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Food Corporation of India, Hapur Vs. Ishwar Singh Bharat Bhushan, Barot - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 2600 of 1978
Judge
Reported inAIR1980All125
ActsArbitration Act, 1940 - Sections 34; Uttar Pradesh Civil Laws (Reforms and Amendment) Act, 1976 - Sections 19 and 36
AppellantFood Corporation of India, Hapur
Respondentishwar Singh Bharat Bhushan, Barot
Appellant AdvocateBrij Mohan, Adv.
Respondent AdvocateV.K. Goel, Adv.
DispositionRevision dismissed
Excerpt:
.....- section 34 explanation ii of arbitration act, 1940 - adjournment obtained on date of filing of written statement - explanation ii was not applicable on that date - does not have retrospective effect so as to apply to pending suits - held, no stay can be granted. - - an appeal filed against that order also failed. 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 the proceedings and if..........was fixed for filing the written statement. on that date the defendant appeared and prayed for time. time was allowed till december 22, 1976. on that date the defendant again applied for time which was granted till january 22, 1977. on january 22, 1977, the defendant appeared and moved an application for stay of the hearing of the suit under section 34 of the arbitration act. the arbitration agreement was set up and it was prayed that the matter in dispute be referred to arbitration. the application under section 34 was dismissed. an appeal filed against that order also failed. aggrieved, the defendant has come to this court in revision.2. section 34 of the arbitration act runs as follows:'34. where any party to an arbitration agreement or any person claiming under him commences any.....
Judgment:
ORDER

Satish Chandra, C.J.

1. On July 2, 1976, the plaintiff opposite party filed a suit for recovery of money against the Food Corporation of India. In the summons that were issued December 15, 1976 was fixed for filing the written statement. On that date the defendant appeared and prayed for time. Time was allowed till December 22, 1976. On that date the defendant again applied for time which was granted till January 22, 1977. On January 22, 1977, the defendant appeared and moved an application for stay of the hearing of the suit under Section 34 of the Arbitration Act. The arbitration agreement was set up and it was prayed that the matter in dispute be referred to arbitration. The application under Section 34 was dismissed. An appeal filed against that order also failed. Aggrieved, the defendant has come to this Court in revision.

2. Section 34 of the Arbitration Act runs as follows:

'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 the 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 and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings.'

3. One of the conditions for applying this provision is that the party applying for stay under Section 34 has not taken any steps in the proceedings or filed a written statement before the making of an application under Section 34. The courts below have held that on December 15, 1976 and December 22, 1976 the defendant took time to file a written statement. Thereby they have taken steps in the proceedings and hence were not entitled to apply for stay of the hearing of the suit under Section 34.

4. Learned counsel for the defendant applicant has invited my attention to the amendment of Section 34 of the Arbitration Act by the U. P. Civil Laws (Reforms and Amendment) Act, 1976 (U. P. Act No. 57 of 1976) which came into force on January 1, 1977. Section 19 of this Amending Act provides :--

'19. Amendment of Section 34. In Section 34 of the principal Act, at the end the following explanation shall be inserted, namely:

Explanation 1.

Explanation 2. A mere application for time to file a written statement or a mere contest to an interlocutory application for injunction, appointment of Receiver or the like, shall not, amount to taking any steps in the proceedings'.

5. Learned counsel submits that because of the statutory provision the prayer for time to file written statement made by the defendant could not be held to taking steps in the proceedings within meaning of Section 34.

6. To the question that the defendant applicant took time in December, 1976, prior to the coming into force of the Amending Act of 1976, learned counsel invited my attention to Section 36 of the Amending Act which provides :

'36 Disposal of pending civil cases -- A civil Suit, or Proceeding to which the Code of Civil Procedure, 1908 applies, pending on the date of commencement of this Act shall be disposed of in accordance with the provisions of the said Code as amended by this Act.'

7. The present suit was filed in 1976. It was pending on January 1, 1977, when the Amending Act came into force. It had to be disposed of in accordance with the provisions of the Code of Civil Procedures, as amended by this Act. The amendments introduced in the Code of Civil Procedure are not material or relevant in this case. The applicant relies upon an amendment to Section 34, Arbitration Act by adding Second explanation. Section 36 of the Amending Act does not extend to the amendments introduced to the Arbitration Act. It will not automatically apply to pending suits.

8. Learned counsel relied upon certain decisions in support of the proposition that a curative or declaratory law must be deemed to be retrospective. Section 34 of the Arbitration Act is neither curative nor declaratory. It amends the law. Previously a Division Bench of this Court in Union of India v. Hans Raj Gupta & Co. (AIR 1957 All 91) had held that taking of time in order to file a written statement is taking steps in the proceedings within the meaning of Section 34 and precludes a party from applying under that Section. This law was sought to be set at naught by the addition of the Second Explanation, It is more in the nature of amendment of the law rather than declaratory of it. I am, hence, not in a position to agree that the Second Explanation was retrospective in operation so as to apply to pending suits.

9. Even if it be held that it was retrospective, it will apply to time being taken to file a written statement after coming into force of the Act In the pre-sent case time was taken on December 15, 1976. Explanation II cannot catch or affect the action of the defendant in asking for and obtaining an adjournment on December 15, 1976, for filing the written statement, prior to coming in force of the explanation. The application under Section 34 was, hence, not maintainable and was rightly dismissed.

10. In the result, the revision has no force and is accordingly dismissed with costs.


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