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Rajasthan High Court
Sarjoo Prosad C.J. & Chhangani, J.
Joharimal - Appellant
Versus
Fatehchand - Respondents
D.B. Civil First Appeal No. 15 of 1956
Decided On : November 21, 1959
Per Chhangani, J.—An application for time to file written statement or any other application should not be treated as a matter of law a step in the proceedings. In order to constitute a "step", it must be of such a nature as to lead the Court to the conclusion that the party prefers to have his rights and liabilities determinea by civil court rather than by the domestic forum upon which the parties might have agreed. It must display an unequivocal intention to proceed with the suit and to abandon the right to have the matter disposed of by arbitration.
(2) The test, however, should not be subjective and a party cannot be ;entitled to say that he had no actual knowledge of the right under the arbitration agreement and that in fact he did not intend to give up his right. On the other hand, the test must be objective and a person shall be deemed to have taken a step under sec. 34 of the Act, if it can be held that he could have actual or constructive knowledge of his right in the event of exercising due diligence and that in spite of that he participated in the proceedings of the Court.
(3) Prima facie, an application for time to file written statement should raise a presumption that the defendant had actual or constructive knowledge of his right and that he acquiesced in the method adopted by the plaintiff. The presumption, however, is not absolutely irrefutable and can be rebutted by showing that even constructive knowledge cannot be imputed to the defendant. It is however, not proper and fair to lay down that the presumption can be rebutted only on the ground that the defendants did not receive the copy of the plaint. In rare and exceptional cases, it may be rebutted by other circumstances, such as appearance of a Government counsel without getting instructions in a particular case to appear. It is not desirable to enumerate the exhaustive-list of the circumstances and to make generalization and each case should be considered on its own facts and circumstances. (Para 25)
Sarjoo Prosad, C.J.—The salutary rule appears to be that where a party has consciously submitted to the jurisdiction of the Court with full knowledge of the nature of the cause of action on which the suit against him is founded, the step so taken would deprive him of the right to go to the private forum agreed upon between him and his opponent under any arbitration clause. (Para 1)
2. The plaintiff Fatehchand son of Champalal of Churu instituted a suit in the court of the Civil Judge, Churu on 1st of March, 1955 against defendant Joharimal and 10 others for recovery of Rs. 32,500/- : Rs. 27,780/11/6 as principal and Rs. 4,719/4/6 as interest. Chainrup and Sohanlal were impleaded as proforma defendants Nos. 12 and 13. It is not necessary to set out the case of the plaintiff for the disposal of this appeal. The suit was registered on 2nd March, 1955 and 26th March, 1955 was fixed for the settlement of issues. On this date, Shri Vishambhar Dayal and Shri Manoharlal, advocates, presented their Vakalatnama on behalf of Joharimal, defendant No. 1 and appeared for him. The other defendants could not be served and, therefore, the case was adjourned to 17th May, 1955. The plaintiff of course on this date applied for making some clerical amendments in the plaint which were opposed by the defendant Joharimals counsel, but the objection was over-ruled and the amendments were permitted. On 17th May, 1955, the Presiding Officer of the court was on leave and nothing substantial happened. The case was adjourned to 20th July, 1955. In the meanwhile, on 27th of June, 1955, Shri Vishambhar Dayal, counsel for the defendant put in an application in the court for order directing the plaintiff to arrange for inspection by the defendant of the account-books on which the suit was based as also of the original agreement referred to in paragraphs 4 and 5 of the plaint. It was mentioned that the original agreement had not been produced along with the plaint. This application was heard in the presence of Shri Keshav Prasad Gupta, counsel for the plaintiff on the same day and it was ordered that the documents might be inspected on 5th of July, 1955. However, the inspection of the documents on 5th of July, 1955 could not be given by the plaintiff and, therefore, on 7th July, 1955 directions for arranging inspection on 20th July, 1955 were issued by the court. On 20th July 1955 Shri Manoharlal stating that he would file Vakalatnama on behalf of the defendant No. 1 requested for an adjournment for filing written statement and Vakalatnama. It may be pointed out here that Vakalatnama on behalf of Joharimal having already been filed, the inclusion of his same in connection with promise to file Vakalatnama is evidently an error due to in-advertance. The plaintiff produced account-books and further three more documents and the defendant was directed to inspect them. The case was adjourned to 15th of September 1955. In the meanwhile, an application was put in by Shri Vishambhar Dayal on behalf of Joharimal on 25th of July, 1955 in which it was stated that the inspection of account-books was being carried on and that the inspection revealed a number of irregularities in the maintenance of the books. It was, therefore, prayed that the account-books should be secured and kept in the custody of the court.
3. Later on, however, on 12th of August, 1955, an application under sec. 34 of the Act was presented requesting the court to stay the proceedings in view of an alleged agreement between the parties to get their dispute settled by arbitration. On 16th of September, 1955, the Presiding Officer of the court was again on leave and Shri Manoharlal again sought an adjournment to file Vakalatnama and written statement on behalf of defendants Nos. 2 to 11 and the case was fixed for 18th of November, 1955. On the last mentioned date, Shri Manoharlal presented Vakalatnama and again requested for time to file written statement. It was represented that some of the defendants have been residing in Pakistan and it, therefore, became necessary to request for an adjournmen
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