H. SRINIVAS PAI & ANR. v.

H.V. PAI (D) THR. LRS. & ORS. (Civil appeal No. 5220-5221 of 2010)

JULY 9, 2010 [R.V. Raveendran and H.L. Gokhale, JJ.]

2010 (8) SCR 413

The following order of the Court was delivered

O R D E R

1. Leave granted. Heard the counsel.

2. The first respondent filed a suit for partition in the year 1991. In the said  

suit, the appellant filed an application for stay of proceedings under Section  

34 of the Arbitration Act, 1940 (‘old Act’ for short). The said application under  

Section 34 was dismissed on 15.3.1995 on the ground that the appellant had  

acquiesced to court’s jurisdiction. The appeal filed by the appellants, as also  

a further revision by them, were dismissed in 2000 and 2001.

3. The suit, however, continued to be pending and the appellants thought  

fit to file an application under Section 8 of the Arbitration and Conciliation Act,  

1996 (‘Act’, for short). That application was dismissed by the trial Court by  

order dated 29.3.2003. Feeling aggrieved, the appellants filed a revision  

which was referred by a learned single Judge of the High Court to a Division  

Bench. The Division bench, by order dated 3.11.2008, dismissed the  

application under Section 8 of the Act but while so doing, observed thus:  

“In view of Section 1 (2) of the Act, the said Act has got application in  

respect of commercial agreement matters and international commercial  

matters. The right claimed by the respondent in the original suit for  

partition of the joint family properties, is a civil dispute, which does not  

attract the provisions of the Act.”

The appellants filed a review petition which was dismissed on 17.4.2009. The  

said orders dated 3.11.2008 and 17.4.2009 are challenged in this appeal by  

special leave.

4. This court while issuing notice granted stay of the said observation and  

made it clear that there shall be no stay of the suit and that the suit shall  

proceed expeditiously as it has been pending for 18 years.

5. There is absolutely no basis for the observation of the High Court that  

Arbitration and Conciliation Act, 1996 will not apply to ‘civil disputes’, but will  

apply only to ‘commercial disputes’ or international commercial disputes. The  

Act applies to domestic arbitrations, international commercial arbitrations and  

conciliations. The applicability of the Act does not depend upon the dispute  

being a commercial dispute. Reference to arbitration and arbitability depends  

upon the existence of an arbitration agreement, and not upon the question  

whether it is a civil dispute or commercial dispute. There can be arbitration  

agreements in non-commercial civil disputes also.

6. However, the said observation of the High Court does not, in any way,  

affect the correctness of the said order passed by the High Court. As already  

noticed, the application under Section 34 of the old Act was dismissed in the  

year 1995 and affirmed in appeal in 2000 and by the High Court in 2001 and  

attained finality. The subsequent attempt of the appellants by filing an  

application under Section 8 of the Act has been rightly negatived by the trial  

Court and by the High Court.

7. In view of the above, we dispose of these appeals without disturbing the dismissal  

of the revision by the High Court. We, however, set aside the observation of the High  

Court in paragraph 4 of its Judgment (extracted in para 3 above) holding that the Act  

will not apply to ‘civil disputes’. We request the trial Court to dispose of the suit  

expeditiously not later than three months from today.