RAMVALLABH TIBREWALLA versus DWARKADAS & CO.

Citation: [1966] 1 S.C.R. 689 · Decided: 31-08-1965 · Supreme Court of India · Bench: K. SUBBA RAO · Disposal: Appeal(s) allowed
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

f 
' 
A 
RAMVALLABH TIBREWALLA 
v. 
DWARKADAS & CO. 
August 31, 1965 
B 
[K. SUBBA RAO, J. R. MUDHOLKAR AND R. S. BACHAWAT, JJ.] 
Arbitration Act ( 10 of 1940). s. 20-Scope of. 
After the appellant instituted a suit against the respondent claiming 
a money decree the parties entered into an agreement for reference of 
the disputes to arbitration. The agreement provided for the withdrawal 
C 
of the suit and the suit was withdrawn on or about the same date as that 
of the agreement. There were changes in the arbitrator, and also exten .. 
sions of time, but no award was made. The appellant therefore applied 
to the Court for filing of the arbitration agreement, under s. 20 of the 
Arbitration Act, 1940, but the application was rejected on the ground 
that the section was not attracted. 
D 
E 
F 
G 
In .foe appeal to this Court, 
HELD : In the light of the other parts of s. 20, its heading, and the 
general scheme of the Act, the words "before the institution of any suit 
with respect to the subject matter of the agreement or any part of it" in 
the section, mean, ''while no suit with respect to the subject matter of 
the agreement or any part of it is pending"; and not "where no suit has 
been instituted". 
Therefore, the section is attracted 
to an arbitration 
agreement entered into while no suit with respect to its subject matter 
ia pending. [691 G-H; 692 H; 693 A-BJ 
Since on a proper interpretation of the 
agreement in the present 
case the withdrawal of the suit was the essential condition, the agree-
ment would become operative only upon its fulfilment. 
Thus the effec-
tive arbitration agreement came into existence when the suit was with-
drawn and may properly be said to have been entered into while no suit 
with respect to its subject matter 
was pending. 
Therefore, the agree-
ment could be filed under s. 20. [694 A-Cl 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 460 of 
1965 .. 
Appeal by special leave from the judgment and order dated 
February 21, 1964, of the Bombay High Court in Appeal No. 
58 of 1960. 
P. R. Mridul, G. L. Sanghi, J. B. Dadachanji, 0. C. Mathur 
and Ravinder Narain, for the appellant. 
A. V. Viswanatlza So.stri, D. R. Dhanuka, B. R. Agarwala, 
and Tl. K. Puri, for the respondent. 
H 
The Judgment of the Court was delivered by 
Bachawat, J. 
This appeal raises a question of construction of 
s. 20 of the Indian Arbitration Act, 1940. The appellant instituted 
'690 
SUPREMB COURT- µPORTS 
[1966] l S.C.R. 
I 
Suit No. 1712 of 1949 in the Bombay High Court against 
A 
the respondent claiming a decree for money ,said to be due on 
account of various dealings between the parties. 
On or about 
February 18, 1954, the parties entered into an arbitration agree--
ment for reference of the disputes to the arbitration of Sri Ram-
rikhdas 
Parasrampuria. 
The agreement also provided 
for 
withdrawal of the suit. 
In view of the agreement, !he suit was 
<luly withdrawn. 
Sri Parasrampuria was subsequently removed, 
and in his place, two other arbitrators were appointed. 
These 
arbitrators were also subsequently removed, and in their place, 
B 
Sri S. V. Gupte "was appointed the arbitrator. 
The time for 
making the award was extended by orders of Court from time to 
time up to March 2f, 1958. 
Two more applications for 
ex-
tension of time were rejected by the Court. Sri S. v. Gupte was 
unable to make the award by March 25, 1958. 
On April 3, 1958, the appellant applied to the Court for (a) 
c 
the filing of the arbitration agreement under s. 20 of the Indian 
Arbitration Act, 1940, (b) extension of the time of Sri. Gupte to D 
make the award, ( c) in the alternative, reference of the disputes 
to some other person, and ( d) an order for exclusion ,of the time 
from February 18, 1954 up to April 3, 1958 so as to save the 
bar of limitation, if any_ 
The prayer for extension of the time 
of Sri. Gupte to make the award was rejected by K. K. Desai, 
J. and also by the appellate Court, and that prayer is no longer 
E 
pressed by the appellant. 
Both Courts also rejected the appel-
, lant's prayer for the filing of the arbitration agreement 
under 
-s. 20. K. K. Desai, J. held that in order to attract s. 20, the 
applicant must prove that the subject-mat\er of the arbitration 
agreement was not the subject-matter of any suit already insti-
tuted. The appellate Bench held that the arbitration agreement 
having been entered into five years after the institution 9f the 
suit, could not be said to be a
Excerpt shown. Read the full judgment & AI analysis in Lexace.