accounts of a partnership firm against the defendants who were partners along with the plaintiffs in that firm and whose suit failed on a decision on a preliminary point that the suit was not maintainable as the notice as required under sec. 43 of the Indian Partnership Act had not been given prior to filing of the suit can subsequently file an application under sec. 29 of the Indian Arbitration Act for getting the arbitration agreement filed in court. ... ... ... ... ... ... ...
(2.) IN view of the pleadings and in view of the application filed by defendant No. 1 at Ex. 16 under Order 14 Rule 2 of the Code of Civil Procedure the court framed preliminary issues as per ex. 26 viz. "(1)Whether the present suit is not maintainable as alleged in para 2 to (8) of the written statement of the defendant No. 1 ? (2) What order ?" After hearing the learned Advocates of both the sides and looking into the documents which were on record the court came to the conclusion that the plaintiff had abandoned their right to go in for arbitration by filing special civil suit No. 50 of 1970 against the defendants without resorting to the arbitration clause in the partnership deed; and the court therefore upheld the contention of the defendants that by virtue of the filing of the said suit prior to the present suit that is application under sec. 20 of the Arbitration Act which was converted into the suit the present suit was not maintainable. The court therefore dismissed the same and it is this order dismissing the suit on a decision on the preliminary point passed by the learned Civil Judge Senior Division Jamnagar on 18th June 1974 in Special Civil Suit No. 2 of 1973 which is assailed by the appellants in this appeal ... ... ... ... ... ... ... Mr. Shahs second contention is that the previous suit was a suit in which the final order which was passed was that of rejecting the plaint and not of dismissing the suit and it should therefore be treated as an order passed under Order 7 Rule 11(a) of the Code of Civil Procedure and the result therefore would be that on rejection of the plaint it will have an effect as if no such suit was filed. That means the action of the plaintiffs in filing the suit was an exercise in futility and that it was non est. It therefore cannot be said that by merely filing the said suit in which the plaint was rejected under Order 7 Rule 11(a) of the said Code the plaintiffs had done anything which would amount to waiver or abandonment of their right to enforce the arbitration clause contained in the partnership deed.
(3.) MR. Shah in further support of his argument has relied on a Full Bench decision of the Andhra Pradesh High Court viz. In re Chunduru Vankata Subrahmanyam A.I.R. 1955 Andhra 74. This was a case in which the court dispaupered a pauper and ordered him to pay the courtfees and on non payment of the court fees the suit was dismissed and while pointing out the distinction between rejection of a plaint under Order 7 Rule 11 and dismissal of a suit under Order 33 Rule 11 the court observed as follows at page 77: "In the absence of any ambiguity courts are bound to give full meaning to the words used by the Legislature. But the main distinction between O.7 R 11 and O.33 R. 11 is apparent. In the case of an order under O.7 R. 11 there is no provision for collecting the courtfee due to the Government for the simple reason that the plaint would be treated as if it Was not filed at all whereas in the case of dispaupering an express provision is made enabling the court to make an order for payment of courtfee It may be for that very reason the authors of the rule designedly used the word dismissal in contradistinction to the word rejection". MR. Shah therefore contends that in the instant case as the plaint was rejected it should be treated as if the suit was not filed at all and that therefore filing of the said suit cannot amount to abandonment of the right to enforce the arbitration agreement. MR. Shah also relied on Phaltan Bank Ltd. v. Saburao Appajirao and another A.I.R. 1954 Bom. 43. This was a case in which a pauper appeal against a preliminary decree was admitted as the court did not notice that it was filed beyond time. On a preliminary objection being taken the court treated the appeal as ordinary appeal and granted time for payment of court fee to the appellant. On the appellants failure the court passed an order in the form of dismissal of the appeal with costs. Formal decree was drawn up and it was held that inspite of this the order must be treated as one rejecting the memo of appeal under sec. 107 and Order 7 Rule 11 of the Code of Civil Procedure and that it was not a decree under sec. 2(2) of the Code of Civil Procedure and consequently the preliminary decree did not merge in it. The court also held: "Nor is it a decision of the appellate court on merits because in the case of an order made by the court of appeal rejecting the appeal on the ground that proper courtfees have not been paid the appeal virtually has not come before the court of appeal for disposal on the merits but has faded out for the reason that the preliminary steps to present the appeal before the appellate court properly and effectively were not taken by the appellant". ;

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