VYANKATESH MAHADEV Vs. RAMCHANDRA KRISHNA

JUDGEMENT

(1.) A suit had been instituted and it is alleged that the plaintiff and one of the defendants after the institution of the suit entered into an agreement to submit the matters in difference between them to arbitration. Thereupon the defendant moved the Court to stay the further progress of the suit. The first Court refused, and on appeal the learned District Judge was of opinion that the defendant s application could not be sustained and that the suit must proceed.

(2.) We are asked to interfere in the exercise of our revisional jurisdiction and to set aside that order of the learned District Judge. It appears to me that the agreement alleged to have been made between the plaintiff and one of the defendants does not fall under any of the clauses of the second Schedule of the Civil Procedure Code. The first sixteen of those clauses exhaust the whole process of arbitration after the suit has been instituted and the parties desired to submit their differences to arbitration under the control of the Court. The Court under those sixteen clauses controls completely the whole course of the reference, indeed the reference is its own, and its jurisdiction is never at any time ousted until a good award has been made. In the event of an award having been made, but being set aside for any reason, the Court immediately resumes its jurisdiction and completes the trial of the action. The next class of cases provided for in the second Schedule are TEBH those in which persons who have not instituted any legal proceedings desire to submit any difference between them to arbitration. Having agreed to do so either party may then bring the agreement into Court, and, if resisted by the other party, his application to have the agreement filed and further action taken upon it will be treated as a suit. Thereafter, again the Court immediately assumes and retains control of the subsequent arbitration proceedings. The third and the last case provided for in the second Schedule is where the parties who have not come into Court have not only agreed to refer matters in difference between them to arbitration, but have obtained an award. Here again the party desiring to enforce the award may bring it into Court and upon proper proceedings obtain a decree in conformity with it. There remains only one single Clause 18 which is of an exceptional character, and virtually re-enacts a portion of Section 21 of the Specific Relief Act, which is declared to have no applicability to any arbitration proceeding provided for in the second Schedule. That clause, which is also to be found almost in tolidem verbis in Section 19 of the Arbitration Act, provides for a special class of cases in which, after parties have agreed to submit matters in difference between them to arbitration, one of them in violation of such agreement institutes a suit in respect of any or all of those matters. Then the other party may set up in bar of the suit the agreement to submit to arbitration. If this analysis be correct, and I think there is no doubt but that it is, it is clear that what the defendant here relies upon is an agreement nowhere provided for in the second Schedule of the Civil Procedure Code, nor does it fall within the language or the spirit of Section 18, for that section, as I say, is designedly restricted to cases in which the suit com. plained of has been instituted after the agreement to refer to arbitration. It might be objected that no solid ground in reason can be found for refusing to extend the principle of that section to cases where, after a suit had been instituted, parties had privately agreed to submit the matters in difference bet-wean them to arbitration, and in spite of such agreement and in violation of it one of them insists on going on with the suit. The answer to that appears to me to be short and simple, and to cover other objections which might arise upon other points I have very generally indicated, for, in my opinion, where the Court is seized of a cause its jurisdiction cannot be ousted by the private and secret act of parties, and if they, after having invoked the authority of the Court and placed themselves under its superintendence, desire to alter the tribunal and substitute a private arbitrator for the Court, they must proceed according to the law laid down in the first sixteen clauses of the second Schedule. Therefore it appears to me that there is no force whatever in the applicant s contention that a private agreement of this kind is on the same footing as the private agreement contemplated in Clause 17 reproducing old Section 523, nor, as I have just explained, will it give him any right to invoke the assistance of Clause 18. How then could it serve him? Only as a lawful agreement by which the suit had been adjusted wholly or in part. Doubtless any parties litigating in Court have perfect liberty to compose their differences amongst themselves by entering into any lawful agreement, compromise or satisfaction. And when this is done they have only to apply to the Court to act under Order XXIII Rule 3. But it is equally clear that a mere agreement to refer to arbitration, even though it be in other respects valid, could not be such an adjustment in whole or in part of the suit as the Court could give effect to under Order XXIII Rule 3.

(3.) In my opinion, therefore, the learned Judge below was right and no case whatever has been made out for the exercise of our revisional jurisdiction. I would, therefore, dismiss this application with all costs. Hayward, J.