PREM AGGARWAL Vs. HARPAL SINGH

JUDGEMENT

(1.) In the suit filed for specific performance of agreement to sell dated 6/03/1987 in regard to flat No. 140, first floor, DDA flats. East of Kailash, New Delhi, the defendant moved this application under Section 34 of Arbitration Act, 1940 (for short the 'Act'), alleging that in view of arbitration clause contained in the agreement dated 6/03/1987 upon differences having arisen between parties, the plaintiff filed Suit No. 2951/88 under Section 20 of the Act for referring the disputes as detailed in para No. 8 of petition to arbitration and by the order dated 20/07/1990, Justice Charanjit Talwar (Retd.) was appointed as Sole Arbitrator for adjudication of those disputes. The Arbitrator entered upon reference on 25/08/1990 on which date, D.C. Aggarwal, husband of plaintiff was present while defendant was represented by his Counsel. On time being sought by plaintiff's husband on the ground of his Counsel being out of station, the Arbitrator allowed 10 days' time for filing statement of claim by the plaintiff. It is alleged that Arbitrator fixed his fee at Rs. 15,000.00 and required the parties to pay it in equal shares. Although the defendant paid Rs. 7,500.00 but the plaintiff failed to pay her share of fee. She also failed to file her statement of claim till as late as 24/11/1990. On 17/12/1990 the Arbitrator asked the plaintiff to file affidavit(s) by way of evidence by 20/12/1990 and 23/12/1990 was fixed to conclude the case and deliver award within the statutory period of four months. On 23/12/1990, the defendant appeared alongwith his Counsel who was ready with affidavit and documents in support of the defence and to argue the case. After waiting for over 40 minutes for the plaintiff, the Arbitrator adjourned the case sine die saying that since period of four months has elapsed, he would not fix any date unless the time is extended by the Court. The defendant has neither filed written statement nor taken any other steps in the proceedings. It was prayed that suit be stayed pending adjudication of the disputes which had been referred to arbitration vide order dated 20/07/1990 passed in Suit No. 2951/88.

(2.) Plaintiff contested the application by filing reply. It is not disputed that in Suit No. 2951 / 88 filed under Section 20 of the Act, by the order dated 20/07/1990, Justice Charanjit Talwar (Retd.) was appointed as Sole Arbitrator for adjudication of claims; the Arbitrator entered upon reference on 25/08/1990; the plaintiff filed her statement of claim on 24/11/1990 and she was asked to file affidavit(s) by way of evidence by 20/12/1990; the Arbitrator fixed 23/12/1990 and no one appeared on her behalf on that date and Arbitrator adjourned the proceedings sine die. However, it is alleged that in view of the judgments reported in 1990 RLR 454 and 1990 RLR 536, suits for specific performance were not liable to be referred to arbitration. Accordingly, the plaintiff filed an application dated 20/12/1990 before the Arbitrator bringing to his notice both the said judgments and taking note thereof, he did not proceed further with the reference. It is denied that Arbitrator did not proceed with the reference as the period of four months had elapsed, as alleged. It is claimed that plaintiff had always been ready and willing to pay her fair share of fee to the Arbitrator. It is pleaded that the plaintiff has filed OMP No. 13/93 praying that arbitration clause in the agreement to sell dated 6/03/1987 be declared to be of no effect etc. It is denied that suit is liable to be stayed as prayed for.

(3.) Simultaneously with the filing of suit of specific performance/injunction/ damages etc., the plaintiff also filed OMP No. 13/93 on 13/01/1993. In this OMP filed under Sections 33 and 37(5) of the Act, the prayer made by the plaintiff is for declaration that the arbitration clause in agreement to sell dated 6/03/1987 is of no effect for the purpose of deciding the disputes between the parties under the said agreement and it shall cease to exist with reference to the differences/ disputes referred to arbitration. Decisions in Smt. Sulochana Uppal v. Sh. Surinder Sheel Bhakri, AIR 1991 Del 138, and Hari Om Properties (P) Ltd. v. B. Dutta, 1990 RLR 536, are the basis for filing this OMP. After formulating the following question, the file was ordered to be placed before Hon'ble the Chief Justice for constituting a Bench to reconsider aforesaid two decisions by a learned Single Judge by the order dated 27/09/1996 in the said OMP.