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1967 Supreme(Del) 12

High Court Of Delhi
CHADHA MOTOR TRANSPORT COMPANY - Appellant
Versus
R.N.CHOPRA - Respondent
Decided On : 01/17/1967

A Court of Small Causes has jurisdiction to stay a suit under Section 34 of the Arbitration Act, 1940.

Headnote:

ARBITRATION ACT, 1940 - SECTION 34 - STAY OF PROCEEDINGS - JURISDICTION OF SMALL CAUSES COURT - COURT OF SMALL CAUSES HAS JURISDICTION TO STAY SUIT UNDER SECTION 34 OF THE ACT.

Fact of the Case:

The plaintiff filed a suit in the Court of Additional Judge Small Causes, Delhi for recovery of money. The defendant made an application under section 34 of the Arbitration Act, 1940 praying that in view of an arbitration clause in the agreement between the parties, the proceedings should be stayed. The learned Additional Judge Small Causes, relying upon an unreported judgment of a learned Single Judge of this Court in Jai Prakash v. Managing Committee of the Minto Road Club, has held that the provisions of section 34 of the Arbitration Act of 1940 are not attracted to a suit pending in the Court of Small causes, and consequently he has declined to stay the proceeding.

Finding of the Court:

The Court held that a Court of Small Causes has jurisdiction to stay a suit under Section 34 of the Arbitration Act, 1940. The Court further held that the definition of the word "court" in Section 2(c) of the Act and the provisions of Section 40 of the Act do not militate against this conclusion.

Issues: Whether a Court of Small Causes has jurisdiction to stay a suit under Section 34 of the Arbitration Act, 1940.

Ratio Decidendi: The Court interpreted Section 34 of the Arbitration Act, 1940 and held that the language of the Section is clear and unambiguous and does not exclude the jurisdiction of a Court of Small Causes in the matter of granting stay. The Court also held that Section 40 of the Act, which deals with the jurisdiction of Small Causes Courts over arbitration proceedings and applications arising thereout, does not apply to applications for stay under Section 34.

Final Decision: The Court allowed the revision petitions, set aside the impugned orders, and directed that the applications under Section 34 of the Act may be disposed of on their merits.

Jindralal, J.

( 1 ) THIS judgment will dispose of civil revisions No. 319-D and No. 320-D of 1964.

( 2 ) THE plaintiff-respondent brought a suit in the Court of the Additiol Judge small Causes, Delhi for recovery of Rs. 328-80 np. The defendant transport company made an application under section 34 of the Arbitration Act of 1940 praying that in view of an arbitration clause in the agreement between the parties, the proceedings should be stayed.

( 3 ) THE learned Additional Judge small causes, relying upon an unreported judgment of a learned Single Judge of this Court in Jai Prakash v. Managing Committee of the Minto Road Club, ( 1 ) has held that the provisions of section 34 of the Arbitration Act of 1940 are not attracted to a suit pending in the Court: of Small causes, and consequently he has decined to stay the proceeding. The defendant has come up in revision.

( 4 ) LEARNED counsel for the defendant-petitioner has challenged the correctness of this authority and has cited Basanti Cotton Mills Ltd. v. M/s Dhingra Brothers, (2) and Choteylal Shamlal Cooch Behar Oil M ills Ltd. (3) Both of these authorities appear to support his contention. I have grave doubts regarding the correctness of the judgment of this court mentioned above. It may be mentioned that the respondent was not represented in this Court in that case.

( 5 ) IT is desirable that this matter be heard by a large Bench. Let the case be put up before my Lord the Chief Justice for constituting a larger Bench to hear this revision.

( 6 ) THIS judgment would dispose of Civil Revisions No. 319-Dof 1964, No. 320-D of 1964 and No. 668-D of 1965, all of which have been filed by Chadha Motor Transport Company (Private) Limited.

( 7 ) ARGUMENTS have been addressed before us in Civil Revision No. 319-D of 1964 and it is stated by learned counsel for the parties that the decision in this case would also govern the other two cases because the matter involved is identical. In the circumstances, we may briefly refer to the facts of the case in Civil Revision No. 319-D of 1964. R. N. Chopra respondent in that revision brought a suit for recovery of Rs. 328-80 np. on account of compensation for non-delivery of goods against the petitioner Transport Company in the Court of Additional Judge, Small Causes, Delhi. The petitioner-Company made an application under section 34 of the Arbitration Act, 1940 (Act No. X. of 1940) (hereinafter referred to as the Act) for stay of the suit on the ground that the plaintiff-respondent had entered into an agreement with the petitioner that all disputes in respect of the goods Receipt, under which the goods in dispute were booked, would be referred to Arbitrator. The respondent denied the existence of such an arbitration agreement and averred that there was dispute between the parties falling within the purview of arbitration clause as printed on the reverse of the goods Receipt. The learned Additional Judge Small Causes Court held that the Court of Small causes had no jurisdiction to stay the proceedings under section 34 of the Act. In arriving at this conclusion the learned Additional Judge relied upon a judgment of Grover, J. in Jai Parkash v. Managing Committee of the Minto Road Club, New Delhi. Civil Revision No. 250-D 1957, decided on 29/2/1960. The petitioner-Company then came up in revision to this Court.

( 8 ) AT the hearing of the present revision and the two connected revisions before Jindra Lal, J. , the counsel for the petitioner challenged the correctness of the view of Grover, J. in Jai Prakash" case and relied upon two decisions of Calcutta High Court Basanti Cotton Mills Ltd. , v. M/s. Dhingra Brothes and Chotaylal Shamlal v. Coech Behar Oil Mills Ltd. , ). Jindra Lal, J. expressed his doubt regarding the correctness of the view of Grover, J, and directed that the matter may be placed before my Lord the Chief Justice for constituting a larger Bench to hear the revisions. It is, in these circumstances, that the revisions have been p



















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