Western Coalfields Limited vs R.M. Bhardwaj
2002 Latest Caselaw 560 Bom

JUDGMENT

D.Y. Chandrachud, J.

1. The Impugned order of the learned 2nd Joint Civil Judge, Sr. Dn., Nagpur, has been passed on an application moved by the applicant herein, which is the original defendant to Misc. Judicial Case No. 327 of 1994. The respondent instituted the aforesaid proceedings under Section 20 of the Indian Arbitration Act, 1940 on 15.12.1994 for a direction that the Arbitration Agreement, which was, according to the respondent, entered into between the parties be filed in the Court.

2. The case of the respondent is that in pursuance of the tenders invited by the applicant for carrying out the maintenance of tree plantation in certain areas at Umrer Project, the respondent was awarded the contract by award letters dated 7.10.1978 and 23.11.1987. The period for completion of the contract was two years and three years respectively. A formal agreement between the parties was signed on 17.1.1989. According to the respondent, there were several breaches committed by the applicant despite which the respondent could complete the contract within the stipulated period. The respondent has certain claims against the applicant and accordingly filed an application before the learned Civil Judge. Sr. Dn., Nagpur, for a direction that the Arbitration Agreement be filed in the Court under Section 20 of the Arbitration Act of 1940 and for a direction for appointment of an Arbitrator.

3. The applicant in its reply to the application claimed that the Misc. Application filed by the respondent was barred by limitation. The contracts dated 7.10.1987 and 23.11.1987 were to be completed within a period of two years and three years respectively. The application filed by the respondent on 15.12.1994 was, as submitted, barred by limitation.

4. By the impugned order dated 26.6.1995 the learned Trial Judge has observed that the original agreement is not on record and unless and until it is produced, the Court cannot determine the point of limitation. The applicant was, therefore, directed to file a copy of the original agreement on record. The learned Counsel for the applicant has urged that the interim order which has been passed by the learned Trial Judge in these proceedings virtually concludes the application under Section 20 the Arbitration Act. It is urged that under Section 20 of the Court is required, upon the filing of an application, to issue a notice to the parties and the Court is to order that the agreement be filed only when sufficient cause is shown. According to the applicant, ex facie on the application, which has been filed by the respondent himself, it would be apparent that the claim is hopelessly barred by limitation.

5. Section 20 of the Arbitration Act, 1940, which held the field at the material time, in the present case provides that where any persons have entered into an arbitration agreement before the institution of the suit with respect to the subject matter of the agreement and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in the Court. The application has to be numbered and registered as a suit under Sub-section (2) of Section 20. Then Sub-section (3) provides that the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause why the agreement should not be filed. Sub-section (4) is important because it provides that where no sufficient cause is shown, the Court shall order the agreement to be filed and shall make an order of reference to the Arbitrator appointed by the parties. In other words, before the Court orders that the agreement should be filed in the Court. It has to consider whether any sufficient cause has been shown by the defendants to the application. In the present case, the Court has not considered the sufficiency of the cause made by the applicant at, all. The Court was of the view that unless the original agreement is filed it cannot consider the sufficiency of cause. This reason is ex facie erroneous. Filing of the original agreement can only be the culmination of the process by which the Court determines whether sufficient cause has been shown. The applicant has attempted to make out a case that the agreement cannot be ordered to be filed under Section 20 because the claim is time barred. Whether that amounts to a sufficient case is something on which I need not express any opinion at this stage. However, I am of the view that it was not open to the learned Trial Judge to direct that the original agreement be filed without adjudicating upon the sufficiency of the cause shown.

6. In the circumstances, it is apparent that the learned Trial Judge has acted with a material Irregularity and illegality within the meaning of Section 115 of the Code of Civil Procedure; a case for interference is made out for and the conditions set out to the proviso under Section 115 are also fulfilled. In the circumstances, the impugned order of the learned Trial Judge dated 26.6.1995 is quashed and set aside. The learned Trial Judge is directed to dispose of Misc. Judicial Case No. 327 of 1994, in the light of the observations contained in this order and after considering the sufficiency of the cause shown by the applicant. The civil revision application is accordingly disposed of.