VEE EMM AGENCIES Vs. UNION OF INDIA

JUDGEMENT

(1.) THIS petition has been filed under article 227 of the Constitution of India challenging the order dated 12th March, 2012 (P -11) passed by the learned Additional District Judge, Jalandhar vacating the stay order dated 19th January, 2010 (P -9) passed by the learned Civil Judge (Senior Division), Jalandhar. It is prayed that the stay order passed by the learned Civil Judge (Senior Division), Jalandhar be restored.

(2.) THE present proceedings arise out of Civil Suit No.56 of 2009 filed by the petitioner against Union of India through Rail Coach Factory, Kapurthala. The suit was for declaration and permanent injunction. The subject matter of the dispute was with respect to supply of welding goggles by the petitioner to the Rail Coach Factory. The Rail Coach Factory having accepted the supply of 3864 welding goggles woke up after one year and one month of delivery of goods allegedly finding 2385 welding goggles defective and proceeded to recover the price of the defective supply. The defect notice period recited in the contract of supply of material was 90 days. The consignee's right of rejection is prescribed in IRS Instructions No.1502 which reads : - Note :In respect of material pre -inspected at the firm's premises the consignee will issue rejection advice within 90 days from the date of receipt."

(3.) THE respondents filed the written statement on 13th November, 2009. In para. 8 of the preliminary objections, the respondents pointed out that as per IRS Condition No.2900, it is only "the Court of District Judge under the Indian Arbitration Act" which has got the jurisdiction to entertain and try the petition. The wording of para.8 is evidently clumsy. Be that as it may, a defence has been taken that the dispute is open to arbitration. After the RCF filed its reply, it filed a separate application for referring the matter to arbitration. The application does not state, under which provision it has been filed. But it is assumed by this court that it was traceable to Section 8 of the Arbitration and Conciliation Act, 1996. In case, an application under Section 8 is filed at the threshold, then it is liable to be allowed on producing the arbitration clause duly executed between the parties. The request has to be made in the first instance. If a defence is taken on merits, then the right under Section 8 stands surrendered. In view of the defence taken in the written statement in para. 8 and the clumsy drafting contained in it, it should be so treated as a part of the objection taken in written statement to foreclose the suit in order to refer parties to Arbitration to resolve the dispute with respect to deductions from bills and consequential recovery. However, since a request was made in the suit by the respondent traceable to Section 8 of the Act, the Civil Court then is not denuded of its jurisdiction to pass appropriate orders by way of interim measures and temporary injunctions invoking power traceable to Section 9 of the Act. The exercise of jurisdiction under Section 9 of the Act is akin to the jurisdiction of Civil Courts to pass orders of temporary ad -interim injunctions under order 39 rule 1 & 2 CPC. Thus, even if the Civil Court had no jurisdiction to try the suit, it could yet pass orders of temporary injunction against the defendant before packing off the parties to resolve their disputes through arbitration. If we view the entire matter from this perspective, it cannot be said that the learned Civil Judge (Senior Division), Jalandhar did not possess the jurisdiction to pass an order under order 39 rule 1 & 2 CPC since power exercised can be traced to section 9 of the Act, if the trial court order is otherwise sustainable on merits, sufficient to justify grant of ad - interim injunction, then I cannot say, per se, that the interim injunction granted was in error of jurisdiction. Resultantly, the learned Additional District Judge, Jalandhar in appeal failed to appreciate the above stated legal position.