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TMI Blog1981 (12) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... the rolls on 25-1-1979. 95 per. cent of the price was immediately payable, but the defendant failed to pay. Meanwhile 5 per cent balance price had also become due. Hence, the suit for recovery of the price with interest at 15 per cent per annum. (2) The defendant made two applications on 25-1-1980 one under section 34 of the Arbitration Act (herein the Act) for stay of the suit along with one other under section 5 of the Limitation Act. In the latter, it was stated that the summers of the suit were received by the defendant on 27-12-1979, but their counsel was available for consultation only on 23-1-1980. They urged that the period of 20 days prescribed under Rule 2 of the Delhi High Court (Original Side) Rules (herein the Original Side Rules) does not apply to an application under section 34 of the Act and if it does, the delay may for reasons aforesaid, be condoned. It was also contended that the suit was not covered by Rule 1 of the Original Side Rules and was also outside the purview of Order 37 Rule 2(6) of Civil Procedure Code because the amount in question was not a debt and there was no stipulation for interest in the written contract which was necessary for a suit to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of 20 days was still to expire. It is also not shown that any legal advice from the counsel was obtained which could have led to an error in good faith. The defendant rather remained silent for about a year after the receipt of the goods and did not seek any specific reference to arbitration before the suit was instituted and further did not obtain legal advice from a counsel as to when the application under section 34 of the Act should have been moved. The summons was delivered to the receipt clerk of the defendant and clothing has been brought out to show that the defendant was not apprised of the summons within 20 days preceding 25-1-1980 when the application was moved. Both the applications were rejected and the suit was decreed with costs. Hence, this appeal. (6) Regarding the objection as to the maintainability of the suit raised by the appellants, we are of the view that where the suit is for recovery of the price of the goods, it should be construed as a suit for enforcing payment of a debt, within the amended clause (b) of sub-rule (2) of Rule 1 of Order 37 Civil Procedure Code . which cover a few more categories of suits and not being inconsistent with Rule 1 of Chapte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication covering section 34 of the Act where there is scope of such application, must fulfill the further limitation for leave to defend under Order 37 Civil Procedure Code The next question, Therefore, is whether this is the correct statement of law and whether an application under section 34 of the Act should have been moved within 20 days of service at the most and could in no case be entertained after the expiry of that period, as was the view taken in Tekchand Madan v. M/s. Shyam Kamal Agencies, (1978) 80 Plr 83, and James Manickam v. Jaya Narayan Daga, AIR1953Mad767 . (9) According to Order 37 and the Forms prescribed summons in Form No. 4 in Appendix B together with a copy of the plaint and annexures thereto is issued in the first instance. Such summons requires the defendant to cause an appearance to be entered within ten days from the service thereof and to file in court an address for service of notices on him. If he fails to enter appearance, the allegations in the plaint shall be deemed to be admitted and the plaintiff shall be entitled to a decree forthwith. If he enters appearance, he shall deliver a notice of such appearance to the plaintiff or his pleader or sen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to examine the notice which was issued to the defendant under Order 37 Civil Procedure Code read with Chapter Xc of the Original Side Rules. It purported to summon the defendant "To obtain leave from the court within twenty days from the service hereof to appear and defend the suit and within such time to cause an appearance to be entered for you. In default whereof the plaintiff will be entitled at any time after the expiration of much twenty days to obtain decree for any sum not exceeding the sum of Rs. 3,69,642.64. The case is fixed for hearing on 31-3-1980." "Leave to appear may be obtained on an application to the court supported by any affidavit of declaration showing that there is a defense to the suit on the merits or that it is reasonable that you should be allowed to appear in the suit." (12) This notice as the endorsement on the back shown was served on 27-12-1979, but was not returned until 1-2-1980 and the case was adjourned to 17-3-1980. In the meanwhile, on 25-1-1980 Mr. S. K. Puri for the defendant Corporation filed an application under section 34 of the Act coupled with an application under section 5 of the Limitation Act for condensation of delay. Thereaft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g at the matter is that the special law of arbitration should be allowed to prevail over the general law. If the procedure under Order 37 or Chapter XV of the Original Side Rules is allowed to prevail and the period of 20 days is held to operate as the period of limitation for making a stay application under section 34 of the Act, then, the defendant will not at all be able to make such an application unless he has obtained leave to appear and defend because it is only upon such leave being given that a defendant is entitled to be heard in the matter. And if he makes an application to obtain leave to appear and defend, then it will amount to taking a step in the proceedings and he will be precluded from making an application under section 34 of the Act. Authority for such a view is available in Jadavli Narsidas Shah & Co. v. Birachand Chaturbhuj, AIR1954Bom174 . We, Therefore, hold that it is not necessary that an application for stay under section 34 of the Act can be made only .within the time prescribed in Chapter XV of the Original Side Rules or Order 37 Civil Procedure Code and shall be rejected if not made in time. Such an application can be made as long as a decree has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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