K BAPINEEDU Vs. K ANITHA

JUDGEMENT

(1.) THESE two appeals arise out of common facts and raise similar question of law. Therefore, they are heard together and are being disposed of by this common judgment. The parties will be referred to as they are arrayed in C.M.A. No.164 of 1993

(2.) THE appellant and respondents 1 to 3 constituted a partnership firm in the name and style of "Kuchipudi Enterprises" to run a cinema theatre called 'Durga theatre'. Disputes arose between the parties. In accordance with the arbitration clause in the partnership deed, the disputes were referred to an arbitrator, who passed the award on 9-12-1991. THE arbitrator filed the award in the Court for passing a decree in terms of the award. THE first respondent filed an Original Petition under Section 30 of the Arbitration Act, 1940 (hereinafter referred to as 'the Act') to set aside the award; and the appellant filed an Original Petition to make the award rule of the Court. While so, the first respondent filed O.S.No.317 of 1991 on the file of the Subordinate Judge, Rajahmundry, praying for a decree dissolving the partnership firm (first defendant therein) and for a direction to defendants 2 to 4 therein to render accounts. In the said suit the appellant herein filed I.A.No.67 of 1992 under Section 34 of the Act praying that the said suit be stayed till the award is made rule of the Court. By order dated 16-4-1992 the learned Subordinate Judge dismissed the said application. It is the correctness of that order that is assailed in this appeal, namely, C.M.A. No.164 of 1993

(3.) SRI V.L.N.G.K. Murthy, learned counsel for the appellant in these two appeals, contends that the purpose of Section 34 of the Act is to bind the parties to the arbitration agreement, which includes award as well as the decree that would be passed in terms of the award by making it a rule of the Court. So, till the award is made a rule of the Court, Section 34 of the Act can be invoked to stay the proceedings in a suit wherein the very same relief, which is the subject matter of arbitration agreement, is claimed. Mr. M.S.K. Sastry, learned counsel for the respondents, on the other hand, contends that the scope of Section 34 of the Act is very limited. It applies to a case where the parties, instead of referring the dispute to the arbitrator, approach the Court. In such a situation alone the Court has the power to stay the suit for the purpose of directing the parties to approach the arbitrator.