M.K. Sharma, J.
Rule D.B.
(1) This appeal by the appellant respondent is directed against the order dated 8.11.1995 passed by the learned Single Judge in I.A.860/1994 in Suit No.2760/1993 dismissing the application filed by the defendant/respondent seeking for rejection of the plaint.
(2) The respondent petitioner filed a petition under Section 20 of the Arbitration Act, 1940, (hereinafter referred to as 'the Act') against the appellant/respondent seeking for filing of the arbitration agreement and for reference of the disputes to the arbitration. In the petition filed under Section 20 of the Arbitration Act, the respondent contented, inter alia, that in response to an invitation inviting tenders issued by the appellant/ respondent for construction of flats in 7 towers and external development work at Plot No. 14, Patparganj, Mayur Vihar, Phase-I, New Delhi - 110 091, the respondent herein submitted its tender as per the tender documents prepared by the appellant herein on 17.3.1986. It was further contended that the said work of 7 towers was awarded to the respondent-Company and the articles of agreement were executed on 4.9.1986. The general conditions of work agreed upon between the parties contain an arbitration close in terms of which, in case of any dispute, the matter was to be referred to the arbitration of the Hony. Director, owner or his nominee and that his decision would be final.
(3) It was contended that the respondent was awarded the work of construction of 3 more towers by a letter dated l2.12.1988 and the work of constructions of 4 more towers by a letter dated 1.3.1990. The respondent placed bills for various construction work carried out by the appellant, but since the same was not being paid, the petition under Section 20 of the Arbitration Act came to be filed in this Court on the basis of which the Suit No. 2760/1993 came to be registered.
(4) After notice was served on the appellant herein, an application was filed under Order 7 Rule 11 of the Code of Civil Procedure seeking for rejection of the plaint. The main thrust in the said application filed by the appellant under Order 7 Rule 11 appears to be two-fold. The first objections seems to be that since under the provisions of Section 90 of the Delhi Cooperative Societies Act, 1972, no suit could be instituted against the Cooperative Society until the expiration of three months next after notice in writing had been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and also the reliefs which he claims and such a notice having not been served on the appellant by the respondent prior to the filing of the present suit, the suit was barred under the aforesaid provisions and, thereforee, the plaint was liable to be rejected under the provision of Order 7 Rule 11 of the Code of Civil Procedure. The second and the final objection of the appellant raised in the application under Order 7 Rule 11 was that, that the arbitration agreement as contained in the agreement of 4.9.1986 was not with regard to the entire work in question, but with regard to 7 towers and not 14 towers and, thereforee, the plaint was liable to be rejected. The aforesaid application filed by the appellant under Order 7 Rule 11 of the Code of Civil Procedure was heard by the learned Single Judge and by his order dated 8.11.1995, he dismissed the said application. Under the aforesaid order, the learned Single Judge has discussed the arguments advanced by both the parties in respect of the aforesaid two objections and on consideration of the Delhi Cooperative Societies Act and a decision of this Court and also a decision of the Calcutta High Court and also on evidence on record came to the conclusion that as far as Section 90 of the Act is concerned, it would apply to a suit and not the petition under Section 20 of the Arbitration Act. With regard to the other issue relating to the terms of the contract, the learned Single Judge after considering the various correspondences and the terms and conditions of the contract came to the conclusion that the arbitration agreement as contained in the agreement of 4.9.1986 would operate with regard to the entire work in question and on the basis thereof recorded the second contention advanced by the appellant and finally dismissed the application filed under Order 7 Rule 11.
(5) Under the provision of Order 7 Rule 11, a plaint could be registered only when any of the four conditions mentioned in Clauses 'A' to 'D' is fulfillled. On a close scrutiny of the application filed by the appellant under Order 7 Rule 11, the main contention of the appellant appears to be that the plaint does not disclose a cause of action and that from the statement made in the plaint, it appears that, the suit is barred under the provision of Delhi,Cooperative Societies Act. Where the plaint does not disclose a cause of action, it is liable to be rejected. However, while doing so, the Court is to look only to the contents of the plaint and nothing else. In asking the Court to decide an issue where the plaint discloses a cause of action or not, the applicant must be taken to admit for the sake of argument that the allegations of the plaintiff in his plaint are true in manner or form. The power to reject a plaint must be exercised only if the Court comes to a definite conclusion that even if all the allegations are proved, the plaintiff would not be entitled to any relief whatsoever. Again Clause D of Order 7 Rule Ii authorises the rejection of a plaint where the suit appears from the statement in the plaint to be barred by any law. Accordingly in the instant case, the applicant was liable to be satisfy the Court that any of the aforesaid two conditions was satisfied and only on such an account, the plaint could be rejected.
(6) Since the first contention raised before us by the learned Counsel for the appellant relates to the suit being barred by the provisions of Section 90 of the Delhi Cooperative Societies Act, it is necessary to examine the provisions of the said section which for convenience sake is quoted hereunder :-
'NOTICE necessary in suits : No suit shall be instituted against a co-operative society or any of its officers in respect of any act touching the business of the society until the expiration of three months next after notice in writing has been delivered to the Registrar or left at his office, standing the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left.'
(7) According to the aforesaid provisions, no suit could be instituted before expiry of three months period after issuing a notice to be delivered to the Registrar stating the cause of action. The issue, thereforee, which arises for re-consideration is as to whether the arbitration proceeding initiated by the respondent in the present case pending before the learned Single Judge for disposal could be said to be a suit. A similar question came to be considered before this Court in the case of Sheel Chandra v. State Bank of India and Ors. reported in : AIR1982Delhi179 wherein this Court held that the proceedings under the Arbitration Act could not be basically treated as a suit, their scope and purport being essentially different. In S.P.C. Engineering Company v. Unions of India reported in : AIR1966Cal259 , the Calcutta High Court simultaneously held that the proceedings under the Arbitration Act could not be termed as a suit. It held that the wording of Section 20(2) that 'applications shall be numbered and registered as a suit' does suggest that it is not a suit in the fullest sense of the term. On consideration of the arguments advanced by Mr. A.S. Chandiok, appearing for the appellant and on appreciation of the ratio of the aforesaid decision, we find no reason to take a different view than what is held by this Court in Sheel Chandra v. State Bank of India and Ors. (supra). The suit is essentially initiated by presentation of a plaint and the Court is required to adjudicate upon the matters in controversy between the parties, whereas the parties of a petition under the Arbitration Act is altogether different, inasmuch as, the Court is simply asked to refer the controversies to Arbitrators and then it is left over to them to adjudicate upon the merits. The purpose, thereforee, of an arbitration proceeding is entirely different than that of the purpose of filing a suit. In that view of the matter, we hold that an arbitration proceeding initiated by filing an application under Section 20 of the Arbitration Act cannot be termed as a suit under any circumstances.
(8) In view of our aforesaid conclusion, there could not be any bar of filing an application by the respondent under Section 20(2) of the Arbitration Act and registered and numbered as Suit No. 2760/1993. Since the proceeding initiated thereon cannot be said to be a suit, there is no bar created either in presentation or in continuing the aforesaid proceeding even inspire of the provisions of Section 90 of the Delhi Cooperative Societies Act which, in our opinion, is not applicable at all to a proceeding initiated on the basis of an application filed under Section 20(2) of the Delhi Cooperative Societies Act. Accordingly the first contention raised by the learned Counsel for the appellant has not merit and is accordingly dismissed and we hold that the application filed by the respondent was not liable to be returned in view of the provision of Clause 'D' of Order 7 Rule 11.
(9) The last contention raised by Mr. A. S. Chandiok in respect of the terms of the contract and that there were three contracts in all and each was independent of the other and that since the arbitration clause was contained in the subsequent contracts and as bills were jointly raised with regard to all the three contracts, no cause of action is disclosed. On a reading of the application filed under Section 20 of the Arbitration Act and, thereforee, the application was liable to be rejected as it did not disclose a cause of action in terms of Order 7 Rule 11 of the Code of Civil Procedure.
(10) In order to appreciate the submission of the learned Counsel for the appellant, it would be necessary to look into the terms and conditions of the agreement executed between the parties on 4.9.1986. The relevant clauses of the said terms and conditions reads as follows :-
'AND where as the contractor has also agreed to execute the work of seven towers with 100% external works with the said contract amount in the first instance and further work of the balance towers that would be entrusted to him within 4 months of the date of award of work at the same per. sq.m. rates arrived at the above lump sum price for each tower and for the alternate specifications. And whereas the employer has accepted the offer of the contractor for the said contract amount subject to the terms and conditions set forth herein and mutually agreed to by both the parties.'
(11) On perusal of the aforesaid terms and conditions contained in the agreement arrived at between the parties it would be apparent that the parties agreed to execute the work of not only 7 towers, but also the further work of the balance towers. However, it was therein stipulated that the aforesaid further work of the balance towers would be entrusted to the respondent within four months of the award of work at the same per sq.m. rates arrived at the same lump sum price for each tower and for the alternate specifications. It is further stipulated in the said agreement that the appellant also accepted the offer of the contractor for the said contract amount subject to the terms and conditions set forth in the agreement and mutually agreed to by both the parties. From the aforesaid terms and conditions agreed to between the parties and put down in writing in the form of present agreement clearly reveals that the terms and conditions of the agreement were not only applicable to the 7 towers alone, but all the 14 towers, the other 7 towers being envisaged in the said terms and conditions as further work of the balance towers. thereforee, the other two contracts are part and parcel of the arbitration agreement as contained in the agreement of 4.9.1986. thereforee, although at the initial stages work was awarded for 7 towers under the terms and conditions of the aforesaid agreement, a closer scrutiny of the said terms would prove and establish that the parties also arrived at a mutually agreed decision that the same would also be executed by the respondent in respect of the remaining 7 towers also. The entire work was treated by both the parties as one apart from the 7 towers as the second phase of the construction. thereforee, we are of the considered opinion, that the arbitration clause was not only applicable to the initial 7 towers awarded to the respondent but also to the other 7 towers covered by the subsequent contacts and, thereforee, the bills which were jointly raised with regard to all the three contracts, the respondent is entitled to seek the remedy under the provisions of Section 20 of the Arbitration Act on the basis of the arbitration clause, which is held to be applicable to all the contracts entered into during the currency of construction. thereforee, the second submission of the learned Counsel for the appellant also has no force and the same is rejected.
(12) Accordingly the contention raised by the learned Counsel for the appellant to the effect that the plaint was liable to be rejected on the ground on non-disclosure of any cause of action and also being barred by law and, thereforee, the application to be rejected applying the principles of Order 7 Rule 11 are found to be baseless and without any merit.
(13) The learned Single Judge acted legally and within his jurisdiction in rejecting the application filed by the appellant under Order 7 Rule Ii of the Code of Civil Procedure. Consequently, the appeal has no merit and is dismissed, but, without any costs.