PUNJAB STATE CO OPERATIVE SUPPLY AND MARKETING FEDERATION LIMITED Vs. SHIV RICE AND GENERAL MILLS BARETA

JUDGEMENT

(1.) This order shall dispose of the above mentioned two revision petitions, having common questions of law and fact. For the purpose of convenience, the facts of Civil Revision No. 29 of 1999 being given below.

(2.) This is a revision petition against the orders dated 22-9-1998 and 16-5-1997 passed by the Courts below restraining the defendants form proceeding with the arbitration proceedings with the Arbitrator and staying the proceedings before the arbitrator till the decision of the suit.

(3.) The facts which are relevant for the decision of the present revision petition are that M/s. Shiv Rice and General Mills (plaintiff) had filed a suit for declaration and injunction against the defendants (Punjab State Co-operative Supply and Marketing Federation Limited and another), challenging the recovery notice dated 8-9-1995 issued by the defendant-Federation and for restraining the defendants from recovering the disputed amount during the pendency of the suit and order dated 10-11-1996 was passed restraining the defendants from recovering the suit amount from the plaintiff during the pendency of the suit. It was alleged that in order to make the suit infructuous, the defendants had referred the matter in dispute to the Arbitrator vide order dated 22-11-1996 and the Arbitrator had summoned the plaintiff to appear before him and to file a claim. It was accordingly prayed that the defendants be restrained from proceeding with the arbitration proceedings during the pendency of the suit. The said application was contested by the defendants, taking up various preliminary objections, including the maintainability of the said application, alleging therein that initiating arbitration proceedings even during the pendency of the suit was not a bar, especially when there was no stay in referring the matter to the Arbitrator and it was prayed that the application be dismissed. The learned trial Court, after hearing both sides, vide order dated 16-5-1997, allowed the application of the plaintiff and granted ad-interim injunction, restraining the defendants from proceeding with the arbitration proceedings. Aggrieved against this order of the trial Court, the defendants filed an appeal, which was dismissed by the Additional District Judge vide judgment dated 22-9-1998. Aggrieved against these orders of the Courts below, defendant No. 1 has filed the present revision petition in this Court.