KEJRIWAL, J. - (1.) - This revision has been directed against the order dated 25. 4. 1990, passed by learned Additional District Judge No. 1 Alwar, whereby he set aside the order dated 12. 12. 1988, passed by learned Additional Civil Judge No. 1, Alwar.
(2.) THE relevant facts of the case giving rise to this revision are that late Shri Munshi Ram predecessor of the petitioners was dealer of M/s Indo Burma Petroleum Company Ltd. in the year 1972. He was the sole owner of this petroleum pump. Later on, on account of financial problems, he took the non-petitioner Sh. Ramawatar in partnership and the partnership deed was executed "on 11. 2. 1985. In this partnership deed, there was a clause that in case of dispute between the parties, the matter shall be referred to arbitration. Later on there was a dispute between the parties, the plaintiff Shri Munshi Ram served a notice on the defendant- non-petitioner Ramawatar on 17. 9. 1986, but the defendant did not reply the same. THE plaintiff again served a notice dt. 3. 10. 1986, asking the defendant for sending the names of two punchas so that the matter may be referred to the arbitrators for arbitration. Still the defendant remained silent and did not reply the said notice. Under these circumstances, the plaintiff had filed a suit against the defendant-non-petitioner No. 1 for rendition of accounts and injunction on 13. 10. 1986. On receipt of summon of the suit, the defendant on 23. 12. 86, filed an application under Section 34 of the Indian Arbitration Act (hereinafter referred to as 'the Act' ). THE defendant in this application admitted that the partnership deed was executed on 11. 2. 1985 but according to the defendant, the said deed came to an end on 21. 6. 1985 and the plaintiff received more than Rs. 30,000/- of a share in the business. In para No. 6 of the application, the defendant alleged as under : - "****hidni****" The trial court vide its order dated 12. 12. 88, held that the defendant was not willing and ready for arbitration on the date of the suit. The trial court found that now the defendant seems to be willing for arbitration but as the defendant was not ready and willing for arbitration on the date of the suit, hence the application under section 34 of the Act was dismissed. Against this order of the trial court, the defendant filed an appeal which was allowed by learned Additional District Judge No. 1, Alwar, vide his order dated 25. 4. 1990. The plaintiff Munshi Ram died and under these circumstances the petitioners who are legal representatives of the deceased Munshi Ram, being aggrieved with the order of learned Additional District Judge No. 1, dated 25. 4. 1990, have come in revision. I have heard learned counsel for the parties and perused the record. It has been argued by Mr. Mathur, learned counsel for the petitioner that the trial court while rejecting the application under Sec. 34 of the Act, submitted by the defendant gave cogent reasons and as such the appellate court should not have set aside the order of the trial court. He argued that it is not open to the appellate Court to substitute its own exercise of discretion for that of the trial Judge unless it appears to the appellate Court that the trial court has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach. He argued that under Section 34 of the Act, it is necessary for the defendant to be ready and willing for arbitration not only after the institution of the suit but also at the time of filing of the suit. He argued that the plaintiff served notice on the defendant on 17. 9. 1986, but the defendant remained silent. The plaintiff again served notice dated 3. 10. 1986, for referring the matter to the arbitrator but still the defendant remained silent. He further argued that even from the application of the defendant under Section 34 of the Act, it is apparent that the defendant was ready for arbitration only for the partnership business from 11. 2. 85 to 21. 6. 85. He submits that under these circumstances, the trial court was within its rights to reject the application of the defendant under Section 34 of the Act but the lower appellate Court erred in allowing the appeal only on the ground that the application under Section 34 of the Act, cannot be rejected merely from silence of the defendant. He argued that it is not a case of mere silence but looking to the whole conduct of the defendant, it can be said that the defendant was not ready for arbitration at the time of filing of the suit. In support of his arguments, Mr. Mathur placed reliance on AIR 1984 Patna, 291 (1), AIR 1983 Bombay 169 (2), AIR 1978 Calcutta 305 (3), AIR 1975 S. C. 469 (4), 1955 S. C. R. 862 (5), AIR 1955 S. C. (6) and AIR 1980 Allahabad 181 (7 ).
(3.) ON the other hand, Mr. Kasliwal, learned counsel for the defendant supported the order of learned District Judge No. 1, Alwar. He argued that the trial court rejected the application under Section 34 of the Act merely on the ground that the defendant did not reply to the notice served by the plaintiff. He argued that from mere silence it cannot be inferred that the defendant was always and still ready and willing for arbitration. In support of his argument, he placed reliance on judgments reported in AIR 1947 Lahore 215 (8), AIR 1979 Rajasthan 84 (9), AIR 1980 Goa 25 and AIR 1975 S. C. 469 (10), AIR 1958 Punjab 19 (11), AIR 1985 Patna 302 (12) and AIR 1957 Punjab 223 (13 ). Section 34 of the Arbitration Act reads as under : - "34. Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready any willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings. ";