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High Court Of Delhi
INDERPAL SINGH HASSANWALIA - Appellant
Versus
BIR TIBBTAN WOOLLEN MILLS,CHOWGAN, NEAR BIR (H.P.) - Respondent
Suit 36A of 1971
Decided On : 01/24/1973
ARBITRATION - APPLICATION UNDER SECTION 20 OF THE ARBITRATION ACT - JURISDICTION - STAY OF PROCEEDINGS - LIMITATION - APPOINTMENT OF ARBITRATOR.
Fact of the Case:
Petitioner, a sole proprietor of Wool World (India), entered into an agreement with Respondents 1 and 2, appointing the petitioner as the sole selling agent of blankets and other woolen textiles produced by Respondent 1 for five years. Disputes arose, and the petitioner filed an application under Section 20 of the Arbitration Act to file the agreement in court and appoint an arbitrator. Respondents 1 and 2 contested the application, arguing lack of jurisdiction, the need for a stay of proceedings, and delay.
Finding of the Court:
The court held that it had jurisdiction to entertain the application, as an application for stay under Section 34 of the Arbitration Act is not an application in a reference within the meaning of Section 31(4) of the Act. The court also held that Section 10 of the Code of Civil Procedure, which provides for stay of proceedings, does not apply to applications under Section 20 of the Arbitration Act. The court further held that the application was not barred by limitation, as Article 137 of the Limitation Act, 1963, which provides a three-year limitation period for applications for which no other limitation period is provided, applies to applications under Section 20 of the Arbitration Act.
Issues: 1. Whether the court has jurisdiction to entertain the application under Section 20 of the Arbitration Act. 2. Whether the application should be stayed under Section 10 of the Code of Civil Procedure. 3. Whether the application is barred by limitation. 4. Whether an arbitrator should be appointed.
Ratio Decidendi: 1. An application for stay under Section 34 of the Arbitration Act is not an application in a reference within the meaning of Section 31(4) of the Act, and therefore does not confer exclusive jurisdiction on the court where the application is made. 2. Section 10 of the Code of Civil Procedure, which provides for stay of proceedings, does not apply to applications under Section 20 of the Arbitration Act. 3. Article 137 of the Limitation Act, 1963, which provides a three-year limitation period for applications for which no other limitation period is provided, applies to applications under Section 20 of the Arbitration Act. 4. In the absence of an agreement between the parties on the appointment of an arbitrator, the court has the power to appoint an arbitrator.
Final Decision: The court accepted the application under Section 20 of the Arbitration Act and referred the matter to the sole arbitration of Sh. C. L Joseph, Advocate Delhi. The petitioner was ordered to pay Rs. 500.00 as fees to the sole arbitrator in the first instance and was also awarded costs of the application.
( 1 ) THIS is an application under Section 20 of the Arbitration Act. The material facts as stated in the application are these.
( 2 ) THE petitioner is the sole proprietor of Wool World (India ). The respondents I and 2 entered into an agreement dated 10th of March, 1969 with the petitioner. By this agreement the petitioner was appointed the sole selling agent of blankets and other wollen textiles produced by respondent No. 1 for a period of five years. Copy of this agreement is set out as annexure A to the petition. According to the terms of this agreement the mills agreed to produce various kinds of blankets, tweeds, yarn and other textiles excluding mufflers as per instructions and requirements of the petitioner. The minimum production of the mills was to he of the order of Rs. . 15 lakhs a commission of 5% was to be paid to the petitioner ower the difference between the actual value of the produced material and the agreed minimum value of Rs. 15 lakhs. It is not necessary to reproduce here other terms of the agreement as these are not material for the decision of this application.
( 3 ) THE petitioner has alleged that respondents I and 2 did not perform their part of the contract. The petitioner has alleged a number of breaches of the contract by the respondents. It is said that respondents 3 and 4 have failed to deliver and supply the processed and the finished products to the petitioner. The petitioner needed woollen blankets for sale at Kulu Mela but these goods were not delivered to the petitioner. On the other hand respondents I and 2 themselves set up a stall in Kulu Mela in October, 1969 and sold their woolen products at rates much lower than those at which the petitioner sold his woollen products. In the agreement there is a term as to arbitration. This is clause 12 and it provides :
"any dispute between the parties will be settled mutually between themselves. In case no mutual agreement will be attained, the dispute may be solved by arbitration. " The petitioner has prayed that the agreement be filed in court and an arbitrator may be appointed, in terms of the clause 12 of the said agreement for the determination of the disputes between the parties.
( 4 ) AS will benoticed from the allegations in the application the contesting respondents are respondents I and 2. Respondent No. 1 has filed a reply to the petition. In this reply respondent No. 1 has admitted the agreement dated 10th of March, 1969 which was entered into between the petitioner and respondent No. 1. It has however, been contended that the breach of the agreement was committed by the petitioner. It is said that the petitioner did not deposit 25% of advance payment at the time of the placing the orders.
( 5 ) IN point of law two Contentions have been raised in the reply of respondent No. 1.
( 6 ) FIRSTLY, it is submitted that this court has no jurisdiction to try this application under Section 20 of the Arbitration Act. In this behalf it was under that on 24th of November, 1969 the petitioner instituted a suit for injunction (Suit No. 664/1969) in the court of Sh. R. L. Gupta, Subordinate Judge, First Class, Delhi against the respondents. This suit for injunction is also based on the agreement dated 10th of March, 1969. In this suit the respondents I and 2 filed an application under Section 34 of the Arbitration Act praying that since there is. anarbitration agreement between the parties, the suit should be stayed. It is submitted that this court has no jurisdiction to entertain this application for the reason that the application under Section 34 of the Arbitration Act was made to the court of Subordinate Judge, First Class and, therefore, under the provisions of Section 31 (4) of the Arbitration Act only the court of the Sub-ordinate Judge, First Class, Delhi has jurisdiction over all the subsequent applications.
( 7 ) SECONDLY, the contention raised is that this application is liable to be stayed under Section 10 of the Code of
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