Bharat v. Lala Ram — 1959 DIGILAW 228 (ALL)

JUDGMENT S.N. Dwivedi, J. - The defendant appellants filed this appeal against the order of the trial court refusing to stay further proceedings in the application for permission to sue as a pauper under Sec. 34 of the Indian Arbitration Act, 1940. The circumstances, which have given rise to this appeal, are as follows:- 2. The plaintiff respondents filed an application for permission to sue as pauper on the 2nd of November, 1953. The relief claimed in the application was that a decree for Rs. 36,285/- should be awarded to the plaintiffs against the defendants. Notices of the application for permission to sue as a pauper were issued to the defendants requiring them to file objections against the application. On 30th January, 1954 Sri Madan Mohan Bhatnagar Vakil filed an application praying for time to file objections. A telegram from the defendants was also attached along with the application. The telegram requested the aforesaid Vakil to apply for adjournment to the court. The application was, however, filed without a vakalatnama from the defendants, and since the application was not properly presented, the trial court re-fused to adjourn the case and passed an order that the case should proceed ex-parte against the defendants. On 22nd February, 1954, the defendants filed an application supported by an affidavit praying for the setting aside of the ex-parte order and filing of an objection to the application for permission to sue as a pauper. 3. The trial court set aside the ex-parte order on that date and fixed the 30th of March, 1954 for filing an objection by the defendants. On 30th March, 1954 the defendants filed an objection under Sec. 34 of the Indian Arbitration Act. It was stated in that application that the plaintiffs and the defendants had entered into an agreement in respect of the subject matter of the pauper application and clause 23 of that agreement required the parties to settle their disputes by arbitration. It was said that since the dispute in the case arose out of the aforesaid agreement, the court could not proceed with the matter because the defendants were always ready and willing to submit the dispute to arbitration and Sec. 34 of the aforesaid Act, in such circumstances, required that the court should stay further proceedings until the dispute was decided by the arbitrators. 4. 4. Two objections were raised on behalf of the plaintiffs to the defendant's application under Sec. 34 of the Indian Arbitration Act. The first objections was that the plaintiffs have already challenged the validity of the above-mentioned agreement under Sec. 33 of the said Act and that question was still under consideration of the court in a separate proceeding. The trial court in a separate proceeding. The trial court accepted this objections, but if has not been pressed before us by learned counsel for the plaintiff, and it will be deemed that the point has been given up in the appeal. 5. The second objection to the defendant's application was that since the defendants had already taken steps in the proceedings Sec. 34 of the Indian Arbitration Act was not applicable to the case and the court could not stay further proceedings. It was said that on the 30th of January, 1954 and application for adjourning the case was made by Sri Madan Mohan Bhatnagar Vakit of the defendants. But that application was filed by Sri Madan Mohan Bhatnagar without any vakalatnama or any other authority from the defendants. The true legal position on that date, therefore, was that Sri Madan Mohan Bhatnagar had no power or authority to present the application and the said application was, accordingly not an application on behalf of the defendants in the eye of law. The defendants cannot be held to have taken any steps in the proceeding on account of the mere fact that Sri Madan Mohan Bhatnagar had made that application on 30th January, 1954. Indeed, the trial court did not consider that application at all and rejected it as defective and incompetent. 6. It was then submitted that the defendants moved on the 20th of February, 1954 an application supported by an affidavit for the setting aside of the ex-parte order dated the 30th of January, 1954 and for the filing of an objection to the pauper application and thereby took steps in the proceedings. The trial court accepted this submission and dismissed the defendant's objections under Sec. 34 of the Indian Arbitration Act. 7. We have carefully perused the application and the affidavit dated the 20th of February, 1954 and we are of opinion that the defendants, by moving that application, cannot be said to have taken a step in the proceedings. The trial court accepted this submission and dismissed the defendant's objections under Sec. 34 of the Indian Arbitration Act. 7. We have carefully perused the application and the affidavit dated the 20th of February, 1954 and we are of opinion that the defendants, by moving that application, cannot be said to have taken a step in the proceedings. As already stated, on 30th January, 1954 the trial court had passed an order that the case would proceed ex-parte against the defendants, and the defendants could not possibly take any part in further proceedings until the ex-parte order was set aside. The defendants were, in the circumstances obliged to apply to the court for the setting aside of the ex-parte order, and their application dated the 20th February, 1954 contained the following prayer:- "It is therefore respectfully prayed that the ex-parte order dated 30th January, 1954 be set aside and the defendants be given opportunity to file objections and contest the application and for this the defendants shall ever pray." 8. The trial court set aside the ex-parte order as prayed and fixed the 30th of March, 1954 for the filing of an objection, and on that date the defendants filed an objection under Sec. 34 of the Indian Arbitration Act for stay or proceedings. No other step was taken by the defendants in the proceedings and it seems to us that their real intention in making the application date 20th February, 1954 was to remove the impediment of the ex-parte order form their way and then to file an objection under Sec. 34 of the Indian Arbitration Act. The word"...................... the defendants be given opportunity to file objections and contest the application" in the prayer in that application should, in the circumstances mentioned above, be construed to refer to an objection and a contest under Sec. 34 of the Indian Arbitration Act. It may be conceded that those words are equivocal and may also import, when insulated from their setting, an intention to abandon the arbitral forum and submit to the judicial forum and contest the plaintiff's application by raising objections permissible under Or. XXXIII, C.P.C. But this is not a legitimate method of ascertaining a person's intention from a document. It may be conceded that those words are equivocal and may also import, when insulated from their setting, an intention to abandon the arbitral forum and submit to the judicial forum and contest the plaintiff's application by raising objections permissible under Or. XXXIII, C.P.C. But this is not a legitimate method of ascertaining a person's intention from a document. When a words in a document suffer from equivocation, it is the duty of the Court to X-ray then with the aid of their entire background and thus discover the true, and real intention of the writer. So examined, the aforequoted words evince one and only one intention that the defendants wanted an opportunity, after the setting aside of the ex-parte order, to move the court to stay its hands so that the dispute could be resolved by arbitration. Their application dated the 20th of February, 1954 was, indeed, a fore-shadow of their objection under Sec. 34 of the Indian Arbitration Act and nothing more. 9. Considering all the facts and circumstances of the case, we have no doubt that the defendants, by filing the application dated the 20th of February, 1954, did not take any step in the proceeding within the meaning of that expression in Sec. 34 of the Indian Arbitration Act. 10. We are supported in our view by a decision of the Punjab High Court in Messrs. Charan Dass and Sons v. Messrs. Harbhajan Singh Hardit Singh, A.I.R. 1952 Pun. 109 In that case also an ex-parte order was passed against the defendants. The defendants applied for the setting aside of the ex-parte order and after the ex-parte order been set aside, they made an application under Sec. 34 of the Indian Arbitration Act for the stay of further proceedings in the case. It was thereupon contended on behalf of the plaintiffs that the defendants had already taken a step in the proceeding by applying for setting aside the ex-parte order. The contention was rejected and it was held that since the defendants were obliged to apply for the setting aside of the ex-parte order, it could not be said that they had taken any step in the proceeding. The contention was rejected and it was held that since the defendants were obliged to apply for the setting aside of the ex-parte order, it could not be said that they had taken any step in the proceeding. It was observed that if, after the setting aside of the ex parte order, the defendants had taken any other step in the suit besides the step of asking the court to stay proceedings because of the arbitration clause in the agreement, then no doubt they could not avail of the benefit of Sec. 34 of the Indian Arbitration Act; but the defendants had not taken any step except the application for setting aside the ex-parte order and, therefore, it was held that the defendants could get the benefit of Sec. 34 of the Indian Arbitration Act. 11. In the case before us also the defendants did not take any intermediate step between the date of the setting aside of the ex-parte order and the making of the application under Sec. 34 of the Indian Arbitration Act. The observations of Du Parcq, L. J., in Lane v. Herman, (1939) 3 A.E.R. 353 (356) would also inferentially lend support to the view we are taking in this case. 12. We may also mention here that learned counsel for the defendants addressed an argument to us that at the time when the defendants had applied for the setting aside of the ex-parte order, the application to sue suit was then pending before the trial court, so that it could not be said that the defendants had taken a step in a proceeding in respect of any matter agreed to be referred to arbitration. Since it has been possible for us to dispose of the case on a narrower ground, we have not considered it proper to express any opinion on this question. 13. We, accordingly, allow this appeal and set aside the order of the trial court and further direct that the trial court will now proceed to pass an appropriate order under Sec. 34 of the Indian Arbitration Act having regard to the observations which may be placed before it for consideration. The plaintiff shall pay the costs of this appeal to the defendants.