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1982 Supreme(Pat) 92

PATNA HIGH COURT
Hari Lal Agrawal, J.
Heavy Engineering Corporation Limited
Versus
S.P.Arya
Civil Revision No. 278 of 1978 ;
Decided On : JULY 30, 1982

Headnote:Arbitration Act, Sec. 33 - The Arbitrator as well as the Court have jurisdiction to determine the effect of arbitration agreement - Such determination will include whether the dispute as within the arbitration agreement - Courts jurisdiction is not barred to that extent. (Para 6)

       Code of Civil Procedure, Sec. 115 - Court coming to a decision without considering the evidence and materials - High Court can interfere in revision (Para 7)

       

Judgment

1. This application in revision has been filed by the applicant who had made an application under Sec.33 read with Section 9 of the Arbitration Act in the Court below for a declaration that the disputes referred to by the opposite party to the arbitrator were not referable to him under the arbitration clause between the parties.

2. Opposite Party No.1 had executed a contract work of the petitioner-company of raising the height of a slag pond embankment in Jan., 1973. After the completion of the work one arbitration proceeding had already taken place between the parties with respect to certain dispute between them and the opposite party obtained an award in their favour. After that opposite party No.1 raised some further disputes and the stand of the petitioner in that regard was that they were not referable as they were within the "accepted matters". Some correspondence followed between the parties in this connection and on the petitioners continued resistance the opposite party No.1 appointed opposite party No.2 as their sole arbitrator and asked him to decide the disputes. This led the petitioner to the filing of the application, as already indicated earlier, namely, that the disputes were not arbitrable and, therefore, the reference should be revoked.

3. The learned Subordinate Judge by the impugned order, however, has held that the petitioner has failed to satisfy him that the disputes in question fell within the "accepted matters" and he has, therefore, rejected the application.

4. Mr. Kameshwar Prasad, appearing in support of this application, argued that the learned Subordinate Judge while considering the matter has not adverted to the various affidavits and other materials that were filed before him to come to the conclusion and has recorded his finding in a cursory manner.

Reading the order of the Court below there appears to be some justification for setting aside the order and remitting it back to the Court below, but the learned counsel for the opposite party raised an entirely different contention. His argument was that the question as to whether the disputes came within the purview of "accepted matters" or not was a question that lay within the jurisdiction of the arbitrator himself and not of the Court and, therefore, the application filed by the petitioner in the Court below was entirely misconceived. The basis of this argument of the learned counsel for the opposite party was that if the Court has to refer to the terms of the arbitration clause inasmuch as existence of the arbitration agreement was undisputed, then the arbitrator was the sole judge to decide the merits of such an objection.

5. Sec.33 of the Arbitration Act, inter alia, provides for making of an "application by any party to an arbitration agreement or any persons claiming under him challenging the existence or validity of an arbitration agreement . ... .. . .. or to have the effect of either determined........." The scheme of Sec.33 of the Arbitration Act, therefore, in my view, empowers a Court also to determine the effect of an arbitration agreement.

6. The petitioner had applied to the Court for examining the question as to whether the disputes raised by opposite party No. 1 were covered by the arbitration clause or were outside the same. Learned counsel for the opposite party however placed implicit reliance upon the case of Jawahar Lal Barman V/s. Union of India (AIR 1962 SC 378) where it was held that if a party affirms the existence to an arbitration agreement or its validity, it is not open to him to file a suit for the purpose of obtaining a declaration about the existence of the said agreement or its validity. Proceeding further, with respect to S.33 it was observed that "the person affirming the existence of an agreement" is entitled to apply to the Court under the latter part of Sec.33 for making a declaration about the said existing agreement, then the first part of S.33, i.e., where a challenge to the existence of an arbit




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