STATE OF UTIAR PRADESH & ANR. versus JANKI SARAN KAILASH CHANDRA & ANR.

Citation: [1974] 1 S.C.R. 31 · Decided: 23-04-1973 · Supreme Court of India · Bench: C.A. VAIDYIALINGAM · Disposal: Dismissed

Cited by 3 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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31 
STATE OF UTIAR PRADESH & ANR. 
v. 
JANKI SARAN KAILASH CHANDRA & ANR. 
April 23, 1973 
[A. ALAGIR!SWAMI, I. D. DUA AND C. A. VAIDIALINGAM, JJ] 
Arbitration Act 1940. S. -34-District Govcnunent Couµsel accepting sum• 
mons along with cbpy of wrillen statement i11 suit for da1nages for breach of 
contract against State Government-Filing nienzo of appearance and asking for 
acljo:,;,rnn1e111-whether in doing so ''any other step in the proceedings" is taken 
Withill. meaning .of s. 34--State Gov~rnnient's plea for iSfav of suit under s. 34 
whether cuuld be entt!11tained in circumstances of cast-It was belier to have 
suit for large sum r;ied by court rather than by arbitrator. 
The plaintiffs (respondents 
herein) 
instituted a suit for the recovery of 
daillages for breach of contract impleading the State of U.P. (through the Collec-
tor of Bijnor) as the first defendant, and the Divisional Forest Officer, Bijnor 
as the second defendant. The summqns in the suit issued to the State of U.P. 
were served on the District Government Counsel. 
On September 2. 1966 the 
said counsel filed an appearance slip in the court and also put in a fvrmal appli· 
cation praying for one month's time for the purpose .of filing written statement. 
This prayer was granted. 
On October l, 1966 the District Government counsel 
filed an application under s. 34 of the Arbitration Act pleading that there was an 
arbitration clause in the agreement between the parties to the suit and the State 
of U.P. being willing to refer the matter to arbitration the suit should be stayed. 
The trial court held that the dispute was subject to arbitration. clause and S;ince 
the State of U.P. had not taken any steps in the suit proceedings and had also 
not filed -the written statement the -suit was liable to be stayed. on appeal the 
!High CQurt held that the action Of the District Government Counsel in applying 
for time to file the written statement amounted to taking a step in the proceed~ 
Jugs within the Ineaning of s. 34 of the Arbitration Act. On this view the de· 
'fendant was held disentitled to claim that the suit should be stayed. By special 
'leave the defendants appealed to this Court. 
Dismissing _the appeal, 
$1.D : (i) Taking other steps in the suit proceedings within the meaning of 
>S. 34 connotes the idea of dOing something in aid of the progress of the suit or 
submitting to tlte jurisdiction of the court for the purpose of adjudication of 
the merits of the controversy in the suit. [37E-F} 
A recognised agent like the District Government Counsel can scarcely be 
.considered to appear voluntarily in a case on behalf of the Government in the 
·&ense of being unauthorised by his client for the simple reason that he is autho-
Tised by virtue of statute to appeal, act and make applications on behalf of the 
Government. Indeed in the present case the District Government Counsel also 
filed in the Court the usual appearance slip. If he wanted time fot further con-
sultations, he could and should have specifically made a prayer to that effect. 
. 
D~ 
The State tqok the benefit of the adjournment. 
It would be some\ ·•at irra-
tional and perhaps incongruous to permit the State, after having taken the henefit 
of the adjournment, to plead that the application for adjournment was not mlde 
on instructions and was unauthorised. [38E] 
(ii) The argument that the trial court's discretion had been erroneouslr re-
veri;ed by the High Court was equally devoid of merit. If the appellant's appli-
cation was for adjournment for the purpose of filing the 
written statement, 
then othere was no question of any exercise of discretion by the trial court. 
Discretion with regard to stay under s. 34 of the Arbitration Act is to be exercised 
only when ~n application under that section is otherwise competent. [38GJ 
(iii) Keeping in view the long delay after the commencement of the suit and 
the fact that the suit was for a very heavy _amount by way of damages for 
breath of contract, it would be more satisfactorv on the whole to have the suit 
tried in a competent court of law in the normal course rather than by a lay 
32 
SUPREME COURT REPORTS 
( 1974] l S.C.R. 
arbitr.:o.:.Jr who was not bound either by the law of evidence or by. the law of 
A 
prncedore. [39lll 
· 
. 
l)ni;:;d Provinces Governn1ent v. Sri Har Nath, A.I.R. 1949 AU. 611 Union 
of lndfll v. Hans Raj Guvta & Co. A.l.R. 1957 All. 91. Punjab State v. ·M~ji Ram 
&\.J.R.

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