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2003 Supreme(Kar) 409

Karnataka High Court
TATA IRON AND STEEL COMPANY LTD - Appellant
Versus
N.B.EXPORTS, BANGALORE - Respondent
Decided On : 05-30-03
C.R.P. : 25 of 2001

Advocates:
K.S.Chengappa, P.S.DINESH KUMAR

Headnote:Application of the Act to the proceedings initiated under Arbitration Act 1940.

       ARBITRATION & CONCILIATION ACT, 1996 - Section 8(1) -Arbitration Act, 1940 -Section 40 -Reference to arbitration - validity of -suit filed on 31-5-1995 - application filed, reference to arbitrator sought -revision -upon remand allowed the application on 29-9-2000 -Arbitration and Conciliation Act coming into force on 25-1-1996 -whether the provisions of the new Act are applicable? Yes.

       [V. G. Sabhahit, J.] - The Arbitration and Conciliation Act, 1996 which has come into effect on 25.1.1996 has repealed the Arbitration Act, 1940, and while repealing the 1940 Act, the saving clause provides that the provisions of the old Act are applicable to the pending arbitral proceedings. Admittedly, no arbitral proceedings were pending pertaining to the subject matter when the 1996 Act came into force and when the provisions of the Arbitration Act, 1940, have been repealed with effect from 25.1.1996. The question of making an application under Section 34 of the 1940 Act does not arise as the Act itself has been repealed.

       Cases Referred : AIR 1997 SC 412

       Relied: AIR 1998 Guj 99.

V. G. SABHAHIT, J.

( 1 ) THIS revision is directed against the order dated 29-9-2000 passed by the XXVI Additional City Civil Judge, Mayo Hall, Bangalore, in O. S. No. 10503 of 1995 on LA. No. II filed by the defendant-respondent herein, directing the parties to the suit to the arbitration for due adjudication of the issues in dispute between the plaintiff and defendant and staying the proceeding of the suit in the meanwhile. The facts of the case in brief leading to this revision are as follows. The parties would be referred with reference to their rank before the trial Court.

( 2 ) THE plaintiff filed the suit O. S. No. 10503 of 1995 on the file of the xxvi Additional City Civil Judge, Bangalore, on 31-5-1995 seeking for recovery of Rs. 17,75,498. 00 with costs, averring that, there is an agreement between the plaintiff and the defendant on 10-8-1992 and defendant represented to the plaintiff that they would supply 50 cubic metres of granite blocks every month for a period of six months subject to the plaintiff giving to the defendant an interest free advance of Rs. 5,00,000. 00 and, further the defendants have also agreed to furnish suitable security to the plaintiff for the said sum. However, since defendant did not comply with the agreement and did not supply the granite as per the agreement, the plaintiff filed the suit for recovery of Rs. 17,75,498. 00 alleging that the defendant instead of refunding the amount which had been advanced by the plaintiff, did not supply the granite nor refunded the amount in reply to the notice. The defendant entered appearance and sought for time to file written statement and before the written statement was filed, he filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking for referring the matter to the Arbitrator in view of Clause 15 of the agreement dated 10-8-1992. The said application was filed on 12-8-1997. The application was resisted by plaintiff by filing objections contending that the application is not maintainable and that the agreement is rescinded by the plaintiff and the application is filed belatedly for about more than two years after the filing of the suit. It was also averred in the objections statement that the arbitration clause is not meant to be strictly followed, but, it is inserted by way of routine affair, and the agreement was executed at bangalore wherein the plaintiff has its branch office and the defendant has its office at Bangalore and also the residence of proprietrix, but, strangely enough under Clause 15 of the agreement, the venue of arbitration was fixed at Madras obviously with mala fide intention and therefore, sought for dismissal of the application. The Trial Court by its order dated 27-5-1999 rejected the application filed by the defendant by holding that the defendant cannot take the benefit of the Arbitration and Conciliation Act, 1996, and seek directions from the Court to refer the parties to the suit for arbitration. Being aggrieved by the said order dated 27-5-1999, the defendant preferred C. R. P. No. 2355 of 1999 on the file of this Court and this Court set aside the order dated 27-5-1999 and remitted the matter to the Trial Court for fresh consideration in accordance with law. The Trial Court after remand, passed an order after hearing the Counsels appearing for the parties on 29-9-2000 and allowed i. A. No. II filed under Section 8 (1) of the Arbitration and Conciliation act, 1996, and parties to the suit were referred to arbitration for due adjudication of the disputes between the plaintiff and the defendant, and till then, the further proceedings were stayed. Being aggrieved by the said order dated 29-9-2000, the plaintiff has preferred this revision petition.

( 3 ) I have heard the learned Counsel appearing for the plaintiff-petitioner and the learned Counsel appearing for the respondent.

( 4 ) THE learned Counsel for the petitioner submitted that, the agreement is dated 10-8-1992 and the suit was fi








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