A.C. Desilva vs State of Jammu and Kashmir

Mufti, J.—This is a suit for the recovery of a sum of Rs. 1,12.200/-. 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 u/s 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 some time 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 u/s 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, mala fide, frivolous and vexatious and based on wrong facts. According to him

the defendant-State had taken steps in the proceedings as envisaged u/s 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 u/s 34 of the Arbitration Act.

In Radha Krishan Mirza v. 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 be 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.

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 u/s 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 Government 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.

In the result I find no force in this application which is hereby rejected. The defendant will file its written statement within two weeks and the

case will come up for further orders thereafter on a date to be fixed by the Deputy Registrar.