Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Invocation of the Arbitration clause in the contract to set off money due under a different and independent contract Arbitration |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Arbitration - Balance of price of goods supplied under a contract-Liability to pay admitted -Invocation of the arbitration clause in the contract to set off money due under a different and independent contract -Whether permissable -Arbitration Act, 1940 (X of I940), s . 34. The respondent supplied to the appellants goods of the value of Rs. 1,06,670.89 nP. under a contract entered into by the parties and received about Rs. 93,727/- as part payment. The appellant declined to pay the balance on the plea that an amount of about R5. I0,625/- was due to the appellant under another contract between the parties. The respondent thereupon filed a suit before the Senior Subordinate Judge, Delhi, for realisation of the amount. The appellant applied under s. 34 of the Arbitration Act, 1940, for stay of the suit allegingthat a dispute had arisen between the parties and there being an arbitration agreement it could be invoked by the appellant. The respondent submitted that there was no dispute concerning the contract which was covered by any valid arbitration clause and which attracted the application of s. 34 of the Arbitration Act. The Subordinate Judge held that before s. 34 could be invoked the suit must raise a dispute in respect of the matter agreed to be referred to arbitration and not independent of it and as no dispute was raised by the appellant about its liability to pay the amount claimed by the respondent arising out of the contract and the only dispute which was sought to be raised was in respect of the liability of the respondent under another contract the suit could not be stayed. An appeal against this order was dismissed in limine by the I High Court.The present appeal was by way of special leave granted by this Court. It was contended that the terms of the arbitration agreement included a dispute relating to a refusal to meet the obligations arising under the contract even though the refusal was not founded on any right arising under the terms of the contract. |
Judge | Honble Mr. Justice J.C. Shah |
Neutral Citation | 1963 INSC 75 |
Petitioner | Union Of India |
Respondent | Birla Cotton Spinning & Weaving Mills Ltd. |
SCR | [1964] 2 S.C.R. 599 |
Judgement Date | 1963-03-27 |
Case Number | 609 |
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