MUTCHERLA RAMANATH RAO Vs. TUNGATURTI VENKATAKRISHNA SASTRY

JUDGEMENT

(1.) THIS is an appeal against the Order of the District Judge Warrangal, rejecting an application under section 20 of the Arbitration Act, 1940 (X of1940)

(2.) THE facts material for the purpose of this enquiry lie in a narrow compass. THE appellant and the respondent entered into an agreement on 24th June 1955 to refer certain matters in difference between them to the arbitration of three persons viz,. (i) C.Ramahngam, (ii) Tandra Venkatram Narasiah and (iii) K.Rajeshwar Rao, the last two of them being Advocates practising at Warrangal. alleging that subsequent to the date of agreement neither the arbitrators not the respndent evinced any interest in the matter of settlement of disputes, the appellant filed an application under section 20 of the Arbitration Act for filing the arbitration agreement into Court. THE application was resisted by the respondent on the objection that such an application was incompetent without the institution of a suit. This objection found favour with the District Judge with the result that he rejected the application in limine. It is this order that is under appeal now.

(3.) WE do not find anything in the language of the section which can lead to the inference that a suit has to precede an application under section 20. On the other hand, the indications are that the section does not contemplate the institution of a suit. It is plain from sub-section (2) of section 20 that the application itself will be regarded as a suit and not that an independent suit should be laid for the enforcement of the agreement referring the disputes to arbitration. The very intendment of the Legislature as manifested in the section seems to be to make a reference to the arbitrators and to direct them to proceed in accordance with the provisions of the Act in cases where there is an arbitration agreement between the parties. That being so, we fail to see for what purpose a suit should be brought. The relief to be obtained by the parties is to direct the arbitrators to proceed with the enquiry for the settlement of disputes and to make an award embodying their decision. That being so, there does not seem to be any warrant for the conclusion that an independent suit is envisaged by the section.