- (1.) These appeals by special leave are directed against the order of the Calcutta High court dated 2/02/1973. Brief facts necessary for the determination of these appeals are that Shri Gouri Sankar Sarda (hereinafter referred to as 'respondent 1') filed a Suit No. 1783 of 1965 in the Calcutta High court against R. Mcdill and Company Pvt. Ltd. (in short appellant 1, Misrilal Dharmchand (Pvt. ) Ltd. (in short appellant 2 and Shri Misrilal Jain for the recovery of some amounts as well as for some other reliefs. On or about 15/12/1965 both appellants 1 and 2 who were also defendants in the suit submitted a joint application in the High court for staying proceedings of the aforesaid suit, under S. 34 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act'). In view of some formal defect in the application the High court by order dated 25/02/1966 gave permission to withdraw the said application with liberty to file a fresh application. As the entire case hinges on the above order dated 25/02/1966, relevant portion of the said order is reproduced as under: "Application withdrawn with liberty to make a fresh application. Cost to be paid by the applicant. "though the above order does not make a mention of the formal defect, but according to the appellants the permission to withdraw was sought as no copy of the plaint was annexed with such application. Thereafter, on 21/03/1966 appellants 1 and 2 instead of making a joint application submitted two separate applications for staying the suit against the respective appellants and in the alternative for stay of the suit as a whole. These applications were resisted by the plaintiff-respondent 1 on the ground that separate applications were not in terms of the order dated 25/02/1966 and hence no stay should be granted. Learned Single Judge upheld the objection raised by the plaintiff and refused to stay the suit. On appeal the division bench of the Calcutta High court by order dated 2/02/1973 dismissed the appeal. The division bench took the view that liberty was granted to make a fresh application and as such, under the provisions of Order XXIII of the Code of Civil Procedure, the appellants had no right to move two separate applications for staying the suit.
(2.) Aggrieved against the aforesaid order of the High court dated 2/02/1973 the appellants have filed these appeals by the grant ofspecial leave. Order XXIII Civil Procedure Code as it existed at the relevant time is reproduced as under: "Xxiii : Withdrawal and adjustment of suits 1. Withdrawal of suit or abandonment of part of claim.- (1 At any time after the institution of a suit, the plaintiff may as against all or any of the defendants, withdraw his suit or abandon a part of his claim: (2 Where the court is satisfied- (A) that a suit must fail by reason of some formal defect, or (B) that there are other sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claimit may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or abandon such part of a claim with liberty to institute a fresh suit in respect of the subject matter of such suit or such part of a claim. (3 Where the plaintiff withdraws from a suit, or abandons part of a claim, without the permission referred to in sub-rule (2, he shall be liable for such costs as the court may award and shall be precluded from instituting any fresh suit in respect of such subject matter or such part of the claim. (4 Nothing in this rule shall be deemed to authorise the court to permit one of several plaintiffs to withdraw without the consent of the others. "
(3.) It was contended on behalf of the appellants that the provisions of Order XXIII were not applicable in the matter of applications filed under S. 34 of the Arbitration Act. It was contended that the provisions of Order XXIII could only apply to the proceedings of a suit and not in respect of any applications filed under the Act. It was submitted that the High court committed an error in taking a highly technical view of the matter that initially a joint application was submitted for staying the suit and liberty was given to withdraw the same and to make a fresh application and as such the appellants were not entitled to submit two separate applications though for the same purpose. It was contended in this regard that there were two separate agreements between the plaintiffs and appellants 1 and 2 containing an arbitration clause and as such the appellants were given a legal advice to submit two separate applications for staying the suit and the High court should not have dismissed the applications on the ground that liberty to file fresh application was given in respect of one application only. Learned counsel for theappellants in support of his contention placed reliance on Nawab Usmanali Khan v. Sagarmal.;