RACHAPPA GURUADAPPA BIJAPUR versus GURUSIDDAPPA NURANIAPPA & ORS.

Citation: [1988] SUPP. 3 S.C.R. 884 · Decided: 16-11-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Dismissed
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Judgment (excerpt)

A. 
RACHAPPA GURUADAPPA BIJAPUR 
v. 
GURUSIDDAPPA NURANIAPPA & ORS. 
NOVEMBER 16, 1988 
B 
[SABYASACHI MUKHARJI AND S. RANGANATHAN, JJ.] 
c 
Arbitration Act, 1940: Section 34-'Taking any other steps in the 
proceedings'-Interpretation of-Step should clearly and unam-
biguously manifest intention to waive benefit of arbitration agreement-
Adjournments taken for filing written statement-Disentitles asking for 
stay of suit. 
· 
The petitioner and the respondents in the S.L.P. were partners in 
a partnership firm. On 8th November, 1980, respondent No. l issued a 
notice calling for dissolution of the firm alleging mismanagement, loss 
and exclusion from the management, and later filed a civil suit for: (i) 
O dissolution of the firm, and (ii) accounts. On 4th November, 1981, 
respondent No. 9 who was defendant No. 7 in the suit, filed an applir•-
tion-.under Section 34 of the Arbitration Act, 1940 for stay of the suit. 
The Trial Judge after referring to the order-sheet in the matter 
a11d noticing that the counsel for the petitioner had taken steps in the 
E proceedings in the suit, by seeking and securing adjournments for filing 
the written statement, held that there was no jurisdiction to stay the suit 
under Section 34 of the Act. 
On appeal, the Division Bench of the High Court confirmed the 
order 0fthe Trial Judge, and held that the petitioner having taken steps 
F 
in the suit, had thereby disentitled himself from asking for the stay of 
the said soit. 
Dismissing the petitioner's Special Leave Petition, 
HELD: I. Arbitration is an alternative procedure for speedy 
q, adjudication of disputes between the parties and should normally be 
encouraged as parties have bound themselves to have their disputes 
adjudieated by arbitration, so they should be held bound by the 
agreement. [887B] 
2. Section 34 of the Arbitration Act is the statutory provision 
H wlJich deals with the powers to stay legal proceedings where there is an 
884 
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R.G. BIJAPUR v. GURUSIDDAPPA 
885 
arbitration agreement. One of the requirements is .that the application 
for stay must be filed before the filing of the written statement or 'taking 
any other steps in the proceedings'. [887C; 888E] 
3. The expression 'taking any other steps in the proceedings' does 
not mean that every step in the proceedings would come in the way of 
enforcement of the arbitration agreement. The step must be such as 
would clearly and unambiguously manifest the intention to waive the 
benefit of arbitration agreement, and display an unequivocal intention 
to proceed with the suit giving up the right to have the matter disposed 
of by arbitration. [891E-F; Bl 
' 
4. Each Court must find out from the context of each case what 
has happened, and whether a step was taken in the suit which would 
disentitle the party from obtaining stay of proceedings. [89IC] 
In the instant case, it is indisputable that the proceeding was 
commenced by a party to an arbitration agreement against the other 
party to the agreement and the legal proceedings which was sought to be 
stayed was in respect of a matter agreed to be referred to arbitration. 
From the order-sheet in the case as noted by the Trial Judge, it appears 
that the counsel appearing for the petitioner had sought adjournment 
'specifically for filing written statement'; and obtained time on more 
than one occasion for such purpose. It was not only the time taken to 
consider whether written statement shotild be filed as a defence to the 
plaint, but it was time taken to have the matter decided by the suit. The 
party evinced an intention to have the matter adjudicated by the Court 
and not keen to have the matter adjudicated by arbitration. If that is so, 
the party has disentitled itself to ask for the stay of the said suit. The 
High Court was, therefore, right in affirming the order of the Trial 
Judge. [891F-H; 892A] 
State of Uttar Pradesh & Anr. v. Jaliki Saran Kaiiasiz Chandra & 
Anr., [1974] 1 SCR 31 and Food Corpli. of India & Anr. v. Yadav 
Engineer and Contractor, [1983] i SCR 95; referred lo. 
A 
B 
c 
D 
E 
Law of Arbitration by R.S. Bachawat (/st Edn.), pp. 498-499; 
tJ 
referred to. 
CIVIL APPELLATE JURISDICTION: Speciai Leave Petition 
(Civil) No. 10264 of 1988 
From the Judgment and Order dated 26.5.1988 of the Kamaiaka H 
886 
SUPREME COURT REPORTS 
[1988] Supp. 3 S.C.R 
A 
High Court in M.F.A. No. 52 of 1982. 
B 
c 
S.K. Kulkarni and Mrs. Kiran Suri for the Petitioner. 
Jagdish G. Yadwad and S. Sriniv
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