TRIBIDALL PRIVATE LIMITED v. NATIONAL PROJECTS CONSTRUCTION CORPORATION Limited
2005-12-09
BHASKAR BHATTACHARYA, PRAVENDU NARAYAN SINHA
body2005
DigiLaw.ai
BHATTACHARYA, J. ( 1 ) THIS first miscellaneous appeal is at the instance of an applicant under Section 20 of the Arbitration Act, 1940 (hereinafter referred to as the Act) and is directed against the order dated 18th September, 1986, passed by the Assistant District Judge, 3rd Court, Alipore in Title Suit No. 82 of 1984 thereby rejecting the said application as not maintainable. ( 2 ) THE present appellant filed the aforesaid application under Section 20 of the Act thereby praying For filing an agreement between the parties which contained an Arbitration Clause. ( 3 ) THE aforesaid application was contested by the respondents thereby denying the material allegations contained in the application and also taking a point as to the maintainability of the application. According to the respondents, an application under Section 20 of the Act is not maintainable unless the applicant had approached the respondents for referring the disputes in terms of the agreement for arbitration. ( 4 ) THE learned Trial Judge on consideration of the materials on record came to the conclusion that the dispute raised by the appellant was covered by the agreement but it was the duty of the appellant to apply for an appointment of arbitrator as provided in Clause 20 of the General Condition of Contract entered into between the parties before approaching the Court and according to the learned Trial Judge, if the defendant refused to act in spite of demand by the plaintiff, then and then only, the plaintiff could maintain an application under section 20 of the Act. ( 5 ) THE learned Trial Judge, thus, dismissed the application thereby giving liberty to the appellant to apply to the defendant to appoint an arbitrator for settling its claim as stipulated in Clause 20 of the General Condition of contract. ( 6 ) THE learned Trial Judge further found that there being definite dispute between the parties, no costs should be awarded in favour of respondent. ( 7 ) BEING dissatisfied, the plaintiff has come up with the present first miscellaneous appeal. ( 8 ) THE only question that arises for determination in this appeal is whether in order to maintain an application under Section 20 of the Act. it is necessary for the applicant to prove that before approaching the Court he moved before the defendant invoking the Arbitration Clause.
( 8 ) THE only question that arises for determination in this appeal is whether in order to maintain an application under Section 20 of the Act. it is necessary for the applicant to prove that before approaching the Court he moved before the defendant invoking the Arbitration Clause. ( 9 ) AFTER hearing the learned Counsel for the parties and after going through the materials on record we find that in order to maintain an application under Section 20 of the Act the following essential conditions must be fulfilled : (a) The parties must have entered into an agreement. (b) The agreement must have been entered into before a suit with respect to its subject matter is filed in Court; and (c) a difference contemplated in the agreement has arisen. ( 10 ) IF the aforesaid three conditions are satisfied, the parties may either avail of the procedure prescribed by Chapter II i. e. refer the dispute to arbitration without the intervention of the Court or have the agreement filed under Section 20. ( 11 ) SUB-SECTIONS 2 to 4 lay down the procedure to be followed by Court when an application is filed under this Section and sub-section 5 makes the provisions of the remaining sections of the Act applicable to the proceedings under his Section. ( 12 ) IN the present case, the Court itself having found that a valid agreement between the parties to refer the dispute to arbitration was subsisting and that the dispute involved is covered by the said Clause, in our view, the learned Trial Judge refused to exercise jurisdiction vested in him by law in rejecting the application on the ground that it was the duty of the plaintiff to approach the defendant in terms of agreement first and if the defendant refused, it could come before the Court. If 1s now settled law that in order to invoke section 20 of the Act, it is not necessary for the parties to approach in terms of chapter II. ( 13 ) WE, thus, find that it is a fit case where the order impugned should be set aside. We have already indicated that the learned Trial Judge had already found that the dispute involved is covered by agreement and as such, we direct that the agreement be filed.
( 13 ) WE, thus, find that it is a fit case where the order impugned should be set aside. We have already indicated that the learned Trial Judge had already found that the dispute involved is covered by agreement and as such, we direct that the agreement be filed. Let the matter be referred to the Arbitrator, in terms of the agreement within one month from today. In the facts and circumstances, there will be, however, no order as to costs.