SARASWATI INDUSTRIAL SYNDICATE LIMITED Vs. APOLLO TYRES LIMITED

JUDGEMENT

(1.) -

(2.) THIS order disposes of defendant's application under Section 34, Arbitration Act. The facts giving rise to this application are that the plaintiff-M/s. Saraswati Industrial Syndicate Ltd. had filed a suit for recovery of Rs. l,60,633.83P as principal and Rs. 3,87,592.34P as interest against defendant-M/s. Apollo Tyres Limited on the ground that on 11th February 1975 the 'plaintiff had entered into an agreement with the defendant for supply/erection and commissioning of two coal fired/water tube boilers and after the said job was completed by the plaintiff some differences arose between the parties on the question of amounts due to the plaintiff and vide settlement dated 25th February 1982 between the parties it was agreed that the defendant would in all pay a sum of Rs. 3,21,267.66P apart from interest which was to be decided by the managing directors of the plaintiff and defendant and in pursuance of the said settlement dated 25th February, 1982 a sum of Rs. 1,60,633.83P was paid by the defendant to the plaintiff by means of cheque No. 240650 dated 13th May 1982 and the remaining amount of Rs. 1,60,633.83P due in pursuance of the said settlement had not been paid and as such this suit for recovery of the said amount together with interest.

(3.) THERE could be no doubt that where the parties agreed to refer their disputes and differences to arbitration but subsequently ignoring the arbitration agreement the parties mutually through their representatives agree and arrive at a settlement and that settlement is acted upon as well in part, then only the subsequently arrived at settlement would govern the relations of the parties thereafter and the parties cannot be permitted to ignore such a settlement so as to have recourse to the original arbitration agreement. In these circumstances, the arbitration agreement stands discharged, abrogated and abandoned and the same becomes infructuous and cannot be revived by any of the parties. Such is the position in the instant ease and in these eircumstarnces the defendant would be estopped from invoking the provision of arbitration agreement and cannot be permitted to have recourse to it through the instrumentality of Section 34, Arbitration Act.