Rajadhyaksha, J. - (1.)THIS is an application in revision against an order passed by the Assistant Judge at Ahmedabad confirming the decision of the Civil Judge, Senior Division, Ahmedabad, refusing to stay the proceedings in a suit filed by the plaintiff against the Central Government of India. The plaintiff was a subscriber of telephone No.5019 and had executed a telephone hiring contract in respect of that telephone. It was signed by him in his personal capacity and not on behalf of any partnership firm. It appears that the telephone was used by other parties who had printed its number on their business letters. The Executive Engineer thereupon served the plaintiff a notice under Clause 15 of the conditions of agreement determining the contract on the expiration of seven days thereof. The telephone was accordingly disconnected on October 28, 1946. On November 2, 1946, the plaintiff gave a notice of a suit under Section 80 of the Civil Procedure Code. The Director General of Posts and Telegraphs replied to that notice on December 19, 1946, giving reasons for the disconnection of the telephone. The Assistant Deputy Director General of Posts and Telegraphs informed the plaintiff by a letter dated February 4, 1947, to refer the dispute to arbitration in accordance with condition 19 of the hiring contract. The plaintiff was also informed that Government would apply for stay of the suit, if any suit was filed by the plaintiff. The plaintiff denied having received any such intimation and proceeded to file a suit oh February 9, 1947, in the Court of the Civil Judge, Senior Division, Ahmedabad, praying for (1) a declaration that the determination of the contract of hiring of the telephone No.5019 at Ahmedabad and the subsequent disconnection and removal of the telephone instrument are illegal and ultra vires, and (2) a decree for Rs. 900 as damages for inconvenience, mental worry and loss of earnings suffered on account of the disconnection and further damages at Rs. 1,000 per month from the date of the suit till restoration of the said telephone. After the suit was filed, an application was made on behalf of the Central Government that the suit might be stayed under Section 34 of the Indian Arbitration Act, because there existed a clause in the agreement by which any dispute between the parties had to be referred for decision to the Director General of Posts and Telegraphs. The plaintiff opposed the application on two grounds : (1) that the suit involved complicated questions of fact, and (2) the Director General of Posts and Telegraphs would not be a proper person to decide the question as to whether the action of his own department was wrongful. The learned Judge held that the question involved was not complicated, but was of opinion that the stay could not be granted for two reasons : (1) that there was no provision in the agreement under which the plaintiff would be entitled to claim damages if the dispute was referred for the decision of the Posts and Telegraphs Department, and (2) that a reference to the Director General of Posts and Telegraphs, who was the head of the Posts and Telegraphs Department, was in effect a reference to a person who was one of the contracting parties and thus one of the contracting parties itself would be acting as arbitrator in the case. He therefore thought that it would not be fair to force the plaintiff to go to arbitration. The application was accordingly rejected.
(2.)AGAINST that order an appeal was preferred to the District Court of Ahmedabad and was heard by the learned Assistant Judge. The learned Assistant Judge saw no reason why the matter should not be referred to the Director General of Posts and Telegraphs in accordance with the arbitration agreement. But he held that this reference to the Director General of Posts and Telegraphs was not in fact a reference to arbitration. He thought that an official of the department which is responsible for the observance of this contract was certainly in the position of a party to the contract, and that no one could be a judge of his own cause. He seems to have been further of the opinion that a reference to arbitration did not come within the compass of the exception to Section 28 of the Indian Contract Act, and that therefore the agreement was void under that section. He, therefore, agreed with the view of the trial Court that the proceedings should not be stayed and dismissed the appeal with costs. AGAINST that order this application has been filed in revision.
A preliminary objection has been taken by Mr. N. C. Shah that no revision lies against an order passed by the appellate Court on an application for the stay of proceedings under Section 34 of the Indian Arbitration Act. He invited our attention to Section 39 of the Act under which there is an appeal from an order refusing to stay legal proceedings where there is an arbitration agreement. He argued that even under Section 115 of the Civil Procedure Code, this Court had no jurisdiction to entertain an application in revision. Under Section 115 of the Civil Procedure Code, the High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears (a) to have exercised a jurisdiction not vested in it by law, or (6) to have failed to exercise a jurisdiction so vested, or (c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit. So far as Clause (c) of the section is concerned, it is settled law that where a Court has jurisdiction to determine a question and it determines that question, it cannot be said that it has acted illegally or with material irregularity, because it has come to an erroneous decision on a question of fact or even of law. Although Clause (c) of Section 115 would not apply to the present case, we are of the opinion that the present ease is governed by Clause (b) of Section 115 inasmuch as we think that the learned Assistant Judge has failed to exercise the jurisdiction vested in him. According to the judgment of the learned Assistant Judge, he was prepared to order stay of the proceedings but for the fact that he considered that there was no valid arbitration agreement to which the plaintiff was a party. Under Section 34 of the Indian Arbitration Act, it is only where any party to an arbitration agreement commences any legal proceedings against any other party to the agreement, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings apply to the judicial authority before which. the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and 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, such authority may make an order staying the proceedings. According to the learned Judge, the condition requisite for the making of an application for stay of proceedings was not satisfied because he considered that there was no valid reference to arbitration. It is because of this view of his that he declined to exercise jurisdiction and stay the proceedings which he was otherwise inclined to do. His view therefore of the nature of the reference to arbitration has resulted in his failure to exercise jurisdiction under Section 34 of the Indian Arbitration Act, and in our opinion the case falls within Clause (b) of Section 115 of the Civil Procedure Code. In this connection we may refer to a decision of the Allahabad High Court where an application in revision was entertained in respect of applications for the stay of proceedings. In Charan Das v. Gur Saran Das [1945] All. 162 it was held that, The objection as to jurisdiction has to be taken by the defendant relying upon the arbitration clause before the filing of the written statement. The Court should look at the plaint and see for itself whether the arbitration clause applies to the dispute, and if it does, whether the nature of the dispute is such that the ends of justice would be better met by the decision of the Court than by that of a private forum. There is nothing in Section 39 or Section 41 of the Arbitration Act to deprive the High Court of the powers conferred on it by Section 115 of the Civil Procedure Code.

(3.)THE learned Assistant Judge in the present case has clearly declined to exercise jurisdiction because of his view that there is no valid reference to arbitration. As we are of opinion that the view of the learned Assistant Judge as regards the nature of the reference to arbitration is incorrect, we think that we are entitled to interfere in revision as the learned Judge appears to have failed to exercise the jurisdiction which is vested in him by law.