New India Assurance Company Ltd. vs Vidhichand Gupta

Dr. T.N. Singh, J.

The short question of law to be decided in this appeal rests primarily on the interpretation of Section 34 of the Arbitration Act, but it is necessary to state first few simple and short facts pertinent to the question mooted for decision in this appeal.

What is not denied and appears established beyond dispute on the face of records is that on 27-9-1976, the respondent instituted a suit in the Court of District Judge at Morena, claiming compensation from the defendant/appellant for damages suffered by his truck, Registration No. M.P.W. 1621, in respect of which the plaintiff had taken out a comprehensive insurance policy from the defendant/appellant. He alleged that as a result of the accident which took place on 22-11-1975, the truck was damaged and in terms of the insurance policy, the defendant was bound to compensate the plaintiff to the extent of Rs. 24,991.65. It appears from the Order sheet of the suit that 16-11-1976 was fixed for filing written statement by the party, namely, the Insurer. However, what happened on 16-12-1976 is of signal relevance to the instant lis and indeed on both sides, long arguments have been advanced on the import and purport of the order passed on that date in the suit. It is the admitted position on facts that on 16-11-1976, the Presiding Officer of the Court was absent, and it was, therefore, submitted by Shri Dubey, appellant''s counsel, that whatever order was recorded on that date was done by the Reader of the Court to which the Officer in-charge of the Office of the on that date, in the absence of the District Judge, subscribed his signature. More about it later, but I proceed further to refer to few more facts to complete the narration of events. It also appears from the records of the suit that on 8-12-1976, an application u/s 34 of the Arbitration Act was filed in the suit in which it was stated that under the terms of the Policy of insurance, the parties were bound to refer the dispute for decision to an Arbitrator and the suit was liable to be stayed and it was further averred in para 4 of the application that the defendant had not filed any written statement and had not taken any steps in the suit because on 16-11-1976, Presiding Officer of the Court was on leave. It is also stated in para 4 that no instructions had been obtained till then from the defendant and the objection to the suit is being filed after receiving necessary instructions. The Policy of insurance was also filed and it was submitted that in accordance with the terms of the Policy, the defendant/objector were prepared to do the needful. To this objection, filed u/s 34 aforesaid, a reply was filed on 20-12-1976 by the plaintiff, wherein the main contention raised was that the objection u/s 34 was misconceived and not maintanable inasmuch as the defendant/objector had "already taken steps in the proceeding prior to the objection." Arguments were heard on the "objection" and the "reply" advanced by counsel for parties on 22-12-1976 and, thereafter, the impugned order was rendered on 12-1-1977 rejecting the "objection", namely, the application made u/s 34 by the defendant.

In support of his two-fold contention, Shri Dubey has submitted that the Court below has misconstrued the expression "taking any step in the proceeding" which occurs in Section 34 aforesaid, relying on the decisions of the Apex Court in The State of Uttar Pradesh and Another Vs. Janki Saran Kailash Chandra and Another, and F.C.I, vs. Yadav Engineer and Contractor (AIR 1982 SC 1302). Counsel has also drawn my attention to few decisions of this Court, namely, 1967 MPLJ SN 100, 1976 MPLJ SN 55,1978 1 MPWN 443, besides relying on the provisions of Section 18 of M.P. Civil Courts Act, 1958 and Rule 132 of M.P. Civil Courts Rules, 1961.

I propose to examine first counsel''s second contention that the order recorded in the suit on 16-11-1976 that counsel for the defendant had filed power and the counsel had made a prayer for time for filing written statement cannot impair the right available to the defendant/appellant u/s 34 because the Court was not constituted on that date for the purpose of taking steps by parties in the suit. Indeed, it is also his contention that the Officer in-charge of the Court who had signed the order was not competent to record the order inasmuch as he was not authorised to do so by law as manifested in the provisions of Section 18 and rule 132 aforesaid. It is true, as contended by Shri Dubey, that Section 18 carefully circumscribed the power of the Judicial Officer in-charge of the District in the temporary vacancy in the Office of the District Judge and vests in him limited power of the Office of District Judge. This appears very clear from the language of the Section which I propose to quote in extenso :

Temporary vacancy in office of District Judge. - In the event of the death of a District Judge or of his being prevented from performing his duties by illness or other cause or of his absence from the Civil District on leave, the Additional District Judge, if any, in the District or if there are more than one the first in rank amongst them or where there is no Additional District Judge, the first in rank of the Civil Judge, if any, shall assume charge of the District Court without interruption to his ordinary duties, and while so in charge, shall perform the duties of a District Judge with respect to the filing of suits and appeals, receiving pleadings, execution of processes, return of writs and the like, and shall be designated as the Additional District Judge or the Civil Judge, as the case may be, in charge of the District and shall continue in such charge until the office of the District Judge has been resumed, or assumed by an officer duly appointed thereto.

5-6. It is very clear that the Additional District Judge who has to assume temporary charge of the Office of the District Judge has to do so "without interruption of his ordinary duties" and that he has to perform only such duties of the District Judge as are explicitly mentioned, namely, matters relating to "filing of suits and appeals, receiving pleadings, execution of processes" etc. of ministerial nature. He cannot exercise judicial powers of the District Judge. Indeed, this position is further made clear by Rule 132 which provides that when a Presiding Judge of the Court is, or is expected to be absent, on any date, any case fixed on that date shall not be taken up, but shall be "adjourned". It is very clear, therefore, that the order recorded on 16-11-1976, inviting prayer of the counsellor time to file written statement and disposing of that prayer, was an order which must be deemed to be illegal and invalid for several reasons but mainly that defendant''s counsel could not be heard on his prayer for time to file written statement on that date and no question of passing any order in that regard could arise. I am also prepared to take the view on the language of Section 34 itself that it speaks of a "Judicial Authority" which is duly constituted and empowered under the law for the purpose thereof and any "steps", to which reference is made in Section 34, would have to be taken before such a "Judicial Authority" as is empowered to deal with prayers for "steps". Because, Section 34 contemplates an important right as also a serious disability and the latter necessitating a strict construction to fulfil the object of the provision, I would rather hold that to be construed as a "step", the prayer must not be made before a duly constituted authority but it must be a written (and not an oral) prayer manifesting clearly the intention of the party. What is understood by the presiding officer may not be intended by the party and what is recorded in the order would not, therefore, be conclusive of the party''s intention. Indeed, when a written prayer is made it would also become clear if the prayer was made under proper instructions as the right which is reserved to the litigant can be abandoned by him or under his due and appropriate instructions.

I proceed now to have a look to few authorities cited by Shri Dubey, relevant to the view I have taken in the last paragraph. In the case of Thakur Sangam Singh (1967 MPLJ SN 100), it was held that the Court-Reader cannot by his volition fix a date requiring the parties to lead their evidence on a particular date. In the absence of the presiding Judge, he is only authorised to give date to the parties and the judicial order can only be passed by the Presiding Judge for necessary and proper conduct of the case. In Cement Corporation of India''s case (1976 MPLJ SN 55) it was held that when the Presiding Judge is not present, the Court should be deemed to be closed that day for judicial business and it was further held that any statement made to the Reader that time was required for filing written statement would not be considered as a "step" so as to bar an application being made subsequently u/s 34 of the Arbitration Act. In the case of Kranti Kumar Jha (1978 1 MPWN 443) the view expressed was that the Reader was only a ministerial official and he could do no judicial business and it was once again reiterated that in the absence of the Presiding Judge, the Court should be deemed closed for judicial funcioning as if a date had been fixed which happened to be a holiday. I find sufficient support, therefore, reading the decisions cited for the proposition canvassed by Shri Dubey and for the view I have taken that the second contention of Shri Dubey has sufficient force and it must prevail, if I have to say anything more, it is to be noted that in the application u/s 34 which was filed on 18-12-1976, two days earlier to the date fixed (on 16-11-1976), the same counsel Shri A. P. Gupta, who was present in the Court on 16-11-1976 and who is said to have made an oral prayer for time for filing written statement, took care to make a categorical averment that no steps had been taken in the suit and that on the last date, namely, 16-11-1976, the counsel had no instructions from the defendant and that application u/s 34 was filed after taking instructions in the matter, on the basis of Insur. nee Policy.

Now, the two decisions of the Apex Court may be seen little more closely because Shri Swami Saran, who appears for the respondent, has submitted that Janki Saran (supra) does not advance the case of the appellant, but it supports the respondent.

However, I find little therein for the view canvassed by learned counsel because their Lordships took particular care to indicate that in such circumstances as when an application for adjournment was made for filing written statement, it should be considered that steps had been taken in the pending suit and the plea that the counsel was not authorised to make such an application was not available. In para 7 of the Report, it was held that taking steps in the suit or proceeding connotes the idea of doing something in the aid of progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy in suit. This holding, according to me, supports my view that such a deliberate act of the objector (preferring application u/s 34 for stay of the suit) prior to the proceedings as may indicate that the litigant had submitted to the jurisdiction of the Court for the purpose of adjudication of the claim made in the suit on the merits.

The position is made more clear in the subsequent decision in Yadav Engineers (supra), wherein the expression "taking any other steps in the proceeding" are construed to take the categorical view that "it must be given a narrow meaning" so as to indicate that such steps "clearly and unambiguously manifest the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings". Shri Swami Saran''s reliance, therefore, on a Division Bench decision of this Court in the case of State of Madhya Pradesh vs. Basantlal (1971 JLJ SN 73) is evidendy misconceived. It must still be noticed that on facts, the case is evidendy distinguishable inasmuch as in that case written statement had already been filed and, thereafter, the objection u/s 34 was filed for stay of the proceedings.

However, Shri Swami Saran has pressed another contention to submit that the order u/s 34 being a discretionary order, it warrants little or no interference by this Court. What is only to be observed to reject summarily this submission is the fact that the discretion vested in the trial Court u/s 34 has not been judicially exercised in this case. It is only when on a proper consideration of jurisdictional facts and of law laid down in binding authorities a decision is rendered, then it may be said to be a decision rendered in due exercise of judicial discretion. Unfortunately, nothing of that sort appears to have been done. Indeed, Shri Swami Saran rightly concedes that on merit the application was not considered and decided, but it was disposed of on the preliminary ground of maintainability.

For all the foregoing reasons, I have no hesitation to allow the appeal and set aside the impugned order, but without costs. The application/objection of the defendant/appellant u/s 34 stands allowed The suit is stayed. I am mindful of the fact that Chambal is now in spate and much water has flown down the ligigious river during the course of last several years, since the impugned order was passed. It is necessary to indicate therefore, that further proceedings that shall ensue now under the Arbitration Act must not take a circuitous course for relieving the grievance of both sides.