Salil K.Roy Chowdhury, J. - (1.) THIS is an application for stay of the Suit No. 2241 of 1969 (Bisheswar Daya) Meatle v. Shroff Brothers) and all proceedings thereunder under Section 34 of the Arbitration Act, 1940.
(2.) THE facts of the case briefly are: That the petitioner is a member of the Calcutta Stock Exchange Association Limited and carried on business as stock-broker and/or as a dealer in stocks and shares. During January to March, 1965 and January to August, 1966, the respondent entered into a series of transactions with the petitioner for purchases and sales of stocks subject to the rules and bye-laws of the Calcutta Stock Exchange Association Ltd. It is alleged in the plaint filed by the respondent that by the 31st of March, 1965 as a result of the said transactions between the parties a sum of Rs. 69,793/- became due and payable by the petitioner to the respondent. THE respondent further alleged that the petitioner by a letter dated the 5th of April, 1965 signed by Sawalram Shroff one of the partners of the petitioner made an acknowledgment of its liability to the respondent and a part of payment of Rupees 40,000/- demand draft of same date. It is alleged by the respondent that after crediting the said sum of Rupees 40,000/- a balance sum of Rupees 29,793/- became due and payable to the respondent by the petitioner in respect of the said transactions. THE said transactions terminated between the parties on the 31st of August. 1966. It is further alleged by the respondent in the plaint that on or about 31st of August, 1966 the petitioner made an acknowledgment in writing signed by the said Sawalram Shroff and made a part payment of Rs. 11,092.50 p. to one Messrs. Bhagwandas Gupta on the respondent's instructions for and on behalf of the respondent and admitted the existence of an account in relation to the said transactions between the parties and submitted a purported statement of account falsely alleging that nothing was due to the respondent by the petitioner. It is further alleged by the respondent that the said purported account contained fraudulent entry of alleged payment of Rs. 500/- in cash and omission of the said sum of Rs. 29,793/- due to the respondent by the petitioner in the said account. THE respondent alleges in the plaint that he has not accepted the said account of the petitioner. Finally in the plaint the respondent after crediting the said amount of payment made by the petitioner on or about 31st of August, 1966 being the said sum of Rupees 11,092.50 claimed a sum of Rs. 30,293/- being the balance amount due in the said account relating to the said share transactions between the parties together with interest thereon at the rate of 12% per annum. THE respondent further alleged that a notice in writing dated the 2nd of August, 1969 demanding the said sum with interest thereon at the rate of 12% per annum was duly given to the petitioner. As the petitioner failed to pay the said amount as demanded by the respondent, the Suit No. 2241 of 1969 (Bisheswar Dayal Meatle v. Shroff Brothers) was filed in this Court in August, 1969. THE Writ of summons of the said suit No. 2241 of 1969 was admittedly served on the petitioner along with a copy of the plaint on the 19th of November, 1969. THErefore under Chapter VIII, Rule 5 of the Original Side Rules of this Court time to file written statement in this case was 28 days from the date of service of the Writ of summons that is upto 16th of December, 1969. In this case it is quite clear that the petitioner also did not enter appearance before the date fixed for its appearance in the said Writ of Summons on it under Chapter VIII, Rule 15 of the Original Side Rules. It further appears that the present application for stay of the suit under Section 34 of the Arbitration Act, 1940 was filed in this Court on the 6th of March, 1970 and an ad interim stay of the suit was obtained on the same date. It is clear on the face of it that after the writ of summons was served, the petitioner did not do anything for getting the suit stayed by making the application prior to the expiry of the date of filing the written statement under the provisions of the Rules of this Court. It is only after about 2 months 20 days from the date of expiry of the filing of written statement fixed under the Rules, the petitioner made this application and obtained an interim stay on the 6th of March, 1970. It appears that on the 10th of March, 1970 by special leave this application was made returnable and on that date direction for filing an affidavit was given by Ghose, J. being affidavit-in-opposition on the 24th of March, 1970 and affidavit-in-reply on the 4th of April, 1970 and the matter was adjourned till 6th of April, 1970. Thereafter it appears that the petitioner was not at all diligent or vigilant to get the matter heard and took advantage of law's delay as it is helpful to the petitioner to delay the adjudication either by the Court or by arbitration and gained time as long as possible. Thereafter I find the matter was mentioned before me on the 31st of August, 1971 when I directed the matter to appear in the list next Monday. Subsequently the matter was adjourned from time to time and the petitioner was not interested to get the matter heard and gained time as long as possible in order to delay the adjudication of the alleged claim of the respondent. It is significant that the petitioner after getting the stay of the suit as far back on the 6th of March, 1970 has neither made a genuine, sincere and honest effort to get the matter heard, as had it been so I would have disposed of the matter but somehow or other the parties got the matter adjourned to suit the convenience of their lawyers. The petitioner in my view deliberately did not take any step after getting the stay to refer the matter to arbitration and it was not really sincere and honest and ready and willing to get the same adjudicated by the arbitrator. I posed that question to Mr. S.K. Kapoor who appeared for the petitioner and his answer being that it was the respondent's claim to be preferred before the arbitrator and the petitioner had no claim to be made I cannot understand the said plea. It appears to me that in a case like this court has to exercise its discretion either to grant stay or refuse stay, taking into consideration the entire facts and circumstances of the case and conduct of the petitioner upto the date of the hearing of this application. Nothing prevented the petitioner to refer the matter to arbitration denying the alleged claim of the respondent arising out of the share transactions which are the subject-matter of the suit. In my view, the petitioner by simply getting the stay even after gaining some time from the date of the expiry of the filing of the written statement under the Rules of this Court, sat over the matter and took advantage of the laws delay in all possible way, as if the petitioner or its lawyer has no duty to discharge towards the court which will be called upon to exercise discretion at the time of hearing of this application. However, I will come to this question subsequently and after the matter was mentioned before me by the respondent on the ground that stay has been obtained about more than three years back and the petitioner has prevented the hearing of the application on some ground or other and the adjudication of the respondent's claims is being delayed, ultimately I have been able to get the matter heard before me.
(3.) MR. S.K. Kapoor appearing for the petitioner submitted that all the conditions under Section 34 of the Arbitration Act, 1940 have been satisfied as the subject-matter of the suit is covered by the arbitration clause contained under the rules and bye-laws of the Calcutta Stock Exchange Association Ltd. admittedly which governs the contract between the parties. Therefore, MR. Kapoor submitted that there is no sufficient cause why the suit should not be stayed. MR. Kapoor in reply to my question as to why the matter has not been heard for such a long time of about 4 years submitted that the petitioner has got nothing to do with the hearing of this application as no court took up the matter for disposal. I must say I cannot accept the said contention at least from the period it was mentioned before me it must have been adjourned with the consent of both the parties or one of the parties was not present in the court when the matter was called on in the list. It further appears that the matter was adjourned from time to time with the consent of the parties. Further to my question as to why the petitioner has not referred the matter to arbitration after getting the suit stayed as far back on the 6th of March, 1970, MR. Kapoor's answer was that the petitioner has no claim against the respondent as such there was nothing to refer to arbitration by the petitioner. In my view, such answer is not at all convincing but gives me the impression that the whole object of the petitioner is to gain time and delay the adjudication of the disputes between the parties either by arbitration or by suit. MR. Kapoor submitted that in the plaint it is admitted by the respondent that the contract was subject to the Rules and bye-laws of the Calcutta Stock Exchange Association Ltd. which contained the arbitration clause and as such in the facts and circumstances of this case the suit must be stayed and the interim stay must be confirmed.;