S.K.ROY CHOWDHURY, J. - (1.) THIS is the second application under Section 20 of the Arbitration Act for filing the arbitration agreement dated 24th August, 1977.
(2.) SHORTLY the facts are that pursuant to an invitation of tender made by the respondent/defendant for construction of a paper plant building at Bagaha, District West Champaran in the State of Bihar the petitioning creditor submitted its tender and work order was placed by the respondent/defendant dated 16th August, 1977 and formal contract was entered into being dated 24th August 1977, a copy of which is annexed to the petition. The said contract contained an arbitration clause in the following terms : "In the case of any dispute/differences arise during the course of execution of this contract and/or thereafter relating to this contract, the matter/dispute/difference shall be referred to arbitration Of the Architect, namely, Messrs. Kothary and Co., Calcutta, whose decision shall be final and binding on both the parties." It appears that certain disputes arose between the parties in respect of the said contract and the petitioner-plaintiff alleged breach on the part of the Architect M/s. Kothari and Co., the named arbitrator in the said arbitration clause and the petitioner-plaintiff claimed certain amount and thereafter on or about 11th January, 1979 the petitioner-plaintiff instituted a suit being Title Suit No. 79 of 1979 (Messrs. Kalipada Das v. Messrs. North Bihar Sugar Mills Ltd.) in the City Civil Court inter alia praying for a decree for declaration that the said contract dated 24th August 1977 was still subsisting and also for injunction and other reliefs. In the said suit the plaintiff made an interlocutory application for temporary injunction against the respondent/defendant from obstructing the petitioner plaintiff from carrying out the work under the said contract which was rejected and from the said order the petitioner plaintiff preferred an appeal on 23rd January 1977 which was also dismissed on 25th February, 1980. On 23rd August, 1980 the petitioner plaintiff made the first application under Section 20 of the Arbitration Act before this court which was dismissed by S. C. Deb. J. on the 12th September, 1980 inter alia on the ground that there is a likelihood of conflicting decisions between the two forums, one being the said suit pending before the City Civil Court and another by the arbitrator if appointed under Section 20 of the Arbitration Act. It appears to me that in the said short judgment of Deb, J. dated 12th September 1980 his lordship held that there was sufficient cause not to make an order under Section 20 of the Arbitration Act. Subsequently the petitioner plaintiff made an application under Section 23 (1) (3) of the Code of Civil Procedure before the City Civil Court for withdrawing the said title suit unconditionally and for an order granting the petitioner leave and/or permission to institute fresh suit in respect of the subject-matter of the title suit No. 79 of 1979 in the approppriate court. The City Civil Court, 12th Bench by an order dt. 26th Sept. 80 made an order under Sec. 23, Rule 1, sub-rule (3) after contest and the petitioner plaintiff was permitted to sue afresh on the said subject-matter or cause of action if not otherwise barred and payment of Rs. 200/- was made a condition precedent to be made by the petitioner plaintiff to the respondent defendant. Thereafter the present application under Section 20 was presented on the 1st October, 1980 and after directions were given for filing affidavits the matter came up for hearing. Mr. Sunrhit Deb, appearing for the plaintiff-petitioner submitted that all the conditions under Section (20?) subsection (1) are satisfied and the respondent/defendant has failed to show sufficient cause why the arbitration agreement should not be filed and order of reference should be made as prayed for in the present petition. He also submitted that the previous Section 20 application was dismissed by Deb, J. only on the ground of possibility of conflicting decisions between City Civil Court and the arbitrator to be appointed under the Arbitration Act and such a situation should not be allowed to happen and, therefore, the application was dismissed. Mr. Deb submitted that thereafter the suit having been withdrawn under Order 23. R. 3, sub-rule (3) of the Civil Procedure Code the said suit is no longer pending and liberty was given to file a fresh suit on the same subject-matter and. therefore, the petitioner has instituted the present application under Section 20 which is to be treated as a suit under Section 20, sub-section (2) of the Arbitration Act. Therefore, all the conditions being satisfied an order should be made as prayed for.
(3.) MR. Bimal Chatterjee. appearing for the respondent/defendant, submitted that the petitioner-plaintiff having instituted a suit before the City Civil Court has indicated its intention to abandon the arbitration agreement and take recourse to ordinary course of law by filing the said suit. Therefore, that constituted a sufficient cause why the arbitration agreement should not be filed. He drew my attention to the order of the City Civil Court, a certified copy of which was produced in court being Order No. 39 dated 26th September. 1980 in the said Title Suit No. 79 of 1979 (M/s. Kalipada Das v. North Bihar Sugar Mills Ltd.) and submitted that leave was granted only for the purpose of filing a fresh suit on the same subject-matter and not for reference to arbitration by making an application under Section 20 of the Arbitration Act. Therefore, the petitioner-plaintiff is estopped from making this application under Section 20 and that constitutes sufficient cause for not granting the order as prayed for. He referred to the well known principle that the court is to exercise its discretion in making an order under Section 20 and the principle under Sections 20 and 34 of the Arbitration Act as to the exercise of court's discretion is same. Reference may be made to the decision of Gannon Dunkerlay and Co., . MR. Chatterjee also referred to the principle on which the discretion of the court is to be exercised and what is meant by sufficient cause under Section 20, subsection (4) of the Arbitration Act as laid down in the Supreme Court decision in Abdul Kader's case. Therefore. MR. Chatterjee submitted that the present application should be dismissed as sufficient cause has been shown by the respondent/defendant as to why the order should not be made for filing the arbitration agreement. MR. Chatterjee also pointed out that in the arbitration agreement the reference is made to named arbitrator being Kothari and Co., which is a firm of architect and well known engineers and not a tribunal of arbitration or a person who can be appointed as arbitrator. The said contention is not absolutely without subtance as it may be contended that a firm of architect cannot be appointed as an arbitrator as it is not a tribunal of arbitration which generally takes institutional arbitrations. For the purpose of the present application it is not necessary for me to make any comment on the said submission and express any final opinion on this aspect of the matter.;