MALTEX MALSTERS PRIVATE LIMITED Vs. ALLIED ENGINEERS

JUDGEMENT

(1.) THIS appeal under Section 39 of the Arbitration Act, 1940 (hereafter called "the Act") is directed against the order of the learned single Judge of this Court dated March 11, 1974 directing that the arbitration agreement between the parties be filed and the dispute between them be decided by a sole arbitrator.

(2.) DISPUTES arose between the parties and on failure of the appellant to refer the same to arbitration, in October, 1971 the respondents applied under section 20 of the Arbitration Act (hereafter called "the Act") for an order of the court to make a reference to arbitration according to the arbitration clause. The appellant contested the application on several grounds. Amongst others, they maintained that the courts at Delhi had no jurisdiction to try the application and that in any case the application was liable to be stayed in view of a previous application filed by them at Patiala under section 33 of the Arbitration Act. The learned single Judge framed the following issues: (1) Whether this Court has jurisdiction to hear the application? (2) Whether this petition is liable to be stayed under sections 10 and 151 of the Code of Civil Procedure? (3) Whether there is an arbitration agreement between the parties ? If so, whether there are existing disputes which can be referred to arbitration ? (4) What is the effect of the suit filed by the petitioner against the respondent at Patiala on the arbitration agreement? (5) Relief.

(3.) "The discretion conferred by section 149 of the Code of Civil Procedure has normally to be exercised in favour of the litigant except in case of contumacy or positive mala fides or reasons of the similar kind"-(See Custodian of Evacuee Property, New Delhi v. Rameshwar Dayal and others: A.I.R. 1968 Delhi 183). In this case the court also held that the question of bona fides for purposes of this section has to be considered from the point of view of the definition as contained in the General Clauses Act and not as in the Limitation Act so that a thing should be presumed to be done bona fide if it is done honestly, whether it is done negligently or not. In Mahanth Ram Das v. Ganga Das: A.I.R. 1961 S.C. 882 also the Supreme Court has ruled that a liberal view in regard to the powers of the court under this section has to be taken.