S. Maharajan, J. - (1.) This is an appeal filed by the plaintiff in O.S. No. 4834 of 1969, against the order of the VI Assistant City Civil Judge, Madras, staying the trial of the suit on an application made by the plaintiff under S. 34 of the Indian Arbitration Act, 1940, and directing a reference of the matter to the arbitrators as per Cl. 25 of the conditions of the contract. The appellant is a firm of engineering contractors who entered into a contract with the Southern Railways, Madras, for the supply of a certain number of cross arm channels. Some dispute arose between the railway administration and the appellant as to whether the administration was right in rejecting the supplies made, whereupon the appellant instituted the suit against the railway administration for the recovery of a sum of Rs. 24528 -15 with interest at six percent per annum and for costs of suit. The defendant railway before filing a written statement, made a petition under S.34 of the Indian Arbitration Act and prayed that as per CL. 25 of the conditions of the contract between the parties, the dispute might be referred to two arbitrators, one to be nominated by the contractor and the other to be nominated by the railway administration. This petition was opposed by the appellant, firstly, on the ground that there was no arbitration clause at all in the contract between the parties, and secondly, on the ground that under S.34 of the Arbitration Act, the railway administration was not, either at the time when the proceedings were commenced or at the time of the application, ready and willing to do all things accessory to the proper conduct of the arbitration. The court below rejecting the objections, allowed the petition for stay. It is against this order that the present appeal has been filed.
(2.) The first round raised by the appellant may be disposed of at first. According to the learned counsel or the appellant, by the order placed by the railway administration with the appellant, which has been typed at page 2 of the typed papers, the appellant has been asked to deliver to the Assistant Signal and Telecommunications Engineer, Southern Railway, (sic), the articles contracted for, "subject to the general conditions of contract for the Stores Department of this railway and o addendum to the same specially applicable to this contract". Learned counsel would complain that no copy of the general conditions of the contract for the Stores Department of the railway was ever delivered into the hands of the appellant at the time of the contact. It was also his complaint that though he communed the railway administration to produce the tender made by his client, the administration failed to produce the same in the court below. In pursuance of our directions counsel for the railway administration he is produced the same and we find that the appellant has signed the tender in which 'he engages to supply the Southern railway with the articles specified above upon the terms of the Indian Railway Standard Conditions of Contract for Stores, Serial No. A.3 - -51, and upon the terms of the special conditions printed in the stores bulletin and the instructions for the guidance of the contractors issued by the railway, as amended from time to time'. The Indian Railway Code for the stores department contains, at page 533, the Standard Conditions of Contract, Serial No. A3 -5 Cl.25 of the said Standard Conditions runs as follows: In the event of any question or dispute arising under these Conditions or in connection with this contract (except (sic) to any matters the decision of which is specially (sic) for in these conditions) the matter in dispose shall be referred to two arbitrators, one to be nominated by the Purchaser and one to be nominated by the contractor, or in the case of the said arbitrators not agreeing, then to an umpire to be appointed by the arbitrators in writing before proceeding in the reference and the decision of the arbitrator or in the event of their not agreeing of the said umpire shall be final and conclusive and the provisions of the Indian Arbitration Act. 1940 and the Rules thereunder and any statutory modification there I shall be deemed to apply to, and be incorporation this contract. The tender made by the appellant on 11th November 1964 and signed by him must have been made after he bad studied the general conditions contained in the Standard Conditions of Contract and printed even in 1960. It is, therefore, idle to contend that the appellant who is an engineering contractor, could have made the tender without scrutinizing the Standard Conditions of Contract No. A -3 -51. We presume that he looked into the same and knowing fully well that it contained an arbitration clause he made the tender on 11th November 1964. Learned counsel for the appellant would say that the reference in the tender form to the railway Standard Conditions of Contract for Stores may not be to the general conditions of, contract referred to in the purchase order. We think that the distinction drawn is without substance. The tender is quite clear that the reference was made by the tenderer only to the contract for Stores Serial No. A. 3 -51, and it is the acceptance of that tender that constitutes the contract. The reference in the purchase order to the 'general conditions' of the contract is obviously to the general conditions contained in the Standard Conditions of Contract for Stores, Serial No. A. 3 -51.
(3.) The next objection raised is that the Railway Administration was not at the relevant times ready and willing to do all things necessary to the proper conduct of the arbitration. In support of this argument, reliance is placed upon the lack of requisite allegations in the petition of the railway administration in which it has merely stated that the petitioner is willing and ready for arbitration." A supplemental affidavit was however, permitted to be filed later on, in which the railway administration alleged that it was always ready and willing for the arbitration, that is to say, both at the time of commencement of the proceedings and at the time of the petition. This supplemental affidavit was filed evidently in difference to certain observations made by Ramamurthi, J. in Padmanaban v/s. Srinivasan : A.I.R. 1967 Mad. 201. There, the learned Judge referred to the ruling of the Supreme Court in Anderson Wright Ltd. v/s. Motan and Co. : A.I.R 1955 S.C. 53 but has not in our view, stated the effect of that ruling correctly. This is what the Supreme Court said: Thus in order that a stay may be granted under this Sec. (S.34), it is necessary that the following conditions should be fulfilled: (1) The proceeding must have been commenced by a party to an arbitration agreement against any other party to agreement; (2) the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred; (3) the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that he should satisfy the court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration; and (4) the court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. Neither condition No. 3 nor S. 34 of the Act from which that condition has been deduced prescribes that the making of any kind of formal averment is a pre -condition to the grant of stay under S.34. All that the Sec. requires is that the applicant must satisfy the Court (among other things) that he 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. But Ramamurti, J. went beyond the requirements of the Sec. when he observed that the party invoking S.34 should make 'a clear' unambiguous and specific averment' to the effect that "he was not only at the commencement of the suit quite ready and willing to have the dispute resolved by arbitration proceedings, but that he is throughout ready and willing for such arbitration and do everything necessary for the proper and successful conduct of the arbitration proceedings." It seems to us that the interpretation placed by the learned Judge upon the Supreme Court ruling and upon S. 34 of the Arbitration Act is erroneous. The true position is that whether an averment is made or not, the party asking for stay should satisfy the court not only that he is but also was, at the commencement of the proceedings, ready and willing to do everything necessary for the proper conduct of the arbitration. Insistence upon proof of readiness and willingness at the relevant times ought not to be confused with an obligation to make any averment in the petition in any particular form. It may be that under certain circumstances, the absence of an averment in the petition may justify an adverse inference against the petitioner's profession of readiness and willingness. But, what is important is the satisfaction of the court, and not a ritual of mere averments. We, therefore, overrule the decision of Ramamurti, J., in Padmanabha v/s. Srinivasa, A.I.R. 1967 Mad. 201, and hold that neither the Sec. nor the ruling of the Supreme Court requires an averment of the kind contemplated by the learned Judge as a condition precedent to the invocation of the section. Averment or no averment, if the court is satisfied that the administration was in fact ready and willing, at the relevant times, to do everything necessary for the proper conduct of the arbitration, and that the other conditions laid down in the Sec. have also been fulfilled, there is no bar to the grant of a stay by court.;