Bhagwati, J. - (1.)THIS is a notice of motion taken out by the first defendants that the suit and all proceedings therein be stayed. The notice of motion is addressed not only to the plaintiffs but also to defendants Nos. 2, 3, 4 and 5 herein. The plaintiffs are the only persons who have appeared on this notice of motion, contesting the same. Defendants Nos. 2, 3, 4 and 5 have chosen not to appear.
(2.)THE plaintiffs as well as the first defendants are members of the Bombay Bullion Exchange, Ltd. For the delivery No.18 of February 28, 1946, the plaintiffs had entered into a large number of transactions for the purchase and sale of silver with the first defendants and other merchants as a result of which transactions the plaintiffs were on the whole to take delivery of 4378 silver bars of the said delivery. In accordance with Rule 54 (4) of the Rules of Business of the Bullion Exchange a clearance sheet was submitted by the plaintiffs to the clearing house and delivery orders for the 4378 silver bars of the delivery were ultimately handed over by the clearing house to the plaintiffs. One of the delivery orders was a delivery order for 50 silver bars issued by the first defendants. On each of those delivery orders the Bullion Exchange appended a note that the person who took delivery of the silver bars thereunder was bound to pay Rs. 10-5-0 per 100 tolas being the additional import duty announced by the Finance Member in the budget. THE plaintiffs contended that they were not bound to pay the additional Rs. 10-5-0 per 100 tolas and offered to pay to the first defendants the price of 50 bars of silver apart from that additional import duty of Rs. 10-5-0 per 100 tolas. This was the position adopted by the plaintiffs with regard to all the members of the Bullion Exchange from whom they had received the delivery orders through the clearing house. Disputes arose between the parties and apprehending that by reason of their attitude the Bullion Exchange would take disciplinary action against them, the plaintiffs filed on March 7, 1946, a suit inter alia against the Bullion Exchange for various reliefs, one of which was for a declaration that Rule 28 of the Rules of Business of the Bullion Exchange was ultra vires the Bullion Exchange and/or its Board of Directors and/or its Merchants Mandal. Interlocutory proceedings were taken at the instance of the plaintiffs. THE notice of motion was heard before Coyajee J. and he granted an injunction inter alia against the Bullion Exchange on certain terms. THE matter went before the Appeal Court and on March 28, 1946, the Appeal Court allowed the appeal, dissolving the injunction. THE judgment delivered by the Appeal Court proceeded on the basis that the persons who had issued he delivery orders which had ultimately gone to the plaintiffs through the clearing house were not parties to that suit, that the Bullion Exchange would not take any action against the plaintiffs unless and until a default alleged to have been committed by the plaintiffs was reported by the parties concerned to the Bullion Exchange, and that as the position then stood there was no cause of action for any injunction against the Bullion Exchange. It appears that after this decision of the Appeal Court, dissolving the injunction, the plaintiffs thought of filing suits against the several parties as also the Bullion Exchange and the members of the clearing house sub-committee, and the present suit is one of that series.
This suit was filed on May 15, 1946, against the first defendants who, as I have stated, had issued a delivery order for 50 silver bars which had gone to the plaintiffs through the clearing house and also against the Bullion Exchange and the members of the clearing house sub-committee to whom the disputes between the plaintiffs and the parties who issued delivery orders including the first defendants had been referred by the Bullion Exchange for adjudication. A notice of motion was taken out by the plaintiffs in this suit seeking to restrain the Bullion Exchange who are the second defendants herein and defendants Nos. 3, 4 and 5 who were the members of the clearing house subcommittee from adjudicating the disputes in respect of the delivery of the 50 bars between the plaintiffs and the first defendants and from taking any action against the plaintiffs by way of declaring or posting the plaintiffs as defaulters in exercise of the disciplinary jurisdiction. The notice of motion came on for hearing ultimately before Chagla J. on June 26, 1946, and he dismissed the notice of motion with regard to prayers (b) and (d) of the plaint, adjourning the notice of motion as regards prayer (f) until occasion arose for bringing the same on. Certain directions were given by Chagla J. as regards the filing of the written statement and the further hearing of the suit. It appears, however, that the clearing house sub-committee which had been appointed by the Bullion Exchange on April 5, 1946, to adjudicate upon the disputes between the plaintiffs and the other parties including the first defendants did not take any further action until August 9, 1946. The sub-committee met on August 9, 1946, and on that day proceeded with the adjudication of those disputes. The plaintiffs appeared without prejudice before the sub-committee. As the first defendants had not applied for holding the auction sale as required by the rules of exchange, the sub-committee could not adjudicate upon the disputes and referred the parties to take steps to have the matter adjudicated by arbitration.

(3.)AFTER the proceedings before the sub-committee terminated in such manner, the first defendants moved in the matter of arbitration. A letter dated August 10, 1946, was received by the plaintiffs under the signature of the secretary of the Bombay Bullion Exchange, Ltd. , stating that the first defendants had appointed Jwalaprasad P. Tiwari, the fifth defendant, as adjudicator to adjudicate the disputes with regard to the 50 bars of silver and requested the" plaintiffs to appoint their arbitrator within 7 days from the receipt of their letter. The plaintiffs by their attorneys' letter dated August 15, 1946, disputed the right of the first defendants to go to arbitration so long as the present suit was pending. They, however, by their attorneys' letter dated August 17, 1946, for the sake of greater caution and in order that their case might not go by default appointed one Narandas Pokarmal as their arbitrator without prejudice to their rights and contentions in the suit and reserving their rights and remedies in the matter. The first defendants thereafter on August 28, 1946, took out this notice of motion for stay of the suit by reason of the. arbitration agreement which subsisted between the parties.
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