PETITIONER:
STATE OF ORISSA
Vs.
RESPONDENT:
KLOCKNER AND COMPANY & ORS
DATE OF JUDGMENT: 16/04/1996
BENCH:
VENKATASWAMI K. (J)
VERMA, JAGDISH SARAN (J)
CITATION:
JT 1996 (4) 254 1996 SCALE (3)527
ACT
HEADNOTE
JUDGMENT
WITH
CIVIL APPEAL NOS. 7574-76/1996 Orissa Minining Corporation V. Klockner & Co. & Ors.
WITH
SPECIAL LEAVE PETITION (C) NO. 19846/1995 M/s. Klockner & Company V. Orissa Mining Corporation Ltd & Ors.
JUDGMENTK.VENKATASWAMI. J.
The above Civil Appeals arise out of an Order passed in Misc. Case No. 426/93 in T.S.152/93 on the file of Civil Judge, Bhubaneswar dated 16.4.94 which was later upheld by the Orissa High Court by Order dated 12.5.95. Against a single Order of the learned Civil Judge, Bhubaneswar in M.C. No.426/93, the State of Orissa filed one Miscellaneous Appeal No.553/94 and Civil Revision Petition No. 262/94 before the Orissa High Court on the plea that there was a doubt whether an appeal or revision petition would lie against the Order of the Civil Judge in the said Miscellaneous Case. The High Court rendered its decision in Civil Revision Petition No. 262/94. However. while moving this Court, the State of Orissa not only filed two Special Leave Petitions against the common Order of the Orissa High Court in Civil Revision and Civil Miscellaneous Appeal but also preferred independent Special Leave Petition against the Order of Civil Judge, Bhubaneswar in Miscellaneous Case No. 426/93. Likewise, the Orissa Mining Corporation (appellant in C.A. Nos.7574-16/95 and third respondent before the High Court), has also filed three Special Leave Petitions against the common order of the High Court and of Civil Judge. After leave was granted, all these Special Leave Petitions were numbered as Civil Appeals as mentioned above.
Brief facts, shorn of details, necessary for the disposal of these Appeals are as under :-
The first respondent herein, namely, Klockner & Company entered Company, entered into an agreement on 20.4.82 described as "Marketing Agreement" with Orissa Mining Corporation (hereinafter referred to as "O.M.C." for short), a Government of Orissa Undertaking. We are not giving all the clauses in the agreement under consideration. The said agreement inter alia stipulated that O.M.C. will establish a plant at Bamnipal in the district of Keonjhar, Orissa, for production of "charge chrome" (hereinafter called as the "product"). It (OMC) agreed to market the said product exclusively through Klockner and Co. upon the terms and conditions contained in the said agreement to which Klockner & Co. gave acceptance. The agreement stipulated that during the currency of the agreement, O.M.C. shall not be entitled to market its product by direct contracts with purchasers nor shall it be entitled to market its product through any agent or distributor other than the Klockner and Co. That during the currency of the agreement, the Klockner and Co. shall not be entitled to purchase the product from any source in India other than O.M.C. One important clause in the agreement is that the delivery of the product shall commence by April 1985 and shall continue over a period of five years but it will not come to an end until a total quantum of 250,000 MT of the product was delivered. There is also a clause in the agreement enabling the parties to extend the period by mutual consent. According to another clause in the agreement, if the agreement is terminated by mutual consent or cancelled, then notwithstanding the termination/cancellation of the agreement, the parties shall remain responsible for the fulfillment of any obligations which are outstanding at the time of termination/cancellation of the agreement. It was agreed that OMC will pay to Klockner & Co. a commission on the sale of the product effected in the territory in consideration of the services rendered by it in terms of the agreement and the commission shall be 4% of the final FOB value of the product sold. The said commission shall be payable to Klockner & Co. by way of reduction from each invoice. Another important clause for the purpose of disposal of these Appeals is clause 15 in the agreement which relates to arbitration. It reads as follows:
"15.1. In the remote and unlikely
event of there being any dispute
or difference whatsoever arising
between the parties out of/or
relating to the construction,
meaning and operation or effect of
this contract or the breach thereof
shall be settled in the first place
by amicable agreement, failing an
agreement all disputes arising
between OMC and Klockner within the
framework of this contract are to
be referred to the International
Chamber of Commerce. The place of
arbitration shall be London or such
other place as is mutually agreed
upon. The law applicable shall be
substantial Swiss Law or any other
law mutually agreed upon.."
Subsequent to the original agreement as mentioned above, another agreement was entered into on 16.2.87 between OMC and Orissa Mining Corporation (Alloys) Ltd. which is a wholly-owned subsidiary company of OMC to implement and establish 100% export oriented unit at Bamnipal for manufacturing inter alia charge chrome in which it was stipulated that OMC has already entered into a marketing arrangement with Klockner & Co. of the Federal Republic of Germany under which OMC is to market the products of Alloys exclusively through Klockner & Co. and that Alloys products would be handled through the agency and instrumentality of the OMC on the basis of OMC’s agreement with Klockner & Co. and the terms and conditions of the marketing agreement between OMC and Klockner & Co. dated 20th April, 1982 will be treated as if OMC (Alloys) replaced OMC. It is not in dispute that the agreement was acted upon by the parties and pursuant to that 108,429 MT of charge chrome were delivered leaving a balance of 141,571 MT of Charge Chrome undelivered as per the agreement.
In the meanwhile the Department of Company Affairs of the Govt. of India ordered merger of Orissa Mining Corporation (Alloys) with the Orissa Mining Corporation on 30.8.91.
Shortly after the merger as mentioned above, the Government of Orissa (Law Department) promulgated Ordinance 8 of 1991 dated 24.8.91 and the Charge Chrome Division was taken over under the said Ordinance. The relevant clauses in the Ordinance will be referred to at the relevant place hereinafter. After the taking over as mentioned above, the Charge Chrome Division was transferred by way of sale to Tata Iron & Steel Company.
At this stage, the first respondent (Klockner & Co.) after unsuccessful attempts to negotiate with OMC for fulfillment of the terms of the agreement, took steps to refer the dispute for arbitration to the International Chamber of Commerce, invoking clause 15 in the Agreement.
The appellant, State of Orissa, received notice of the arbitration proceedings on 3.5.93. Thereafter the appellant filed T.S. No. 152/93 on the file of Civil Judge, Bhubaneswar, seeking the following reliefs :
"(a) Declaration declaring that the
plaintiff is not the successor of
Defendant No. 3 and more
particularly is not the successor
of Defendant No. 3 in the context
of the claim of Defendant No.1
against Defendant No. 3 before
Defendant no.2 and;
(b) Declaration declaring that
plaintiff is not liable to pay-
jointly with Defendant No. 3 or
otherwise to Defendant No. 1 U.S. $
2.949.938.42 with ten percent
interest or any part there of as
claimed by Defendant No. 1 in its
request dated 21.4.93 for
arbitration to Defendant No.2 and
in its statement of claim appended
thereto which Request tor
arbitration and claim Defendant
No.1 has got served on the
plaintiff through Defendant No.2.
(c) Declaration declaring that
plaintiff has got no obligation
whatsoever under document dated
20.4.1982. nomenclatured as
Marketing Agreement and no
obligation whatsoever towards
Defendant No.1 under the said
document.
(d) Declaration declaring that the
Aforementioned claim of Defendant
no. 1. against the plaintiff and
Defendant No. 3 jointly is not a
matter agreed either between
Defendant No. 1 and Defendant No. 3
or between the plaintiff and
Defendant No. 1 or amongst
plaintiff, Defendant No.. 1 and
Defendant No.3 to be referred to
arbitration under the said
document dated 20.4.1982
nomenclatured as marketing
Agreement or otherwise.
(e) Permanent injunction injunction
Defendant No. 1 from prosecuting
the arbitration proceeding (bearing
reference No. 7878/HV of Defendant
No.2) initiated before Defendant
No. 2 by Defendant No.1. in its
said request fol arbitration dated
21.4.93 and said statement of
claim dated 21.4.93 appended
thereto.
(f) Such other relief/reliefs as
this Hon’ble court may deem fit and
proper in the facts and
circumstances of the case."
The respondent herein on coming to know of the suit filed by the appellant moved the Miscellaneous Case No. 426/93 invoking Section 3 of Foreign Awards (Recognition & Enforcement) Act. 1961 for stay of the suit.
The appellant stoutly resisted the application for stay of the suit. However, the learned Civil Judge on the basis of the materials placed before him and also on the basis of the arguments advanced came to the conclusion that the suit should be stayed under Section 3 of the Foreign Awards Act.
Aggrieved by the order of the learned Civil Judge, the appellant, State of Orissa preferred Miscellaneous Appeal as well as Revision Preferred before the Orissa High Court. The learned Single judge for the reason stated in the Order under Appeal observed as follows :
"9. Testing the case at hand on the
touch stone of the principles
enunciated in the decided cases
discussed above. the position is
manifest that the parties to the
arbitration agreement have decided
that the place of arbitration shall
be London and the law applicable
shall be substantive Swiss Law. My
attention has not been drawn to any
stipulation in the agreement nor
any other material which directly
or impliedly shows that the
intention of the parties was that
Indian Law will be applicable to
the Arbitration Agreement. As noted
earlier, Klockner & Co. is a
company registered in the Federal
Republic of Germany and the
agreement of 20.4.1982 was entered
in Germany. It is not the case of
the petitioner that the award
which may be passed in this case is
not a foreign award as defined in
Section 2 of the Foreign Awards Act
but it is a domestic award. In that
view of the matter there is little
scope for doubt that the provisions
of the Foreign Awards Act,
particularly Section 3 are
applicable to the case. As held by
the Apex Court in the case of
Renusagar Power Co. (supra) stay of
the suit is mandatory if the
conditions specified in Section 3
are fulfilled. The averments in the
plaint and the objections filed
to section 3 do not make out the
case that the agreement is null and
void, inoperative or incapable of
being performed or that there is
not in fact any dispute between the
parties with regard to the matter
agreed to be referred. The trial
court has specifically held that
the circumstances to prove
exception under the statutory pro-
vision have not been established.
At the cost of repetition. I may
state that it is clear from the
materials on record that the
agreement was acted upon by the
parties, in pursuance of it
contracts were entered between OMC
Ltd and OMC Alloys Ltd with
foreign buyers and Klockner & Co.
was paid its dues relating to the
transactions. In the circumstances,
the learned Trial Judge was right
in holding that a case for stay of
the suit u/s. 3 of the Foreign
Awards Act has been made out by
the opposite party- No. I -
defendant. The order is therefore
unassailable. Thus the cases being
devoid of merit are dismissed."
Still aggrieved, the appellant, State of Orissa as well the Orissa Mining Corporation preferred these Appeals challenging the Order of stay of suit under Section 3 of the foreign Awards Act.
Mr. B.M. Patnaik, Senior counsel appearing both for the State of Orissa as well as for Orissa Mining Corporation, though the contentions of both parties are not identical and to a certain extent conflicting, strenuously contended that the Orders of the trial court and of the High Court, granting stay of the suit cannot be sustained in as much as the State which has filed the suit was neither a party to the agreement in question nor, he State claimed the right through or under the Orissa Mining Corporation Ltd. Further, the State being not a party to the agreement is not bound by the terms and, therefore, the suit cannot be stayed. He also put forward arguments relating to the merits of the claim put forward by the first respondent Klockner & Co. in the arbitration proceedings. In support of his argument, learned senior counsel placed reliance on two decisions of this Court reported in Renusagr Power Co Ltd vs. general Electric Company & Another. (1984) 4 SCC 679 ) and Svenska Handelsbanken & Ors. vs. M/S. Indian Charge Chrome Ltd & Ors. ( (1994) 2 SCC 155 ).
Mr. C.S. Vaidyanathan learned senior counsel appearing for the first respondent. Klockner & Co. answering the contentions of the learned senior counsel for the appellant submitted that it is untenable to contend that the State of Orissa has nothing to do with the agreement in question having regard to the clauses in the Ordinance under which the Government took over Charge Chrome Division from Orissa Mining Corporation and also having regard to the terms under which the charge chrome Division was handed over to Tata Iron & Steel Company. He placed reliance in particular on clauses 4,5,7 and 12 in the take over Ordinance. He also placed reliance on clause 9 of the agreement between State of Orissa and Tata Iron & Steel Company to support his contention that State of Orissa for the purposes stepped into the shoes of Orissa Mining Corporation and, therefore, the appellant cannot contend that it is not claiming through or under Orissa Mining Corporation any rights regarding Charge Chrome Division. The learned senior counsel also placed reliance on the following judgments of this Court to sustain the Order of stay granted by the Civil Judge and confirmed by the High Court. Anakapalla Co-operative Agricultural & Industrial Society Limited vs. Workmen ( (1963) (Supl) 1 SCR 730 National Thermal Power Corporation vs. Singer Company & Ors. ((1992) (3) SCC 551 ).
We have considered the rival submissions. From the above narration, it is obvious that the main thrust of Mr. B.M. Patnaik, Sr. counsel for the appellant is that the State of Orissa is not a successor in interest of OMC, in particular, the Charge Chrome Division of OMC, taken over by the Govt. To appreciate this argument on behalf of the appellant and the counter-argument advanced on behalf of the first respondent, it is necessary to set out certain relevant clauses in the take over Ordinance, namely, Ordinance 8 of 1991 dated 24.9.91. Clauses 4(5), 5, 6 and 7 read as follows :-
4(5). If, on the appointed day, any
suit, appeal or other proceeding of
whatever nature in relation to any
property: which has vested in the
State Government under section 3 or
instituted or preferred by or
against the Charge Chrome Division
is pending, the same shall not
abate, be discontinued or be, in
any way prejudicially affected by
reason of the vesting and transfer
of the Charge Chrome Division of
the Company but the suit appeal or
other proceeding may be continued
or enforced by or against the State
Government or, where the Charge
Chrome Division of the Company
vested under section 6 in any other
company, by or against the other
company.
5. Every liability of the Charge
Chrome Division of the Company
including dues to foreign and
Indian Banks shall be the liability
of the State Government on which
the properties of the Charge Chrome
Division has vested and shall be
enforceable against the State
Government or, where the Charge
Chrome Division of the Company is
directed to vest in any other
company, against the other company.
6(1) The State Government may, it
is satisfied that any other company
is willing to comply with such
terms and conditions as the
Government may think fit to impose,
direct by notification that the
Charge Chrome Division of the
Company and the right, title and
interest of the Charge Chrome
Division of the Company which have
vested with the State Government
under section 3 shall, instead of
continuing to vest in the State
Government, from the date of
publication of the notification of
such vesting, vest in the other
company.
6(2). Where the right, title and
interest of the Charge Chrome
Division of the Company is vested
under sub-section (1) in any other
company the other company shall, on
and from the date of such vesting,
be deemed to have become the owner
in relation to the Charge Chrome
Division and all rights and
liabilities of the State Government
in relation to such Division shall,
on and from the date of such
vesting, be deemed to have become
the rights and liabilities of the
other company.
7. The State Government hereby
takes over all the assets of the
Charge Chrome Division at the
depreciated written down value or
book value as the case may be as on
the date of transfer. The State
Government also hereby takes over
the liabilities of the Charge
Chrome Division including loans of
foreign and Indian Banks on the
said date of transfer. The net
difference between the value of the
assets and the liabilities referred
to above shall be settled by actual
payment."
In this context, Clause 9 of the agreement between the State Government and Tata Iron & Steel Company, with whom the Charge Chrome Division of OMC, taken over by the Government subsequently, came to be vested is also relevant to be noted and that reads as follows :
"9. It is specifically, agreed
between the parties that Tata Steel
shall not be bound or governed by
any agreement whatsoever entered
into or executed by OMC Alloys
Ltd., OMC Ltd. or Government,
including marketing agreement in
respect of the sold plant which is
not agreed to be ratified by Tata
Steel. Any claim, action, liability
in respect of such agreement shall
be discharged by Government and it
shall keep Tata Steel indemnified
at all time against such claims,
actions, loss and liability."
A conjoint reading of the Clauses extracted from the take over ordinance and the agreement between the State of Orissa and Tata Iron & Steel Co. will clearly show that the State of Orissa is the successor in interest of OMC Charge Chrome Division taken over by the Government under Ordinance of 1991. In view of this clear position, it is not possible to accept the contention of the learned senior counsel for the appellant that the State of Orissa has nothing to do with the contract entered into between the Klockner & Co. and OMC in respect of which the former has initiated arbitration proceedings invoking Section 3 of Foreign Awards Act.
The other aspect to be considered is whether the requirements of Section 3 of the Foreign Awards Act are satisfied to justify the invocation of that provision on the facts of this case.
In this case, the existence of agreement dated 20.4.82 cannot be disputed by OMC or by the appellant. The first respondent (Klockner & Co.) one of the parties to the agreement has commenced arbitration proceedings against the other party is also an undisputed fact. In the light of the wide scope of Clause 15 of the agreement between the first respondent and OMC dated 20.4.82 (already extracted) relating to arbitration and in view of our finding that the State of Orissa is the successor to OMC, it is not open to the appellant to contend that the legal proceedings initiated was not in respect of any matter agreed to be referred to arbitration in the agreement. Except filing an application under Order 7 Rule 11 CPC for rejection of the plaint in the suit filed by OMC, the first respondent has not taken any step in the legal proceedings and that application for rejection of the plaint cannot he construed as any step in the legal proceedings to bar the invocation of Section 3 of the Foreign Awards Act by the first respondent vide General Electric Company vs. Renusagar Power Company ( (1987) 4 SCC 137 ).
In the absence of any serious challenge to the commercial contract or to the arbitration agreement, it has to be found that the agreement was valid, operative and can be of being performed and that there are disputes between the parties with regard to the matters agreed to be referred to.
In General Electric Company’s case (supra) this Court had occasion to consider the scope of Section 3 of the Foreign Awards Act and it observed as follows :
"It may be straightaway noticed
that while Section 34 of the Indian
Arbitration Act vests in the court
the discretion to stay or not to
stay the proceedings, Section 3 of
the Foreign Awards (Recognition and
Enforcement) Act vests no such
discretion in the court. Under the
Foreign Awards (Recognition and
Enforcement) Act it is mandatory
that the proceedings should be
stayed if the conditions prescribed
are fulfilled. But the application
of the defendant to the court, be
it under Section 34 of the Indian
Arbitration Act or Section 3 of the
Foreign Awards (Recognition and
Enforcement) Act, may be filed
before filing a written statement
or taking any other step in the
proceedings. It is competent then
only and not thereafter."
In Renusagar Power Co. Ltd vs. General Electric Co. ((1984) 4 SCC 679 ) the court held as follows :
"On a plain reading of the section
as it now stands two things become
very clear. In the first place the
section opens with a non obstante
clause giving overriding effect to
the provision contained therein and
making it prevail over anything to
the contrary contained in the
Arbitration Act, 1940 or the Code
of Civil Procedure, 1908. Secondly,
unlike Section 34 of the
Arbitration Act which confers a
discretion upon the court; the
section uses the mandatory
expression "shall" and makes it
obligatory upon the court to pass
the order staying the legal
proceedings commenced by a party to
the agreement if the conditions
specified therein are fulfilled.
The conditions required to be
fulfilled for invoking Section 3
are :
(i) there must be an agreement to
which Article II of the Convention
set forth in the Schedule applies.
(It is not disputed that this is so
in the instant case);
(ii) a party to that agreement must
commence legal proceedings against
another party thereto. (It is again
not disputed that Renusagar and
G.E.C. are the two parties to the
arbitration agreement and that
Renusagar has commenced legal
proceedings against G.E.C by filing
Suit 832 of 1982);
(iii) the legal proceedings must be
in respect of any matter agreed to
be referred to arbitration" in
such agreement. (The question
whether this condition is fulfilled
here needs to be decided);
(iv) the application for stay must
be made before filing the written
statement or taking any other step
in the legal proceedings.
(Admittedly this condition is
fulfilled);
(v) the Court has to be satisfied
that the agreement is valid,
operative and capable of being
performed; this relates to the
satisfaction about the "existence
and validity" of the arbitration
agreement. (In the instant case
these questions do not arise);
(vi) the Court has to be satisfied
that there are disputes between the
parties with regard to the matters
agreed to be referred; this relates
to effect (scope) of the
arbitration agreement touching the
issue of arbitrability of the
claims.
We have already found that on a conjoint reading of relevant clauses in the takeover Ordinance, the agreement between the State of Orissa and Tata Iron & Steel Company and the marketing agreement dated 20.4.82, the requirements of Section 3 of Foreign Awards Act have been satisfied. We, therefore, find that the test laid down by this Court in Renusagar’s case (Supra) for invoking Section 3 of the Foreign Awards Act is satisfied and the High Court was, therefore, justified in confirming the stay granted by the trial court.
As observed earlier, the main thrust of the learned counsel for the appellant was to challenge the finding of the High Court that State of Orissa was the successor in interest to OMC Charge Chrome Division. The connected arguments relate to disputes or differences that would arise between the parties in the arbitration proceedings concerning the construction, meaning etc. of the contract. These connected arguments need not be gone into in these proceedings and those arguments are to be addressed before the appropriate forum. Once it is found that the first respondent has established a case for invoking Section 3 of Foreign Awards Act, all other disputes will has to be addressed and settled in appropriate forum. The limited issue before us is with reference to the legality and validity of invoking Section 3 of the Foreign Awards Act which we have found in favour of the first respondent.
Now coming to Special Leave Petition (C) No. 19846/95, this petition is filed against the judgment and order of the High Court of Orissa at Cuttack in First Appeal No. 14/95 dated 12.5.95. By the Order under appeal, the High Court has reversed the Order of the learned Subordinate Judge, Bhubaneswar dated 26.3.94, by which the learned Subordinate Judge accepting an application filed under Order 7 Rule 11 C.P.C., rejected the plaint in title suit No. 231/92 filed by the first respondent in Special Leave Petition. The learned Single Judge of the High Court while reversing the Order of the learned Subordinate Judge observed as follows:-
"In the present case on a fair
reading of the petition filed by
defendant No. 1 under Order 7, Rule
11 of C.P.C it is clear that the
case of the applicant is that the
plaintiff has no cause of action to
file the suit. It is not
specifically pleaded by the
applicant that the plaint does not
disclose any cause of action. The
learned trial Judge has also not
recorded any specific finding to
this effect. From the discussions
in the order it appears that the
learned trial Judge has not
maintained the distinction between
the plea that there was no cause of
action to the suit and the plea
that the plaint does not disclose a
cause of action. No specific reason
or ground is stated in the order in
support of the finding that the
plaint is to be rejected under
Order 7, Rule 11(a). From the
averments in the plaint, it is
clear that the plaintiff has
pleaded a cause of action for
filing the suit seeking the reliefs
stated in it. That is not to say
that the plaintiff has cause of
action to file the suit for the
reliefs sought that question is to
be determined on the basis of
materials (other than the plaint)
which may be produced by the
parties at appropriate stage in the
suit. For the limited purpose of
determining the question whether
the suit is to be wiped out under
Order 7, Rule 11(1) or not the
averments in the plaint are only to
be looked into. The position noted
above is also clear from the
petition filed by defendant No. 1
under Order 7, Rule 11 in which the
thrust of the case pleaded is that
on the stipulations in the
agreement of 20.4.82 the plaintiff
is not entitled to file a suit
seeking any of the reliefs stated
in the plaint.
10. Coming to the question whether
the plaint is to be rejected under
clause (d) of rule 11 of order 7,
the Supreme Court in the case of
Orient Transport Co. (supra) has
clearly laid down that there is a
distinction between a case in which
the validity, effect and existence
of the arbitration agreement is
challenged and suit in which the
validity of the contract which
contains an arbitration clause is
challenged. The bar to suit under
section 32 of the Arbitration Act
extends to a case where the
existence, effect or validity of an
arbitration agreement is challenged
and not to the latter type of the
suit. On this question too the
learned trial Judge has failed to
maintain the distinction between
the two types of cases. He has
failed to notice that the case
pleaded by the plaintiff is that
the entire agreement including the
arbitration clause is null and void
and unenforceable and not that the
arbitration agreement is null and
void.
11. From the lower court record in
the case and also the records in a
similar suit filed by the State of
Orissa, Title Suit No. 152 of 1993
in which OMC Ltd. is a defendant,
it appears that in both the cases
the defendant No. 1 - Klockner &
Co. filed applications under
section 3 of the Foreign Awards
(Recognition and Enforcement) At,
1961. Such application presupposes
that the applicant accepts the
position that the said Act applies
to the case and the Arbitration
Act, 1940 has no application to the
case. Under the Foreign Awards Act,
there is no specific provision for
bar of suit. Further, from the
averments in the application filed
under Order 7, Rule 11 of C.P.C.,
it is clear that the main case
pleaded by the applicant was that
the parties had agreed that the
Swiss Law will be applicable to the
contract as the arbitration
agreement and the venue of
arbitration will be at London and,
therefore, the Indian Law in
general and the arbitration Act in
particular, have no application to
the case. Alternatively the
applicant has pleaded that even
assuming that the Indian Law of
Arbitration applies to the case
then the suit is barred under
section 32 of the Act. The learned
trial Judge does not appear to have
considered the main case pleaded by
the applicant but disposed of the
petition on consideration of the
alternative case pleaded by it.
Therefore this finding against bar
of the suit under Order 7, Rule
11(d) is also vitiated.
12. On the analysis and discussions
in the foregoing paragraphs, it is
my considered view that the order
passed by the learned trial Judge
rejecting the plaint under Order 7,
Rule 11(a) and (d) of C.P.C. is
unsustainable and has to be set
aside. Accordingly the appeal is
allowed and the order dated
26.3.1994 of the Civil Judge
(Senior Division) Bhubaneswar in
Misc. Case No. 75 of 1993 is set
aside. There will be no order for
costs of this Court."
After hearing the learned counsel on both sides and after carefully perusing the relevant pleadings, we do not think that the High Court has committed any error in rejecting the application of the appellant under Order 7 Rule 11. We accept the view taken by the High Court and consequently find no case for interference.
In the result all the Civil Appeals are dismissed with costs and Special Leave petition is dismissed without costs.