JUDGMENT Sachchidanand Jha, J 1. This civil revision is directed against order dated 14-12-1995 passed by the 8th Subordinate Judge, Patna, in Misc. Case No. 6 of 1994 holding that the Court has jurisdiction to appoint Umpire under Section 8(2) of the Arbitration Act, 1940 (in short 'the Act'). 2. The background of the case is that the petitioner filed money suit No. 226 of 1976 in the Court of the 1st Subordinate Judge, Patna, for realisation of sum of Rs. 65,49,535.42 paise on account of damages for the alleged breach of contract in the matter of supply of power cable. The opposite party, in view of the Arbitration clause contained in the agreement, filed an application for stay of the suit under Section 34 of the Act. The Subordinate Judge rejected the application. On appeal (Misc. Appeal No. 27 of 1980) this Court set aside the order and stayed the suit. The S.L.P. preferred by the petitioner was dismissed by the Supreme Court. The suit in the meantime was dismissed in default. This Court by order dated 21-5-1993 in C.R. No. 1032 of 1991 restored the suit but with a rider that it shall not be taken up till the conclusion of the Arbitration proceeding. Prior to that after the dismissal of the S.L.P. by the Supreme Court, the parties had nominated their respective Arbitrators and the arbitration commenced. In view of difference of opinion between the two Arbitrators the dispute was referred to an Umpire, a retired Judge of this Court. The Umpire, however, later resigned. 3. On 4-2-1994 the opposite party gave written notice to the petitioner nominating another retired Judge of this Court as the Umpire, asking the petitioner to concur in the appointment. In response to the said notice, the petitioner by its letter dated 14-2-1994 nominated another person as Umpire. The opposite party informed the petitioner that in terms of the provisions of Section 8 of the Act it is open to the petitioner to concur in the appointment of the person nominated by it (opposite party), failing which the appointment is to be made by the Court, but the petitioner cannot suggest the name of another person. On 21-2-1994 the opposite party filed a petition under Section 8(2) of the Act before the Subordinate Judge, Patna, which was registered as Misc. Case No. 6 of 1984.
On 21-2-1994 the opposite party filed a petition under Section 8(2) of the Act before the Subordinate Judge, Patna, which was registered as Misc. Case No. 6 of 1984. Soon after, on 8-3-1994 the petitioner also filed a similar petition under Section 8(2) in money suit No. 226 of 1976 for appointment of the Umpire. The petitioner objected to the maintainability of Misc. case No. 6 of 1994. By the impugned order, as indicated at the outset, the objection has been overruled and the petition has been held to be maintainable. Appointment of Umpire has also been made. 4. Mr. Shiva Kirti Singh, learned counsel for the petitioner, submitted that the Court below has passed the impugned order under an erroneous impression that in view of the order of stay of the suit under Section 34 of the Act, the Court in seisin of Money Suit No. 226 of 1976 cannot deal with the matter of appointment of Umpire. He submitted that stay of the suit under Section 34 does not put an end to the suit nor ousts the jurisdiction of the concerned Court to pass orders in ancillary matters. He pointed out that the Court below had called for the record of money suit No. 226 of 1976 from the concerned Court, namely 6th Subordinate Judge, and passed the order, as if he could oversee the proceeding of that Court, without may order of the District Judge in that regard. He submitted that the money suit being, pending although lying in a dormant state, it was the Court in seisin of the suit which was the proper and competent Court to pass order of appointment of Umpire, particularly when the objection under Section 8(2) for the said purpose hand been filed by the petitioner. 5. Mr. I. R. Joshi, learned counsel for the opposite party, submitted that the dispute having been referred to arbitration under Chapter II and not Chapters III or IV of the Act, the pendency of the suit was of no significance and the Court in seisin of the suit cannot be deemed to be the Court within the meaning of Section 8(2) of the Act.
He submitted that in any view the order does not cause any prejudice to the petitioner and, therefore, in terms of the proviso to Section 115 of the Code of Civil Procedure, it is not a fit case in which the High Court should interfere in civil revision. 6. Section 8 provides for appointment of Arbitrator or Umpire by the Court, where parties do not agree upon he appointment of an Arbitrator of Umpire (where Umpire is required to be appointed) or where the appointed Arbitrator or Umpire neglects or refuses to act or is incapable of acting or dies, upon written notice by one party the other party does not concur in the appointment of an Arbitrator named by him. It would be useful to quote sub-section (2) of Section 8 as here under : "If the appointment is not made within fifteen clear days after the service of the said notice, the Court may, on the application of the party who gave the notice and after giving the other parties an opportunity of being heard, appoint an Arbitrator or Arbitrators or umpire, as the case may be who shall have like power to act in the reference and to make an award as if he or they had been appointed by consent of all parties." It would be also useful to notice the definition of "Court" under Section 2(c) of the Act as hereunder : "Court" means 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, but does not except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court." 7. There is no dispute at the Bar that neither the Court of 6th Subordinate Judge, before which the money suit is pending, nor the Court of the 8th Subordinate Judge, which has passed the impugned order, lacks in jurisdiction within the meaning of Section 2(c) of the Act. It was stated at the Bar that suits congnizable by the Court of Subordinate Judge are usually filed in the Court of 1st Subordinate Judge wherefrom they are transferred to other Courts under orders of the District Judge. It is significant to mention here that Misc. Case.
It was stated at the Bar that suits congnizable by the Court of Subordinate Judge are usually filed in the Court of 1st Subordinate Judge wherefrom they are transferred to other Courts under orders of the District Judge. It is significant to mention here that Misc. Case. No. 6 of 1994 was also initially filed in the Court of lst Subordinate Judge, wherefrom it was first transferred to the filed of the 4th Subordinate Judge and, later, to the file of the 4th Subordinate Judge and, later to the file of 8th Subordinate judge. In fact, Money Suit No. 226 of 1976, filed initially in the Court of the 1st Subordinate Judge, was later transferred to the file of 6th Subordinate Judge, where it is presently pending, Mr. Shiva Kirti Singh in course of hearing, categorically stated that he does not deny the inherent jurisdiction of the Court to appoint the umpire, the only question, according to him, is as to which Court whether the Court of 6th Subordinate Judge or the 8th Subordinate Judge should make the appointment, in the present case. 8. The Arbitration Act provides for three modes of reference to arbitration, Chapter II deals with arbitration without intervention of Court, Chapter Ill deals with arbitration with the intervention of the Court and Chapter IV deals with arbitration in suits. The application of Chapter III in the present case is clearly ruled out because no application was filed in Court calling upon the parties to file arbitration agreement nor dispute was referred to any Arbitrator appointed by the Court. Where an agreement contains an arbitration clause it is open to the parties or any of them to refer the dispute to the Arbitrator appointed by them or appointed by the Court under Chapter II or to file an application under Section 20 (falling in Chapter III) to call upon the other party to produce Arbitration Agreement and, if sufficient cause is not shown, to refer the dispute to an Arbitrator by the Court. Section 20 i.e., Chapter III is, therefore, clear excluded Chapter IV also is not applicable. Where in any suit all the parties interested agree that the matter be referred to arbitration and whereupon the dispute is referred to the Arbitrator, it is deemed to be arbitration in suit within Chapter IV of the Act. No such thing was done in the present case.
Where in any suit all the parties interested agree that the matter be referred to arbitration and whereupon the dispute is referred to the Arbitrator, it is deemed to be arbitration in suit within Chapter IV of the Act. No such thing was done in the present case. No doubt, an application for stay of suit under Section 34 was filed but such an application is not deemed to be "reference" in the matter of arbitration. The point stands settled in view of the decision of the Apex Court in Union of India v. Surjit Singh Atwal ( AIR 1970 SC 189 ). 9. The facts, briefly, narrated above hardly leave any room for doubt that the reference of dispute in the present case was under Chapter II of the Act. If that is so, the fact that a Money Suit at the instance of the petitioner is pending in another Court of coordinate jurisdiction was/is of no consequence for the purpose of exercise of power under Section 8(2) of the Act by another Court of similar coordinate jurisdiction. The suit, it is true, has not come to an end and the Court i.e., 6th Subordinate Judge, which is in seisin of the suit, is competent to pass order in ancillary matter including matter covered by Section 8(2) of the Act. "As a matter of fact, the petitioner had filed such a petition before the 6th Subordinate Judge in the money suit. 10. The point for consideration is as to which of the two Courts was/is competent to dispose of the petition under Section 8(2). If the reference had been made under Chapter III or Chapter IV, a view of the provisions of Section 31 of the Act, the Court which had made the reference would have been the Court having exclusive jurisdiction to make an order. However, as reference is to be treated as one under Chapter II, without intervention of the Court, the pendency of the suit in the Court of 6th Subordinate Judge would not oust the competence or jurisdiction of the Court of 8th Subordinate Judge, to make such an order. 11. In Kumbha Mawji v. Dominion of India ( AIR 1953 SC 313 ), the parties had referred the dispute to two Arbitrators and ultimately to an umpire. The umpire made the Awards and made over them, in original, to each of the parties.
11. In Kumbha Mawji v. Dominion of India ( AIR 1953 SC 313 ), the parties had referred the dispute to two Arbitrators and ultimately to an umpire. The umpire made the Awards and made over them, in original, to each of the parties. On 10-8-1949 the respondent filed and application under Section 14(2) of the Arbitration Act in the Court of the Subordinate Judge, Gauhati, paying that the umpire be directed to file the awards in Court so that the petitioner may get an opportunity to file an objection. Pursuant to the notice the umpire sent the copy of the awards to the Court. Thereupon notice was issued to the parties to file their copies of the awards. In the meantime, on 17-8-1949 i.e., a week after the respondent had filed the application before the Subordinate Judge at Gauhati, the appellant had sent letter to the Registrar of the Calcutta High Court enclosing the two original Awards, duly stamped, for issuing notice to the parties. Thereupon the notices were issued by the High Court to the parties. Thus, in respect of the same Awards two proceedings were initiated, both purporting to the under Section 14(2) of the Act, simultaneously - one in the Court of the Subordinate Judge of Gauhati and the other on the original side of the Calcutta High Court. The Supreme Court in view of the provisions of Section 31(4) of the Act, which provides at Page 317, "Notwithstanding anything contained else where in this Act or in any other law for the time being in force, wherein any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference, and the arbitration proceedings shall be made in that Court and in no other Court." Held that as the application by the respondent Union of India was made (before the Subordinate Judge, Gauhati) earlier on 10-8-1949, while the earliest move by the appellant before the Calcutta High Court was on 17-8-1949, the Gauhati Court only had the jurisdiction and not the Calcutta High Court.
The following observations at prge 317 of the Report may usefully be quoted in this connection : "Thus, it will be seen on a comprehensive view of Section 31 that while the fist sub-section determines the jurisdiction of the Court in which an award can be filed, sub-sections (2), (3) and (4) are intented to make that jurisdiction effective in three different ways, (1) by vesting in one Court the authority to deal with all questions regarding the validity, effect or existence of an award or an arbitration agreement, (2) by casting on the persons concerned the obligation to file all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings in one Court, and (3) by vesting exclusive jurisdiction in the Court in which the first application relating to the matter is filed ...... The necessity for clothing a single Court with effective and exclusive jurisdiction, and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbitration is commenced." 12. Inasmuch as reference of the dispute in the present case was under Chapter II and not under Chapter III or Chapter IV of the Act, the pendency of the money suit would not exclude the jurisdiction of the 8th Subordinate Judge to make an order under Section 8(2). As a matter of fact, it is not the case of the petitioner that the Court of 8th Subordinate Judge lacks in inherent jurisdiction within the meaning of Section 2(c) of the Act to make an order under Section 8(2). Both the 6th Subordinate judge and 8th Subordinate Judge being, thus, competent to pass independent order under Section 8(2), the filing of the petition by the opposite party being earlier in point of time, the jurisdiction of the 8th Subordinate Judge to pass the linpugned order in Misc. Case No. 6 of 1994, which has come unto its file on transfer cannot be doubted. The present case is covered by decision in the case of Kumbha Mawaji (supra) both on facts and in law. 13. In the result, I do not find any merit in the revision petition, which is, accordingly, dismissed but without any order as to costs. Petitiott dismissed.