A C DESILVA Vs. STATE OF J&K

JUDGEMENT

(1.) THIS is a suit for the recovery of a sum of Rs. 1,12,000/ -. The suit is based on a Lottery ticket which, the plaintiff says, was the prize winning ticket in the 10th draw of the Jammu and Kashmir State Lotteries and was held by him. The suit was instituted on 11 -9 -1973 after previous notice to the defendant -State as required under section 80 of the Code of Civil Procedure. On 8 -12 -1973, Mr. A. K. Malik, Additional Advocate General, entered appearance on behalf of the defendant -State and sought time to file his power of attorney, which he eventually filed on the next hearing fixed for 8 -1 -1974. The case was adjourned for further proceedings to 18 -1 -1974. On that date Mr. Malik stated that the relevant records had been seized by the Anti -Corruption Department and it might take him sometime to get into touch with that Department and go through the records before he could be able to prepare the written statement. He, therefore, sought time for filing the written statement which was granted. The case came up for hearing again on 21 -3 -1974 when Mr. Malik did not put in his appearance because it was a restricted holiday. It was adjourned to 28 -3 -1974. On that date Mr. Malik submitted an application and sought time to file the written statement pleading that he could not have access to the original records which were seized by the Anti -corruption Organisation in connection with a pending investigation and as such he had to get the copies prepared which, too, were not supplied to him in time to enable him to go through, them and prepare the defence. In view of this application time was again granted to him for filing the written statement and the case was put off to come up again on 24 -4 -1974. On that date Mr. Malik was away at Jammu. The case was, therefore, adjourned to 2 -5 -1974. Meanwhile Mr. Malik made an application on 29 -4 -1974 praying that the suit be stayed under section 34 of the Arbitration Act and the matter be referred to the arbitration of the Government in terms of the arbitration clause appearing amidst the conditions printed on the ticket. It was stated in the application that the motion for stay could not be made earlier "because of the fact that the original records of the case had been seized by the Police authorities and were not made available to the defendant for inspection till very recently. The counsel for the defendant had no occasion to examine these records earlier and being unaware of the facts of the case, adjournments were sought by him for submission of the written statement." The plaintiff opposed the application. He has filed written objections pleading that the application was incompetent, malafide, frivolous and vexatious and based on wrong facts. According to him the defendant -State had taken steps in the proceedings as envisaged under section 34 of the Arbitration Act by seeking several adjournments and opportunities for filing of the written statement adding that the ticket was a standard document, prepared by the State itself which could not, therefore, plead ignorance of the conditions appearing thereon, particularly so, because the plaintiff had presented the ticket at the earliest opportunity to the State who continues to be in possession thereof. The sole question that falls for determination is whether, in the circumstances of this case, time taken by the defendant for filing of the written statement constitutes a step in the proceedings so as to disentitle the defendant from claiming the stay under section 34 of the Arbitration Act.

(2.) IN Radha Krishan Mirza Vs. The State of Jammu and Kashmir (AIR 1964 J&K, 75) a similar question arose for consideration of this court. After referring to several decisions of other High Courts in India, Bhat J. seems to have held the view that an application, oral or written, for adjournment of a case to enable the defendant to file the written statement should ordinarily to treated as a step in the proceedings within the meaning of section 34 of the Arbitration Act unless the defendant is able to prove circumstances which will negative such result.

(3.) IN the present case there can be no doubt that the defendant -State applied more than once for adjournment of the case to enable it to file the written statement. So doing it has taken steps in the proceedings and lost the right for stay under section 34 of the Arbitration Act. The result cannot be avoided by it on the plea of ignorance. The case of the State is that the records were with the Anti -corruption Department and as such it could not have knowledge of the arbitration clause in time. The argument, putting it mildly is untenable. The Anti -corruption Department is nothing but a limb of the state and it is difficult to accept the suggestion that the State could not have access to the records in its possession. Particularly so, when the plaintiff served the State with two months notice before the institution of the suit, when one would expect the State and its functionaries in the concerned Department to procure the records, look into them and seek legal advice to define and formulate their stand in the matter. Same too when notice of the suit was given to the State by this court. But despite notice nobody in the Govt. seems to have cared to do the needful for months before or after the suit was instituted. The State cannot therefore be heard to say that it had no knowledge of the arbitration clause. That would be tantamount to a party claiming benefit of its own wrong and seeking allowance for its own default and negligence -something which the law cannot countenance. Knowledge must be presumed. In fact the Government was itself the author and architect of the ticket and it is difficult to hold that it did not know the conditions set out by it in this ticket without having a look at it. In this background I am not prepared to hold that the State did not have knowledge of the arbitration clause and that the prayer for adjournments for filing of the written statement should be ignored as a step in the proceedings. The plea for avoidance raised by the State must fail.