LexJAWAHAR LAL BURMAN versus UNION OF INDIA
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3 S.C.R. SUPREl'lffi COURT REPJRTS JAWAHAR LAL BURMAN v. UNION· OF INDIA 769 (B. P. SINHA, C. J., P. B. GAJENDRAGADKAR and RAGHUBAR DAYAL, JJ.) Arbitration-Denial of validity of contract contai1ting arbi- tration agreement-Petition for dedarati011 that there ia valid contract and to afffirm exiatence of arbit1ation agreement- Maintainability-&ope and effeci-Juritdictio•-Arbitration Act, 1940 (10 of 1~40) "· 28, 31, 32, 33. The appellant and.the respondent nominated their arbi- trator. who heard the matter at length and. the proceedings had reached a •tage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no concluded contract. The appellant refused to apply under s. 33 and so a stalemate issued became the arbi· trators were not entitled to proceed further with the arbitration proceedings. - , The respondent moved the court under s. 28 along with 1. 33, for a decision of the question about the existence and validity of the arbitration agreement, and also prayed that extension of time be granted to the arbitrators for making the award. The appellant pleaded in defence that there was no concluded contract, and there was no juri.!idiction iri the court to grant extension under $~ 28 of the Act. The High Court confirmed the finding of the trial court that there was a concluded contract which contained a valid , arbitration ag_reement. As for jurisdiction it held that since the petition had been filed as cornposit application und<r ss. 28 and 33, it was open to the court under s. 28 to enter upon the question of the existence or validity of the contract and so there was no subztance in the point of jurisdiction raised by the appellant. It is against this decision that the appellant crune up by special leave. Section 33 of the Arbitration. Act, 1940, consists of two parts-the first part deals with a challenge to the existence or validity of an arbitration agreernent or an award and it provides that only persons who challenge the existence of the arbitration agreement that can apply under the first part of the section, The second part of the section Fefers to the application made to have the effect of either the arbitra- tion agreement or the award determined, and under this part 1961 1961 J awoltar Lal Btu"'311 v. l:nitm ~J lndi• • 770 SUPREME COURT REPORTS [1962] an application can be made to have the effect or purport of 1hc agreement determined but not itl exi•tence. That means that an application to ha,·e the effect of tre agreement can be made provided the existence of the agreement i• not diJputed. The question is-whether a person affirming an arbitration agreement can apply under the latter part of s. 33 about the existence of the agreement or its validity. Jleld, that a party affirming the existence of an arhitra- tion agreement cannot apply under s. 33 for obtainin!! a decision that the agreement in question exists. An application to have the effoct of the arbitration agreement determined can however, legitimately cover the dispute a. to the existence of the said arbitration agreement. Section 32 of the Act creates a bar against the irutitution of suits with regard to an arbitration agreement or award on any ground whatsoever. Thus if a party affirms the exiJtencc of an arbitration agreement or its validity it is not open to the party to file a sllit for the purpo.e of obtaining a decla1 ation about the existence of the said agreement or its validity. The bar to the suit thus created by s. 32. inevitably rai!ICS the question as to what remedy is open to a party to adopt in order to obtain a appropriate declaration about the existence or validity of an arbitration agreement. Hdd, that having regard to the scheme of'"· 31, 32, 33 of the Act in matters which fall within the bar created by s. 32, if a ruit cannot be filed it is nece&Sarily intended that an application can be made under the court's powers provided for by s. 31 and impliedly recognised by •. 32 of the Act. Jleld, further that in holding that s. 32 impliedly recognises the inherent jurisdiction of the court to entertain an application made by parries affirming the existence of an arbitraticn agreement the provisions of s. 32 is brought in line with the provisions of ss. 33 an<l 20 of the Act. Indeed s. 33 is a corollary of s. 32, and in a s
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