SADHU SINGH GHUMAN versus FOOD CORPORATION OF INDIA & ORS.

Citation: [1990] 1 S.C.R. 353 · Decided: 14-02-1990 · Supreme Court of India · Bench: K. JAGANNATHA SHETTY · Disposal: Appeal(s) allowed
cites 2 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

SADHU SINGH GRUMAN 
A 
v • 
.-.i, 
FOOD CORPORATION OF INDIA & ORS. 
FEBRUARY 14, 1990 
[K. JAGANNATHA SHETIY AND R.M. SAHA!, JJ.] 
I:! 
) 
Arbitration Act, 1940: Section 34-"A step in the proceeding"-
What is-Interpretation thereof. 
In a suit filed by tbe Respondent for recovery of a certain amount 
from the appellants and others, on the basis of an agreement between c 
the parties, appellant entered appearance and prayed for the produc-
tion of original documents, since photostat copies were not clear, so 
that written statement may be filed. 
Thereafter the appellant moved the Court under Section 34 of the 
Arbitration Act, 1940 for stay of the suit on the ground that there was D 
an arbitration clause in the suit agreement covering the matter in dis-
pute. Though the Respondent Cm,·poration admitted the existence of 
such a clause, it opposed the prayer for stay of the proceedings on the 
J,l, 
plea that the appellant had taken steps in the proceedings of the suit, in 
that an adjournment was taken for filing written statement. Staying the 
proceedings, the trial court observed that there was no prayer for E 
adjournment of the case for filing the written statement. 
On appeal by the Respondent-Corporation, the First Appellate 
Court vacated the stay order passed by the trial court. The Revision 
petition filed by the appellant was dismissed by the High Court. 
F 
"" 
This appeal, by special leave, is against the High Court's order. 
Allowing the appeal, this Court, 
HELD: 1.1 The expression "a step in the proceeding" which 
would disentitle the defendant from invoking section 34 of the Arbitra- G 
tion Act is not every step taken by him In the suit. It should be a step to 
I( 
abandon the right to have the suit stayed. It should be a step in aid of 
the progress of the suit. The step must have been consciously taken with 
a view to submit to the jurisdiction of the Court for the purpose of 
adjudicating the controversy on merits. [356C-D] 
~ 
353 
A 
B 
c 
354 
SUPREME COURT REPORTS 
(1990] l S.C.R. 
1.2 Before the trial court, the defendants only sought a direction 
to the plaintiff to produce the original agreement and other documents 
so that they may file written statement. It was not stated that they 
wonld file the written statement. They never took any other step sub-
mitting to the jurisdiction of the court to decide the case on merits. The 
right to have the dispute settled by arbitration has been conferred by 
agreement of parties and that right should not be deprived of by techni-
cal pleas. The Court must go into the circumstances and intention of the 
party in the step taken. The conrt must examine whether the party has 
abandoned his right under the agreement. In the light of these princi-
ples and looking to the substance of the application dated January 4, 
1985, one cannot form an opinion that the defendants have abandoned 
their right to have the suit stayed and took a step in the suit to file the 
written statement. (357B-D] 
State of UP. v. Janki Saran Kai/ash Chandra, [1974] 1 SCR 31; 
Food Corporation of India v. Yadav Engineer, [1983] 1 SCR 95 and 
General Electric Co. v. Renusagar Power Co., [1987] 4 SCC 137, relied 
D 
on. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1201 
of 1990 
From the Judgment and Order dated 5.6.87 of the Punjab and 
E 
Haryana High Court in C.R. No. 556/87. 
F 
Mukul Mudgal for the Appellant. 
S.S. Javali, Y.P. Rao and Raju Ramachandran for the 
Respondents. 
The Judgment of the Court was delivered by 
K. JAGANNATHA SHETTY, J. Special leave granted. 
Food Corporation of India filed a suit for recovery of Rs.2 lacs 
G 
against the appellant and respondents 2 to 7 on the basis of an agree-
ment between the parties. After service of notice, the appellant 
entered appearance on December 10, 1984. On January 4, 1985, the 
appellant filed an application stating as follows: 
)I
"'fhat the photostat copy of the original agreement and 
H 
other documents which have been produced by the plaintiff 
\ 
( 
SADHU SINGH v. F.C.I. IJAGANNATHA SHETTY, J.] 
355 
I 
in their evidence are not visible and clear, and it is very 
difficult for the defendants to inspect and give the written 
statement. 
3. That it is very essential to get the original documents 
produced in the court which are in possession of the 
plaintiff so that the defendants may file the written 
statement. 
4. It is, therefore, respectfully prayed that the plaintiff 
may kindly be ordered to produce the origi
Excerpt shown. Read the full judgment & AI analysis in Lexace.