2016 CLCN 136
Ss. 34, 31(2), 32 & 20---Civil Procedure Code (V of 1908), O. VII, R. 11 & O. II, R. 2---Contract for construction of overhead bridge---Arbitration clause in the agreement---Commencement of legal proceedings by one of the parties during execution of work---Stay of proceedings---Scope---Suit was dismissed under Ss. 31(2) & 32 of Arbitration Act, 1940 read with O. VII, R. 11 & O. II, R. 2, C.P.C.---Validity---When any party to an arbitration agreement had commenced any legal proceedings against other party of such agreement then other party, should, before taking any other step in the same, approach the judicial authority/court for stay of proceedings---Arbitration agreement existed between the parties and as per the clause of agreement, in case of dispute the same was to be referred to the arbitration---Defendants in their application under Ss. 31(2) & 32 of Arbitration Act, 1940 did not refer to the arbitration clause of the agreement nor invoked S. 34 of the said Act---Trial Court not only ignored the arbitration clause but also S. 34 of the Arbitration Act, 1940 which required that in case of arbitration agreement proceedings of suit should be stayed and that too if application was made before taking any other step in the same---Application was moved, in the present case, after filing of written statement and framing of issues which could not be allowed even to stay the proceedings of the suit---Trial Court rejected the plaint which order could not be passed, in circumstances---Effect of arbitration clause in the agreement was that if a civil suit was filed the same would be stayed but plaint could not be rejected---Impugned order was also liable to be set aside as application was filed after taking steps in the suit---Section 34 of Arbitration Act, 1940 required that application for stay of proceedings should be moved before taking any other step---Suit could not be stayed even in presence of the arbitration clause in the agreement between the parties as application for the same was filed after filing of written statement and framing of issues---Impugned order was set aside and suit would be deemed to be pending before the Trial Court which should be decided in accordance with law---Appeal was accepted in circumstances.
0 Comments