JUDGMENT G. D. Dube, J. 1. A preliminary objection about the maintainability of this appeal has been raised by learned counsel for the respondents. In a suit filed by the respondents for accounting etc. before the lower court, an application under section 34 of Arbitration Act (hereinafter referred to as the Act) was moved by the respondent for referring the dispute to arbitration and staying the proceedings of the suit. An application was moved by the respondents for appointment: of a receiver. The trial court allowed both the applications Aggrieved by the order relating to appointment of receiver, this appeal has been filed under Order 43 (1) (d) of the Code of Civil Procedure, 2. Learned counsel for the respondents drew our attention to section 41 of the Act which reads as under : "41. Procedure and powers off Court :-Subject to provisions of this Act and of rules made thereunder- (a) the provisions of the Code of Civil Procedure 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act, and (b) the Court shall have, for the purpose of, and in relation to arbitration proceedings, the same power of making orders in respect of any of the matters set out in the Second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court : Provided that nothing in clause (b) shall be taken to prejudice any power which may be vested in an arbitrator or umpire for making orders with respect to any of such matters." Elaborating his arguments,, learned counsel urged that, according to sub-section (b), the courts in relation to arbitration proceedings have the same powers of making orders in respect of any of the matters set out in the second schedule of the Act as it has in relation to proceedings of the Court. The Court has under clause 4 of second schedule the powers to appoint a receiver. It was, therefore, contended that the exercise of such a power of appointment of a receiver Is not appealable under section 39 of the Act. Learned counsel cited some case laws in support of his contention. 3. Learned counsel for the appellant urged that the impugned order was passed in a proceeding before the court in a regular suit. The dispute has yet not been referred to arbitration.
Learned counsel cited some case laws in support of his contention. 3. Learned counsel for the appellant urged that the impugned order was passed in a proceeding before the court in a regular suit. The dispute has yet not been referred to arbitration. The lower court has only exercised the powers under section 34 of the Act and directed that the suit be stayed. The trial court has directed the parties to name their arbitrators. The impugned order was passed in a regular suit, and not during the pendency of any arbitration proceedings and in exercise of the powers under section 41 read with clause 4 second schedule of the Act. Hence as the court has exercised its power u/o. 40 for appointment of receiver the general provision of order 43 of the Code of Civil Procedure shall apply. 4. Learned counsel for the respondents laid his special emphasis on the words "for the purpose of and in relation to arbitration proceedings" occurring in clause (b) of section 41 quoted above. It was urged that by moving an application under section 34 of the Act the proceedings should be deemed to have started. We do not agree with the above contention. The purpose of section 34 of the Act is only to stay legal proceedings in a court where there is a subsisting arbitration agreement between the litigating parties. The arbitration proceedings have not started by moving of an application under section 34 of the Act. After the court stays the proceedings on acceptance of the application under section 34 of the Act the matter is to be referred to the arbitrator. The proceedings of the court while disposing of application under section 34 of the Act cannot be deemed to be a proceeding for the purpose of and in relation to arbitration. 5. The case laws cited by learned counsel for the respondents are based on different facts. The earliest case cited by learned counsel is Daulat Ram v. Shriram, AIR 1964 MP 219 . In this case, the parties to the dispute had appointed arbitrators on 23-9-1960 for the purpose of their partition of joint property. By the time of the order passed in the reported case the arbitrators had noli effected the partition. The petitioner in the revision filed before the High Court had submitted the applications under section 20 and 41 of the Act.
By the time of the order passed in the reported case the arbitrators had noli effected the partition. The petitioner in the revision filed before the High Court had submitted the applications under section 20 and 41 of the Act. These applications have been rejected by the trial court and on appeal this order was confirmed by a Division Bench of Madhya Pradesh High Court. Thereafter, the petitioner in the revision filed a fresh application under section 41 of the Act praying for the appointment of a receiver. The trial court dismissed the application on the short ground that an application under section 20 of the Act ought to have been filed. In this case, the Madhya Pradesh High Court had considered the above quoted words from section 41 of the Act as under : "The question which falls for consideration in this case is whether the powers of the Court under the Second Schedule could be exercised even in a case where the reference to arbitration has been made without the intervention of the Court, and no proceedings are pending in connection therewith in any Court. The answer to this question depends on the interpretation of the words "for the purpose of and in relation to arbitration proceedings" used in cl. (b) of S. 41.................The word "proceedings" has been used in relation to the proceedings held by arbitrators in S. 11 of the Act. The conduct of proceedings before the arbitrators is comprehensively provided for in S. 12 of the English Arbitration Act, 1950. There is, in my opinion, no reason to suppose that the words "arbitration proceedings" in Sec. 41 of the Indian Arbitration Act refer to only such proceedings as are held by the Court of competent jurisdiction in pursuance of an arbitration agreement." 6. The above case law does not lay down that in the proceedings of the nature from which this present appeal arises the power could be exercised by the Court under section 41 read with schedule 2 clause (4) of the Act. This case law does not help the respondent. Smt. Krishnawati Devi v. Lala Harjas Mal Misra, AIR 1974 Alld. 209, cited by learned counsel for respondent is also based on different facts.
This case law does not help the respondent. Smt. Krishnawati Devi v. Lala Harjas Mal Misra, AIR 1974 Alld. 209, cited by learned counsel for respondent is also based on different facts. In this case a reference for arbitration was pending when an application under section 41 of the Act was moved before the Ist Additional District Judge, Varanasi for appointment of receiver. On these facts it was held by a Division Bench of this Court that Civil Procedure Code is not applicable and the order is not appealable under section 39 of the Act. 7. In the present case no reference has been made, as yet, to the arbitrator. The impugned order has been passed by the court below in exercise of its powers under order 40 rule 1 of the Code. IN a regular suit. Such an order is appealable under .order 43 rule (1) (d) of the Code. 8. Jammu Forest Co. v. State of JAMMU and Kashmir, AIR 1968 J and K 86, is such a case where an application under section 20 of the Act had been moved before JAMMU and Kashmir High Court. In this case an application had been moved for issuing a temporary injunction. One of the points raised in this case was whether the court could issue an injunction. Relying on AIR 1964 MP 219 (Supra) the court held that it had power to issue an injunction. The case does not canvass any point regarding maintainability of an appeal against an order of trial court, where an order of appointment of receiver was passed in a pending suit where an application under section B4 of the Act had been moved. The last case cited is M/s. Raj Builders v. Indore Development Authority, AIR 1983 MP 146 . In this case the petitioner firm had entered into a contract with Indore Development Authority for execution of some work. A dispute arose between the parties about the execution of work. The petitioner served a notice on the respondents for appointment of an arbitrator in pursuance of an arbitration clause in agreement executed between the parties. The respondeat appoint two arbitrators to which the petitioner consented. In the meantime the respondent issued a notice calling for fresh tenders.
A dispute arose between the parties about the execution of work. The petitioner served a notice on the respondents for appointment of an arbitrator in pursuance of an arbitration clause in agreement executed between the parties. The respondeat appoint two arbitrators to which the petitioner consented. In the meantime the respondent issued a notice calling for fresh tenders. The petitioner moved an application under section 41 of the Act before II Additional District Judge for injunction to restrain the respondent from opening and accepting fresh tenders. This application was rejected. Aggrived by this order a revision was filed before Madhya Pradesh High Court. In this case there was no question as to whether any appeal or revision was maintainable against the order of the lower court. It was held by H. P. High Court that even in proceedings of arbitration started outside the court, the provision of section 41 of the Act are applicable. This case is therefore, not applicable to this matter. 9. From the above discussions we are of the opinion that in the instant case the trial court has only asked the parties to name their arbitrator. The arbitration proceedings has not yet started. The impugned order can not be said to have beets passed in exercise of the powers of the trial court under section 41 sub-cause (b) of the Act for the purpose of and in relation to arbitration proceedings. It was purely an order passed under order 40 of the Code of Civil Procedure which is appellable under order 43 rule 1 (s) of the Code. The preliminary objection is therefore, rejected.