JUDGMENT A.N. Varma, J. - This civil revision is directed against an order passed by the learned Civil Judge, Bulandshahr appointing a receives in an application filed by the Opp. Parties under Section 20 of the Arbitration Act registered as Suit. No. 427 of 1981. 2. The relevant facts are that the plaintiff opp. parties filed an application under Section 20 of the Arbitration Act in the court of learned Civil Judge, Bulandshahr with a prayer that the dispute, regarding accounting and distribution of assets of dissolved firm of which the plaintiffs and the defendant-applicants were partners, be referred to the arbitrators Nawab Singh and Pursottam Sharma after appointment of an umpire by the Court. 3. The application was based on the assertion that the plaintiffs and the defendants had entered into a partnership agreement dated, 13.1.1976 for carrying on a cinema business under the name and style Chandra Lekha Theatre at Anoop Shahr District Bulandshahr; As per terms of the partnership agreement accounts were to be rendered and settled every month but Mahendra Prakash, who was the accounting party, failed to render any accounts and further failed to pay a single paisa towards the plaintiff's share in the profits of the business. Under Clause 18 of the partnership agreement, there was a provision for reference for arbitration in case of any dispute or difference between the partners with respect to the partnership agreement through the arbitration of one arbitrator to be appointed by the plaintiffs and one by the defendants. By a notice dated, 14.10.1981 the plaintiffs appointed Sri Nawab Singh as their arbitrator and called upon the defendants to appoint their arbitrator. The defendants vide their reply dated, 26.10.1981 appointed one Sri Pursottam Sharan as their arbitrator. Disputes between the plaintiffs and the defendants having arisen the plaintiff desires that the same be referred to the aforesaid arbitrators and an umpire to be nominated by the court with the consent of the said arbitrators. In case the named arbitrators refused to accept the reference, or enter upon the same, the arbitrators and the umpire be appointed by the court for the purpose. 4. During the pendency of the above application the plaintiffs moved an application for the appointment of a receiver which was rejected by an order dated 22.4.1982.
In case the named arbitrators refused to accept the reference, or enter upon the same, the arbitrators and the umpire be appointed by the court for the purpose. 4. During the pendency of the above application the plaintiffs moved an application for the appointment of a receiver which was rejected by an order dated 22.4.1982. The application was numbered 6-C and the same was rejected with the observation that there was at present no necessity for appointing any receiver. It appears that subsequently the court below was again requested by the plaintiffs to appoint a receiver by means of an application supported by an affidavit. The defendants-applicants filed an objection thereto and 1.2.1983 was fixed. The defendants did not appear on that date. The court thereupon ordered that the case shall proceed ex-parte. Later on the defendants applied for setting aside of the order passed by the court below for proceeding ex-parte. The court fixed 16.1.1984 for the consideration of the defendants application. On that date again, the defendants applicants did not appear whereupon the court below on the basis of the un-controverted averments made in the affidavit filed by the plaintiffs opp. parties (Paper No. 58C) allowed the application of the plaintiffs and appointed Sri Prashant Kumar, Advocate, as a receiver in respect of the business and property of Chandra Lekha Theatre. The defendants-applicants have applied before the court below for setting aside of this ex-parte order and have Simultaneously filled this revision. 5. Sri Vijay Prakash, learned counsel for the applicants, submitted that the impugned order is without jurisdiction in as much as the application filed by the plaintiffs-opp. parties is not maintainable under Section 20 of the Arbitration Act. It was urged that the said application is in truth and substance an application under Section 8 of the Arbitration Act. Hence the court below could not exercise powers under Section 41 (b) of the Arbitration Act. 6. The submission is devoid of any merit. The application filed by the plaintiffs-opp.
It was urged that the said application is in truth and substance an application under Section 8 of the Arbitration Act. Hence the court below could not exercise powers under Section 41 (b) of the Arbitration Act. 6. The submission is devoid of any merit. The application filed by the plaintiffs-opp. parties is clearly covered by Section 20 of the Arbitration Act, It is settled law that where a difference has arisen between persons who have entered into an arbitration agreement, it is open to any of them instead of proceeding under Chapter II of the Arbitration Act before the institution of a suit with respect to the subject matter of the agreement to apply to a court having jurisdiction in the matter that a reference be made according to the agreement. Judicial precedents are unanimous that where parties have entered into an arbitration agreement and any dispute or difference arises between them with respect to the agreement they have an option either to proceed under Section 8 of the Arbitration Act, or under Section 20. It is entirely the litigants choice. He may either opt for arbitration with the intervention of the court in which case he applies under Section 20 or he may resort to arbitration without the intervention of the court, that is, the parties may themselves refer the dispute to the arbitrator after he is appointed by the court under Section 8. See- Balika Devi v. Kedar Nath, AIR 1956 All 377 (382). 7. In the present case, I find that the plaintiffs opp. parties' application Squarely falls within the province of Section 20. The plaintiffs have sought the intervention of the court for an order that a reference be made according to the terms of the partnership agreement. The plaintiffs assert that a difference has a risen to which the agreement applies and there being an arbitration agreement between the parties with respect to the subject matter of the agreement, they are entitled to seek the intervention of the court for reference of the dispute to the arbitrators and an umpire in terms of the said agreement. All the pre-requisites for an order under Section 20 are hence there. 8.
All the pre-requisites for an order under Section 20 are hence there. 8. Learned counsel for the applicants, however, submitted that under para 2 of Schedule-A to the Arbitration Act inasmuch as a reference contemplated under the agreement is to an even number of arbitrators, the law will presume that there was an implied condition that the award shall be given by the two arbitrators as well as an umpire appointed by them and as in the present case no umpire has been appointed yet the court can not make an order for reference of the dispute. 9. I am unable to agree. The fallacy of the argument lies in supposing that the court itself could not appoint an arbitrator or an umpire under Section 10. Section 20 of the Arbitration Act lays down as complete procedure for reference of a dispute and where necessary the court can also make an order appointing an arbitrator or an umpire. Sub-section (4) of Section 20 provides that the court after hearing the parties and on finding that there exists no reason why a reference should not be made in accordance with the agreement, shall make an order of reference to arbitrator appointed by the parties or where the parties can not agree upon an arbitrator, to an arbitrator appointed by the Court. Sub-section (5) of Section 20 states that thereafter the arbitration shall proceed in accordance with the other provisions of this Act. Merely because, therefore, an umpire has not yet been nominated by the arbitrators named by the parties does not m my opinion take the case out of the purview of Section 20 of the Act. 11. Learned counsel also submitted, relying on a few decisions, namely, 1983 A.L.J., page 761, and 1978, S. C page 47, that a mere label or title of a petition is not conclusive of the true nature of the same. There can be no quarrel with this proposition. The same however, has no application to the present case as in my opinion, the application of the plaintiffs is clearly covered by Section 20 of the Act. 12. The next submission of the learned counsel was that the application of the plaintiff. Opp-Parties having been rejected once, the court below had no jurisdiction to pass the impugned order.
The same however, has no application to the present case as in my opinion, the application of the plaintiffs is clearly covered by Section 20 of the Act. 12. The next submission of the learned counsel was that the application of the plaintiff. Opp-Parties having been rejected once, the court below had no jurisdiction to pass the impugned order. It was submitted that against the first order passed by the court below rejecting the application for appointment of a receiver the plaintiffs have filed a First Appeal before this Court which is pending as F.A.F.O. no. 457 of 1982. That being so, it was urged that the court below could not validly appoint a receiver in these circumstances. 13. A perusal of the previous order dated 20.4.1982 passed by the court below indicates that the application of the plaintiffs Opp. parties was rejected with the observation that at that time there was no necessity for appointing a receiver. If, therefore, there were certain fresh developments or facts which were not in existence when the last order was passed, it may be open to the court below to appoint a receiver if it is satisfied that a case has been made out for the same in view of the altered circumstances. It is equally evident that if there was no change in the circumstances the court below would clearly be deemed to have acted without jurisdiction in appointing a receiver on the basis of the same allegations on which the prayer was rejected earlier. On the material before me it is not possible to give any opinion on this aspect. However, the applicants are already prosecuting their remedy before the court below by way of an application for setting aside of the impungned order on the ground that the same was passed without hearing him and this aspect too may be considered by the Court while disposing of that application. 14. In the result, the revision fails and is dismissed but I make no order as to costs. The court below is, however, directed to dispose of the application for setting aside the ex parte order at the earliest giving the case high priority, if possible, within a month of the date on which a certified copy of this order is presented before it by the applicants.