FOOD CORPORATION OF INDIA Vs. GURUKRUPA TRANSPORT CO

JUDGEMENT

(1.) The appellant herein is the original defendant and the res- pondent is the original plaintiff. The appeal is against the order of the learned Civil Judge Senior Division Rajkot dismissing the application filed by the defendant under sec. 34 of the Arbitration Act for stay of the suit in view of the arbitration agreement between the parties.

(2.) The facts leading to this litigation are as follows: The plaintiff filed a suit against the Food Corporation of India the appellant before me to recover the amount for the bills for services rendered by the pla- intiff for transport facilities placed at the disposal of the defendant by the plaintiff. These transport facilities were rendered by the plaintiff under a contract and the plaintiff also claimed for damages alleged to have been caused to the plaintiff by the alleged breach of the contract on the part of the defendant. The defendant filed an application under sec. 34 for stay of the proceedings in view of the arbitration agreement. The plaintiff objected to the application being granted and the grounds on which the plaintiff objected were that the defendant was not ready and willing to have the arbitration as per sec. 34 of the Arbitration Act nor was the Food Corporation of India ready and willing to take appropriate proccedings for arbitration. The main contention of the plaintiff was that on 3/05/1977 the plaintiff had requested the Food Corporation to have arbitration in accordance with the arbitration agreement and also to name the arbitrator for the purpose but the Managing Director of the defendant Corporation failed to accede to the proposal. Thereafter requests and reminders were sent on 3/05/ 19/06/1977 /06/ 4 1977 and 19/12/1977 It was the case of the plaintiff that a sister concern of the plaintiff namely Messrs. Mathurdas Girdharlal had filed Special Civil Suits No. 46 of 1978 and No 49 of 1978 and while the proceedings of those two suits were going on some talks of compromise took place and at that time the defendant came to know that the present plaintiff was also likely to file a suit within a short time and at that time the Corporation designated one Pathak as Arbitrator and that was done on 15/03/1979 As it turned out Pathak had died before 15/03/1979 and thereafter one Saxena was appointed Arbitrator on 17/04/1979 As a matter of fact the suit in which application under sec. 34 of the Arbitration was made was filed on 3/05/1979 that is after the arbitrator had been appointed by the Food Corporation of India. The learned Judge came to the conclusion that there was inaction on the part of the defendant for a period of two years and therefore he came to the conclusion that the defendant was not ready and willing to appoint the arbitrator upto 15/03/1979 and he further came to the conclusion that he appointments of 15/03/1979 and 17/04/1979 were with an oblique motive to have the defence in the suit blocked because the defendant apprehended that a suit would be filed by the plaintiff. According to the learned trial Court judge such inaction or silence in face of repeated requests amounted to unwillingness and unreadiness on the part of the defendant to refer the matter to arbitrators. His final conclusion was that the defendant Corporation was not ready and willing to appoint the arbitrator and hence the provisions of sec. 34 of the Arbitration Act were not attracted. He found that there was not sufficient ground for allowing the application and he therefore dismissed the application.

(3.) Mr. Shah for the respondent has drawn my attention to the decision of the Supreme Court in Uttar Pradesh Cooperative Federation Ltd. v. Sunder Bros. Delhi A.I.R. 1967 S.C. 249. There the scope of an appeal against an order passed under sec. 34 of the Arbitration Act was considered by the Supreme Court and it was held that where the discretion vested in the Court under sec. 34 has been exercised by the lower Court the Appellate Court would be slow to interfere with the exercise of the discretion. In dealing with the matter before it at the appellate stage the Appellate Court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it might have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial manner the fact that the appellate Court would have taken a different view may not justify such interference with the trial Courts exercise of discretion. If it appears to the appellate Court that in exercising its discretion the trial Court has acted unreasonably or capriciously or has ignored relevant facts then it would be open to the appellate Court to interfere with the trial Courts exercise of discretion.