SOHANI GRANITES PRIVATE LIMITED REP Vs. BINNY LTD

JUDGEMENT

(1.) This revision petition is filed against the order dated 1.12.2000 in I.A. No. 1401 of 1999 in O.S. No. 1554 of 1997 on the file of VII Senior Civil Judge, City Civil Court, Hyderabad.

(2.) The plaintiff filed the suit for recovery of a sum of Rs. 40,00,000=00 with future interest and costs and also for a decree for cancellation of the mortgage deed executed by the guarantor directing the defendant to return the original title deeds and for a decree for arrears of rent at the rate of Rs. 20,000=00 per month. The defendant entered his appearance in the court and on the same day, he filed a petition under Section 8 of the Arbitration & Conciliation Act, 1996, requesting the trial court to refer the matter to the appointed Arbitrator and consequently stay proceedings of the suit pending decision of the Arbitrator. According to the defendant there is an agreement between the parties as evident from the letter dated 25.2.1992 to refer the dispute to an Arbitrator. In the counter affidavit filed by the revision petitioner, it is pleaded that clause No.8 of the so called letter is not applicable to the present matter in dispute and the said letter cannot be treated as an agreement to refer the matter to arbitration. Various other objections are also taken by the revision petitioner opposing the petition filed by the defendant in the suit. The trial court found that there is an arbitration agreement between the parties to refer any dispute to the Arbitrator mentioned in the letter dated 25.2.1992. On the facts and circumstances of the present case, I do not see any reason not to accept the said finding of fact recorded by the trial court in the impugned order.

(3.) I would now consider the other objections raised by the revision petitioner. According to the revision petitioner the defendant shall be ready and willing not only on the date of the arbitration agreement but also on the date of filing of the petition to refer the dispute for arbitration and when such readiness and willingness is not established by the defendant, the petition filed by him is liable to be dismissed. He relied upon the decisions in SRIVENKATESWARA CONSTRUCTIONS Vs. UNION OF INDIA, AIR 1974 AP 278 and M. VENKATESWARA RAO Vs. N. SUBBARAO, AIR 1984 AP 200. These two decisions have been rendered on applications filed under Section 34 of the Arbitration Act, 1940. In my considered opinion those two decisions have no application to the petitions filed under Section 8 of the New Act. There is significant difference between the two provisions. To make the position clear, I extract hereunder the provision in Section 34 of the Old Act and Section 8 of the New Act. SECTION 34, ARBITRATION ACT, 1940: