Pratap Singh v. Preetam Singh & Anr.

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-{ I) · Pipliya in Madhya Pradesh, in the·name of the Jaora Slate Pencil Works; {2) Bombay, F in the name of Partap Bro!hers; and (3) Nagpur, in the name of Nice Tiles and Marble, Nagpur: By an agreement dated Decem- ber 18, \965 disputes between Pratap Singh and Preetam Singh relating to the partnership business were referred to the arbitration of their brother Diwan Singh. The arbitrator enter~d upon the reference, but be was unable to complete the reference within four G months .. Diwan Singh, l!pplied 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 H the award. A revision application,. preferred against the order is pending before the High Court of Delhi. 0 1-1 ....... .~·~ 778 SUPREMB COURT REPORTS · Jn the nieanwbile.Preetam Singh filed an action in the Co~rt 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 J aora Slate Pencil-Works and for appointment of a receiver. By amendment of . the plaint a claim for d_issolution of partnership was also made. Pratap Singh applied under s. 34 of the Arbitration Act 1940 for stay of the suit, and the' applicati<•n was granted. But the Addi­ tional District Judge clirected th.at 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 t\fadhya 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 baa been preferred. ' The only question argued in this appeal is about the jurisdic- tion 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. Dy cl. 3 or 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 bas bee~ made or not, enlarge from time to time the time for making the award, and the ellpression "Court" is defined in s, 2 (c) as meaning "a Civil Court having jurisdiction to decide the questions forming the subj~:ct-mattt:r of the reference if the aame bad been the subject-matter of a suit, but • • . . ..... Section 31 of the Act pruvides. (I)) ... (2) · (3) All application~ regarding the conduct of arbitratiod . I . i ' . : .· ·' ., proceedipgs or otherwise ·arising out of such pro· ceedings shall be mad'e ·to the Court where the award has been, or may be,.filed, and to no other Court • . . (4) Notwithstanding anything contained elsewhere i.n 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 arbitrati~n pro­ ceedings shall be made in. that Court and no other· Court ... . Section 34 o.r 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 agai~st any· other I . · · party to· the agreement ' .. :. . in respect -of any matter agreed to be referred, any party to such legal proceeditigs may, at any time before . filing a ~tten statemenfor taking any o!her steps in the proCeedings, apply to the judicial aut6orjty befote which the pro· .. , ' ceedings'are pending to stay the proceedings; and if satisfied that there is no suffieient reason ·why the · · ' mt!ter should not be· referred in accordance with the armtration agreement and that the application was, at -' - J the time when the proceedings were' . comrrienced, ·and . ·. still remai'ds ready' and willing to do all things necessaey . to the proper conduct' of the arbitration such a1,1tborhy · o~: may make an order staying the proceedings." A~ application for stay of the suit . ~nding ~tore Ute Addit,9nal Dlstrict Judge, Mandsaut was made by Pratap Singh and it was .lranted. But thereby the juri~diction: pf the ~o.urt' to pass appro· ' pria~e ~rd~rs for protecting the subject m~,tt~r of the suit was not excluded. An applic~tion for appointment of a :receiver cou_l~ •. be granted notwithstanding the order: o~ stay of suit under s. 34 of the Arbitration Act. But it was urged that it is open to the Court as d~fined in s. 2 (c) under s. 41 read with the Schedule to ·the ...... ' D ''E . ' .. I [ . I· < u· stJPR£MB cotJRt itEi>oilts (19s21 3 s.t!.i. 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 to entertain an application for appoint­ ment 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 Cour~ 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 eitension 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 ques­ tion, the receiver appointed, in order to comply with the require­ ments 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 proper~ies at Bombay and Nagpur and t~at by the expe.dient of obtaining an order for appointment of a recetver Preetam Smgb has managed to remain in possession of the properties at Do~ bay and Nagpur to the exclusion of Pratap Singh. We cannot at this stage, de~~~e . wbether the suit in so far tt:i it relates to the ~sset~ of the partn~~s.~ip at Pipliya alone is maintainable. The arburatJO.n proc~edings .undoubtedly relate to all the assets of the Partnershtp and tf Preetam Singh as contend .. d b p s· .h h • d · • • -. Y ratap IDg , as rrmatne tn possessaon of the properties of the partnersbi at Dombay.and Nagpur to tho exclusion of Pratap Singh and it is p·ust and equttable to have a receiver appointed h' . J · • IS reO\edy IS to COnl" \. . / PitdAP !IN(nt •.. Pki!ilTAM stN6H (J.C. s~J,. Ag. C.i.) 7ai mence appropriate proceedingdor 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. Appealtdismis_sed. )