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1988 DIGILAW 192 (BOM)

New Subhash Pictures Private Ltd. . v. Balkrishna Wamanrao Dande

1988-06-29

M.S.RATNAPARKHI

body1988
JUDGMENT - M.S. RATNAPARKHI, J.:---The order passed by the 14th Civil Judge, Junior Division, Amravati on 23.9.1985 in Regular Civil Suit No. 429 of 1984 rejecting the defendant's application under section 34 of the Arbitration Act and the order passed by the Additional District Judge, Amravati on 15th February, 1988 in Miscellaneous Civil Appeal No. 124 of 1985, dismissing the appeal and confirming the order passed by the trial Court are agitated in this revision. 2. Facts are more or less undisputed. The respondent instituted Regular Civil Suit No. 429 of 1984 against the petitioner for eviction and other allied reliefs. As is evident from the record, the summons of the suit was served on the defendant's company on 7-8-1985 by substituted service. This summons came to be served at the office of the company at about 11.30 A.M. It is also to be noted that according to this summons the defendant was required to file its written statement on that very day before the Court. It is also the averment that the Directors of the defendant Company were not at the head quarters on the day. However they had left a Vakalatnama. That Vakalatnama along with the summons was reached to the advocate at about 3.30 p.m. The advocate approached the Court and filed the application which has been reproduced at page 9 of the memorandum of revision. It reads as follows : "the defendant to apply as under : 1. The defendant company has been served with the summons of this suit just today at 11.30 noon. The case is fixed for today. The defendant wants time to look into the matter and to prepare and file its defence. Prayer : It is, therefore, prayed that the suit be adjourned and the defendant be granted a month's time to file his defence." It appears that the adjournment was granted and the suit was adjourned to 29th August, 1985. On 29th August, 1985 the defendant filed an application under section 34 of the Arbitration Act stating that there is a valid agreement between the parties regarding the subject-matter of dispute for referring the dispute to the arbitrators appointed by the consent of the parties, The defendant, therefore, requested the Court to stay the suit and refer the dispute to the arbitrators. There is no much dispute at this stage that there was in fact a written contract between the parties and there was in fact a term of arbitration. 3. The only defence raised to this application was that prior to the filing of this application under section 34 of the Arbitration Act the defendant did put his appearance before the Court on 7-8-1985 and did apply for an adjournment for preparing his defence and this, according to the plaintiff-respondent, amounts to take further steps within the meaning of section 34 of the Arbitration Act. It was contended that the defendant has already taken further steps, and, therefore, the present application under section 34 of the Arbitration Act is not tenable. 4. On hearing the arguments of both the sides, the trial Court found that the defendant has already taken other steps in furtherance of the suit and it does not entitle him to claim a benefit under section 34 of the Arbitration Act. It, therefore, rejected the application. The appellate Court also concurred with the trial Court and the appeal came to be dismissed. It is against this order that the present revision is directed. 5. Mr. Akhani, the learned Advocate for the petitioner, strenuously urged before me that both the courts below were wrong in treating the application filed by the defendant before the trial Court on 7.8.1985 as "taking further steps in furtherance of the suit". What he urged before the Court was that the summons of the suit was served at about 11.30 a.m. on the same day the Counsel could be approached only at about 3.30 p.m. in the Court precincts. The Director of the Company were out of the head quarters and there was no sufficient time even to give instructions to the Advocate. That is why the Advocate was merely asked to take some time the Court. There appears to be much truth in what Mr. Akhani says, particularly in view of the fact that the summons was served on the defendant on the very day at about 11.30 a.m. and the Advocate could be approached only at about 3.30 p.m. and that too in the Court precincts. The suit might have been a simple suit between the landlord and a tenant, but a party may have its own defence and it requires some reasonable time to impart instructions to the Counsel. The suit might have been a simple suit between the landlord and a tenant, but a party may have its own defence and it requires some reasonable time to impart instructions to the Counsel. There is enough material on record of this case to show that there was no sufficient time at all to impart instructions to the Counsel. 6. It is in these circumstances that the Advocates made an application before the Court. The contents of the application have already been reproduced in the foregoing paragraph and I do not think it proper to repeat it again. Enough to point out at this stage that the Advocate prayed for time to look into the matter and to prepare and file its defence. It is interesting to note that the Advocate did not tell the Court that he wants time to file the written statement to the claim of the plaintiff. What he brought to the notice of the Court was that sufficient time to prepare the defence should be given to him. The defence may be to the plaint allegations on merits. The defence may be to the powers of the Court. A party may allege before the Court that it has no jurisdiction. This does not necessarily mean the answer to the plaint allegations which is conveyed by the term written statement. 7. Both the courts below have held that even such application amounts to "taking any other steps in the proceedings". In support of this view, the ratio laid down in (Rameshchandra v. Shankerlal)1, 1984(2) Bom.C.R. 245 : 1984 Mh.L.J. 187, (Babulal v. Pirudas Oza)2, A.I.R. 1977 Calcutta 503, and (Food Corporation of India v. Ishwar Singh)3, A.I.R. 1980 Allahabad 125 were relied upon even before me. A.I.R. 1980 Allahabad 125 and 1984 Mh.L.J 187 were clearly the cases wherein the defendant came before the Court and applied for time to prepare and file his written statement. A.I.R. 1977 Calcutta 503 was not different from that, though in addition to the prayer for time to file the written statement a prayer for filing the reply to the interim application was also made. What is apparent from all these rulings is that in each case the defendant went before the Court for the first time and sought adjournment for enabling him to file his reply to the allegations made in the suit. What is apparent from all these rulings is that in each case the defendant went before the Court for the first time and sought adjournment for enabling him to file his reply to the allegations made in the suit. This act on the part of the defendant was construed as "taking any other steps in the proceedings." As far as this interpretation is concerned nobody has any dispute and even Mr. Akhani, the learned Advocate for the petitioner, had no dispute with this proposition. What he put up before the Court and with all the vehemence at his command, was that the application which he filed before the Court on 7-8-1985 was not for filing any written statement. In other words, Mr. Akhani added that he made his intentions clear before the Court on the very first day that he would require some time to prepare and file his defence. According to him, the defence was not necessarily to the suit as a whole, but it was to the jurisdiction of the Court itself and accordingly on the next day i.e. on 29th August, 1985 he put up his cards open before the Court by filing an application under section 34 of the Arbitration Act. Thus according to Mr. Akhani, such application does not amount to "taking any other steps in the proceedings" as contemplated under section 34 of the Arbitration Act. 8. Mr. Akhani invited my attention to the (Food Corporation of India v. Yadav Engineering)4, A.I.R. 1982 S.C. 1302. The Supreme Court had an occasion to interpret the term" taking any other steps in the proceedings" in section 34 of the Arbitration Act. It was observed in paragraph 9 as under : "taking any other steps in the proceedings" just follow the specific expression 'filing a written statement' and both are used for achieving the same purpose' Therefore, the latter general expression must be construed ejusdem generis with the specific expression just preceding to bring out the ambit of the latter. Expression 'written statement' is a term of specific connotation ordinarily signifying a reply to the plaint filed by the plaintiff." Therefore, the expression 'written statement' in section 34 signifies a specific thing, namely, filing an answer on merits to the plaint filed by the plaintiff. This specific word is followed by general words 'taking any other steps in the proceedings'. Expression 'written statement' is a term of specific connotation ordinarily signifying a reply to the plaint filed by the plaintiff." Therefore, the expression 'written statement' in section 34 signifies a specific thing, namely, filing an answer on merits to the plaint filed by the plaintiff. This specific word is followed by general words 'taking any other steps in the proceedings'. The principle of ejusdem generis must help in finding out the import of the general words because it is a well established rule in the construction of statutes that general terms following particular ones apply to such persons or things as are ejusdem generis with these comprehended in the language of the legislature...Filing of the written statement would disentitle the party from seeking enforcement of arbitration agreement by obtaining stay of proceedings because it is such an act on behalf of the party entitled to enforce the arbitration which would disclose unequivocal intention of the party to give up the benefit of the arbitration agreement and accept the method in preference to the one set out in the arbitration agreement to the one adopted by the other party by filing the suit and get the dispute adjudicated upon by the machinery of the Court. It was further observed in the same paragraph : "That some other step must indisputably be such steps as would manifestly display an unequivocal intention to proceed with the suit and to give up the right to have the matter disposed of by arbitration. Each and every step taken in the proceedings cannot come in the way of the party seeking to enforce the arbitration agreement by obtaining stay of proceedings but the step taken by the party must be such step as would clearly and unmistakably indicate an intention on the part of such party to give up the benefit of arbitration agreement and to acquiesce in the proceedings commenced against the party and to get the dispute resolved by the Court. A step taken in the suit which would disentitle the party from obtaining stay of proceeding must be such step as would display an unequivocal intention to proceed with the suit and to abandon the benefit of the arbitration agreement or the right to get the dispute resolved by arbitration." In paragraph 11 of the judgment also the Court has observed as follows : "Therefore, the expression taking any other steps in the proceedings' must be given a narrow meaning in that the step must be taken in the main proceeding of the suit and it must be such step as would clearly and unambiguously manifest the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings." Thus the test according to the Supreme Court is whether the act discloses an unequivocal intention to proceed with the suit or to abandon the benefit of arbitration agreement. Looked at from this angle, the circumstances that are brought on record are eloquent. In the exchange of notices between parties a specific reference has been made to Clause (6) of the Contract entered in between the parties. This clause speaks about the agreement. Immediately on the first day after the adjournment the defendant did put up before the Court his application under section 34 of the Arbitration Act. 9. In Rameshchandra v. Shankerlal, 1984 Mh.L.J. 187 this Court also accepted this very test so as to make it "taking any other steps in the proceedings." The distinguishing factor in 1984 Mh.L.J. 187; A.I.R. 1977 Calcutta 503 and A.I.R. 1980 Allahabad 123 was that in those cases the defendants came before the Court and sought for an adjournment for a specified purpose, that is for filing written statement. In these circumstances, the courts held that those acts on the part of the defendant came within the term 'taking any other steps in the proceedings.' What we find in the present case is that the defendant never disclosed his intention to participate in the suit and to file a reply to the plaint allegations. He brought it to the notice of the Court with the only prayer of defence which did not necessarily mean the defence to the plaint. 10. He brought it to the notice of the Court with the only prayer of defence which did not necessarily mean the defence to the plaint. 10. Looking from this angle it was not proper for both the courts below to hold that by filing an application for adjournment on 7-8-1985 the defendant indulged in 'taking any other steps in the proceedings.' In fact , that application does not come within the connotation of that term. The courts below, therefore, were not justified in rejecting the application. 11. The revision, therefore, deserves to be allowed and is accordingly allowed. The orders passed by the Courts below dismissing the application under section 34 of the Arbitration Act are hereby set aside. The trial Court is directed to take further steps in the suit according to law. Rule is made absolute in terms above. There shall be no order as to costs. Order accordingly. ------