Decided on April 11,1957

MOJI RAM Respondents


- (1.) THIS is an appeal by the Punjab State against the order of the Senior subordinate Judge, Hissar, by which the Govern-merit's application for stay of the suit filed by Moji Ram for the recovery of Rs. 7,750 has been dismissed.
(2.) MOJI Ram is a Government contractor. On the 1st of May 1951 he was given two contracts to construct at Canal Colony, Hissar, the senior clerk's quarters and Sub-Divisional Officer's bungalow. On 5-2-1952 he was given the contract to construct a V. R. bridge at Rana Distributary and a syphon at Balsamand Distributary. The work entailed in these contracts was described and detailed in work order forms. These forms show that each item of work was specified with rates. On the 3lst august 1954 the contractor filed the present suit for recovery of the balance due for the work done in constructing the buildings. With the plaint he filed the relevant work order forms and also three schedules. One schedule Rave the items of work which are covered by the work orders. The value of this work is Rs. 3. 608-3-0. The second schedule gives the items not covered by the work orders and its value is alleged to be Rs. 4,126-9-0. The third list gives the items of work done and paid for. Thus for the present proceedings we have only to consider the schedule giving the items which according to the plaintiff are not covered by the work orders. The trial Court fixed the 19th of November 1954 for appearance of the defendant. On this date the Government Pleader with one Kartar Singh, Sub-Divisional officer, appeared and asked for time to file written statement as Instructions with a copy of the plaint had not been received. The Court granted adjournment and fixed 17th of December 1954 for filing the written statement. On this date the government Pleader filed the application for stay of the suit under Section 34 of the Indian Arbitration Act. This application was contested by the plaintiff on the grounds that there was no arbitration agreement between the parties and that in any case the suit should not be stayed. Some evidence was lea by the parties and then the Court refused to stay the suit on the ground that the entire suit was not covered by the arbitration agreement, although a" finding was given in favour of the Government that the application for stay was not belated on -account of the Government Pleader's application for adjournment of the case on the 19th of November, 1954. When I last heard the case I found the judgment confusing and I sent the case back for report as to the items which were or which were not covered by the work orders and also for a report if the items not covered by work orders were subsidiary to the work entrusted to the contractor or independent of it. The report has now come. The Court has reported that most of the items in the disputed schedule are not covered by the work orders but that they are all subsidiary to the main contract. Unfortunately, the report is not very helpful as the trial Court has decided the matter of items in reference to the written statement filed by the Government after the dismissal of the application and not on the basis of the evidence produced by the parties for the purpose for which the case was sent down for report. The learned counsel for the respondent has argued before me that the application had been filed after a step in the suit proceedings had been taken by the Government and that the Government was not ready and willing to get the matter decided by arbitration. His main point however, is that the arbitration agreement did not cover the entire dispute in the suit and therefore the suit could not be stayed. I proceed to deal with these items in seriatim.
(3.) ON the 19th of November 1954 when the Government Pleader appeared he stated that he had not received any instructions or a copy of the plaint. There is nothing on the record to show if the plaintiff had filed a copy of the plaint to be served with summons on the Government, nor it can be gathered whether the government had at all been served by that time. The Gov-ernment Pleader filed an affidavit in the trial Court that at the time he had asked for adjournment he had no instructions from the Legal Remembrancer and Secretary to Government, punjab, to defend this case and that he was not conversant with its facts. There is no reason to disbelieve the Government Pleader on these points. The question arises whether in these circumstances the Government can be said to have taken "any steps in the proceedings. " I have not come across any case in which an effort has been made to define as to what is a step in the proceedings. Lindley, L. J. . in Ives and Barker v. Willans, (1894) 2 Ch 478 (A), has said : "the authorities shew that a step in the pro-ceedings means something in the nature of an application to the Court,. . . . . taking of some step, such as taking out a summons or something of that kind, which is, in the technical sense, a step in the proceedings. " In Subal Chandra Bhur v. Md. Ibrahim, AIR 1943 Cal 484 (B), it was held that an application must be made to Court and the act of making such application should indicate that the defendant is acquiescing in the dispute being decided by a suit in civil Court. Similar view has been taken in Nuruddin Abdulhusein v. Abu Ahmed, air 1950 Bom 127 (C ). It follows whether a particular application to Court amounts to a step in proceedings depends on the circumstances in each case and no absolute test can be laid down to determine it. It is however, clear, that such an application must be made by a defendant or under his authority. The Government Pleader had neither received the notice nor had he the authority under the notification appointing him to receive it. On the 19th of November 1954, when he ap-peared before the Court, he had no authority to represent the Government. He, In fact, did not know anything about the case, nor did he know its nature or the cause of action on which it was based. He did not even know whether the suit was based on a contract or on some other cause of action. He merely acted as a volunteer and asked for adjournment on the assumption that in due course be would receive instructions from the Government. In these circumstances it cannot be said that the Government, i. e. , the defendant, took any step at all in the proceedings. In any case application for adjournment in such circumstances really amounts to an application to get time to discover the exact nature of the suit and nothing more. It cannot at all be said that the application in the present case was made with a view to take a step In the proceedings within section 34 of the Arbitration Act. A similar view has been taken by Falshaw J. In Harbans Lal Narang v. National Fire and General Insurance-Co. , Ltd. , No. 45-D of 1952 (D), and I respectfully agree with this view. I have therefore no hesitation in rejecting this contention raised on behalf of the plaintiff. The only ground on which it is urged that the defendant was not ready and willing to do all things necessary to the proper conduct of the arbitration is that the Government did not reply to the plaintiff's notice given by him on 17-2-1953, i. e. about 1 1/2 years before the filing of the present suit. Silence of the defendant before the suit is filed, however, does not affect the applicability of Section 34 of the Arbitration Act, nor does it indicate that the defendant is not ready and willing to get the dispute decided by arbitration. It is only on receiving notice of the suit that the defendant has to make up his mind if he should enforce the arbitration agreement, but he should do so before filing the written statement or before taking any-step in the proceedings in the suit, vide Governor-General in Council v. Simla Banking and Industrial Co. . Ltd. , air 1947 Lah 215 (E ).;

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