KALIPADA DAS Vs. NORTH BIHAR SUGAR MILLS LTD

JUDGEMENT

(1.) THIS is the second application under Section 20 of the Arbitration Act for filing the arbitration agreement dated 24th August, 1977.

(2.) SHORTLY the facts are that pursuant to an invitation of tender made by the respondent/defendant for construction of a paper plant building at Bagaha, District West Champaran in the State of Bihar the petitioning creditor submitted its tender and work order was placed by the respondent/defendant dated 16th August, 1977 and formal contract was entered into being dated 24th August 1977, a copy of which is annexed to the petition. The said contract contained an arbitration clause in the following terms :

(3.) MR. Bimal Chatterjee. appearing for the respondent/defendant, submitted that the petitioner-plaintiff having instituted a suit before the City Civil Court has indicated its intention to abandon the arbitration agreement and take recourse to ordinary course of law by filing the said suit. Therefore, that constituted a sufficient cause why the arbitration agreement should not be filed. He drew my attention to the order of the City Civil Court, a certified copy of which was produced in court being Order No. 39 dated 26th September. 1980 in the said Title Suit No. 79 of 1979 (M/s. Kalipada Das v. North Bihar Sugar Mills Ltd.) and submitted that leave was granted only for the purpose of filing a fresh suit on the same subject-matter and not for reference to arbitration by making an application under Section 20 of the Arbitration Act. Therefore, the petitioner-plaintiff is estopped from making this application under Section 20 and that constitutes sufficient cause for not granting the order as prayed for. He referred to the well known principle that the court is to exercise its discretion in making an order under Section 20 and the principle under Sections 20 and 34 of the Arbitration Act as to the exercise of court's discretion is same. Reference may be made to the decision of Gannon Dunkerlay and Co., . MR. Chatterjee also referred to the principle on which the discretion of the court is to be exercised and what is meant by sufficient cause under Section 20, subsection (4) of the Arbitration Act as laid down in the Supreme Court decision in Abdul Kader's case. Therefore. MR. Chatterjee submitted that the present application should be dismissed as sufficient cause has been shown by the respondent/defendant as to why the order should not be made for filing the arbitration agreement. MR. Chatterjee also pointed out that in the arbitration agreement the reference is made to named arbitrator being Kothari and Co., which is a firm of architect and well known engineers and not a tribunal of arbitration or a person who can be appointed as arbitrator. The said contention is not absolutely without subtance as it may be contended that a firm of architect cannot be appointed as an arbitrator as it is not a tribunal of arbitration which generally takes institutional arbitrations. For the purpose of the present application it is not necessary for me to make any comment on the said submission and express any final opinion on this aspect of the matter.