TAJ FINANCING AND TRADING CO Vs. INDER DEV

JUDGEMENT

(1.) M/s.Taj Financing and Trading Company (hereinafter referred to as the Company) had advanced huge amount to Inder Dev Gupta. The amount of Rs.86,080/- was due to the Company according to the accounts of the Company and for recovery of the same, a civil suit was filed. In the civil suit Bansi Lal and Suraj Chand alias Swaraj Chand were impleaded as defendants as they were the guarantors. Two more persons were impleaded as defendants as in the loan agreement it was mentioned by Inder Dev Gupta that he was taking the loan for himself and on behalf of those persons. When notice of the suit was received by Inder Dev Gupta, he filed an application under S.34 of the Arbitration Act (hereinafter referred to as the Act) and claimed that the suit be stayed as there was an arbitration agreement between him and the Company and reference had already been made to the three named arbitrators. The trial Court allowed the application of Inder Dev Gupta and stayed the suit by order dated 19-2-1979. This is appeal by the Company.

(2.) SHRI P.S. Sandhu, Advocate, appearing for the Company has urged that the arbitration agreement was only between the Company and Inder Dev Gupta and in the agreement the two guarantors were not associated and, therefore, on these facts an arbitration agreement would not stand in the way of filing of the suit and S.34 of the Act was not applicable. In support of the argument, reliance is placed on (1) Asiatic Shipping Co. (Private) Ltd. v. P. N. Djakarta Lloyd, AIR 1969 Cal 374, (2) Chartered Bank v. Commr. for the Port of Calcutta, AIR 1972 Cal 198 and (3) Barium Chemicals Ltd. v. Bombay Industrial and Chemical Company, Bombay, AIR 1977 Andh. Pra. 400.

(3.) MOREOVER, S.5 of the Act is not applicable. What is provided by S.5 of the Act is that the authority of an appointed arbitrator or umpire cannot be revoked except with the leave of the Court. Here no body is seeking to revoke the authority of the arbitrator or umpire. As already noticed, two of the arbitrators themselves have refused to enter into reference. Hence there is no merit in the argument that the reference should be got revoked. S.5 of the Act is not applicable for any such matter.