A K BOSE Vs. SHAW WALLACE AND CO

JUDGEMENT

(1.) THIS is defendant's application under Section 34 of the Arbitration Act (for short 'the Act') seeking stay of the suit. The relevant facts which are necessary for the disposal of this application are; The plaintiff was employed by the defendant company by its letter dated June 12,1984 (for short 'appointment letter') in Grade VI at a monthly salary of Rs. 5500.00 . The terms and conditions of appointment were contained in the said letter and also in an agreement executed by the parties on August 1,1984. According to clause 10 of the agreement, the appointment was to continue until July 31, 1987 unless determined earlier in accordance with clauses 11 or 12 thereof. The defendant by its letter dated July 10.1987 extended the appointment of the plaintiff upto July 31, 1988 on the same terms and conditions as contained in the appointment letter except that the basic salary with effect from July 1, 1987 was enhanced from Rs. 5500.00 to Rs. 6000.00 per month. But before the plaintiff could complete the extended term. his services were terminated by the defendant company on December 23, 1987 in purported exercise of its power under clause 11 of the agreement. The letter of termination, however, specifically stated that the defendant company reserved its right to proceed against the plaintiff as may be considered necessary. On February 8,1988 the plaintiff requested the defendant company to pay a. sum of Rs. 1,28,162.00 on account of his alleged dues upto June 22,1988. Besides the plaintiff also demanded payment on account of various other entitlements. By a legal notice dated April 11, 1988 given through Bajpai & Co. Advocates, the defendant was called upon to pay a sum of Rs. 1.49.162.00 to the plaintiff. The notice, inter alia, averred that the services of the palintiff were. terminated in contravention of the agreement dated July 31,1984 in as much as this was done without giving six month's notice in writing or six months salary in lieu thereof. Finding no response from the defendant company to the letter and notice. the plaintiff on October 26, 1988 filed a suit against the defendant company for recovery of the aforesaid amount together with pendente lite and future interest till realisation @ 21% per annum. The defendant company on being served with summons filed the present application on August 23, 1989 under Section 34 of the Act for stay of the suit on the. ground that clause 15 of the agreement provides for Arbitration of the Bengal Chamber of Commerce in the event of disputes/ differences between the parties arising out of the agreement.

(2.) DR. Shanker Ghosh, Learned Senior counsel, appearing in support of the application contended that the services of the plaintiff were terminated in accordance with clause 11 of the agreement and any dispute arising out of such termination and matters connected therewith fall within the purview of clause 15 thereof, which provides for reference to Arbitration of the Bengal Chamber of Commerce. Learned counsel submitted that the plaintiff has not vacated the company's flat even after his termination and the defendant has adjusted the rent, which was being paid by the company in respect of the flat, against the dues payable to the plaintiff. DR. Ghosh urged that the disputes which are being raised by the parties are covered by the arbitration clause and the defendant at the commencement of suit and still remains ready and willing to do every thing necessary for the. proper conduct of the arbitration. He further submitted that silence on the part of the defendant in regard to the letter and notice of the palintiff, without anything more, cannot be construed as lack of readiness and willingness on the part of the defendant to resort to arbitration, learned counsel contended that in the facts and circumstances of the case the suit should be stayed.

(3.) IN Mis. National Iron & Steel Co. Ltd. and others, Vs. The State of West Bengal and another AIR 1967 SC 1206 while construing Section 25F of the INdustrial Disputes Act the Supreme Court held as follows: