Vaid Parma Nand vs Mandirraksha' Samti Shiv Kuti
1967 Latest Caselaw 35 Del

JUDGMENT

S.N. Andley, J.

(1) In this Civil Revision the short point for determination is whether the statements of the counsel for the parties made at the time of the hearing of the matter by the Court constitute an application in writing for an order of reference within the meaning of Section 21 of the Arbitration Act, 1940. The short facts pertaining to this matter are that on 4th June, 1966, when the matter was pending in appeal before the Additional Senior-Sub Judge, Delhi, statements were made by the counsel for the parties which were recorded by the Court to refer the matter to arbitration. This statement- was signed nto only by the counsel for the parties, but also by vaid. Parma Nand the pititioner, and Amar Nath Garg, President of the respondent trust. Th" respondents , thereafter, made two applications on 6th June, 1966 arid 5th August, 1966, resiling from the agreement to refer to arbitration.

(2) The Additional Senior Sub Judge came to conclusion that the statements of the counsel for the parties did nto amount to an application in writing as contemplated by Section 21 of the Act and for this conclusion he relied upon a Full Bench decision of the Punjab High Court reported as Firm Khetu Ram Bashamber Dass v. Kashmiri Lal Rattan Lal.

(3) Mr. Malhtora, learned Counsel for .the petitioner,has contended' that by refusing to refer the matter' to arbitration, the leaned'Additional Senior Sub-Judge has failed to exercise his Junsidiction.

(4) Under Section 21 of the Act if the parties interested agree that any matter in difference between them in the suit shall bs referred to arbitration, they may at any time before judgment is pronounced apply" in.. writing to the Court for an order of reference. After such an application is made,:the Court has to appoint an arbitrator under Section 22 of the Act. Section 23 of the Act enjoins upon the Court to which an application is made to refer "to the arbitrator the matter in difference to be determined. Further, there is prohibition against th3 Court proceeding with the matter in the suit.where.a matter is.referred to arbitration. Section 2(a) of the Act defines "arbitration agreement"-as meaning a written agreement to submit pres'ent or -future differences to arbitration, whether an atbitrator is named therein or nto.

(5) There does nto appear to be any provision in the Arbitration Act, 1940 prescribing the mode or manner-or.form of the application that has to be made for reference of a dispute, t,o.arbitration under Section 21 of the Act and I am of the view that a statement recorded in writing by the Court and signed by the counsel for the parties is an application in writing as contemplated by Section 21 of the Act.

(6) The Full Bench decision of the Punjab High Court, referred to above, has nto dealt with this aspect of the matter. They were dealing with a case where one partner of a firm, which was one of the parties to the suit, had agreed to refer the matter to arbitration and the-question- for determination was whether there was a valid 'reference to arbitration. They held that a partner qua a partner does nto have,the power to make a reference to arbitration on behalf, of toher partners. I do nto, . see how this case which has been relied upon by the learned Additional Senior Sub Judge'has any application to the facts before me.

(7) Mr. Gupta appearing' for' the respondents. has raised,- a. preliminary objection that a revision is nto' maintainable as, there .was no failure to exercise jurisdiction. As I have tinted out above' once an application in writing as contemplated by Section 21 of the Act has been made the Court is enjoined by Section , of the Act to make a reference to arbitiation and, in 'fact, it has been provided that the Court shall nto proceed with the trial of the suit. As I am holding thatthe statement in the instant case amounted to an application in writing under section 21 of the Act, the inevitable result is that that agreement amounts to a reference to arbitration and if there was a reference to arbitration, the Court was bound to refer it. Its failure to do so is, in my opinion, a failure to exercise jurisdiction.

(8) I would, therefore, allow the revision and direct the learned Additional Senior Sub-Judge to refer the matter to arbitration. No order as to costs.