JAWAHAR LAL BURMAN v. UNION OF INDIA
Citation: [1962] 3 S.C.R. 769; 1961 INSC 278
Court: Supreme Court of India
Bench: BHUVNESHWAR PRASAD SINHA , P.B. GAJENDRAGADKAR, RAGHUBAR DAYAL
Judgment date:
Case summary
1961 INSC 278. Supreme Court of India judgment dated 1961-09-25. JAWAHAR LAL BURMAN v. UNION OF INDIA. Read the judgment and case details on LawSphereX.
Judgment text
770 SUPREME COURT REPORTS [1962] 3 S. C. R. SUPREl'lffi COURT REPJRTS 769 1961 JAWAHAR LAL BURMAN v. UNION· OF INDIA (B. P. SINHA, C. J. , P. B. GAJENDRAGADKAR and RAGHUBAR DAYAL, JJ. ) Arbitration-Denial of validity of contract contai1ting arbitration agreement-Petition for dedarati011 that there ia valid contract and to afffirm exiatence of arbit1ation agreement- Maintainability-&ope and effeci-Juritdictio•-Arbitration Act, 1940 (10 of 1~40) "· 28, 31, 32, 33. The appellant and. the respondent nominated their arbi-trator. who heard the matter at length and. the proceedings had reached a •tage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the plea that there was no concluded contract. The appellant refused to apply under s. 33 and so a stalemate issued became the arbi· trators were not entitled to proceed further with the arbitration proceedings. - , The respondent moved the court under s.
28 along with 1. 33, for a decision of the question about the existence and validity of the arbitration agreement, and also prayed that extension of time be granted to the arbitrators for making the award. The appellant pleaded in defence that there was no concluded contract, and there was no juri.! idiction iri the court to grant extension under $~ 28 of the Act. The High Court confirmed the finding of the trial court that there was a concluded contract which contained a valid , arbitration ag_reement. As for jurisdiction it held that since the petition had been filed as cornposit application und plea. that there was no concluded contra. ct. Even then he refused to apply under s. 33 and so a stalemate issued becauso the arbitrators were not entitled to proceed further with the arbi· tration procoedings in •iew of the point raised by the appellant. 'It is necesee. ry to bear in mind thi11 backgrow1d of the dispute in considering tho point-of jurisdiction.
The question of jurisdiction raised by the appellant has to be answered in the light of tho construction which can be reasonably placed on the material provisions of as. 32 and 33 of the Act. It may be concerled at the outset that the question thus rniscd presents some difficulty. Sections 32 and 33 read thus: "32. Notwithstanding any law for the time being in force, no suit shall lie on any ground wh[l,tsoevcr for a decision upon tho existence, effect or validity of an arbitr[l,tion ngreemont or award, nor shall any arbitration agreement or award be set aside, amend-ed, modified or in any way affected otherwiso than as provided in thie Act. 33. Any party to an arbitration agreement or any person claiming under hiJ:J? - ?
-csir-ing to challenge the existence or validity of an -arhitration agreement or an a~ard or to b1we the eff<>ct of either detcrmmed shall apply to the Court and tho Court shall decide the question on affidavitB: Provided that whcro the Court deems it just and oxnedient, it may set down tho • application for hearing cm other evidence f also, and it may pass such orders for dis-covery and particulars as it may do in a suit. " In appreciating the effect of these two provisions it would be relevant to remember that the object of the Legislature in enacting the two sections quite clearly was to prevent the abuse of the process of the Court. Before the present Act was passed experience showed that unscrupulous and dishonest parties to the arbitration agreements frequently chose to deny the existence of the said agreements even after the arbitration proceedings had concluded and ended in awards and that tended to make all arbitration proceedings futile.
More often than not these pleas ultimately failed but it meant considerable delay and waste of time and substantial expense. That is why ss. 32 and 33 have been enacted with the object of bringing the relevant disputes for decision before the specified Courts in the form of petitions. It is significant that under s. 31(2) of the Act all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. Indeed, s. 2(c} defines a Court 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 does not, except for the purpose of arbitration proceedings under s. 21, include a Small Cause Court.
Therefore, stated broadly, it would be correct to assume that the main object of introducing the new provisions of ss. 31, 32 and 33 was to entrust the decision of the relevant disputes to the specified Court and to require the parties to bring the said disputes for the decision of the said Court in ' the form of petitions. Remedy by a regular suit is intended to be excluded . 776 SUPRE? im COURT REPORTS [1962) Section 32 creates a bar against the institu. tion of suits, and it provides that if the existence effect or validity of an arbitration agreement or award is in dispute on any ground whatsoever no suit shall lie for the adjudication of the said dispute. It also provides that no suit shall lie to set aside, amend or modify or in any way affect an arbitration agreement or an award.
It would be noticed that tho clause "on any ground whatsoever" is very wido and it denotes, inter alia, that if tho existence or validity of an arbitration agree· mcnt is questioned on any ·ground whatever it cannot be the subject-matter of a suit; the said dispute shall be tried as provided in this Act. Thus there can be no doubt, that if a party affirms the existence of an arbitration agreem rtation of gold except with the permission of the Reserve Bank. Section 23A of the Act, which was introduced by an amendment in 1952, provided that " .. the restrictions imposed by s. 8( I) .. shall be deemed to have been imposed under s. 19 of the Sea Customs Act, 1878, and all the provi1ions of the Act shall have effect accordi~gly .. " Section 19 of the Sea Custom• Act, 1878, enabled the Central Government, by notification, to prohibit or restrict the bringing goods of any specified description into
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