GAYA ELECTRIC SUPPLY CO., LTD. Vs. THE STATE OF BIHAR

JUDGEMENT

(1.) THIS is an application by the pltf. for leave to appeal to the S. C. from an order of a Bench of this Ct. dated 30 -3 -1951, directing the suit instituted by the petnr. to be stayed under S. 34, Arbitration Act. The relevant facts are these:

(2.) THE petnr. (hereafter referred to as the pltf.) is a Company known as the Gaya Electric Supply Company Limited, incorporated under the Companies Act having its registered office at Gaya. The Company held a licence, called the "Gaya Electric Licence", granted by the Province of Bihar for the supply of electric energy within the limits of the town of Gaya. On 23 -6 -1949, the Govt., for certain reasons, revoked the licence by a notfn. with effect from 9 -7 -1949. Thereupon the petnr., on 4 -7 -1949, instituted Title Suit No. 58 of 1949 for a declaration that the order revoking the licence was 'mala fide' & 'ultra vires'. This suit, however, was compromised & the Province of Bihar agreed to acquire the undertaking on certain terms & conditions & an agreement was executed by & between the parties on 28 -10 -1949. There was an arbitration clause in the agreement which provided that in case of any difference or dispute between the parties over the payment of balance which may be found due after valuation, such dispute shall be submitted to the sole arbitration of a single arbitrator who should be a high Govt, officer of the Provincial Govt, of rank equal to or higher than a Divisional Commissioner & his award shall be final & binding on both parties.

(3.) ON 9 -10 -1950, the State of Bihar filed an application before the learned subordinate Judge of Gaya under S. 34, Arbitration Act, in order to have the matter in dispute referred to arbitration in accordance with the terms of the agreement & prayed for stay of further proceedings in the suit. The learned subordinate Judge refused to stay the suit & rejected the application of the State of Bihar by his order dated 18 -12 -1950. The State of Bihar thereupon preferred an appeal to this Ct. which was heard by Ramaswami &. Rai, JJ., who by their order dated 30 -3 -1951, set aside the order of the Ct. below & directed the suit to be stayed. The pltf. has, therefore, filed the present application for leave to appeal to the Supreme Court.