STANDARD BATTERIES LTD Vs. CASINGS (INDIA) PVT. LTD

JUDGEMENT

(1.) A neat question of some importance arises in this matter: - Is an application or suit filed under the provisions of Section 20 of the Arbitration Act, 1940, a suit within the meaning of Clause XII of the Letters Patent?

(2.) THE Plaintiffs have filed this suit under Section 20 of the Arbitration Act asking that the arbitration agreement between the parties should be taken on the file of this Court and an order of reference to an arbitrator be made in respect of the disputes between them. The plaintiffs obtained leave under Clause XII of the Letters Patent upon the averments that supplies of material had been made in Bombay, payments were made in Bombay and the agreement was signed in Bombay; the plaintiffs contended that a material part of the cause of action has arisen in Bombay.

(3.) AT the hearing before me, the only point canvassed by Mr. J. I. Mehta appearing on behalf of the defendants was that leave under Clause XII could not be granted in a suit under Section 20 of the Arbitration Act and that the leave granted should, accordingly be revoked. Mr. Mehta relied upon the provisions of Section 20 of the Arbitration Act and particularly upon Sub -section (2) thereof to contend that an application under Section 20 of the Arbitration Act was required to be 'numbered and registered as a suit' and that it was thus clear such application was not a suit of a civil nature to which Clause XII of the Letters Patent could apply. Mr. Mehta also relied upon Section 41 Sub -section (a) of the Arbitration Act in support of his contention, that it was the Code of Civil Procedure, 1908, alone which applied to proceedings under the Arbitration Act and that the Letters Patent had no application. Mr. Mehta relied upon a judgement of the Calcutta High Court in the case of S. P. C. Engineering Co. v. Union of India : AIR1966Cal259 , wherein the Court was concerned with the very question which I am called upon to decide. In para. 12 of that judgment the following passages occur (p. 266):. In my judgment the test to be applied for determining whether a proceeding is a suit within the meaning of Clause 12 of the Letters Patent is not whether it is initiated by notice. The test is whether the proceeding is intended to terminate in a final adjudication of the rights of the parties by a decree in that proceedings .. In the case of an application under Section 20 however, all that the court is required to do is to pass of an order filing the agreement and making an order of reference. The proceeding comes to an end by the passing of the said order. The wording of Section 20(2) is the 'application shall be numbered and registered as a suit,' does suggest that it is not a suit in the fullest sense of the term.