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Gokul Chand Vs. Bhonri Lal and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtRajasthan High Court
Decided On
Case NumberD.B. Civii Misc Appeal No. 149 of 1979
Judge
Reported in1980WLN164
AppellantGokul Chand
RespondentBhonri Lal and ors.
DispositionAppeal dismissed
Cases ReferredState of Gujarat and Ors. v. The Ghanshyam Salt Works
Excerpt:
.....cannot be deprived of his light to approach court of law--seeking long adjournment for filing written statement held, it constitutes a step in the proceedings--trial court exercised its discretion properly.;a litigant cannot be deprived of his right to approach a court of law without their being a specific bar and without strict compliance with the provisions of section 34 of the arbitration act.;the action of the defendant in seeking an adjournment for filing the written statement in the facts and circumstances of the present case constitutes a step in the proceedings, within the meaning of section 34 of the arbitration act.;the trial court has exercised its discretion with regard to staying of the proceedings in the suit under section 34 of the arbitration act in a proper..........the provisions of section 34 of the arbitration act. it is apparent that taking other steps in suit proceedings can notes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction or the court for the purpose of adjudication on the merits of the controversy in the suit.6. in janki saran's case : [1974]1scr31 the district government counsel appeared in the court and as summons were not accompanied with a copy of the plaint, he asked for a copy of the plaint and also wanted time for seeking fuller instructions and asked for time to file the written-statement. it was urged on behalf of the state that the plea for adjournment made by the district government counsel was unauthorised and was without instructions. their lordships of the supreme court.....
Judgment:

D.P. Gupta, J.

1. In this appeal, the only question, which requires determination, is as to whether the defendant No. 3, who is the appellant before us, had taken any other step in the proceedings within the meaning of Section 34 of the Arbitration Act, 1940.

2. We have carefully looked into the record of the case The order-sheet of the Additional District Judge, No. 1. Jaipur City in the suit dated December 16 1977, shows that copies of the plaint were delivered to the defendants Nos 3 and 4 on that day and both the defendants Nos. 3 and 4 sought a long adjournment for filing their written statement son the ground that the valuation of the suit wag more than Rs. 1,00,000/ and they wanted to look into the documents. The court, therefore, with the consent of the counsel for the plaintiff, adjourned the case 4o February 4, 1978 on the last mentioned date, defendant No. 3 filed an application under Section 34 of the Arbitration Act, praying that the proceedings in the suit be stayed, on the plea that the alleged agreement between the parties dated June 3, 1976, contained an arbitration clause In para 3 of his reply to the application of the defendant No. 3, the plaintiff specifically stated on February 15, 1978 that on December 16, 1977, the defendant No. 3 had sought time for filing the written-statement and as such the application under Section 34 of the Arbitration Act was not maintainable The defendant No. 3 filed a rejoinder dated March 15, 1978, in answer to the plaintiff's reply dated February 15, 1978 and the same was also supported by an affidavit. But neither in the rejoinder dated March 15, 1978 nor in the affidavit filed by the appellant defendant No. 3 Gokulchand in support thereof, the averment made by the plaintiff in his reply dated February 15, 1978 that the appellant had sought time on December 16, 1977 for filing the written statement was denied on the other hand, defendant No. 3 generally averred that he appeared in the court on December 16, 1977 and filed a vakalatnama and asked for a copy of the plaint, which was supplied to him and the case was fixed for February 4, 1978 for filing the written statement and, thus, 'legally speaking' February 4, 1978 was the date fixed for filing the written statement Here the defendant appellant failed to state as to whether time was sought by him or not on December 16, 1977 for filing the written-statement and as to whether a long 'adjournment was given. on that day by the trial court for filing the written statement at his instance or by itself or on the request of defendant No. 4 only, as it is sought to be suggested now. The trial Court considered the Conduct of defendant No. 3 in this respect and held that the same amounted to submission to the jurisdiction of the court and was a step in' furtherance of the progress of the suit. It was also held by the trial court that in his application dated February 4, 1978, defendant No. 3 did not demonstrate his readiness and willingness to proceed with the arbitration. Consequently, the application for staying the proceedings in the suit under Section 34 of the Act was rejected by the learned Additional District Judge, No. 4 Jaipur City on March 20, 1979.

3. Learned Counsel, Mr. V.S. Dave, appearing for the appellant defendant No. 3, submitted that there was no conscious submission to the jurisdiction of the trial court on the part of defendant No. 3 and that as a copy of the plaint was delivered to the defendant appellant on December 16, 1977 itself, it Cannot be said chat he sought an adjournment on that date for filing a written statement, because ordinarily when the copy of the plaint was supplied to defendant No. 3 in the court on December 16, 1977, as the same was not accompanied with the summons, then it was natural for the court to adjourn the case and fix a date for filing the written-statement. The submission of the learned Counsel, thus, is that the conduct of the appellant defendant No. 3 should not be construed as taking any other steps in the proceedings and the trial court should have stayed the proceedings in the suit under Section 34 of the Act. On the other hand, the contention of the learned Counsel for the plaintiffs-respondent is that the defendant had taken time on December 16, 1977 for filing the written-statement and on his request the court specifically granted a long adjournment for the purpose of filing the written-statement. It was also urged that the averments made in para 3 of the reply of plaintiff dated February 15, 1978 to the effect that the defendant sought an adjournment on December 16, 1977 for filing the written-statements was not controverted by defendant No. 3 either in his application dated March 15, 1978 or in the affidavit, which was filed by the defendant No. 3 in support thereof. It was also urged that there was no material produced by defendant No. 3 on the record to show that his intention was not to submit to, the jurisdiction of the trial court.

4. The question as to what constitutes 'step in the proceedings' for the purpose of Section 34 of the Arbitration Act has been authoritatively determined by a Division Bench of this Court in joharimal and Ors. v. Fatehchand and Ors. wherein the test in this respect has been laid down as under:

On principle and judicial authority, we consider that the following propositions may be easily deducted:

(1) An application for time to file written-statement or any other similar application should not be treated as a matter of law a 'step' in the proceedings. In order to constitute a 'step', it must be of such a nature as to lead the Court to the conclusion that the party prefers to have his rights and liabilities determined by the Civil Court rather than by the domestic forum upon which the parties might have agreed. It must display an unequivocal intention to proceed with the suit and to abandon the right to have the matter disposed of by arbitration.

(2) The test, however, should not be subjective and a party can not be entitled to say that he had no actual knowledge of the right under the arbitration agreement and that in fact he did not intend to give up his right. On the other hand, the test must be objective and a person, shall be deemed to have taken a step under Section 34 of the Act, if it can be held that he could have actual or constructive knowledge of his right in the event of exercising due diligence and that inspite of that he participated in the proceedings of the Court.

(3) Prima facie, an application for time to file written-statement should raise a presumption that the defendant had actual or constructive knowledge of his right and that he acquiesced in the method adopted by the plaintiff. The presumption, however, is not absolutely irrefutable & can be rebutted by showing that even constructive knowledge cannot be imputed to the defendant. It is, however, not proper and fair to lay down that the presumption can be rebutted only on the ground that the defendants did not receive the copy of the plaint. In rare and exceptional cases, it may be rebutted by other circumstances, such as appearance of a Government counsel without getting instructions in a particular case to appear. It is not desirable to enumerate the exhaustive list of the circumstances & to make generalization and each case should be considered on its own facts and circumstances.

The aforesaid tests laid down by the Division Bench of this Court in Joharimal's case have been approved by their Lordships of the Supreme Court in the State of Uttar Pradesh and Anr. v. Janki Saran Kailash Chandra and Anr. : [1974]1SCR31 and their Lordships held that Joharimal's case enunciates the correct tests in such cases.

5. Under Section 9 of the Code of Civil Procedure every aggrieved person has a right to file a suit in a civil court except where the cognizance of the suit is barred either expressly or impliedly. if a party seeks to curtail this general right of suit given under Section 9 of the Code of Civil Procedure then he must discharge the onus of establishing his right of curtailing such general right. We are of the view that a litigant cannot be deprived of his right to approach a court of law without there being a specific bar and without strict compliance with the provisions of Section 34 of the Arbitration Act. It is apparent that taking other steps in suit proceedings can notes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction or the court for the purpose of adjudication on the merits of the controversy in the suit.

6. In Janki Saran's case : [1974]1SCR31 the District Government counsel appeared in the court and as summons were not accompanied with a copy of the plaint, he asked for a copy of the plaint and also wanted time for seeking fuller Instructions and asked for time to file the written-statement. It was urged on behalf of the State that the plea for adjournment made by the District Government counsel was unauthorised and was without instructions. Their Lordships of the Supreme Court did not accept this contention advanced on behalf of the State and held that the appearance of the District Government counsel was on behalf of the State Government, who took the benefit of his appearance and his successful prayer for adjournment of the case by one month for the purpose of filing the written-statement, It was also observed by their Lordships in that case that the onus lay upon the defendant to prove that his conduct did not, amount to submission to the jurisdiction of the Court. In Bhanwarlal and Anr. v. Insaf All and Anr. (3) it was observed that a presumption' arose if the defendant sought time for the purpose of filing the written-statement, that it was a step in the proceedings and although the presumption was rebuttable, it could be refuted by cogent evidence to the contrary. It was for the defendant-appellant in the present case to establish by cogent and reliable evidence that he did not intend to submit to the jurisdiction of the court and his conduct did not constitute a step in furtherance of the proceedings It may be observed that no evidence at all has been produced on the record, on behalf of the defendant appellant to show that he did not seek any adjournment for filing the written-statement. Although a specific plea was raised in this respect by the plaintiff in his application dated 15-2-78, yet the same was not controverted. Thus, by making a prayer seeking a long adjournment for the purpose of filing his written-statement, the defendant appellant apparently showed his readiness to get his rights determined by the civil court. The aforesaid conduct on the part of the defendant-appellant gave rise to a presumption of acquiescence in the jurisdiction of the civil court, which has not been rebutted, as we have already pointed out above.

7. It was argued by the learned Counsel that the order-sheet dated December 16, 1977 did not represent the correct situation in as much as only defendant No. 4 sought adjournment for filing the written-statement and the mention In the said order-sheet that defendant No. 3 also made a prayer for filing the written-statement was introduced by inadvertence. This argument clearly appears to be an after thought inasmuch as neither in the application dated February 4, 1978 nor even in his rejoinder dated March 15, 1978, not in the affidavit of defendant No. 3 filed along with the rejoinder, it was specifically mentioned that he did not seek an adjournment for filing the written-statement on December 16, 1977 and the order-sheet did not present the true facts. The defendant appellant did not explain his conduct even in his subsequent application dated March 15, 1978.' We may also mention here that, as held by their Lordships of the Supreme Court in Bank of Bihar v. Mahabir Lal and Ors. : [1964]1SCR842 if the defendant appellant desired the statement made in the order sheet dated December 16, 1977 in this respect to be rebutted and if he desired to say that a thing mentioned in it did not happen, then it could only he challenged by him by pointing out the same in that very court, so that the court itself would have an opportunity to say as to whether the recital made in the order-sheet was correct or erroneous. In the present case, it was only at the argument stage that a new plea developed and was raised before the transferee court and it was alleged that the recital made in the order sheet was incorrect. We fail to understand as to why the defendant appellant did not raise this plea before the court which recorded the order sheet dated December 16, 1977, so that the veracity of such a plea could have been testified by the same court. We therefore, hold that the action of the defendant in seeking an adjournment for filing the written-statement in the facts and circumstances of the present case constitutes a step in the proceedings, with the meaning of Section 34 of the Arbitration Act.

8. We are further of the view that the trial court has exercised its discretion with regard to staying of the proceedings in the suit under Section 34 of the Arbitration Act in a proper manner. Looking to the averments made in the plaint and the written-statements of the other defendants, it appears to us that complicated questions of fact and law are involved and it is a proper case for being tried by a civil court.

9. Learned Counsel for the appellant relied upon a decision of a learned Single Judge of this Court in the case of M/s Bhonrilal Hiralal v. Prabhu Dayal 1979 RLW 110 and decision, of a learned Single judge of the Gujarat High Court in State of Gujarat and Ors. v. The Ghanshyam Salt Works : AIR1979Guj215 . Both these decisions are not relevant, as in those cases the question was of merely filing a reply to an application for appointment of a interim receiver or an application for grant of an interim injunction & there was no question in those cases of seeking time to file a written-statement, which is print a facie indicative of the intention of the party to proceed further in the matter for getting the dispute adjudicated by the civil Court and Which amounts to taking further step in the suit.

10. We, therefore, find no substance in this appeal and, consequently the same in dismissed. The parties are directed to bear their own costs.


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