Surya Agroils Limited vs Inter Continental Sales ...
1995 Latest Caselaw 605 Del

JUDGMENT

Vijender Jain, J.

(1) ADMIT.MR. Jain, learned Counsel for the appellant says that he is ready to argue the matter and he does not wish to file any rejoinder. Appellant had entered into an Agreement with the respondent dated 1.1.1987, containing arbitration clause in the following terms:- "THAT in the event of any doubt or difference or difficulty arising out of this agreement, it shall be referred to arbitration in accordance with the provisions of Indian Arbitration Act, 1940 or any enactment on statutory modification thereof from time to time"

(2) Facts of the case are that appellant filed a suit for recovery of a sum of Rs. 65,052.28 paise. After the suit was filed, the respondent filed an application under Section 34 of the Indian Arbitration Act pleading inter alia that the suit of the appellant-plaintiff be stayed in view of the arbitration clause contained in the Agreement. The Trial Court came to conclusion that Section 34 of the Arbitration Act was applicable and, therefore, allowed the application of the respondent. Aggrieved by the order of the Trial Court dated 4.5.1993, the present appeal was preferred. Mr. Jain has argued that in the first instance, there was no dispute, which was covered under the Arbitration Agreement in question. Learned Counsel for appellant has further contended that in any event of the matter, no inclination was shown by respondent that he was ready and willing to go for arbitration, right from the time of commencement of legal proceedings. Thirdly, it has been contended by the learned Counsel for appellant before me that application under Section 34 of the Arbitration Act is an abuse of the process of the Court and has been filed with mala fide intentions.

(3) On the other hand, Mr. Ashwani Kumar, learned Counsel for the respondent, has argued that the dispute with regard to the commission, which the respondent has to take from the appellant, is a dispute, which is covered under the Arbitration Agreement, and in the application, which was filed before the Trial Court under Section 34 of the Arbitration Act, the respondent did raise said dispute and the respondent also specifically mentioned that the respondent was ready and willing to carry out his obligation under the Agreement.

(4) I have heard the learned Counsel for the parties at length. In my considered opinion, the application filed under Section 34 of the Arbitration Act by the respondent ought to have been rejected by the Trial Court. The Trial Court observed that a legal notice was sent by the appellant on 19.4.1989 calling upon the respondent to make the payment of the amount due on account of dishonour of cheque. No reply was sent by the respondent to this notice raising any dispute which was sought to be agitated by way of an application under Section 34 of the Arbitration Act on which much reliance has been placed by learned Counsel for the respondent before me.

(5) There is another aspect of the controversy. The respondent had issued cheque for the sum of Rs. 84,500.00 on 1.7.1988, admittedly, that cheque was dishonoured. After the dishonourment of the cheque, the respondent made payment of Rs. 25,000.00 . No dispute was raised either before giving of the cheque or after its dishonour. All the disputes, which for the first time came into existence, were raised when the application under Section 34 of the Arbitration Act was moved by the respondent. Therefore, I hold that neither any disputes existed between the parties to which arbitration Agreement applies nor the respondent was ready and willing to refer the same for adjudication. The application of the respondent filed under Section 34 of the Arbitration Act was mala fide. There is yet another fallacy in the argument of the learned Counsel for the respondent, on one hand the stand of the respondent is that there is some amount, which is outstanding against the appellant on account of commission due to respondent, on the other hand no such dispute was raised by the respondent for the said claim except the averment made in the application under Section 34 of the Act. I further hold that after execution of the cheque and its dishonour, no dispute existed in relation to the said sum, which was governed by the arbitration Agreement.

(6) For the reasons mentioned above, I allow the appeal and set aside the order of the Trial Court and direct the Trial Court to proceed with the Suit of the plaintiff appellant in accordance with law. The appeal is disposed of accordingly.