M S RAMAIAH Vs. STATE OF BIHAR

JUDGEMENT

(1.) THE defendant of Money Suit No, 11 of 1969, pending in the Court of the 3rd Additional Subordinate Judge, Motihari, is the appellant under Section 39 (1) (v) of the Arbitration Act, 1940 (hereinafter to be referred to as "the Ad"). THE appeal is directed against an order passed by the learned Additional Subordinate Judge on the 18th of November, 1971, rejecting the prayer of the appellant for staying further proceedings in the suit either under Section 151 of the Code of Civil Procedure or under Section 34 of the Act.

(2.) SHORN of all details, the short facts relevant for the disposal of this appeal are that the State of Bihar, which is the plaintiff in the suit and respondent here, instituted the aforesaid money suit for recovery of a sum of Rs. 7,34,500/-from the appellant which has been explained by the respondent in paragraph 19 of the plaint. We are not concerned with the merits of the claim. When notice of the suit was served on the appellant, he filed an application before the learned Additional Subordinate Judge for staying further proceedings in the suit both under the provisions of Section 151 of the Code and Section 34 of the Act. The ground on which stay was prayed for was that, according to the appellant, there was an arbitration agreement between the parties to the suit which would cover the amount in dispute arising out of a contract. The learned Additional Subordinate Judge having given detailed reasons held that the application under Section 151 of the Code was not maintainable, and that if at all stay could be granted, it would be under the provisions of Section 34 of the Act. Learned counsel for the appellant did not, and rightly so, challenge the legality of that part of the impugned order by which Section 151 of the Code was held to be inapplicable. As a matter of fact, no civil revision has been filed at all against that part of the order. We are, therefore, not concerned in this appeal with regard to the decision of the court below regarding the maintainability of the application under Section 151 of the Code Learned Counsel for the appellant rightly confined his submissions to the first part of the order by which the court below has refused to stay the proceedings of the suit under Section 34 of the Act.

(3.) MR. J. C. Sinha, learned counsel for the appellant, while attacking the impugned order, laid great stress on the fact that the court below has approached the matter from a completely erroneous view of law inasmuch as it has proceeded upon the assumption that there must be a written arbitration agreement before the power of the Court under Section 34 of the Act can be invoked. In this connection learned counsel drew our attention to the following portion of the judgment of the learned Additional Subordinate Judge.