Chakravartti, C.J. - (1.) THIS is an appeal from an order of S.R. Das Gupta J. dated 23-84951, by which the learned Judge stayed a suit brought by the appellant Moran and Co. Ltd., against the respondent, Anderson Wright Ltd., upon an application made by the latter under Section 34, Arbitration Act.
(2.) THE facts are as follows: By two different contracts, both dated 7-7-1950, the respondent purchased 12,00,000 yards of Hessian Cloth, 6,00,000 yards under each of the contracts, delivery to be made at the rate of 1,00,000 yards per month from January 1951 and payment to be made in cash on delivery. Each delivery was to be treated as a separate and distinct contract. THE Bought Notes, which were addressed to the respondent and signed by the appellant over the word 'Brokers', began with the sentence, "Dear Sirs, We have this day bought by your order and . on your account from our Principals," and then it proceeded to set out the particulars of the goods and the terms and conditions of the contracts. Those terms included an arbitration clause in the standard form of Indian Jute Mills Association contracts and expressed as follows: "All matters, questions disputes, differences and/ or claims arising out of and/or concerning and/or in connection with and/or in consequence of/or relating to this Contract, whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed, shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to-such rules the arbitration shall be conducted". In pursuance of the said two contracts, delivery was duly given in all the months from January to June, 1951 except March, but goods due to be delivered in that month were not delivered. By a letter dated 27-3-1951, the appellant intimated to the respondent that its sellers had informed it that, according to them, the contract had been 'ipso facto' terminated by reason of the failure of the respondent to give at least seven days' notice to place goods alongside, as required by the contracts. The respondent apparently did not accept the position that the appellant had any principal or that any default on its own part had been committed. Thereafter, on 11-6-1951, the appellant brought a suit on the Original Side of this Court for a declaration that it had merely acted as a broker in respect of the two contracts, a further declaration that it had no liability under them and an injunction restraining the respondent from enforcing the contracts against the appellant and claiming any damages from it thereunder. It was stated in the plaint that the appellant had only "brought about" the two contracts, acting as a broker, between the respondent and one Gowarchand Dhanchand and that the respondent was wrongfully alleging that the appellant was a party to the contracts and as such liable for their performance and consequently liable for damages for non-delivery of the goods due in March, 1951.
(3.) THE Writ of Summons was served on the respondent on 23-6-1951, but it took no steps in the suit. Instead, on 19-7-1951, it filed an application under Section 34, Arbitration Act, for a stay of the suit, out of which the present appeal arises. It was stated in the application that the contracts were "principal contracts" by which the respondent had bought from the appellant and that the appellant was liable under the contracts as a principal. In one part of the application it was also stated that "even apart from any liability of any other person or persons", the appellant was liable under the contracts "by reason of well-established practice and custom in the market .......... as well as in law". It was alleged further that the appellant had failed to make the deliveries for March, 1951, then repudiated its liability to make such deliveries, next repudiated its liability to pay the damages suffered by the respondent and lastly brought the suit in order to prevent arbirtation proceedings which the respondent was preparing to commence. THE damages suffered were stated to be Rs. 1,13,042-3 as. THE entire subject-matter of the suit, it was said, was covered by the arbitration agreement and accordingly it was prayed that the suit be stayed.;