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Raghubar Dayal and Durga Prasad Vs. Strauss and Company - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad
Decided On
Judge
Reported in(1921)ILR43All279
AppellantRaghubar Dayal and Durga Prasad
RespondentStrauss and Company
Excerpt:
act no ix of 1899 (indian arbitration act), section 19 - subject matter of pending suit referred to arbitration--order under section 19 staying suit--arbitration ending in an award--formal order revoking stay and dismissing suit unnecessary. - - if that were the correct view, clearly the stay would have to be removed before any final decree could be passed......made an application on the 21st of february to remove the stay of the 27th of august. the learned judge obviously felt great difficulty about it and with considerable reluctance finally made an order removing the stay which he himself had granted, the effect of which was to revive the suit, although the matter had been disposed of according to law by arbitration. the defendant appeals from that order, in support of the learned judge's order it is suggested that in any event, even in a case where the matter in dispute has been referred to arbitration, if a suit has been instituted, it is necessary that there should be a final decree dismissing the suit. if that were the correct view, clearly the stay would have to be removed before any final decree could be passed. we have come.....
Judgment:

Piggott and Walsh, JJ.

1. This appeal and the connected revision No 49 of 1920, are brought against an order of the District Judge of Cawnpore, dated the 21st of February, 1920. On the 27th of August, 1919, ho had stayed a suit upon the ground that the parties had submitted the matter to arbitration in accordance with the terms of the contract between them. In the meanwhile an arbitrator had been appointed, an award had been made, and a decree passed in pursuance of the award. For some reason or another the present respondents made an application on the 21st of February to remove the stay of the 27th of August. The learned Judge obviously felt great difficulty about it and with considerable reluctance finally made an order removing the stay which he himself had granted, the effect of which was to revive the suit, although the matter had been disposed of according to law by arbitration. The defendant appeals from that order, In support of the learned Judge's order it is suggested that in any event, even in a case where the matter in dispute has been referred to arbitration, if a suit has been instituted, it is necessary that there should be a final decree dismissing the suit. If that were the correct view, clearly the stay would have to be removed before any final decree could be passed. We have come to the conclusion that no final decree is necessary. Without faying that there are no cases in which a stay could possibly be removed--for example, the parties by consent might decide to drop the arbitration and relegate their dispute to the courts of law; in such a case, by the consent of parties, no doubt a stay could be removed--it is clear that where the circumstances are the same, as they were in this case, as at the time when the stay was originally imposed, the Judge is functus officio, and cannot reverse his own order.

2. If the order of the 21st of February had not been made or if it were now reversed, the original stay order of the 27th of August would remain in force. Ordinarily a stay is permanent unless the order directing it provides otherwise by imposing some terminus. In the case of Sheo Babu v. Udit Narain (1914) 12 A.L.J. 757, to which we were referred in the course of argument, it was suggested that my brother PIGGOTT had said that the suit in such a case would have to be formally dismissed upon a finding that the matter had been otherwise disposed of. While agreeing with everything which was said in that case, we do not think that it was intended to lay down any definite practice fen this particular matter, which was not necessary for the decision. We have consulted the learned Judge of the English department, and we have come to the conclusion that a stay order under Section 19 of the Arbitration Act, when arbitration has in fact taken place, is sufficient finally to dispose of the suit. The intention of the Legislature was to oust the jurisdiction of the ordinary courts, and any procedure other than that provided by the Arbitration Act in matters which are referred to arbitration, would only create difficulty and confusion. There ought to be no difficulty so far as the file and records in the lower court are concerned in disposing of the suit which has been stayed. We would only further observe that it is satisfactory to note that the dispute arising out of this contract was disposed of by a decree within less than six months from the institution of the suit. The appeal and revision of the defendant against the order of the 21st of February, must be allowed with costs and the learned Judge's order set aside.


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