JUDGMENT Hon’ble S.U. Khan, J.—This First Appeal From Order was earlier allowed on 13.11.1991 by Hon’ble Om Prakash, J. (as His Lordship then was) since retired, without hearing any one on behalf of plaintiff-respondent as no one had appeared on his behalf. Thereafter re-hearing application was filed which allowed by me on 21.5.2008. 2. Heard learned Counsel for the parties on the merit of the appeal. This First Appeal From Order is directed against order dated 19.7.1982 passed by Civil Judge, Ghazipur in O.S. No. 6 of 1982, Durga Prasad v. State of Uttar Pradesh. Through the said order application of defendant-appellant for making a reference of the dispute to the arbitrator as provided by Clause 16 of the agreement was rejected. The Court below rejected the contention of the plaintiff that the dispute was not covered by Clause-16 of the agreement. However, dispute was refused to be referred to the Arbitrator on two very strange grounds. The first ground was that specified arbitrator was Superintending Engineer as he was from the defendant’s department hence he was likely to give award in favour of the defendant. It was further mentioned that the order of arbitrator/Superintending Engineer was to be final and binding upon the plaintiff hence it was arbitrary and in the nature of penal clause. The other reason given is that references often yield no positive results and on the other hand it is wastage of valuable time etc. of all concerned. Both the reasons are wholly untenable in law. If the view taken by the Court below is accepted and approved then the entire arbitration law will fall down. Normally in the agreements in between Government and private contractor some officer of department is nominated as arbitrator. In any case as the plaintiff agreed for arbitration by signing the agreement hence he was bound by that. 3. The speculation that award would be invariably in favour of the department was wholly unwarranted. The view of the Court below that the award would be final is also not correct. Under Arbitration Act if the Arbitrator has misdirected himself then the award is liable to be set aside by the Court. 4. As far as the observation that arbitration proceedings prove wastage of time is concerned, the least said the better. The purpose of arbitration is to curtail time in decision of dispute in the Court. 5.
Under Arbitration Act if the Arbitrator has misdirected himself then the award is liable to be set aside by the Court. 4. As far as the observation that arbitration proceedings prove wastage of time is concerned, the least said the better. The purpose of arbitration is to curtail time in decision of dispute in the Court. 5. Learned Counsel for the respondent has mainly argued that after obtaining the stay order in this FAFO its copy was not promptly filed and it was filed only after conclusion of evidence (evidence is stated to have been concluded on 13.12.1984). Learned Counsel has argued that this amounted to waiver. In fact stay order was passed on 30.11.1984 hence it cannot be said that if it was not filed by 13.12.1984 then there was undue delay in filing the copy of this order. Moreover delayed filing of copy of stay order does not mean that the defendants appellant waived its right to get the matter decided by arbitrator. 6. Learned Counsel for the plaintiff respondent has cited the following authorities : (1) AIR 1963 SC 1044 , Michael Golodetz v. Serajuddin and Co. (2) (1973) 2 SCC 96 , State of U.P. v. Janki Saran Kailash Chandra. (3) (1975) 4 SCC 815 , Food Corpn. of India v. Thakur Shipping Co. (4) (1978) 1 SCC 68 , State of Punjab v. M/s Geeta Iron & Brass Works Ltd. (5) (1989) 3 SCC 245 , Rachappa Gurudappa Bijapur v. Gurudiddappa Nurandappa and others (6) AIR (38) 1951 All 541, Union of India v. Firm Vishydha Ghee Vyopar Mandal. (7) AIR 1985 Mad 272 , Yeswant v. Usha Kumar (8) AIR 1957 All 91 , Union of India v. Hans Raj Gupta & Co. 7. In the aforesaid 1975 authority it has been held “where a party to an arbitration agreement chooses to maintain silence in the face of repeated requests by the other party to take steps of arbitration, the case is not one of “mere inaction”. Failing to act when a party is called upon to do so is a positive gesture signifying unwillingness or want of readiness to go to arbitration.” 8. In the authority of 1973 Supreme Court it has been held that power of the Court to stay proceedings of the suit on the ground that arbitration clause operates as bar to the suit in Court is discretionary. 9.
In the authority of 1973 Supreme Court it has been held that power of the Court to stay proceedings of the suit on the ground that arbitration clause operates as bar to the suit in Court is discretionary. 9. In the aforesaid 1978 authority of the Supreme Court it has been held as follows : “Where the parties to a contract have agreed to refer their dispute to arbitration Courts should, as far as possible, proceed to give an opportunity for resolution of dispute by arbitration rather than by judicial adjudication. Even so, the Court has a discretion to stay or not to stay a suit having regard to the totality of circumstances and one weighty factor is to find out whether the party who intervened the arbitration clause has expressed his readiness to rely on it at the earlier stage.” 10. In the aforesaid authority of 1989 SCC it has been held that if adjournment as sought specifically for filing written statement then plea of bar of arbitration cannot be taken. 11. In the aforesaid authority of 1963 Supreme Court it has been held that stay of suit on the ground of arbitration is discretionary. 12. In the aforesaid authority of AIR 1957 All 91 question of laches and when it amounts to waiver has been considered. 13. In AIR 1985 Mad 272 it has been held that if time is sought to submit written statement in reply to application for appointment of arbitrator it is a step in proceedings. 14. In the aforesaid authority of AIR 1951 All 541 it has been held that stay of suit on the ground of arbitration clause is discretionary. 15. None of the above authorities help the respondent. On the other hand 1989 SCC authority rather goes against the respondent. 16. On the basis of the mere fact that the copy of stay order granted by this Court was filed after few days before the Court below, it cannot be said that there was any waiver. Moreover waiver has to be prior to the filing of the suit or at least at the trial stage. Few days or even few weeks time taken in filing copy of stay order passed by the High Court before the trial Court, by any stretch of imagination, cannot be said to be waiver. 17. Accordingly appeal is allowed. Impugned order is set aside.
Few days or even few weeks time taken in filing copy of stay order passed by the High Court before the trial Court, by any stretch of imagination, cannot be said to be waiver. 17. Accordingly appeal is allowed. Impugned order is set aside. The dispute shall be referred to the arbitration in view of the arbitration clause in the agreement in between the parties. ————