K.C. Agrawal, J. - (1.) This is an appeal preferred by the defendant Sri Madhesia Trading Company Limited, Khalilabad, district Basti, and its proprietor Moti Lal against the judgment and order of the court below refusing to stay the proceedings of the suit under Section 34 of the Arbitration Act.
(2.) Briefly, the facts are these M/s Ganesh Flour Mills Company Limited, Kanpur, filed suit for recovery of Rs. 2,90,000/- against the defendant, aforesaid, on the ground that the defendant no 1 was its dealer and had been appointed for the purposes of carrying on sale of ghee manufactured by it. For this purpose defendants used to obtain goods from the plaintiff and used to draw Hundis The Hundi drawn on the defendants were sent for collection by the Bank, but some of them were returned uncashed. Consequently, thereafter the defendants were approached by the plaintiff and the defendants agreed to pay the amount due in instalments of Rs. 10,000/- per month. But the defendants failed to comply with the terms of the agreement arrived at between them and the plaintiff and, therefore, the suit for the recovery of the aforesaid amount was filed,
(3.) The defendants filed an application under Section 54 of the Arbitration Act for stay of the suit on the ground that as the dispute in between the parties was preferable to arbitration, the suit could not be tried on merits and decided by the court. Clause 12 of the agreement, which deals with arbitration, reads that should any dispute between the parties arise under this agreement, or relating to any goods supplied or to be supplied by the Company, or to the prices thereof or the amount due, the same shall be referred to Arbitration of two Merchant members of the Uttar India Chambers of Commerce at Kanpur.;