# STATE OF UTIAR PRADESH & ANR v. JANKI SARAN KAILASH CHANDRA & ANR

- **Citation:** [1974] 1 S.C.R. 31
- **Court:** Supreme Court of India
- **Decided:** 1973-04-23
- **Bench:** A. Alagir!Swami, I. D. Dua, C. A. Vaidialingam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-utiar-pradesh-anr-v-janki-saran-kailash-chandra-anr-5975
- **Pages:** 9

## Headnote

Arbitration Act 1940. S. -34-District Govcnunent Couμsel accepting sum•
mons along with cbpy of wrillen statement i11 suit for da1nages for breach of
contract against State Government-Filing nienzo of appearance and asking for
acljo:,;,rnn1e111-whether in doing so ''any other step in the proceedings" is taken
Withill. meaning .of s. 34--State Gov~rnnient's plea for iSfav of suit under s. 34
whether cuuld be entt!11tained in circumstances of cast-It was belier to have
suit for large sum r;ied by court rather than by arbitrator.
The plaintiffs (respondents
herein)
instituted a suit for the recovery of
daillages for breach of contract impleading the State of U.P. (through the Collector of Bijnor) as the first defendant, and the Divisional Forest Officer, Bijnor
as the second defendant. The summqns in the suit issued to the State of U.P.
were served on the District Government Counsel.
On September 2. 1966 the
said counsel filed an appearance slip in the court and also put in a fvrmal appli·
cation praying for one month's time for the purpose .of filing written statement.
This prayer was granted.
On October l, 1966 the District Government counsel
filed an application under s. 34 of the Arbitration Act pleading that there was an
arbitration clause in the agreement between the parties to the suit and the State
of U.P. being willing to refer the matter to arbitration the suit should be stayed.
The trial court held that the dispute was subject to arbitration. clause and S;ince
the State of U.P. had not taken any steps in the suit proceedings and had also
not filed -the written statement the -suit was liable to be stayed. on appeal the
!High CQurt held that the action Of the District Government Counsel in applying
for time to file the written statement amounted to taking a step in the proceed~
Jugs within the Ineaning of s. 34 of the Arbitration Act. On this view the de·
'fendant was held disentitled to claim that the suit should be stayed. By special
'leave the defendants appealed to this Court.
Dismissing _the appeal,
$1.D : (i) Taking other steps in the suit proceedings within the meaning of
>S. 34 connotes the idea of dOing something in aid of the progress of the suit or
submitting to tlte jurisdiction of the court for the purpose of adjudication of
the merits of the controversy in the suit. [37E-F}
A recognised agent like the District Government Counsel can scarcely be
.considered to appear voluntarily in a case on behalf of the Government in the
·&ense of being unauthorised by his client for the simple reason that he is authoTised by virtue of statute to appeal, act and make applications on behalf of the
Government. Indeed in the present case the District Government Counsel also
filed in the Court the usual appearance slip. If he wanted time fot further consultations, he could and should have specifically made a prayer to that effect.
.
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The State tqok the benefit of the adjournment.
It would be some\ ·•at irrational and perhaps incongruous to permit the State, after having taken the henefit
of the adjournment, to plead that the application for adjournment was not mlde
on instructions and was unauthorised. [38E]
(ii) The argument that the trial court's discretion had been erroneouslr reveri;ed by the High Court was equally devoid of merit. If the appellant's application was for adjournment for the purpose of filing the
written statement,
then othere was no question of any exercise of discretion by the trial court.
Discretion with regard to stay under s. 34 of the Arbitration Act is to be exercised
only when ~n application under that section is otherwise competent. [38GJ
(iii) Keeping in view the long delay after the commencement of the suit and
the fact that the suit was for a very heavy _amount by way of damages for
breath of contract, it would be more satisfactorv on the whole to have the suit
tried in a competent court of law in the normal course rather than by a lay
32
SUPREME COURT REPORTS
( 1974] l S.C.R.
arbitr.:o.:.Jr w

## Text

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STATE OF UTIAR PRADESH & ANR.
v.
JANKI SARAN KAILASH CHANDRA & ANR.
April 23, 1973
[A. ALAGIR!SWAMI, I. D. DUA AND C. A. VAIDIALINGAM, JJ]
Arbitration Act 1940. S. -34-District Govcnunent Couμsel accepting sum•
mons along with cbpy of wrillen statement i11 suit for da1nages for breach of
contract against State Government-Filing nienzo of appearance and asking for
acljo:,;,rnn1e111-whether in doing so ''any other step in the proceedings" is taken
Withill. meaning .of s. 34--State Gov~rnnient's plea for iSfav of suit under s. 34
whether cuuld be entt!11tained in circumstances of cast-It was belier to have
suit for large sum r;ied by court rather than by arbitrator.
The plaintiffs (respondents
herein)
instituted a suit for the recovery of
daillages for breach of contract impleading the State of U.P. (through the Collector of Bijnor) as the first defendant, and the Divisional Forest Officer, Bijnor
as the second defendant. The summqns in the suit issued to the State of U.P.
were served on the District Government Counsel.
On September 2. 1966 the
said counsel filed an appearance slip in the court and also put in a fvrmal appli·
cation praying for one month's time for the purpose .of filing written statement.
This prayer was granted.
On October l, 1966 the District Government counsel
filed an application under s. 34 of the Arbitration Act pleading that there was an
arbitration clause in the agreement between the parties to the suit and the State
of U.P. being willing to refer the matter to arbitration the suit should be stayed.
The trial court held that the dispute was subject to arbitration. clause and S;ince
the State of U.P. had not taken any steps in the suit proceedings and had also
not filed -the written statement the -suit was liable to be stayed. on appeal the
!High CQurt held that the action Of the District Government Counsel in applying
for time to file the written statement amounted to taking a step in the proceed~
Jugs within the Ineaning of s. 34 of the Arbitration Act. On this view the de·
'fendant was held disentitled to claim that the suit should be stayed. By special
'leave the defendants appealed to this Court.
Dismissing _the appeal,
$1.D : (i) Taking other steps in the suit proceedings within the meaning of
>S. 34 connotes the idea of dOing something in aid of the progress of the suit or
submitting to tlte jurisdiction of the court for the purpose of adjudication of
the merits of the controversy in the suit. [37E-F}
A recognised agent like the District Government Counsel can scarcely be
.considered to appear voluntarily in a case on behalf of the Government in the
·&ense of being unauthorised by his client for the simple reason that he is authoTised by virtue of statute to appeal, act and make applications on behalf of the
Government. Indeed in the present case the District Government Counsel also
filed in the Court the usual appearance slip. If he wanted time fot further consultations, he could and should have specifically made a prayer to that effect.
.
D~
The State tqok the benefit of the adjournment.
It would be some\ ·•at irrational and perhaps incongruous to permit the State, after having taken the henefit
of the adjournment, to plead that the application for adjournment was not mlde
on instructions and was unauthorised. [38E]
(ii) The argument that the trial court's discretion had been erroneouslr reveri;ed by the High Court was equally devoid of merit. If the appellant's application was for adjournment for the purpose of filing the
written statement,
then othere was no question of any exercise of discretion by the trial court.
Discretion with regard to stay under s. 34 of the Arbitration Act is to be exercised
only when ~n application under that section is otherwise competent. [38GJ
(iii) Keeping in view the long delay after the commencement of the suit and
the fact that the suit was for a very heavy _amount by way of damages for
breath of contract, it would be more satisfactorv on the whole to have the suit
tried in a competent court of law in the normal course rather than by a lay
32
SUPREME COURT REPORTS
( 1974] l S.C.R.
arbitr.:o.:.Jr who was not bound either by the law of evidence or by. the law of
A
prncedore. [39lll
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l)ni;:;d Provinces Governn1ent v. Sri Har Nath, A.I.R. 1949 AU. 611 Union
of lndfll v. Hans Raj Guvta & Co. A.l.R. 1957 All. 91. Punjab State v. ·M~ji Ram
&\.J.R. 1957 Punjab 223, Stare of Hin1achal Pradesh v. Laichand Shahi A.I.R:
1953 H.P. 75. Harba11s Lal v. National
Fire & General Insurance C~. Lid.,
A.LR. 1955. Notes on Unreported Cases (Punjab) 4917 (Delhi), The Printers
«'lysore) Prirate Ltd. v. Bothen Joseph, [19601 J. S.C.R. 713, Joharimal and
01hers "'.'. Fatelu:l1and anti otlzers A.l.R.1960. Raj. 67 • . tnderson tVright Ltd. v.
B
,\foran & Co. A.I.R .. 1955 S.C. 53. Sarat Kumar Ray v. Corporarion of Calcutta,
l.L.R. 3-t Cal. 4-1-3, Adirard lladb011s v. Juggilal, A.LR. 1943 ·Bom. 222, Roop
Kisl;or£· '!.·. U.P. Go1·er11nzenl A.I.R. 1945 All. 24, Ford's Hotel Co. Ltd. v.
Li<rtl£:, ~1896] A.C. 1 (H.L.) nnJ /.1V. Shalt & Co;
v.
Hiracluind, A.l.R.
1954, &Jm. 174, referred to.
C:\"IL APPELLATE JURISDICTION: Civil Appeal No. 1701 of 1971.
Appeal by special leave from the judgment ·and order dated February · C
10, 1~71 of the Allahabad Hi.;;h Court in F.A. from Order No. 187
of 1967.
G . .V. Dikshit and 0. P. Rana, for the appellants.
Mohan Behari Lal, for the respondents.
The Judgment of the Court was delivered by
DUA;. J.-In this appeal by special leave the State of U.P. ·and
the Divisional Forest Officer, Bijnor . (defendants in· the trial court
in th·e plaintiff-respondents' suit) cha)lenge the judgment and order of ·
a learned Single Judge of the Allahabad High Court, allowing the
plaintiff-respondents' appeal and setting aside the order of ·the trial
court ~laying th_e suit under s. 34 ·of the Arbitration Act.
The plaintiffs had instituted a suit for the recovery of Rs. 69,556.27
by way of damages for breach of contract impleading_ the State of U.P.
(through the Collector of Bijnor) as the first defendant and the Divisional Forest Officer, Bijnor as. the second defendant The summons
in the suit issued to the State of U.P. were
served on the District
Government Counsel.
On September 2, 1966 the said counsel filed
an appearance slip in the court and also put in a formal application
praying for one month's time for the purpose of filing written statement ..
This prayer was granted. On October 1, 1966 the District Government
counsel filed an application under s. 34 of the Arbitration Act pleading
that there was an arbitration clause in the· agreement between the
parties to the suit and the State of U.P. being willing to refer the
matter to arbitration the suit should be stayed. The trial court held
that the dispute was subjeet to arbitration clause and s_ince the State
of U.P. had not taken any steps in the suit proceedings and had also
uot filed the written statement the suit was liable to be stayed.
So
holding the V'Jp!ication · of. the State Government was allowed and
the suit stayed.
·
On appeal by the plaintiff the High Court relying on two of its
earlier decisions in United Provinces Government v. Sri Har Nath(')
and Union of India v. Hans Raj Gupta & Co.('), held-tl!at.action of
(!) A.l.R. 1919 All, 611.\
(2) A.l.R.1957 All. 91D
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U. P. STATE \'. JANK! SARAN (Du«, /.)
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the
District Government Counsel in
applying for time to file the
written statement amounted to taking a step in the proceedings within
the meaning of s. 34 of the Arbitration Act. On this view the defen-
<fant was held disentitled to claim that the suit should be stayed. The
appeal was accordingly allowed and the order of stay set aside.
In this Court Shri G: N. Dikshit learned counsel for the State of
U.P. strongly· contended that the District Government Counsel had
no instructions to ask for adjournment for the purpose of filing the
written statement and, therefore, his action in applying for adjournment
for that purpose cannot bind the State of U.P. with the result that
· application for stay ot proceedings in the suit under s. 34 of the Arbitration Act could not be held to be incompetent.
It was also con-
'tended that the trial court having granted stay in its discretion the
C
High Court was in error in reversing that order and setting it aside on
appeal.
According to this submis~ion the discretion had been exercised by the trial court which could not be considered to be either
unreasonable or contrary to any recognised principles and the High
Court should, therefore, have upheld it.
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The counsel relied in sqpport of his submission on Punjab State
v. Moji Ram(I). In that case on the date fixed by the trial court
for appearance of the defendant, the Government pleader, with one
Kartar Singh Sub-Divisional Officer, appeared and asked for time to
file written statement as instructions with a copy of the plaint had
not been received.
Adjournment was granted and a date was fixed
for filing the written statement.
On the adjourned date the Government pleader filed an application for stay of the suit under s. 34 of
the Arbitration Act. On these facts the High Court observed that the
Government pleader had merely acted as a volunteer and asked for
adjournment on the assumption that in due course he would receive
instructions· from"the Government. The Government as a defendant,
therefore, could not be said to have taken any step in the proceedings.
The application for adjournment in those
circumstances was held
really to amount to a prayer to get time to discover the exact nature
of the suit and nothing more.
The application thus could not be
said to have been made with a view to taking a step in the proceedings
within the contemplation of s. 34 of the Arbitration Act.
Reliance
was next placed on State of Himachal Pradesh v. Lalchand Shalti( 2)
where it was observed by the learned Judicial Commissioner that no
person can be deemed to take any step in a proce.eding who is nat
aware of what the proceedings are and. the prayer for adiournment of
the· case made by a counsel, who up till the moment of making the request for adjournment had received no instructions from his client,
did not amount to takin2 of a steo in the oroceed;n!!S within s. 34
of the Arbitration Act.
Harbans Lal v. National Fire & General
Insurance Co. Ltd.(') is also a decision by a learned single .Judge
of the Punjab High Court. In that case the branch office of the de-
(1) A.J.R. 1957 .Punjab 223.
(2) A.J.R. 1953 H.P. 75.
(J) A. I. R. 1955 Notes on Unreported Cases (Punjab) 4917 IDelh;)
4-L944SupCJ/73
34
SUPREME COURT REPORTS
( 1974] I S.C.R.
fendant company had only received the summons of the iuit filed by
the plaintiff, a day provious to the date of appearance. It was observed
by the learned single Judge that presumably it was in the circumstances
necessary to obtain instructions from the head office of the Company
and, therefore, a mere oral application for an adjournment for filing
a written statement could not be regarded as a step in the proceedings
which disentitled the defendant company from applying for stay under
s. 34 of the Arbitration Act. In The Printers (Mysore) Private Ltd.
v. Pothen Joseph(') it was observed that where discretion under s. 34
of the Arbitration Act has been properly and judiciously exercised by
the trial court the appellate cuun would not be justified in interfering
with such exercise of discretion merely on the ground that it would have
taken a contrary decision if it had considered the matter at the trial
stage.
If, however, it appears to the appellate court that the trial
court had exercised its discretion unreasonably or capriciously or had
ignored relevant facts or had approached the matter injudiciously it
would be the appellate court's duty to interfere. Shri Dikshit did not
submit that the earlier decisions of the Allahabad High Court in the
eases of Sri Har Nath (supra) and Hans Raj Gupta &
Co. (supra)
laid down an erroneous rule of law.
His conteption on the other hand
in substance was that where the counsel without any instructions asks
for adjournment, ·though ostensibly, for filing the wntten statement,
the prayer, if it is likely to affect .his client prejudiciously, should be
construed to mean as if it was for seeking time merely to get instructions, so that the client's interests do not suffer.
This, he added, is a
matter to be decided on the facts and circumstances of each case.
He
cited Joharimal and others v. Fatehchand and others(') as enunciating
correct test in such cases, specifically relying on the following observations at page 71 in para 23 :-
"On principle and judicial authority. we consider that
the following propositions may be easily deduced :
( 1) An application for time to file written statement or any
other similar application should not be treated as a matter
of law a step in the proceedings. In order to constitute a
"step", it must be of such a nature as to lead the Court to
the conclusion that the party prefers to have bis xights and
liabilities determined by the Civil Court rather than by the
domestic forum upon which the parties might have agreed.
It must display an unequivocal intention to proceed ~th
the suit and to abandon the right to have the matter disposed
of by arbitration.
( 2) The test, however, should not be subjective and a party
cannot be entitled to say that he had no actual knowledge of
dte right under the arbitration agreement and that in fact he
did not intend to give up his right. On the other hand, the
test must be obiective and a person shall be deemed to have
taken a step under S. 34 of the Act, if it can be held that be
could have actual or construction knowledge of his right in
(I) [1960J3 S.C.R. 713.
(2) A.I.R. 1960 Raj, 67.
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u. P. STATE v. JANK! SARAN (Dua, l.)
the event of the exercising dne diligence and that in spite of
that he participated in the proceedings of the Court.
(3) Prima facie, an application for time to file writen
statement should raise a presumption that the defendant had
actual or constructive knowledge of his right and that he
acquiesced in the method adopted by the plaintiff. The presumption, however, is not absoluately irrefutable and can be
rebutted by showing that even constructive knowledge cannot
be imputed to the defendant. It is, however, not proper and
fair to lay down that the presumption can be rebutted only
on the ground that the defendants did not receive the copy
of the plaint.
In rare and exceptional cases, it may be rebutted by other circumstances, such as appearance of a Government counsel without getting instructions in a particular
case to appear. It is not desirable to enumerate the exhaustive list of the circumstances and to make generalization and
each case should be considered on its own facts and circumstances."
35
Passing reference was also made by the appellant's counsel to an
on-reported decision of this Court in Anderson Wright Ltd. v.
Moran
Co. Ltd. C.A., 452 of 1959 decided on December 1, 1961.
That
case had earlier come up to this Court when the essential requirements
ot s. 34 of the Arbitration Act were analysed and stated : Anderson
Wright Ltd. v. Moran & Co. Ltd.('). The case was remanded to
the High Court for a fresh decision of the appeal from the order of
stay made by the trial court after determining the question whether
the plaintiff was in fact a party, to the agreement. Incidentally, it may
be pointed out that in that case this Court on appeal against the
.iudgrnent and order of the High Court made after remand declined to
·stay the suit having regard to the considerable delay since the institu•
lion of the proceedings and to the fact that questions relating to· custom
of the market and the liability of Moran (plaintiff) under s. 230 of
the Contract Act have to be determined. Power to stay was not considered enforceable as a matter of course. It was said there :-
"We think that in this case at this stage, nearly ten year
after the institution of the suit. we should not remand this
proceeding to the High Court for determination of the same
question over again.
In our view, power under s. 34 to stay
the proceedings where there is an arbitration agreement is
not enforced as a matter of course. The Court may .be satisfied in a particular case, having regard to the circumstances
that the matter should not be referred in accordance with the
arbitration agreement.
Having regard to the considerable
clelav that has taken olace since the institution of the oroceeding and the fact that questions as to cnstom of !he market
fall to be determined and also of the fact· that !he liability
if anv of Morans under s. 230 of the Contract Act has to be
ascertained in the light of the surrounding circumstances,
(I) A.LR. 1955 S. C. 53.
36
SUPREME COURT REPORTS
f 1~ 7.+] 1 S.C.R.
we think this is a case in which the hearing of the suit, in the
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interest of both the parties shmild not be held up but the dispute should be tried in the civII court instead ot by the arbitrator.''
Shri Dikshit submitted that just as a Counsel cann~t hind his client by
his admission and the client can disown it. similar! y the appellant in
this case can disown the act of his counsel as unauthorised in seeidni;
adjournment for filing a written statement, on the ground that no
instructions had been issued to the Counsel to make such a prayer.
Shri Mohan Behari submitted in reply that there was no material
on the record that the counsel applying for adjournment on behalf
of the State had no instructions. The counsel, according to the submission, must be presumed to have been duly empowered to take all
steps that were necessary to be taken in the court in connection with the
proceedings on the date he appeared and filed his appearance slip in
the. Court. Shri Mohan Behari also relied on Sarat Kumar Ray v. Corporation of Ca/cutta( 1), Adward Hadbons v. Judggi/a/(2) and Roop
Kishore v. U.P. Government(') in addition to the two Allahabad judgments referred to in the impugned judgment, for the submission that the
prayer for adjournment for filing a written statement is a step in aid as
contemplated by s. 34 of the Arbitration Act. In Roop Kishore' s case
(~upra), it was emphasised that the whole burden should be upon the
defendant to establish the circumstances which would lead to the result
that effect should not be given to the prima facie meaning of the application ·for adjournment. In that case reference in support of the view
adopted was made inter alia to Sarat Kumar Ray (supra) and Ford's
Hotel Co. Ltd. v. Larlet(4). J. N. Shah & Co. v. Hirachand(") is a
case where in a summary suit the defendant has filed an affidavit
in rep1y setting out defences and had asked for leave to defend and
that was held to amount to a step in proceedings.
In Dr. V. R. Vaidra
v. Union of India (C.R. 347 /6T) decided by the Bombay High Court
on April l, 1970 reported in 1970 Maharashtra Law Journal (notes
of case) at p. 12 (Case No. 20). in accordance with the summons the
counsel for the defendant prayed for adjournment for filing a writfun
statement. On the next day, the defendant applied for stay under s. 34
of the Arbitration Act.
The court stayed the suit. This order was
affirmed on appeal. On revision, the High Court set aside these orders
and declined stay. It was observed that the counsel must be deemed
to have prayed for adjournment for filing a written statement under
instructions and it was not onen to the defendant to say that there
were no instructions to that effect.
The fact that the vakalatnama
was not filed when adiournment was prayed for, was considered inconsenu•ntial. It was also adn•rl thot tlie niser•tion in the matter of
stay had to be exercised on sound judicla! principles.
In our view, there is no serious infirmity in the imnugned iudgment of the High Court and we are unable to find any cogent ground
(ll T.L.R. 34 C'al,. 443.
(3) A.I.R. 1945 All. 24.
(5) A.I.R. 1954 Born. 174.
(2) A.T.R. 1943 Born. 228.
(4) (18%) A.C. I. (H. L.)
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for interference under Article 136 of the Constitution. The legal
position with respect to the scope and meaning of s. 34 of the Arbitralion Act admits of little doubt, the language of this section being
quite plain.
When a party to an arbitration agreement commences
any legal proceedings against any other party to the said agreement
with respect to the subject matter thereof, then the other party is
entitled to ask for such proceedings to be stayed so as to enable the
arbitration agreement to be carried out. It is, however, to be clearly
und~stood that the mere existence of an arbitration clause in an agreement does not by itself operate as a bar to a suit in the court· It does.
not by itself impose any obligation on the couri to stay the suit or to
aivo any opportunity to the defendant to consider the question of enforcing the arbitration
agreement.
The right to institute a
suit in some court is conferred, on a person having a grievance of a civil nature under the general law. It is a fundamental principle of law that where there is a right there is a remedy. Section 9
of the Code of Civil Procedure confers this general right of suit on
aggrieved person except where the cognizance of the suit is barred
either expressly or impliedly. A party seeking to curtail this general
right of suit has to discharge the onus of establishing his right to do
so and the Jaw curtailing such general right has to be strictly complied
with. To enab:e a defendant to obtain an order staving the suit, anart
from other condition mentioned in s. 34 of the Arbitration Act, he is
required to present his application praying for stay before filing his
written statement or taking any other step in the suit proceedings.
In the present case the written statement was indisputably not filed
before the application for stay was presented. The question is whether
any othe.r step was taken in the proceeding as contemplated by s. 34
and it is this point with which we are directly concerned in the present
case.
Taking other steps in the suit proceedings connotes the idea
of doing something in aid of the progress of the suit or submitting to
the jurisdiction of the court for the purpose of adjudication of the merits
of the controversy in the suit.
According to the appellant (State of U.P.). the District Government Counsel is authorised by the Code of Qvil Procedure to receive
summons on behalf of the State : vide ground No. 3 in the petition
for special leave.
Indeed, the District Government counsel was in
fact so served. It is not the appellant's case that the summons were
not accompanied by a copy of the plaint in accordance with law and,
therefore. the District Government Counsel was not aware of the
nature of the case. A copy of the plaint, therefore. must be held to
have been duly served on the District Government Counsel who under
Order XXVIL Rule 2 of the Code of Civil Procedure was authorised
to act for the Government and was deemed to be the recognized
agent by whom aooearances, acts aqd apolications could be made or
done on behalf of the Government. The District Government Counsel
in the present case was thus fully-emoowered to aooear and act for
and on behalf of the Government and also to make aoplications on
its behalf, If the said counsel wanted time for the nuroose of having
fuller instructions. he could have asked for it specifically, for he was
38
SUPREME COURT REPORTS
( 19 /4 j 1 S.C.R.
not a layman ignorant about the legal
position but a
professional
lawiyer retained by the Government for the purpose of acting and
pleadmg on behalf ol the Government as a recognised agent.
He,
however, chose instead to ask for time
specifically for filing written
statement and this act he purported to do on behalf of the State Government which he was fully empowered to do. The State took benefit
of his appearance and his successful prayer for adjournment of the case
by one month for the purpcse of filing the written statement. In those
circumstances, it is hardly open to the State Government to plead that
the District Government Counsel was not authorised to seek adjournment on its behalf for this purpose. An oblique suggestion thrown on
behalf of the appellant that the District Government Counsel had
merely volunteered to appear without instructions, presumably taking
the cue from the decision of the Punjab High Court in the case of
Moji Ram (supra) is merely to be stated to be rejected.
A recognized
agent like the District Government Counsel can scarcely be considered
to appear voluntarily in a case on behalf of the Government in the
sense of being unauthorised by his client for the simple reason that he
is authorised by virtue of statute to appear, act and make applications
on behalf of the Government.
Indeed in the present case .the District
Government Counsel also filed in court the usual apoearance slip,
If he wanted tim~ for further consultations, he could and should have
specifically made a prayer to that effect. It is, however, idle to contenil that he can be considered to have merely volunteered without
authority to appear and ask for time for filing the written statement.
The argument of appearance by a recognized agent as a mere volunteer ·is extremely difficult to appreciate. The State, as already ob•erved, took the benefit of the adjournment. It will be somewhat irrational
and perhaps incongruous to permit the State, after having taken the
benefit of this adjournment, to plead that the application for adjournment was not made on instructions and was unauthorised. To accede
to the State Government the right to do so would clearly be. uniust
to the oyposite party which could have rightfully obiected to
the
adiournment, had there been any indication that the prayer was not
being made on instructions from the. State
Government.
Septembet
2, 1966 was fixed in the
summons for filing written
statement.
Failure to do so would have entailed consequences oreiudicial to thll
State Government.
Those consequences were avoided by making an
application for extension of time for filing written statement which
must have been understood bv the oooosite oarty, as also by the court,
to be on instructions by the State Government. ,
The argument that the trial court's discretion has been erroneously
reversed by the High Court is equally devoid of merit. If the appellant's application was for adjournment for the purpose of filing written
statement, then there is no question of any exercise of discretion by
the trial court.
Discretion with regard to stay under s. 34 of the
Arbitration Act is to be exercised only when an application under that
section is otherwise competent.
Incidentally it is worth noting that
even the order of the trial court is not included by the appellant in
the paper book and we do not know the reasoning of that court for
A
B
c
D
E
:F
H
\
B
c
u. P. STATE v . . JANK! SARAN (Dua, l.)
39
granting stay.
But on the view that we have taken that omission is
of little consequence.
Finally, as a result of the decision of the High Court the only
con~equence is that the suit will now have to be tried by a competent
court on the merits in accordance with law. Keeping in view the iong
deb· after the institution of the suit and the fact that the suit is for a
very heavy amonnt by way of damages for breach of contract, it will,
in our opinion, be more satisfactory on the whole to have the suit
tried in a competent court of law in. the normal course rather than
by a lay arbitrator who is not bound either by the law of evidence or
by the law of procedure.
This course can certainly in no way be
considered unjust or prejudicial to the appellant as to require ;nterference by this Court.
This appeal accordingly fails and is dismissed with costs.
G.C.
Appeal dismissed.