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Gujarat High Court
Judgename :M.S.Shah
VARUN SEACON LIMITED - Appellant
Versus
BHARAT BIJLEE LIMITED - Respondent
C.A. 224 of 1996
Decided On : 08/14/1997
Now a party is disentitled from getting stay of the suit only if the party has earlier submitted its statement on the substance of the dispute, that is, if earlier the defendant has filed its reply on merits.
[Para 12]
In the instant case, admittedly the respondent defendant had not filed any written statement on merits and had submitted Civil Misc. Application No. 113 of 1995 with a prayer to stay the proceedings of the suit on the ground that the disputes between the parties were required to be referred to arbitration. Hence mere filing of applications for adjournment to file Written Statement did not debar the defendant from prosecuting application under Sec. 8 of the New Act.
[Para 13]
(b) General Clauses Act - Sec. 6 - Arbitration Act, 1940 - Sec. 34 - Applicability to pending proceedings after New Act coming in force - Looking to the provisions under Sec. 85(2) of the New Act only the pending arbitral proceedings are saved - As such applications under Sec. 34 of the old Act which are pending in a Civil Court on date of commencement of the New Act are governed by the New Act & not by the old Act.
Looking to the provisions of Sub-sec. (2) of Sec. 85 of the New Act, it is clear that the New Act, while repealing the Old Act, intended to save the repealed Act only for the pending arbitral proceedings. Thus an intention inconsistent with the provisions of Sec. 6 of the General Clauses Act is clearly manifested insofar as the question of applicability of Sec. 34 of the Old Act to pending judicial proceedings is concerned and, therefore, application under Sec. 34 of the Old Act which are pending in Civil Court on the date of commencement of the New Act are governed by the New Act and not by the Old Act.
[Para 10]
Where a party to the proceedings had no right or privilege under the repealed Act, which imposed a procedural restriction or a procedural disability on the other side, repeal of the Old Act and simultaneous re-enactment without that disability does not continue the procedural disability, even on application of Sec. 6 of the General clauses Act. It is clear that the restriction contained in Sec. 34 of the Old Act that the party should not have taken any other step in the proceedings was a procedural disability on the defendant rather than a right on the plaintiff. This Court is, therefore, justified in taking the view that pending applications under Sec. 34 of the Old Act such as Civil Misc. Application No. 113 of 1995 in the present case are covered by the provisions of Sec. 8 of the New Act and not by Sec. 34 of the Old Act.
[Para 11]
( 1 ) THIS appeal is directed against the order dated March 11, 1996, passed by the learned Civil Judge (S. D.), Nadiad, below application Ex. 5 in Miscellaneous Civil Application No. 113 of 1995, which was filed by the respondent herein under S. 34 of the Arbitration Act, 1940 for staying the proceedings of Special Civil Suit No. 114 of 1995 filed by the appellant herein for recovering an amount of Rs. 5 lacs.
( 2 ) THE respondent-defendant herein had supplied certain equipments including transformers to the appellant-plaintiff in the year 1995. There were disputes between the parties. The respondent-supplier claimed Rs. 19 lacs (Approx.) being balance amount of consideration whereas the case of appellant-plaintiff was that because of the defects in the machines, the appellant had suffered damage of Rs. 24 lacs. The appellant, therefore, prayed for a decree of Rs. 5 lacs from the respondent herein by filing Special Civil Suit No. 114 of 1995 in the Court of the learned Civil Judge (S. D.), Nadiad on September 4, 1995.
( 3 ) IN the aforesaid suit, the respondent-defendant appeared and on November 22, 1995, filed Miscellaneous Civil Application No. 113 of 1995 under S. 34 of the arbitration Act, 1940 (hereinafter referred as "the old Act") praying for stay of the suit on the ground that the disputes between the parties were required to be referred to arbitration. In the said Miscellaneous Civil Application, the respondent-defendant also filed application Ex. 5 for staying the suit proceedings pending the decision of the said Miscellaneous Civil Application. By the order under appeal, delivered on March 11, 1996, trial Court has stayed the suit proceedings pending the final decision of Miscellaneous Civil Application No. 113 of 1995.
( 4 ) OF course, the order under appeal is confined to interim stay application ex. 5 in Miscellaneous Civil Application No. 113 of 1995, but looking to the nature of the controversy and in order to save delay and multiplicity of proceedings, learned counsel for the parties have requested the Court to dispose of the said Misc. Civil application No. 113 of 1995 alongwith the present appeal.
( 5 ) MR. A. C. Gandhi, learned Counsel for the appellant-plaintiff has challenged the aforesaid order on the following grounds :- (1) The application under S. 34 of the Old Act was required to be filed in special Civil Suit No. 114 of 1995. Miscellaneous Civil Application No. 113 of 1995 was not filed by the respondent-defendant in the suit, but was an independent application and therefore, was not maintainable under S. 34 of the Old Act. (2) The application was filed by the respondent-defendant under the Old Act and therefore, the provisions of the Old Act alone are required to be considered while testing the order under appeal. (3) The respondent-defendant had appeared in the above suit and had filed applications for adjournment for filing written statement and therefore, as per the settled legal position, the respondent-defendant having taken steps in the proceedings, the application under S. 34 of the Old Act ought to have been rejected. (4) Arbitration Application No. 1 of 1996, purporting to be an application under s. 11 (5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the New Act"), is in the nature of an application under S. 20 of the Old Act and therefore, it was not open to the respondent-defendant to pursue two independent separate proceedings by filing such an application under S. 11 (5) of the of New act and also pursuing the application under S. 34 of the Old Act.
( 6 ) IN reply, Ms. Minoo Shah, learned Counsel for the respondent-defendant has made the following submissions :- (i) Although, Miscellaneous Civil Application No. 113 of 1995 was technically not an application in Special Civil Suit No. 114 of 1995, the said Misc. Civil application was filed before the same judicial authority before whom the Special civil Suit was pending and therefore, there wa
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