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PETITIONER: PRATAP SINGH

       Vs.

RESPONDENT: PREETAM SINGH & ANR.

DATE OF JUDGMENT: 19/08/1969

BENCH:

ACT:      Arbitration Act, 1940-Section 31(4)-Scope of.

HEADNOTE:      The appellant and the respondent were carrying on three businesses  at  three  different  places-Pipliya  in  Madhya Pradesh, Bombay and Nagpur. Certain disputes relating to the partnership business  were referred to an arbitrator. Having not been  able to complete the reference within four months, the arbitrator  applied to  the Subordinate Judge, Delhi for extension of  time.  Overruling  the  objection  as  to  his jurisdiction to  entertain the  application the  Subordinate Judge, Delhi granted extension of time for making the award.      When the  revision application  against this  order was pending before the High Court of Delhi, the respondent filed a suit  in the  court of  the Additional  District Judge  in Madhya Pradesh  for certain  reliefs. In  the  meantime  the appellant applied  under s.  34 of  the Arbitration  Act for stay of  the suit. The Additional District Judge appointed a receiver of  the properties.  In appeal  the Madhya  Pradesh High Court  held  that  having  regard  to  the  proceedings pending in  the High  Court at Delhi it was a case in which, without  adjudicating   upon   the   jurisdiction   of   the Subordinate Judge  at Delhi, the application for appointment of the receiver was maintainable.      In appeal  to this  Court it  was contended that it was open to  a Court to appoint a receiver of any other property in dispute  or in  relation to  any proceedings  before  the arbitrator and by confirment of that power, the power of the Civil Court  in a  suit to  appoint a  receiver was excluded and, therefore,  the only  Court competent  to entertain  an application  for   appointment  of   a  receiver   was   the Subordinate Judge  at Delhi  and not the court of Additional District Judge in Madhya Pradesh.      Dismissing the appeal, ^      HELD: Normally  for the  grant  of  interim  relief  in respect of  the subject-matter  of  the  dispute  before  an arbitrator the parties would have to resort to that court to which the  application for  extension of  time to  make  the award was  made. But as the jurisdiction of the Court of the Subordinate Judge,  Delhi to  entertain the  application for extension of time was in dispute the Civil Court 777 which is seised of the suit was entitled to make appropriate orders for  preserving the  property which  is the  subject- matter of the suit. [780 C-D]      Therefore,  the  Civil  Court  in  Madhya  Pradesh  was competent to  appoint a  receiver of  the property until the

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question about  the jurisdiction of the Delhi Court under s. 31 (4)  of the  Arbitration Act  to  entertain  applications arising  out   of  the   order  of   reference  was  finally determined. After  the High  Court of  Delhi determined that question, the  receiver appointed,  in order  to comply with the requirements  of the statute, may be made subject to the jurisdiction of the Delhi Court if it be held that the Delhi Court had jurisdiction to entertain the application. [780 E]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Civil Appeal No. 2321 of 1968.      Appeal by  Special Leave  from the  Judgment and  Order dated the  1st November,  1968 of  the Madhya  Pradesh  High Court, Indore Bench in Civil Miscellaneous Appeal No. 111 of 1967.      C.K. Daphtary and B. Dutta for the Appellant.      P.C. Khanna for Respondent No. 1.      The Judgment of the Court was delivered by      J.C. SHAH,  AG. C.J.  Pratap Singh,  Preetam Singh  and Diwan Singh  are three  brothers. Pratap  Singh and  Preetam Singh carried  on business  in partnership, at three places- (1) Pipliya  in Madhya  Pradesh, in  the name  of the  Jaora Slate Pencil  Works; (2)  Bombay,  in  the  name  of  Partap Brothers; and  (3) Nagpur,  in the  name of  Nice Tiles  and Marble, Nagpur.  By an  agreement dated  December  18,  1965 disputes between  Pratap Singh and Preetam Singh relating to the partnership business were referred to the arbitration of their brother  Diwan Singh.  The arbitrator entered upon the reference, but  he was  unable  to  complete  the  reference within four  months. Diwan Singh applied to the Court of the Subordinate Judge, Delhi, under s. 28 of the Arbitration Act for  extension  of  time.  Preetam  Singh  objected  to  the jurisdiction of  the Subordinate Judge at Delhi to entertain the  application.   The  Subordinate   Judge  overruled  the objection and  granted extension  of  time  for  making  the award. A revision application preferred against the order is pending before the High Court of Delhi. 778      In the  meanwhile Preetam  Singh filed an action in the Court of  the Additional  District Judge,  Mandsaur  against Pratap Singh  and Pritipal  Singh (brother-in-law of Preetam Singh) for  a decree for rendition of account of the dealing in  respect   of  the  Jaora  Slate  Pencil  Works  and  for appointment of  a receiver.  By amendment  of the  plaint  a claim for  dissolution of  partnership was also made. Pratap Singh applied  under s.  34 of  the Arbitration Act 1940 for stay of  the suit,  and the application was granted. But the Additional  District  Judge  directed  that  a  receiver  be appointed of  the properties of the Jaora Slate Pencil Works at Pipliya.  Against that order an appeal was carried to the High Court of Madhya Pradesh. The High Court was of the view that a  case  was  made  out  for  the  appointment  of  the receiver. The  Court further  held that having regard to the proceedings pending in the High Court at Delhi it was a case in which  without adjudicating  upon the jurisdiction of the Subordinate Judge  at Delhi, the application for appointment of the  receiver was  maintainable. Against that order, with special leave, this appeal has been preferred.      The only  question argued  in this  appeal is about the jurisdiction of  the Additional  District Judge, Mandsaur to entertain the  suit and  to appoint a receiver. The relevant statutory provisions may in the first be noticed.

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    By  cl.  3  of  Sch.  1  of  the  Arbitration  Act  the arbitrator is  required to  make an award within four months after entering  on the  reference. Section  28  of  the  Act provides that  the Court  may, if it thinks fit, whether the time for making the award has expired or not and whether the award has  been made  or not,  enlarge from time to time the time for  making the  award, and  the expression  "Court" is defined in  s. 2  (c)  as  meaning  "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 * * * * *      Section 31 of the Act provides.      (1) ...   ...  ...      (2) ....  ...  ...      (3)     All  applications   regarding  the  conduct  of           arbitration 779           proceedings  or  otherwise  arising  out  of  such           proceedings shall  be made  to the Court where the           award has  been, or may be, filed, and to no other           Court.      (4)   Notwithstanding anything  contained elsewhere  in           this Act or in any other law for the time being in           force, where  in  any  reference  any  application           under this  Act has been made in a Court competent           to entertain  it,  that  Court  alone  shall  have           jurisdiction over  the arbitration proceedings and           all subsequent  applications arising  out of  that           reference and the arbitration proceedings shall be           made in that Court and no other Court."      Section 34  of the  Act provides for stay of a suit. In so far as it is material it enacts.           "Where any  party to  an arbitration agreement ...           ...   commences any  legal proceedings against any           other party to the agreement ... ... 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  application           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." An application  for stay  of the  suit  pending  before  the Additional District Judge, Mandsaur was made by Pratap Singh and it  was granted.  But thereby  the jurisdiction  of  the Court to  pass appropriate orders for protecting the subject matter of  the suit  was not  excluded. An  application  for appointment of  a receiver  could be granted notwithstanding the order  of stay  of suit  under s.  34 of the Arbitration Act. But  it was  urged that  it is  open to  the  Court  as defined in  s. 2  (c) under  s. 41 read with the Schedule to the 780 Arbitration Act  to appoint a receiver of any other property in dispute  or in  relation to  any proceedings  before  the arbitrator, and  by conferment  of that  power, the power of the Civil Court in a suit to appoint a receiver is excluded. On that  premise it  was urged that the only Court competent

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to entertain  an application  for appointment  of a receiver was the Subordinate Judge’s Court at Delhi and not the Court of the  Additional District Judge, Mandsaur. It is true that an application  for extension  of time to make the award was made to  the Court  of  the  Subordinate  Judge,  Delhi  and normally the  parties would have to resort to that Court for interim relief  in respect  of  the  subject-matter  of  the dispute  before   the  arbitrator.   But  so   long  as  the jurisdiction of the Court of the Subordinate Judge, Delhi to entertain the  application for  extension  of  time  was  in dispute the  Civil Court  which is  seized of  the suit  was entitled to  make  appropriate  orders  for  preserving  the property which is the subject-matter of the suit.      We are  therefore of  the view  that the Civil Court at Mandsaur was competent to appoint a receiver of the property until the question about the jurisdiction of the Delhi Court under s. 31 (4) to entertain applications arising out of the order of  reference is  finally determined.  After the  High Court of Delhi determines that question, receiver appointed, in order to comply with the requirements of the statute, may be made  subject to  the jurisdiction of the Delhi Court, if it be  held that  Delhi Court  had jurisdiction to entertain the application.      It was  urged that  the suit  filed  at  Mandsaur  only relates to  the assets, of the partnership at Pipliya within the State  of Madhya  Pradesh and  does not  relate  to  the properties at Bombay and Nagpur and that by the expedient of obtaining an  order for  appointment of  a receiver  Preetam Singh has  managed to remain in possession of the properties at Bombay  and Nagpur  to the  exclusion of Pratap Singh. We cannot at  this stage,  decide whether the suit in so far as it relates to the assets of the partnership at Pipliya alone is maintainable.  The  arbitration  proceedings  undoubtedly relate to  all the  assets of the Partnership and if Preetam Singh,  as  contended  by  Pratap  Singh,  has  remained  in possession of  the properties  of the  partnership at Bombay and Nagpur  to the  exclusion of Pratap Singh and it is just and equitable to have a receiver appointed, his remedy is to com- 781 mence appropriate  proceedings for that purpose and to apply to  a   competent  court   to  appoint  a  receiver  of  the properties.      The appeal  fails and  is dismissed.  There will  be no order as to costs. P.B.R.                                    Appeal dismissed.