The Malabar Wholesale Co-Operative Stores Limited v. Union of India
1960-12-14
S.VELU PILLAI
body1960
DigiLaw.ai
JUDGMENT S. Velu Pillai, J. 1. This is an appeal by the plaintiff against an order of the Subordinate Judge of Kozhikode, staying a suit under S.34 of the Arbitration Act, 1940, which may be referred to as the 'Act'. The appellant sued the respondent, the Union of India, fordamages. Clause 10 of the agreement between the parties, on which the suitwas based, has provided that: "all disputes and differences out of or in any way touching or concerning this agreement' shall be referred to the sole arbitration of any person nominated by the Secretary to the Government of India in the Ministry of Food and Agriculture". The summons was served on the respondent on May 7, 1956, that is, about 11/2months before the date of the first hearing on June 22, 1956. The entry in the"Notes-paper" of the case for that day, was in the following terms : "Deft, by K. P.K. M. W. S. 1/8. (Inld.) (by the Judge) 22/6". On August 1, 1956, the date of thenext hearing, the following entry was made : "G. P. wants now to appear onbehalf of the defendant and he further wants to file an application to take actionunder S.34 of the Arbitration Act and not to file W. S. At this stage, the plaintiff'sadvocate states that the G. P. can't take time. Adj. to 23/8. (Inld.) (by the Judge)1/8". The petition under S.34 of the Act was filed on August 23, 1956, and on thatday, the Government Pleader filed a memorandum of appearance purporting tobear the date, August 14, 1956. 2.
Adj. to 23/8. (Inld.) (by the Judge)1/8". The petition under S.34 of the Act was filed on August 23, 1956, and on thatday, the Government Pleader filed a memorandum of appearance purporting tobear the date, August 14, 1956. 2. S.34 of the Act reads as follows: "Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred,any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; andif satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings." Under this provision, two of the conditions which must be established are, as laid down by the Supreme Court in Anderson Wright Ltd. v. Moran and Co., (AIR1955 SC 53 at 55) that the applicant under S.34 must have taken no step in the proceeding after making his appearance and before filing the application and thatthe applicant not only is, but also was, at the commencement of the proceedings,ready and willing to do everything necessary for the proper conduct of thearbitration. The appellant's learned counsel challenged the order under appealon the ground, that both these conditions have not been fulfilled in this case. 3. Shri K. P. Kesava Menon was the Government pleader attached to the Courtof the Subordinate Judge and the letters "K. P. K. M." in the entry of June 26refer to him. The letters "G. P." in the entry of August 1, evidently denote theGovernment Pleader. The plain meaning of the entry of June 22 is, that therespondent was represented in Court on that day by Shri K. P. Kesava Menonand that the case was adjourned for written statement to August 1, 1956, on an application, which, in the absence of any writing, must be taken to have been made by him orally.
The plain meaning of the entry of June 22 is, that therespondent was represented in Court on that day by Shri K. P. Kesava Menonand that the case was adjourned for written statement to August 1, 1956, on an application, which, in the absence of any writing, must be taken to have been made by him orally. The entries in the "notes-paper", of that date and of the second date of hearing, appear to be in the hand writing of Shri E. K. Moidu, who after an intervening period of absence, has also passed the order under appeal.In that order, he has stated thus, as to what took place in his Court on June 22: "........... .the petitioner (respondent) represented by Shri. K. P. Kesava Menonhas made an oral application to file statement in the suit." It is unreasonable to think, that the appearance of Shri K. P. Kesava Menon onJune 22, was in any other capacity than as Government Pleader, for then, hewould have no right to represent the respondent. The most significant feature inthis case is, that no affidavit has been filed by Shri K. P. Kesava Menon,explaining what he purported to do on that date, and how or in what circumstances, the case was adjourned for filing the written statement. He mightwell have averred, if the facts were so, that the respondent had not received a copy of the plaint before he made the oral application for time, or that he was not authorised to act on behalf of the respondent on that date, or that he had not been fully instructed in the case. The appeal has to be decided without an affidavit. 4. What is a "step in a proceeding" within the meaning of S.34 of the Act, has been explained in Punjab State v. Moji Ram (AIR 1957 Punjab 223), as meaning any application, which indicates, that the applicant is acquiescing in the disputebeing decided by a suit in the civil court; it is a conscious submission to thejurisdiction of the Court, with full knowledge of the nature of the cause of action,as held in Joharimal v. Fatehchand (AIR 1960 Rajasthan 67).
An oral applicationfor adjournment has been held to be a step in the proceeding, being indicative ofa submission to the jurisdiction of the Court, as held in Deluxe Film Distributors Ltd. v. Sukumar Kumar (AIR 1960 Calcutta 206) and Abdul Quddoos Dost Mohammad Momin v. Abdul Gani Abdul Rahman (AIR 1954 Nagpur 332). In Joharimal v. Fatehchand it was decided, that an application for time to file awritten statement was primafacie an indication of acquiescence in the proceedings in the suit. The same view was taken in Roop Kishore v. United Provinces Government, Lucknow (AIR 1945 Allahabad 24.) Joharimal v.Fatehchand has surveyed the case law and three exceptions to the above rule were deduced. Where the defendant had not received a copy of the plaint before applying for time for filing written statement, or where counsel was not authorisedto appear, or where he had not received full instructions from the party, the rulethat an application for time is primafacie a step in the proceeding would notapply. The burden of proving those exceptional circumstances is undoubtedly onthe applicant, as was held in Joharimal v. Fatehchand, Roop Kishore v. United Provinces Government, Lucknow, and Hanutmal Bold v. Khusiram Benarsilal ((1949) 1 Calcutta 199). In Punjab State v. Moji Ram, the Government Pleaderexplained by affidavit, that he had no instructions to defend the case and was notconversant with the full facts when he made the oral application for time for filingthe written statement. The need for an affidavit in these circumstances, bycounsel who appeared to ask for an adjournment, cannot be over emphasised,for he is the best person to state, under what circumstances he acted in this manner. It is unfortunate, that the Government pleader in the Court below had not done this. 5. The learned Subordinate Judge has found, that the Government Pleadercould be deemed to have appeared only on August 23, 1956, and relied on the terms of O.3 R.4, Sub-r.(6) CPC, Madras, which, at the relevant time, read: "No Government or other pleader appearing on behalf of the Government or on behalf of any public servant sued in his official capacity, shall be required to present any document empowering him to act, but such pleader shall file a memorandum of appearance signed by himself and stating the particulars mentioned in sub-rule (5)." The sub-rule does not lay down, that there can be no appearance without filing a memorandum.
Order 3, Rule 4, sub-rule (1) enacts, that no pleader shall act for any person in any Court, unless he has been appointed by a document in writing in the prescribed manner, and sub-rule (2) provides, that such appointment shall be filed in Court and shall be deemed to be in force until determined. Under sub-rule (6) quoted above, a Government or other pleader as aforesaid, need not present a document empowering him to act. Sub-rule (5) of the above rule which does not apply to a Government Pleader or other pleader as aforesaid, prohibits a pleader who has also been engaged for pleading only, from pleading without filing a memorandum of appearance; under sub-rule (6) there is no such prohibition. A memorandum of appearance is necessary, as but constituting a record, that he has entered appearance. It is not the source from which he derives authority, but it only evidences the fact of his appearance. In the present petition under S.34, the respondent's case was, that he had entered appearance on August 1, 1956, though the memorandum of appearance was dated August14, 1956, and was filed on August 23. The finding of the Subordinate Judge on this point cannot be accepted. 6. I therefore hold, that the respondent had taken a "step in the proceeding "within the meaning of S.34 of the Act, by orally applying, through the Government pleader, for time on June 22, 1956, for filing the written statement and that therefore one of the conditions essential to attract S.34 has not been fulfilled. This is sufficient for vacating the order of the Subordinate Judge and it is unnecessary to consider how far the second condition formulated above, has been satisfied. 7. The learned Government Pleader had a further argument to advance, relying on The Printers (Mysore) Private Ltd. v. Pothan Joseph ( AIR 1960 SC 1156 ) that the discretion exercised under S.34 by the Subordinate Judge ought not to be interfered with. The discretion which vests in the Court to stay or not to stay the proceedings, can come into play only after the requisite conditions for applyingS.34 have been made out; there is no discretion in the Court for deciding whether the conditions are satisfied or not. There is therefore no substance in this contention. The order under appeal is therefore set aside and this appeal is allowed with costs.