GOUSIA JAVED Vs. JAGDISH PERSHAD ASSOCIATES

JUDGEMENT

(1.) THIS is an appeal preferred by the defendants in O.S. 137 of 1991 against an order passed by the IV Additional Judge, City Civil Court, Hyderabad, in I.A. 318 of 1991 on 15-4-1991 refusing to grant stay of the trial of the said suit under Section 34 of the Indian Arbitration Act, 1940. The brief facts of the case are as follows :

(2.) THE appellants-defendants and the respondent-plaintiff entered into an agreement on 22-10-1984. This was an arrangement for negative world right control of the picture "YAA GARIB NAWAZ". Under the said agreement, it is stated that the appellants borrowed various amounts from the respondent. It is also the case of the respondent in the plaint that the amounts due to it were not paid as per the understanding, that thereafter there was an amicable settlement on the issue when the appellants came down to Hyderabad from Bombay on 16-10-1990 and that the account was settled at rupees six lakhs towards the discharge and payment of the said settled account. It is further stated by the respondent-plaintiff that in discharge of the said amount, the appellants-defendants issued two cheques, one dated 31-12-1990 and the other dated 5-1-1991, and that the said cheques were dishonoured. THEreafter, the respondent issued a notice to the appellants on 14-2-1991 demanding the amounts and giving fifteen days time to the appellants from the date of receipt of the notice for payment. Even before the said period expired, the respondent filed the present suit on 26-2-1991 in the civil Court under Order 37, Rule 1 of the Code of Civil Procedure as a summary suit requesting the Court to pass judgment in favour of the... respondent for rupees six lakhs with interest, at 24%. THE respondent also filed I.A. 239 of 1991 for attachment before judgment and summons thereon were received by the appellants on 28-2-1991. Suit notices were received mentioning 12/03/1991 as date fixed for appearance. At that stage, the appellants filed I.A. 318 of 1991, out of which this civil miscellaneous appeal arises, contending that clause 9 of the agreement dated 22-10-1984 was comprehensive enough, that the dispute in this suit is covered by the arbitration clause and that, therefore, the suit may be stayed. THE respondent filed a counter stating that "there is no dispute" arising out of the agreement and that in view of the settlement, the two cheques received by the respondent were dishonoured. THErefore, there cannot be any dispute arising out of the original agreement dated 22-10-1984. THE appellants filed a rejoinder stating that the dispute in the suit is covered by the arbitration clause. THEy further stated in paragraph 5 of the rejoinder that, on the face of it, the suit claim is based on frivolous grounds and that it is idle to contend that there was settlement of account on 16-10-1990 in a sum of rupees six lakhs. It is further stated that the appellants have a good defence to the plaintiff's case.

(3.) IN this appeal, we have heard the learned counsel for the appellants, Sri T. Veerabhadrayya, and the learned counsel for the respondent Sri Rajeev INdani.