STATE OF RAJASTHAN Vs. DISTRICT JUDGE KOTA

JUDGEMENT

(1.) THIS miscellaneous appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the 1996 Act') has been filed against the order dated 26 -9 -2002 passed by District Judge, Kota under Section 9 of the Arbitration and Conciliation Act, 1996 ('Act of 1996') whereby the order dated 3 -9 -2002 passed by the appellant for recovery of penalty from the respondent No. 2, the contractor, for reasons of his breach of contract was stayed till the determination of disputes between the parties under the contract dated 6 -6 -2001.

(2.) COUNSEL for the appellant has raised two fold submissions. One, that there was no arbitration agreement between the parties, consequently the application under Section 9 of the 1996 Act was not maintainable nor power available thereunder to the District Judge. The impugned order dated 26 -9 -2002 being without jurisdiction was liable to be set aside, submitted counsel. The second submission of the appellant's counsel is that even otherwise at no point of time, prior to the order dated 26 -9 -2002 or thereafter, even after lapse of 11 years period as of now, since the passing of the impugned order dated 26 -9 -2002 any application for referring the dispute with regard to the recovery of penalty was raised by the respondent -applicant before the Standing Committee under clause 23 of the contract between the parties, which is stated to be the arbitration clause. Counsel submits that the invoking of jurisdiction of the civil court under Section 9 of the 1996 Act necessarily entails a corresponding obligation on the applicant to seek reference of dispute, in respect of which interim protection of the court is sought, to arbitration under the contract between the parties. In support of his submission, reference has been made by the applicant's counsel to the judgment in the case of Firm Ashok Traders Vs. Gurumukh Das Saluja [ : AIR 2004 SC 1433].

(3.) HEARD learned counsel for the parties and perused the impugned order dated 26 -9 -2002.