SRIVENKATESWARA CONSTRUCTIONS Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS appeal is filed under Section 39 of the Indian Arbitration act by the plaintiffs in a suit against an order of the learned Subordinate Judges, Vijayawada graning stay of suit in I. A. No. 1050 of 1972 in O. S. No. 442 of 1971 under section 34 of the Indian Arbitration Act, hereinafter called "the Act".

(2.) THE plaintiffs filed the suit O. S. No. 442 of 1971 in the court of the Subordinate Judge, Vijayawada against the Union of Indian represented by the General Manger, South central Railway, Secunderabad (1st defendant) and the Andhra Bank Ltd., Vijayawada (2nd defendant) , for a decree for Rupees 1,47,085/- in favour of the 1st plaintiff is a firm carrying on construction works by entering into contracts with the Railways. THEy entered into several contract with the Railways. THEy entered into several contracts with the Railways. THE grievance is that several amounts due to them under the contracts have been wrongfully withheld. It was further alleged that with respect to one contract the 1st defendant committed breach of the contract and that the contractor the 1st plaintiff , is therefore, entitled to recover the suit claim against the 1st defendant. As soon as the suit notice was received by the Railways , they filed an application under Section 34 of the Arbitration Act stating that the dispute and the claim raised in the plaint have to be decided by an arbitrator as per the arbitration clause by which the contract is governed and that the suit should therefore be stayed till the matter is decided by an arbitrator. THE application was resisted by the plaintiffs on the following grounds :

(3.) TAKING up the first question for consideration, it has to be noted that the plea was not raised in the lower Court, not argued at the stage of arguments. One of the condition under Section 34 of the Act for granting stay is that the authority before whom the application is filed should be satisfied that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration. In the application filed in the lower court it is stated that the petitioner "is ready and willing to do all things necessary to the proper conduct of the arbitration." The objection raised is that there was no averment that the petitioner was also ready and willing at the time of the commencement of the suit. On this simple ground it is urged that the application should be rejected. On a plain reading of the provisions of Section 34 of the Act, we do not find that there is any requirement as to any such specific averment being contained in the application. No doubt if the petitioner makes such an averment, the Court may consider the averment before being satisfied about its correctness. We do not agree with the extreme contention of the learned counsel that unless there is a specific averment in the petition as regards readiness and willingness the petition should be dismissed. If the objection had been raised in the lower Court, the petitioner would have certainly adduced evidence and satisfied the court about the readiness and willingness at the commencement of the proceedings. But as the objection has been raised before us for the first time, the learned counsel for the 1st defendant relied upon Ex. B-17 dated 6-12-1971 i.e. a few days before the filing of the suit in which the 1st defendant was replying to a letter of the plaintiff. It was stated therein that the plaintiffs would be taking their own risk and incurring unnecessary expenditure if they rush to a Court and the attention of the plaintiffs is drawn to the fact that there is a clause in the contract providing for adjudication of disputes by arbitration. It is urged for the 1st defendant that this clause implies that the 1st defendant was inviting the attention of the plaintiffs to the arbitration clause meaning thereby that they are prepared to go before the arbitrator and advised the plaitniffs not to rush to the court. No doubt there is no express averment that they are ready and willing for arbitration , but in the context in which the said statement is made we are inclined to think that the 1st defendant was ready and willing for arbitration even from the commencement of the proceedings. The appellants learned counsel invited our attention to the following cases. IN Anderson Wright Ltd, v. Moran and Co., (AIR 1955 SC 53) the provisions of Sec. 34 of the Act were analysed and it was pointed out that one of the conditions is that the Court should be satisfied with the readiness and willingness of the defendant at the two material points of time. In Middle East Trading Co. v. New National Mills Ltd., AIR 1960 Bom 292 it was observed that the petitioner should satisfy the Court about his willingness for the arbitration both at the time of the commencement of the suit as well as at the hearing of the application . In N. C. Padmanabhan v. S. Srinivasan, AIR 1967 Mad 201 it was held that the petitioner should establish readiness and willingness even prior to the commencement of the suit. This observation goes far beyond the scope of the section and we are unable to accept this extreme view. But even so we have found from the evidence in this case that the 1st defendant was ready and willing for the arbitration even before the suit.