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Standard Batteries Ltd. Vs. Casings (India) Pvt. Ltd. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtMumbai High Court
Decided On
Case NumberChamber Summons No. 46 of 1978 in Arbitration Suit No. 1082 of 1977
Judge
Reported in(1979)81BOMLR331
AppellantStandard Batteries Ltd.
RespondentCasings (India) Pvt. Ltd.
Excerpt:
arbitration act (x of 1940), sections 20(2), 41 - letters patent of the bombay high court, clause xii - civil procedure code (v of 1908) - whether application under section 20 is suit within d, xii.;the phraseology used in section 20(2) of the arbitration act, 1940 makes it clear that an application for filing an arbitration agreement is required to be numbered as a suit; not that such application is a suit or even that is to be by way of a suit. the re quirement that such application should be numbered and registered as a suit is procedural.;the application under section 20 of the arbitration act does not partake of the requirement of what is ordinarily understood to be a civil suit. the test for determining whether a proceeding is a suit to which clause xii of the letters patent can..........of section 20 of the arbitration act, 1940, a suit within the meaning of clause xii of the letters patent?2. the plaintiffs have filed this suit under section 20 of the arbitration act asking that the arbitration agreement between the parties should be taken on the file of this court and an order of reference to an arbitrator be made in respect of the disputes between them. the plaintiffs obtained leave under clause xii of the letters patent upon the averments that supplies of material had been made in bombay, payments were made in bombay and the agreement was signed in bombay; the plaintiffs contended that a material part of the cause of action has arisen in bombay.3. the defendants have taken out this chamber summons for revocation of the leave granted under clause xii of the.....
Judgment:

Bharucha, J.

1. A neat question of some importance arises in this matter: - Is an application or suit filed under the provisions of Section 20 of the Arbitration Act, 1940, a suit within the meaning of Clause XII of the Letters Patent?

2. The Plaintiffs have filed this suit under Section 20 of the Arbitration Act asking that the arbitration agreement between the parties should be taken on the file of this Court and an order of reference to an arbitrator be made in respect of the disputes between them. The plaintiffs obtained leave under Clause XII of the Letters Patent upon the averments that supplies of material had been made in Bombay, payments were made in Bombay and the agreement was signed in Bombay; the plaintiffs contended that a material part of the cause of action has arisen in Bombay.

3. The defendants have taken out this Chamber Summons for revocation of the leave granted under Clause XII of the Letters Patent. In the affidavit filed in support of the Chamber Summons, the defendants contend that no part of the cause of action has arisen in Bombay; alternatively, that the balance of convenience requires that the leave should be revoked.

4. At the hearing before me, the only point canvassed by Mr. J. I. Mehta appearing on behalf of the defendants was that leave under Clause XII could not be granted in a suit under Section 20 of the Arbitration Act and that the leave granted should, accordingly be revoked. Mr. Mehta relied upon the provisions of Section 20 of the Arbitration Act and particularly upon Sub-section (2) thereof to contend that an application under Section 20 of the Arbitration Act was required to be 'numbered and registered as a suit' and that it was thus clear such application was not a suit of a civil nature to which Clause XII of the Letters Patent could apply. Mr. Mehta also relied upon Section 41 Sub-section (a) of the Arbitration Act in support of his contention, that it was the Code of Civil Procedure, 1908, alone which applied to proceedings under the Arbitration Act and that the Letters Patent had no application. Mr. Mehta relied upon a judgement of the Calcutta High Court in the case of S. P. C. Engineering Co. v. Union of India : AIR1966Cal259 , wherein the Court was concerned with the very question which I am called upon to decide. In para. 12 of that judgment the following passages occur (p. 266):. In my judgment the test to be applied for determining whether a proceeding is a suit within the meaning of Clause 12 of the Letters Patent is not whether it is initiated by notice. The test is whether the proceeding is intended to terminate in a final adjudication of the rights of the parties by a decree in that proceedings ... In the case of an application under Section 20 however, all that the court is required to do is to pass of an order filing the agreement and making an order of reference. The proceeding comes to an end by the passing of the said order. The wording of Section 20(2) is the 'application shall be numbered and registered as a suit,' does suggest that it is not a suit in the fullest sense of the term.

5. This judgment was followed by the Calcutta High Court in, the case of Union of India v. Khem Chand Raj Kumar [1973] 1 Cal. 529.

6. Mr. Cooper, learned counsel for the plaintiffs fairly conceded that the law as laid down by the Calcutta judgments would appear to be correct.

7. That is also my view. I lay considerable stress upon the phraseology used in Section 20 Sub-section (2) of the Arbitration Act. That phraseology makes it clear that an application for the filing of an arbitration agreement in Court is required to be numbered and registered as a suit; not that such application is a suit or even that is to be by way of a suit. The requirement that such application should be numbered and registered as a suit is procedural.

8. The application under Section 20 of the Arbitration Act does not partake of the requirement of what is ordinarily understood to be a civil suit. I am respectfully in agreement with the test laid down by the Calcutta High Court in the case of S. P. C. Engineering Co. (supra) for determining whether a proceeding is a suit to which Clause XII, of the Letters Patent can apply namely, is the proceeding intended to conclude in a determination of the disputes between the parties? In an application, or 'suit', under Section 20 of the Arbitration Act the Court takes the arbitration agreement on file and refers the disputes between the parties to be determined by an arbitrator. That is the Court's only order. There is no determination by the Court of the disputes between the parties.

9. To my mind, therefore, an application or 'suit', under Section 20 of the Arbitration Act, 1940, is not a suit within the meaning of Clause XII of the Letters Patent. Consequently, leave under Clause XII cannot be granted in an application or 'suit' filed under the provisions of Section 20 of the Arbitration. Act.

10. In the result I hold that Clause XII of the Letters Patent is inapplicable to suits under Section 20 of the Arbitration Act, 1940. For that reason and that reason alone, Chambers Summons absolute in terms of prayers (a) and (b).


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