Decided on February 04,1971

RAI AND SON (P) LTD. Appellant


Obul Reddi, J. - (1.) IN these two Civil Miscellaneous Appeals, one preferred by the plaintiff in O. S. No. 57/69 and the other by the defendant in O. S. No. 57/69 the scope of Section 34 of the Arbitration Act is involved.
(2.) ACCORDING to the plaintiff, it is a case where the defendant is seeking to raise a dispute de hors the terms of the contract between the parties; and according to the defendant, the agreement provides for any sort of dispute between the parties being submitted to arbitration by the body specified in the contract. The defendant made an application under Section 34 of the Arbitration Act in the court of the Chief Judge, City Civil Court, Hyderabad, praying that the suit filled by the plaintiff may be stayed pending disposal of the application made by the defendant in the High Court of Delhi for reference of the dispute under Section 20 of the Act. After laying the action in the lower Court, the plaintiff also made an application under Order 39, Rule 5, Civil Procedure Code, for attachment before judgment and alternative under Order 39, Rules 1 and 2, Civil Procedure Code, for an injunction restraining the defendant from alienating is properties pending disposal of the suit. The learned Chief Judge, on the application made by the plaintiff, granted an interim injunction and directed notice to the defendant under Section 34, the learned Chief Judge felt that the agreement is sufficiently comprehensive enough to refer the dispute that has arisen between the parties to arbitration and, therefore, ordered stay of the suit brought by the plaintiff.
(3.) MR. Venkatachar, the learned counsel for the plaintiff contended that there was absolutely no dispute at all between the parties under any of the terms of the agreement, the defendant having accepted the liability in every one of its letter; that it is only after the plaintiff issued a registered notice that it would be constrained to lay an action in the Civil Court, that it would be constrained to lay an action in the Civil Court, that the defendant, without notice to the plaintiff, filed an application under Section 20 of the Act before the Delhi High Court in order to defeat and delay the interests of justice; and that there is absolutely nothing to bear out from the correspondence between the parties that the defendant had raised any kind of dispute or any kind of dispute had arisen under the terms of the contract before the plaintiff filed the suit in the court below. MR. Madhukar Rao Ganu appearing for the defendant, contended that the terms of the contract are clear enough to entitle any one of the reference to arbitration; that by reason of the dispute relating to the supply of goods which did conform to the specifications and also the dispute relating to the payment of interest, the defendant sought reference to arbitration; and that there is absolutely no grounds to interfere with the order of the learned Chief Judge who had thoroughly exam, opened the material placed before him by both sides and given his findings thereon. It was next contended by MR. Ganu that the scope of Sec. 34, Arbitration Act, is of wide amplitude so as to entitle the court to stay not only the trail of the suit but also other proceedings initiated by the plaintiff in that suit and that the order of the lower court, to the extent that it refused to stay the further proceedings in I. A. No. 984 of 1969 filed by plaintiff for an injunction cannot therefore be sustained.;

Click here to view full judgement.
Copyright © Regent Computronics Pvt.Ltd.