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TMI Blog1973 (7) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... he Railways. They entered into several contracts with the Railways. The grievance is that several amounts due to them under the contracts have been wrongfully withheld. It was further alleged that with respect to one contract the 1st defendant committed breach of the contract and that the contractor the 1st plaintiff, is therefore, entitled to recover the suit claim against the 1st defendant. As soon as the suit notice was received by the Railways, they filed an application under Section 34 of the Arbitration Act stating that the dispute and the claim raised in the plaint have to be decided by an arbitrator as per the arbitration clause by which the contract is governed and that the suit should therefore be stayed till the matter is decided by an arbitrator. The application was resisted by the plaintiffs on the following grounds : (1) The disputes between the parties are not covered by the arbitration clause. (2) Plaintiffs 2 and 3 are not parties to the arbitration agreement. Hence there cannot be a partial reference of the disputes to arbitration. (3) The appointment of the General Manger or any other Railway Official of his choice as an arbitrator is opposed to principles of nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication is filed should be satisfied that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration. In the application filed in the lower court it is stated that the petitioner is ready and willing to do all things necessary to the proper conduct of the arbitration. The objection raised is that there was no averment that the petitioner was also ready and willing at the time of the commencement of the suit. On this simple ground it is urged that the application should be rejected. On a plain reading of the provisions of Section 34 of the Act, we do not find that there is any requirement as to any such specific averment being contained in the application. No doubt if the petitioner makes such an averment, the Court may consider the averment before being satisfied about its correctness. We do not agree with the extreme contention of the learned counsel that unless there is a specific averment in the petition as regards readiness and willingness the petition should be dismissed. If the objection had been raised in the lower Court, the petitioner would have certainly add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o a series of correspondence which proceeded from the office of the General Manager, but signed by some other official. The learned counsel for the Railways stated that the objection was not raised in this form in the trial Court and if it was so raised he would have let in evidence to show that the General Manager never knew any thing about the contents of the letters and that the subordinate officers were merely putting their signatures on his behalf. But even assuming that the General Manager knew about the contents of the said letters it is stated by the learned counsel for the Railways that the said General Manager one Mr. Lee retired form service in February, 1973 and that he was succeeded by one Mr. Kaul who is now the General Manager. It should be noted that the objection based on bias is personal to the particular individual and we cannot certainly attribute bias to the present General Manager Mr. Kaul. There is, therefore, no force in the contention that the previous General Manager was disqualified from functioning as an arbitrator. It is then urged that when once a General Manager expressed an opinion in the letters the succeeding General Manager also should be disquali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... absence of any particular set of facts constituting bias a Court cannot infer bias merely on account of one of the parties being a departmental superior to an arbitrator. In coming to this conclusion, that learned Judges referred to the decision of the Supreme Court cited AIR1967SC249 . 6. Lastly it is urged that the subject matter of the suit consists of two parts ; one in which plaintiffs 1 and 2 as parties to the contract are interested and the other in which the 3rd plaintiff is interest. In respect of two contracts in which the 1st plaintiff was interested the 2nd defendant bank executed guarantee bonds in favour of the 1st defendant-Railways giving a guarantee for the due performance of the contracts by the 1st plaintiff. In the plaint it is stated that on account of the breach committed by the 1st defendant Railways the 1st plaintiff rescinded one of the contracts and with the termination of the said contract it is said that the guarantee bonds have ceased to exist and that the 1st plaintiff is discharged from his obligations under the bonds. The 2nd defendant-Bank also obtained a counter guarantee bond executed by the Contractor (1st plaintiff) and the 3rd plaintiff an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit need not be stayed. 8. Let us examine how far the above principles can be applied to the facts of the present case. A perusal of the plaint makes it clear that the reliefs claimed flow from a single cause of action and it is specifically so stated in paragraph 29 of the plaint. The three items of claim as per paragraph 29 of the plaint making an aggregate of ₹ 1,47,085/- are claimed only by the 1st plaintiff-contractor against the 1st defendant-Railways, both of whom are parties to the arbitration agreement. It is further stated in the plaint that the 2nd defendant-bank is a necessary and proper party though no relief is claimed by the plaintiff against the bank. The first prayer in the plaint only concerns the 1st plaintiff and the 1st defendant who are parties to the arbitration agreement. So far as the second prayer (b) is concerned, it is for a declaration that guarantee bonds executed by the 2nd defendant in favour of the 1st defendant are inoperative and unenforceable. No separate court-fee is paid by the plaintiffs with respect to the declamatory relief. This relief is wholly unnecessary having regard to the gist of the plaint. If the main question is decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts discretion, however, will of course depend upon whether it is convenient to try the different parts of the dispute separately. Thus a stay will normally be entirely refused where only a Subordinate and trifling part of the dispute is agreed to be referred, or where two claims one inside and one outside the agreement turn upon substantially the same facts . One of the illustrations given in Ives and Barker v. Willans, ((1894) 2 Ch 478), a case where stay was granted in spite of the fact that a small portion of the claim was not within the arbitration clause. It is, therefore, not an absolute rule of law that in such cases stay should be refused. It is a matter entirely within the discretion of the court to see whether it would really result in a conflict of decisions between the arbitrator and the Court and whether it would be more convenient for the Civil Court to try the entire suit. 9. It often happens that in order to circumvent an arbitration clause a plaintiff adds some unnecessary parties to the suit and in such cases it has been held that the Court can grant stay of proceedings. In Cekop v. Asian Refractories Ltd., ((1969) 73 Cal WN 192) it was laid down that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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