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Gian Chand Vs. Tirath Ram Gupta - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 986 of 1971
Judge
Reported inAIR1973P& H210
ActsIndian Arbitration Act - Sections 33 and 34; Transfer of Property Act; East Punjab Urban Rent Restriction Act; Code of Civil Procedure (CPC), 1908 - Order 18, Rule 4 - Order XIX, Rule 1
AppellantGian Chand
RespondentTirath Ram Gupta
Cases ReferredKhandesh Spinning and Weaving Mills Co. Ltd. v. Rashtriya Girni Kamgar Sangh
Excerpt:
.....to hold that the adjournment was given in pursuance of a request made by the petitioner when the order granting the adjournment does not mention any such request. 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......verifying of rent of other shops in the market'. it was also averred in the application that the written agreement was handed over to the plaintiff. the prayer made by the petitioner, who asserted that he was at the time of the application and earlier 'ready to perform the agreement of arbitration on his part', was that the matters in dispute between the parties be referred to the arbitrators as agreed upon. this application was accompanied by an affidavit.the court directed the plaintiff to file his reply to the application on the 5th of july, 1971. on that date the plaintiff filed in court stamped application headed: 'reply of the application under section 34 of the indian arbitration act and application under section 33 of the said act on behalf of the plaintiff-respondent.' in this.....
Judgment:
ORDER

1. Tirath Ram Gupta, the plaintiff, brought a suit out of which this petition has arisen, against Messrs. Gian Chand Balmukand for the latter's ejectment from a shop-cum-flat designated by No. 7 and situated in Section 18-C, Chandigarh, as also for the recovery of a sum of Rs. 575.90 on account of arrears of rent and damages for unauthorised use and occupation of the same property. Gian Chand petitioner was served with a summons which was addressed to the defendant firm, on the 9th of June, 1971, when a copy of the plaint was delivered to him. The summons required the defendant firm to appear in Court on the 15th June, 1971, and to file its written statement. On the date last mentioned Shri V. P. Gagneja, Advocate, appeared on behalf of the plaintiff at the hearing whereat the petitioner was present in Court along with Shri R. S. Verma, Advocate, when the trial Court passed the following order :--

'For written statement to come up on 28-6-1971.'

On the 28th June, 1971, counsel for the parties appeared in Court and an application under Section 34 of the Arbitration Act (hereinafter referred to as the Act) was filed on behalf of the petitioner. The allegations made in that application were that 'during the month of April, 1971,' the plaintiff had contacted the petitioner with a demand for enhancement of the rent of the premises in dispute from Rs. 350/-to Rupees 450/-per mensem, that the two of them could not agree on the rate of future rent and that after some discussion they entered into an agreement which was reduced, into writing and according to which 'two shopkeepers of the market, one to be appointed by each party, as arbitrators' were to decide 'the dispute regarding enhancement of rent and ejectment after verifying of rent of other shops in the market'. It was also averred in the application that the written agreement was handed over to the plaintiff. The prayer made by the petitioner, who asserted that he was at the time of the application and earlier 'ready to perform the agreement of arbitration on his part', was that the matters in dispute between the parties be referred to the arbitrators as agreed upon. This application was accompanied by an affidavit.

The Court directed the plaintiff to file his reply to the application on the 5th of July, 1971. On that date the plaintiff filed in court stamped application headed:

'Reply of the application under Section 34 of the Indian Arbitration Act and application under Section 33 of the said Act on behalf of the plaintiff-respondent.'

In this application the alleged arbitration agreement was stoutly denied and it was prayed that the suit be proceeded with. In the accompanying affidavit the same stand was reiterated. The order passed by the trial Court at the hearing was :

'Reply filed. In his reply-cum-application under Section 33 of the Indian Arbitration Act the plaintiff had made a prayer that the question of existence of the arbitration agreement be decided on affidavits. Parties should file the affidavits. To come up on 12-7-1971'.

When the case was taken up on the 12th of July, 1971, in the presence of the counsel for the parties, an affidavit sworn by the defendant was filed by his counsel for the plaintiff stated that he did not want to file any fresh affidavit. The case was adjourned for arguments to the 19th of July 1971, and after hearing learned counsel for the parties, the trial Court dismissed the application made by the petitioner under Section 34 of the Act on the 22nd of July, 1971, with the finding that in fact no agreement to refer the matters in dispute between the parties to arbitration was ever arrived at and that the application had been filed merely to delay the proceedings in the suit. This finding was upheld in appeal by the learned District Judge, Chandigarh, who further came to the conclusion that the application made by the petitioner to the trial Court could not proceed inasmuch as the petitioner had taken a step in the proceedings of the suit on the 15th of June, 1971, by making a request which was accepted, for an adjournment to enable him to file the written statement. It is against the order of the two Courts below that the petitioner has come up in decision to this Court.

2. Mr. Siri Chand Goyal, learned counsel for the petitioner, has raised the following points before me :

(a) On the 15th of June, 1971, the Court adjourned the case of its own accord and not because any request in that behalf was made by the petitioner so that all that the petitioner did on that date was that he put in appearance in court in the company of his counsel and went away when the Court ordered that the written statement be files on the 28th of June, 1971.

(b) Not having asked for an adjournment of the case enabling him to file his written statement, the petitioner could not be said to have taken any step in the proceedings with in the meaning of Section 34 of the Act merely because he and his counsel appeared at the hearing whereat the proceedings were adjourned by the Court suo motu with an order that written statement be filed on the 28th June, 1971.

(c) The order of the trial Court requiring the parties to furnish evidence on affidavits was without jurisdiction as were the impugned orders which were passed not on any evidence recorded in the case in the manner provided by Rule 4 of Order 18 of the Code of Civil Procedure but on the affidavits furnished by the parties.

(d) The impugned orders were erroneous on merits. From the statements sworn by the parties it could not be deducted that no agreement to refer disputes to arbitration had been entered into by them.

3. Point (a) is not without substance. There is nothing on the record to indicate that on the 15th of June, 1971, the case was adjourned in pursuance of any request made by the petitioner. Had any request been made, it would have been mentioned by the trial Court in its order which is silent about it. It is true that usually a court does not adjourn a case on a hearing on which the written statement is to be filed to another day for the same purpose without a request in that behalf being made by the defendant but then that cannot be adopted as an invariable rule. In any case I do not think it will be safe to hold that the adjournment was given in pursuance of a request made by the petitioner when the order granting the adjournment does not mention any such request.

4. Now I shall take up a consideration of point (c) which I find to be without merit. Sections 33 and 34 of the Act state:--

'33. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:

Provided that where the Court deems it just and expedient it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. 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 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.'

It would be seen that although Section 34 does not state the manner in which the judicial authority concerned is to satisfy itself that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement, etc., Section 33 authorises the Court to determine the existence or validity of an arbitration agreement or an award or the effect of either, solely on affidavits. Under Section 34 the main question which the court would be called upon to decide in most cases in the existence of the arbitration agreement which is also a matter falling within the ambit of Section 33 and it appears to me that there is no reason why the matter should not be decided when agitated under Section 34 in the same manner as is provided in Section 33, i.e., on affidavits even though the occasion for the application of one of these sections may have nothing to do with that which sets into operation the other of them. Section 33 is intended to come into play when there is no suit pending and it enables a party to challenge the existence and validity of an arbitration agreement or an award or to have the effect of either determined, and the right to which it confers on a party is not conditioned by the pendency of any litigation between that party and another, while Section 34 is inapplicable to a case of that type and an application under it can be made only by a party to a dispute arising in a legal proceedings which, according to that party, is liable to be referred to arbitration by reason of any agreement between that party and another. The difference in the circumstances which make the two sections applicable, however, does not furnish any criteria for determining the procedure which the Court is to follow for arriving at a decision of the questions relating to the existence, etc., of the arbitration agreement. It thus appears tome that the Court is fully competent while action under Section 34 to follow the same procedure as is mentioned in Section 33, namely, to decide the question involved on affidavits. This was also the view taken by Bachawat, J., (as he then was) with whom K. C. Das Gupta, C. J., agreed, in Rungta Sons (P.) Ltd. v. Jugometal Trg. Republike, AIR 1959 Cal 423, although no reasons in support of the view are given therein.

It is true, as is contended by Mr. Goyal, that ordinarily evidence has to be recorded viva voce in Court as provided in Rule 4 of Order XVIII of the Code of Civil Procedure but that procedure may be dispensed with if the parties agree to a decision on affidavits or when, in the absence of such an agreement, the Court follows the procedure described in Order XIX of the Code. (In this connection see Khandesh Spinning and Weaving Mills Co. Ltd. v. Rashtriya Girni Kamgar Sangh, Jalgaon, AIR 1960 SC 571, Rule 1 of Order XIX of the Code enables a Court to order at any time for sufficient reason that any particular fact or facts may be proved by affidavit and when recourse is had by a Court to that rule the procedure in Rule 4 of Order XVIII stands dispensed with subject, however, to the right of a party who bona fide desires the production of a witness for cross-examination to have such witness examined in Court and not on affidavit. It was presumably under Rule 1 of Order XIX that the Court of first instance passes its order dated 5th of July, 1971, requiring the parties to file their affidavits in proof or disproof of one single fact, namely, the existence of the arbitration agreement. To that order no exception was taken by or on behalf of the petitioner who, as already stated, filed his affidavit on the 12th of July, 1971, to which date the case had been adjourned for the purpose. Even it be held, therefore, that the provision of Section 33 of the Act, which enable a Court to decide questions of the existence, validity or effect of an arbitration agreement solely on affidavits, could not have been pressed into service by the Court of first instance while acting under Section 34 of the Act, it must be held that the procedure adopted by that Court was in conformity with the law, sanctioned as it was by the provisions of Rule 1 of Order XIX.

5. Point (d) is also without force. The matter is concluded by concurrent findings of fact given by the Courts below and I do not see any reason to differ from the conclusion arrived at by them. I may add, however, that an analysis of the allegations made in the affidavit filed by the petitioner in support of his application under Section 34 of the Arbitration Act makes it clear that they are baseless and have been concocted merely to delay the proceedings. Had it been otherwise, the story set up by the petitioner could not have lacked certain essential details, namely, the date of the arbitration agreement, the names of the persons in whose presence it was entered into and the names of the scribe and the marginal witnesses, which find no mentioning the affidavits.

The matter may be looked upon from another angle. The relations between landlords and tenants in Chandigarh are governed by the principles underlying the provisions of the Transfer of Property Act and are to subject to the provisions of the East Punjab Urban Rent Restriction Act or any such other piece of legislation conferring special benefits on tenants. The plaintiff could, therefore, successfully eject the petitioner through a suit instituted by him at any time after serving the petitioner with a short notice. The petitioner was, therefore, at a disadvantage which he could escape by recourse to the terms of the arbitration agreement, if any was entered into by the parties, so that in that case he would have retained the agreement himself and not allowed the plaintiff to pocket the same. As it is, there is no reason why the agreement could not have been executed in duplicate and the defendant armed with one of the counterparts. Normally it would also have been executed on a stamped paper the details of the transaction of the purchase of which would have found a mention in the affidavits which is not so. The conclusion is irresistible that no agreement was really entered into and that one has been set up merely to gain time.

6. In view of what I have said above, I need not go into point (d) which is left undecided.

7. In the result the petition fails and is dismissed with costs. The parties are directed to appear before the trial Court on the 5th November, 1971.

8. Petition dismissed.


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