LexR. MCDILL AND COMPANY PVT. LTD. versus GOURI SANKAR SARDA AND OTHERS
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R. MCDILL AND COMPANY PVT. LTD. A V. ~ GOURI SANKAR SARDA AND OTHERS MARCH 13, 1991 [N.M. KASLIWAL AND K. RAMASWAMY, JJ.] B Arbitration Act, 1940: ss. 34, 41-Application for stay in a suit- >----- Provisions of Code of Civil Procedure-Whether applicable. Code of Civil Procedure, 1908: Order XXlll-Suit pending before High Court-Joint application by two defendants under s. 34 of c --- Arbitration Act-Permission to withdraw with liberty to make a fresh ' ......,.. application-Two separate stay applications moved-Maintainability of. In a suit filed by plaintiff-respondent no. 1 before the High Court, defendant-appellants filed a joint application under s. 34 of the Arbitra- tion Act for staying proceedings of the suit and referring the matter to D arbitration. In view of some formal defects in the said application, the High Court on 25.2.1966 without mentioning the defects ordered, "Application withdrawn with liberty to make a fresh application". On 21.3.1966 the appellants submitted two separate applications for stay- ing the suit in so far as it related to them or in the alternative for stay of >- the entire suit. The plaintiff-respondent resisted the applications as not E being in terms of the order dated 25.2.1966. Upholding the objection, Learned Single Judge refused to stay the suit. On appeal, the Division Bench of the High Court held that the liberty was granted to 'make a fresh application' and as such, under the provisions of Order XXIII, C.P.C., the appellants had no right to move F two separate applications to stay the suit. v--· In appeal by special leave to this Court it was contended that provisions of Order XXIII, C.P.C. were not applicable to applications filed under s. 34 of the Arbitration Act; and that the High Court com- mitted an error in taking a technical view that as liberty was given to G withdraw the application in order to make a fresh application, the appellants were not entitled to make separate stay applications. ~.~ Respondent no. 1 supported the impugned judgment. Allowing the appeals, this Court, H - 809 A B c 810 SUPREME COURT REPORTS (1991] 1 S.C.R. HELO: 1. m view of s. 41 of the Arbitration Act, 1940, subject to provisions of the Act, Code of Civil Procedure, 1908 apply to all pro- ceedings before the Court. No provision in the Arbitration Act takes away the provisions of Order XXIII, C.P .C. from being applied to ap- plications filed under s. 34 of the Arbitration Act in a suit. [814F, 816B] Hakam Singh v. MIS Gammon (India) Ltd., (1971] 3 SCR 314, relied on. Nawab Usman Ali Khan v. Sagarmal, (1965] 3 SCR 201, held inapplicable. Munshi Ram v. Banwari Lal, [1962] Supp. (2) SCR 477; Hansraj Gupta v. Official Liquidator Dehradun-Mussoorie Electric Tramway Co., (1932] L.R. 60 I.A-. 13; Union of India v. Mohinder Singh & Co., AIR 1971 JK 10; Union of India v. Rup Kishore, [1957] All. 504; Executive Engineer v. Thingom Iboyaima Singh, AIR 1970 Manipur 76; Abdul Gani v. Reception Committee, AIR 1936 Born. 250; Ram D Bharosey v. Peary Lal, AIR 1957 All. 265; Shrinath Bros. v. Century Spinning & Wvg. Co.,_AIR 1968 Born 443; Indian Minerals Co. v. Northern India Lime Making Association, AIR 1958 All. 69; Ganesh- mal v. Keshoram Cotton Mills, AIR 1952 Cal. 10; Governor-General in Council v. Associated Live Stock Farm (India) Ltd., AIR 1948 Cal. E 230; Soorajmull Nagarmull v. Sagar Mal, AIR 1978 Cal. 239; Ram- chand v. Governor General in Council, AIR 1947 Sind. 147 and Scot- tish Union of National Insurance Co. v. Saraswati Sainani, AIR 1960 Cal. 22, referred to. 2. In the instant case, apart from s. 41 of the Arbitration Act providing for application of Code of Civil Procedure and there being F no provision taking away provisions of Order XXIII, C.P.C. from G- being applied to the applications for stay filed under s. 34 of the ~ Arbitration Act, the proceeding started on a plaint filed by the plaintiff and in such a suit if any application was filed under. the Arbitration Act, the same ought to be governed by the provisions of the Code of Civil Procedure. [816A-C] 3.1 The High Court was not right in dismissing the applications on the ground that two applications were not maintainable as the same were not covered withing its order dated 25.2.1966. [820E-F] 3.2 The term 'a fresh application' in the order dated 25.2.1966 H used in singular had no more significance than the fact that as both the R. McDILL CO. v. G
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