TMI Blog1963 (6) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ases at the cost of the Plaintiff. When differences arose between the parties to the contract, the Plaintiff filed an application, under Section 20 of the Arbitration Act on 13-3-59 which was heard by the Addl. District Judge Jammu, requesting for a reference to arbitration of the dispute between the parties. This application was opposed by the Union of India, but ultimately the Addl. District Judge by his order dated 2-5-60 ordered that the matter be referred to arbitration. The matter stood there. The parties entered into a new agreement of arbitration on 29-7-60 and that agreement of arbitration referred the matters in dispute between the parties to the arbitration of GOC XV Corps, Major General P. C. Gupta who called upon the parties to file their statement of cases. The arbitrator entered on this reference on 4-10-60 and gave his-award on 16-12-60, directing the Plaintiff to pay ₹ 26954.39 to the Union of India. This award came up for consideration before this Court but this Court by its order dated 8-1-62 set side the award. On 9th January 1962 the Plaintiff brought the present suit for injunction and recovery of ₹ 10,000 as already stated. 3. In this suit an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an Joseph AIR 1960 SC 1156 wherein it has been laid down: The power to stay legal proceedings under Section 34 is discretionary, and so a party to an arbitration agreement against whom legal proceedings have been commenced cannot, by relying on the arbitration agreement, claim the stay of legal proceedings instituted in a Court, as a matter of right. However, the discretion vested in the Court must be properly and judicially exercised. Ordinarily the Court would direct the parties to go before the tribunal of their choice and stay the legal proceedings instituted before it by one of them. It would be difficult, and it is indeed inexpedient, to lay down any inflexible rules which should govern the exercise of the said discretion. It is ordinarily not open to the appellate Court to substitute its own exercise of discretion for that of the trial judge; but if it appears to the appellate Court that in exercising its discretion the trial Court has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach then it would certainly be open to the appellate Court and in many cases it may be its duty to interfere with the trial Court's e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal reference had not been superseded, there could be no second reference of the same dispute and there was no need of any. 11. In AIR 1956 Mad 369 it was held by a Division Bench of that Court consisting of Raja- mannar C. J. and Panchapakesa Ayer, J. that so long as the Judge did not supersede the arbitration agreement, it must be presumed that the arbitration agreement is subsisting. Therefore the contention that once the award was set aside the parties could no longer resort to the arbitration clause cannot be accepted. 12. In AIR 1959 P H 102 a Division Bench of the Punjab High Court consisting of Bhandari C. J. and S. S. Dulat, J. laid down: The word 'may' in Section 19 is a word of permission rather than of command, Section 19 thus confers full discretion on the Court to say in each particular case whether the reference should or should not be superseded. When a Court making an order under this section does not expressly supersede the reference and direct that the arbitration agreement shall cease to have effect, it must be deemed to have declined to exercise the power. In this respect it differs from Paragraph 15(2) of the Second Schedule to the Code of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been seriously pressed before the learned trial Judge. 14. Section 34 of the Arbitration Act corresponds to Section 2 of the English Arbitration Act of 1950 and in Halsbury's Laws of England Vol. 2' (3rd edn.) at page 21 it is laid down as under: If any party to an arbitration agreement, or any person claiming through or under him, commences any legal proceedings in any Court against any other party to the agreement, or any person claiming through or under him, in respect of any matter agreed to be referred, any party to those legal proceedings may at any time after appearance, and before delivering any pleadings or taking any other steps in the proceedings, apply to that Court to stay the proceedings, and that Court or judge thereof, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the 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, may make an order staying the proceedings. In all instances, except that mentioned in the following paragraph the exercise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. 16. Keeping the principle of the English Law on the subject and those laid down by the S.C. in view and for purposes of determining whether these tests are fulfilled, we have to consider whether the claim brought in the suit sought to be stayed comes within the submission to arbitration. We cannot go into the validity of that claim in proceedings under that section. (See Gaya Electric Co. Ltd. v. State of Bihar AIR 1953 SC 182). With this background it is clear that there can be no dispute about conditions (1) and (3) of the S.C. case. Condition No. 2 relates to the subject-matter of the dispute in this case. The parties by means of an agreement decided to refer all the disputes and differences arising out of the contract of 25th day of February 1958 for supply of ice machine-made at Jammu for the period 1-4-58 to 30-9-58 to the sol(sic) arbitration of the GOC XV Corps. The statement of cases before the arbitrator clearly shows that the substance of the present suit of the Plaintiff is the same as the statement of case filed by him befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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