Judgment :- 1. The petitioner, a former employee of the Bahrein Petroleum Company Ltd., in Persian Gulf, filed a suit for gratuity and arrears of salary in the Court of the Subordinate Judge of Cochin. The 1st respondent, the 1st defendant, was the recruiting agent at Bombay of the 2nd respondent - company, which was the 2nd defendant. The respondents filed interlocutory applications before the Cochin court for stay of the suit under S.34 of the Indian Arbitration Act, both the petitions were dismissed; and one of the respondents filed an appeal under S.39(1) of the Act to the Court of the District Judge of Ernakulam, which was also dismissed. Then he filed a civil revision petition before this Court, which again was dismissed in limine. 2. In the meantime, the respondents were declared ex parte by the Cochin Court. After the dismissal of the revision petition the respondents filed an application for setting aside the ex parte, which was allowed on payment of costs. Thereafter, they filed their written statements, wherein they raised pleas both on merits as well as against the territorial jurisdiction of the Cochin court to entertain the suit. Issues were also settled; and the respondents then filed an application for disposal of the issues relating to territorial jurisdiction as preliminary issues The Cochin court agreed with the contention of the respondents that it had no territorial jurisdiction to entertain the suit and returned the plaint. This decision was confirmed in appeal by the District Court of Ernakulam whereupon the petitioner filed this civil revision petition. Vaidialingam, J. placed the matter before a Division Bench; and hence the case is before us. 3. Arguments of the counsel on both sides have mostly centered round the effect of the proceedings taken by the respondents under S.34 of the Arbitration Act, whether they would constitute submission to jurisdiction, though the petitioner has relied on other circumstances as well like the pleading of the respondents on the merits of the case and their getting the ex parte set aside. Mr. M.I. Joseph, on behalf of the petitioner, has drawn our attention to the decision of the Supreme Court in Hira Lala Patni v. Sri. Kali Nath (AIR. 1962 SC. 199). In that case the plaintiff obtained leave of the Bombay High Court on its original side and instituted a suit for recovery of moneys due to him.
Mr. M.I. Joseph, on behalf of the petitioner, has drawn our attention to the decision of the Supreme Court in Hira Lala Patni v. Sri. Kali Nath (AIR. 1962 SC. 199). In that case the plaintiff obtained leave of the Bombay High Court on its original side and instituted a suit for recovery of moneys due to him. The matter was thereafter referred to arbitration, to which the defendant agreed; and an award came to be passed. The decree in terms of the award was challenged in execution by the defendant on the ground that the original side of the Bombay High Court had no territorial jurisdiction to entertain the suit and to make the reference to arbitration. The Supreme Court held that the defendant was estopped from challenging the jurisdiction, because he submitted to the jurisdiction. We do not think that this decision directly applies to the present case. In the Supreme Court case there was a reference to arbitration to which the defendant agreed, which meant that the: jurisdiction of the court to try the suit was conceded; whereas, in the case before us there was no reference to arbitration. The only attempt made by the respondents here was to obtain stay under S.34 of the Arbitration Act. 4. The counsel of the petitioner argues that this attempt to obtain stay under S.34 was a concession that the Cochin court had jurisdiction to try the suit; and therefore, it was a submission to its jurisdiction. It is interesting to scrutinise now S.34. The expression used in the section is "judicial authority" and not the term "court", which is defined in S.2 (c) of the Act. "Court" is defined as a civil court having jurisdiction to decide the questions forming the subject-matter of the reference, if the same had been the subject-matter of a suit. This means that the 'court' is the court having jurisdiction to try the suit; so that, if the "judicial authority" in S.34 is a "court" as defined in the Act, then an application for stay under that section is a concession that the court before which the application is filed is a court having jurisdiction to try the suit and thus a submission to its jurisdiction. 5. In the Arbitration Act of 1899 the corresponding provision contained the term "court"; and in 1933 that was changed into "judicial authority".
5. In the Arbitration Act of 1899 the corresponding provision contained the term "court"; and in 1933 that was changed into "judicial authority". Even when the Act of 1940 was passed, the same expression, judicial authority, was retained in S.34. As the section now stands, therefore, there is force in the contention of the respondents' counsel that the "judicial authority" mentioned in S.34 need not necessarily be the "court". The argument is that stay can be granted under S.34 even by a court or judicial authority which has no jurisdiction to try the suit, as in the present case; so that, a mere prayer for stay under S.34 is not conceding that the court has jurisdiction to try the suit. 6. At this stage Mr. Joseph points out that probably if matters stood at that, there might be some force in this contention, but, the filing of an appeal under S.39(1) against the order refusing stay under S.34 concluded the question unequivocally against the respondents. S.39(1) provides for appeals against some orders passed by the "court". The sub-section enacts that in such cases appeals shall lie to the court to which appeals from original decrees of the "court" are provided by law. One order against which appeal is provided is an order staying or refusing to stay legal proceedings where there is an arbitration agreement. This will include an order staying or refusing to stay under S.34; but, an appeal can lie against such an order only if the order is passed by a "court". In a case where the judicial authority passing or refusing to pass an order of stay under S.34 is not a "court", S.39(1) will not apply and no appeal will lie under that sub-section against such an order. 7. Two alternative constructions are possible. One is to construe that the judicial authority mentioned in S.34 is a "court"; and that all orders passed by any judicial authority under S.34 are appealable under S.39(1). We do not think that the wording of S.34 as it stands will justify our adopting this course. The other alternative is to hold that only such orders under S.34 as are passed by the "court" are appealable under S.39(1); and other orders under S.34 passed by judicial authorities which are not "courts" under S.2(c) are not appealable.
We do not think that the wording of S.34 as it stands will justify our adopting this course. The other alternative is to hold that only such orders under S.34 as are passed by the "court" are appealable under S.39(1); and other orders under S.34 passed by judicial authorities which are not "courts" under S.2(c) are not appealable. We think that the latter interpretation is the better one, in view of the wording of S.34. We may also point out that if it is the first interpretation that is correct, then it is obvious that the respondents conceded territorial jurisdiction in the Cochin court when they applied for stay before that court. 8. As already stated, one of the respondents filed an appeal under S.39(1) before the District court against the refusal of the Cochin court to grant stay. By filing that appeal that respondent conceded that the Cochin court was a "court" falling under the definition, that is, a court having jurisdiction to try the suit. In so conceding, it goes without saying, he submitted to its jurisdiction as well. We are therefore of opinion that the respondents submitted to the territorial jurisdiction of the Cochin court; and that they cannot subsequently turn round and question its jurisdiction after having failed to obtain stay. We may also add that since the defect was only of territorial jurisdiction and not of competence or inherent jurisdiction of the court, it could be waived. 9. In the result, we allow the civil revision petition, set aside the orders of the lower courts and direct the court of the Subordinate Judge of Cochin to retain the suit on its file and dispose of it expeditiously on merits. The respondents will pay the costs of the petitioner in this Court; and in the lower courts the parties will suffer their respective costs. Allowed.