1966 Supreme(Pat) 107

PATNA HIGH COURT
U.N.Sinha, J.
In Re
Versus
State Of Bihar
Company Petition No. 1 of 1962 ;
Decided On : SEPTEMBER 09, 1966

The Court held that it had jurisdiction to entertain the application under Sec.20 of the Arbitration Act, 1940, as it was a "Civil Court" within the meaning of the Act and had jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, notwithstanding anything contained in any other law for the time being in force, under Section 446(2) of the Companies Act, 1956.

Headnote:

{'KEYWORD': 'ARBITRATION', 'SUBJECT': 'Filing of Agreement and Appointment of Arbitrator', 'ACT SECTION LIST': ['Sec.20 of the Arbitration Act, 1940', 'Sec. 446(2) of the Companies Act, 1956', 'Article 137 of the Limitation Act, 1963', 'Sec. 37(1) of the Arbitration Act, 1940', 'Sec. 60(1) of the Electricity (Supply) Act, 1948 (Act No. 54 of 1948)']}

Fact of the Case:

The Official Liquidator of Monghyr Electric Supply Company Limited (in liquidation) filed an application under Sec.20 of the Arbitration Act, 1940, praying that the Bihar State Electricity Board may be directed to file an agreement dated the 6th July, 1956 between Monghyr Electric Supply Company Limited and the Governor of Bihar, with respect to the dues and claims of the company for its undertaking taken over by the Government of Bihar. Further prayers were that after a perusal of the agreement, an order may be parsed referring the dispute to an arbitrator to be appointed by mutual consent, and and if not to an arbitrator appointed by the Court.

Finding of the Court:

1. The Court held that it had jurisdiction to entertain the application under Sec.20 of the Arbitration Act, 1940, as it was a "Civil Court" within the meaning of the Act and had jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, notwithstanding anything contained in any other law for the time being in force, under Section 446(2) of the Companies Act, 1956. 2. The Court held that Article 137 of the Limitation Act, 1963 did not apply to the application under Sec.20 of the Arbitration Act, as it could only refer to an application filed under the Civil P. C., and that the right to apply had not accrued prior to the 9th June, 1962. 3. The Court held that the Bihar State Electricity Board, Patna, Bihar was directed to file in this Court, in this case, the original agreement dated the 6th July, 1956, within two weeks from this day. The difference which had arisen between the parties, in view of paragraph 6(ii) of the agreement, was referred to an arbitrator agreed upon by the parties. If the parties cannot agree upon an arbitrator within three weeks of the filing of the original agreement, an arbitrator will be appointed by this Court.

Issues: 1. Whether the Court had jurisdiction to entertain the application under Sec.20 of the Arbitration Act, 1940? 2. Whether Article 137 of the Limitation Act, 1963 applied to the application under Sec.20 of the Arbitration Act? 3. Whether the right to apply had accrued prior to the 9th June, 1962?

Ratio Decidendi: 1. The Court held that it had jurisdiction to entertain the application under Sec.20 of the Arbitration Act, 1940, as it was a "Civil Court" within the meaning of the Act and had jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, notwithstanding anything contained in any other law for the time being in force, under Section 446(2) of the Companies Act, 1956. 2. The Court held that Article 137 of the Limitation Act, 1963 did not apply to the application under Sec.20 of the Arbitration Act, as it could only refer to an application filed under the Civil P. C., and that the right to apply had not accrued prior to the 9th June, 1962.

Final Decision: The Court directed the Bihar State Electricity Board, Patna, Bihar to file in this Court, in this case, the original agreement dated the 6th July, 1956, within two weeks from this day. The difference which had arisen between the parties, in view of paragraph 6(ii) of the agreement, was referred to an arbitrator agreed upon by the parties. If the parties cannot agree upon an arbitrator within three weeks of the filing of the original agreement, an arbitrator will be appointed by this Court.