(1) THIS judgment will dispose of civil revisions No. 319-D and No. 320-D of 1964.

(2) THE plaintiff-respondent brought a suit in the Court of the Additional Judge small

Causes, Delhi for recovery of Rs. 328-80 np. The defendant transport company

made an application under section 34 of the Arbitration Act of 1940 praying that in

view of an arbitration clause in the agreement between the parties, the proceedings

should be stayed.

(3) THE learned Additional Judge small causes, relying upon an unreported

judgment of a learned Single Judge of this Court in Jai Prakash v. Managing

Committee of the Minto Road Club, ( 1 ) has held that the provisions of section 34 of

the Arbitration Act of 1940 are not attracted to a suit pending in the Court: of Small

causes, and consequently he has declined to stay the proceeding. The defendant has

come up in revision.

(4) LEARNED counsel for the defendant-petitioner has challenged the correctness

of this authority and has cited Basanti Cotton Mills Ltd. v. M/s Dhingra Brothers, (2)

and Choteylal Shamlal Cooch Behar Oil M ills Ltd. (3) Both of these authorities

appear to support his contention. I have grave doubts regarding the correctness of

the judgment of this court mentioned above. It may be mentioned that the

respondent was not represented in this Court in that case.

(5) IT is desirable that this matter be heard by a large Bench. Let the case be put

up before my Lord the Chief Justice for constituting a larger Bench to hear this

revision.

(6) THIS judgment would dispose of Civil Revisions No. 319-D of 1964, No. 320-D

of 1964 and No. 668-D of 1965, all of which have been filed by Chadha Motor

Transport Company (Private) Limited.

(7) ARGUMENTS have been addressed before us in Civil Revision No. 319-D of

1964 and it is stated by learned counsel for the parties that the decision in this case

would also govern the other two cases because the matter involved is identical. In

the circumstances, we may briefly refer to the facts of the case in Civil Revision No.

319-D of 1964. R. N. Chopra respondent in that revision brought a suit for recovery

of Rs. 328-80 np. on account of compensation for non-delivery of goods against the

petitioner Transport Company in the Court of Additional Judge, Small Causes, Delh.

The petitioner-Company made an application under section 34 of the Arbitration Act,

1940 (Act No. X. of 1940) (hereinafter referred to as the Act) for stay of the suit on

the ground that the plaintiff-respondent had entered into an agreement with the

petitioner that all disputes in respect of the goods Receipt, under which the goods in

dispute were booked, would be referred to Arbitrator. The respondent denied the

existence of such an arbitration agreement and averred that there was dispute

between the parties falling within the purview of arbitration clause as printed on the

reverse of the goods Receipt. The learned Additional Judge Small Causes Court held

that the Court of Small causes had no jurisdiction to stay the proceedings under

section 34 of the Act. In arriving at this conclusion the learned Additional Judge

relied upon a judgment of Grover,. in Jai Parkash v. Managing Committee of the

Minto Road Club, New Delhi. Civil Revision No. 250-D 1957, decided on 29/2/1960.

The petitioner-Company then came up in revision to this Court.

(8) AT the hearing of the present revision and the two connected revisions before

Jindra Lal,. , the counsel for the petitioner challenged the correctness of the view of

Grover,. in Jai Prakash" case and relied upon two decisions of Calcutta High Court

Basanti Cotton Mills Ltd. , v. M/s. Dhingra Brothers and Chotaylal Shamlal v. Coech

Behar Oil Mills Ltd. , ). Jindra Lal,. expressed his doubt regarding the correctness of

the view of Grover, J, and directed that the matter may be placed before my Lord

the Chief Justice for constituting a larger Bench to hear the revisions. It is, in these

circumstances, that the revisions have been posted for hearing before the Division

Bench. SECTION 34 of the Act, under which the petitioner Company applied to the

Court below for stay of the suit, reads as under:-"where any party to an arbitration

agreement or any person claiming under him commences any legal proceedings

against any other party to the agreement or any person claiming under him in

respect of any matter agreed to be referred, any party to such legal proceedings

may, at any time before filing a written statement or taking any other steps in the

proceedings, apply to the judicial authority before which the proceedings are

pending to stay the proceedings, and if satisfied that there is no sufficient reason

why the matter should not be referred in accordance with the arbitration agreement

and that the applicant was, at the time when the proceedings were commenced,

and still remains, ready and willing to do all things necessary to the proper conduct

of the arbitration. such authority may make an order staying the proceedings. "the

above section deals with power to stay legal proceedings where there is an

arbitration agreement. We are not concerned in the present case with the various

aspects of the Section, because the matter, which needs determination by us, lies

within a narrow compass, and it is whether a Court of Small causes can stay a suit

under the above Section, if the other requirements are fulfilled. Plain reading of the

above Section shows that where any party to an arbitration agreement commences

any legal proceedings in respect of any matter agreed to be referred against any

other party to the agreement, any party to such legal proceedings, may, at any time

before filing a written statement or taking any other steps in the proceedings, apply

to the judicial authority before which the proceedings are pending to stay the

proceedings. It is further provided that if the aforesaid authority is satisfied that

there is no sufficient reasons why the matter should not be referred in accordance

with the arbitration agreement and that the applicant was, at the time when the

proceedings were commenced, and still remains, ready and willing to do all things

necessary to the proper conduct of the arbitration, the judicial authority referred to

may make an order staying the proceedings. The significant words used in the

Section are "the judicial authority before which the proceedings are pending", and

the power of staying proceedings, according to the language used in the Section is

clearly vested in the aforesaid judicial authority. It can hardly be disputed that an

Additional Judge of Small Causes Court constitutes judicial authority, and as the suit,

which was sought to be stayed, was pending before the Additional Judge Small

Causes Court, he must, in our view, be held to be the "judicial authority before

which the proceedings are pendings" It would follow from the above that the Court

below had the power and competence to stay the suit.

(9) IN the case of Jai Prakash (supra) Grover,. accepted the revision of the

petitioner ex-parte and held that a suit for recovery of money pending in the Court

of Additional Judge Small causes could not be stayed under section 34 of the Act. In

arriving at this conclusion the learned Judge referred to the definition of the word

"court" as given in Section 2 (c) of the Act as well as to the provisions of Section 40

of the Act. The word "court" has been defined in section 2 (c) of the Act as under :-

"court means a Civil Court having jurisdiction to decide the questions forming the

subject-matter of the reference if the same had been the subject matter of a suit,

but does not, except for the purpose of arbitration proceedings under section 21;

include a Small Causes Court: "section 40 of the Act runs thus:-"a small Causes Court

shall have no jurisdiction over any arbitration proceedings or over any application

arising there out save an application made under section 21. "

(10) THE definition of the word "court" as well as the provisions of Section 40 of

the Act, in our view, do not militate against the conclusion at which we have arrived

that a Court of Small Causes is competent to stay a suit under Section 34 of the Act.

In the various Sections of the Act there is provision about the powers of the Court

and the making of applications to Court. For example, Section 8 deals with power of

Court to appoint arbitrator or umpire. Section 11 relates to the power of Court to

remove arbitrators or umpire in certain circumstances, while section 12 relates to

the power of Court where arbitrator is removed or his authority is revoked. Sections

15 to 18 deal with the power of Court to modify or remit award, to pass a judgment

in terms of the award, to pass interim orders and to supersede arbitration. Section

20 deals with an application to file an arbitration agreement in a Court. Section 28

gives a power to Court of enlarging time for making award, while Section 28 makes

provision for an application to the Court to challenge the existence or validity of an

arbitration agreement or an award or to have the effect of either determined.

According to section 31, an award may be filed in any Court having jurisdiction in

the matter to which reference relates. Section 36 of the Act deals with the powers of

the Court in certain contingencies, The Court, which is vested with the powers

referred to above and to which the applications mentioned above can be made, in

view of the definition of the word "court", can only be the Civil Court having

jurisdiction to decide the questions forming the subject matter of the reference if the

same had been the subject matter of a suit. It is also obvious that in view of the

definition of the word "court", a Court of Small causes would not have jurisdiction to

exercise any of the powers referred to above or to entertain the applications

enumerated above. The only exception provided is in respect of arbitration

proceedings under section 21 of the Act according to which, where in any suit all the

parties interested agree that any matter in difference between them in the suit shall

be referred to arbitration, they may at any time before judgment is pronounced

apply in writing to the Court for an order of reference. Although the jurisdiction of

the Court of Small Causes except for a limited purpose is excluded and it is not

vested with the authority to exercise the power or entertain applications specified in

the various sections of the Act referred to above, in our view, it does not follow

therefrom that a Court of Small Causes cannot deal with an application under

Section 34 of the Act and grant a stay even though the other requirements of the

Section are fulfilled, The reason for that is that Section 34 of the Act does not talk of

a "court" but of "the judicial authority before which the proceedings are pending. "

The clear language of the Section shows that the application in respect of the

judicial proceedings pending before a Court of Small Causes can only be made to

that Court and it is that Court which is vested with the jurisdiction to stay the suit.

The language of section 34 of the Act in this respect is at variance with that of

section 19 of the Indian arbitration Act, 1899 (Act No. 9 of 1899), wherein the

corresponding words were: "may at any time after appearance and before filing a

written statement or taking any other steps in the proceedings, apply to the Court to

stay the proceedings. "the above change of language is not without significance and

whatever might have been the limitation of a Court of Small Causes in the matter of

granting stay under Section 19 of the Act of 1899, no such limitation is there in

respect of exercise of such power under Section 34 of the Act of 1940. It would

indeed be straining the language of Section 34, which is couched in plain and

unambiguous terms, to read in the Section an exclusion of the jurisdiction of a Court

of Small Causes in the matter of granting stay. Such an exclusion is not warranted

by the words used and it is not permissible to strain those words in order to spell

out an inference of exclusion.

(11) SO far as Section 40 of the Act is concerned, it refers to "jurisdiction over any

arbitration proceedings or over any application arising there out". An application

under Section 34 is only for stay of legal proceedings commenced before a judicial

authority and the aforesaid authority by granting such a stay does not get

jurisdiction over arbitration proceedings or over applications arising there out.

Sections 34 and 40 deal, in our view, with two different and distinct matters. Section

34 is confined only to the matter of stay of legal proceedings, while Section 40

covers within its ambit arbitration proceedings and applications arising there out. An

application for stay under Section 34 cannot held to deal with the matters referred

to in Section 40. It is a well established cannon of interpretation of statutes that the

different provisions of an enactment have to be construed harmoniously. Keeping

this principle in view the power of granting stay given to a Court of Small Causes by

the plain language of Section 34 cannot be held to have been taken away and set at

naught by Section 40 of the Act.

(12) THE reported decisions support the conclusion at which we have arrived.

Basanti Cotton Mills Ltd. , v. M/s. Dhingra Brothers (2) is a case decided by Das

Gupta, as he then was. The head-note of that case, which is based upon

observations in the body of the judgment, reads :-"strictly interpreted, Section 40

only means this that the Small Cause Court shall have no jurisdiction over the

proceedings of the arbitration which have stated nor will have any jurisdiction for

any application which may arise out of those proceedings. The stage at which the

application for stay is made and the stay order is passed is not any part of the

arbitration proceedings. This provision in law that the Small Cause Court has no

jurisdiction over any arbitration proceedings can in no way affect the interpretation

of law which will give the Small Cause Court jurisdiction to pass a stay order. For

clearly, exercising jurisdiction to pass stay orders is not exercising jurisdiction over

arbitration proceedings. Where, therefore a suit is pending before a Small Cause

Court, the Small Cause Court is the authority to whom the application for stay of suit

has to be made, and such authority may pass an order staying the suit". In

Choteylal Shamlal v. Cooch Behar Oil Mills Ltd. (3 ). , as he Bachavat,. , as he then

was, observed :-"section 34 does not provide for an application to a court as defined

under Section 2 (c ). Section 34 provides for an application to the judicial authority

before whom a legal proceeding is pending for stay of that proceeding. THE section

purposely uses the expression judicial authority. The application is made not to the

court but to the judicial authority before whom a proceeding is pending. IN my

judgment, an application for stay made to a judicial authority under Section 34 of the

Act is not an application under the Act in a reference in a court competent to

entertain it as contemplated by Section 31 (4) of the Act. AN application for stay of

a legal proceeding to the judicial authority before whom it is pending is always an

application under the Act to a judicial Authority competent to entertain it. The

judicial authority, however, need not necessarily be a court competent under Section

2 (c) to decide the questions forming the subject-matter of the reference and it is

impossible to hold that the judicial authority becomes the exclusive arbitration court

on the making of the application for stay. "badri Narayan Lall v. Union of India and

others (6), is a case decided by a Division Bench (Bachawat and Laik, JJ ). In the

aforesaid case the learned Judges dealt with the question as to whether a City Civil

Court Judge has jurisdiction to pass an order under Section 34 of the Act staying a

suit pending before him. According to Section 5 (4) of the City Civil Court Act, 1953,

the City Civil Court shall not have jurisdiction to try suits and proceedings of the

description specified in the First Schedule. Item No. 11 of the First Schedule

mentions suits and proceedings under the Arbitration Act, 1940, other than suits and

proceedings under Chapter IV of that Act. Bachawat,. observed :-"now the

application for stay of the pending suit under Section 34 of the Arbitration Act, 1940

is a proceeding in that suit. The City Civil Court is competent to try the suit and all

proceedings in it. The ancillary proceeding in the suit for its stay under Section 34 of

the Arbitration Act is not covered by the expression suits and proceedings under the

Arbitration Act, 1940 in item No. 11 of the first schedule of the City Civil Court Act,

1953 read with Sections 2 (5) and 5 (2) of the Act and the City Civil Court is not

debarred from trying the application. ONLY the City Civil Court Judge before whom

the suit is pending is competent to entertain the application for its stay under

Section 34 of the Arbitration Act, 1940. No other judicial authority is competent to

entertain the application. Section 5 (4) of the City Civil Court Act, 1953, read with

the first schedule to the Act does not take away the jurisdiction of the City Civil

Court Judge to entertain an application under Section 34 of the Arbitration Act,

1940, which can be made to him only and which no other judicial authority is

competent to entertain and try. "like,. also came to the same conclusion, and in

doing so he relied inter alia upon the decisions in the cases of Basanti Cotton Mills

and Choteylal Shamlal (supra).

(13) WE would, therefore, hold that the Court below was in error in rejecting the

applications under section 34 of the petitioner company on the short ground that

had it no jurisdiction to grant stay under section 34 of the Act. We, accordingly,

accept the revision petitions, set aside the impugned orders and direct that the

applications under Section 34 of the Act may be disposed of on their merits. The

parties, in the circumstances of the case, are left to bear their own costs.