Sukumar Chakravarty, J. - (1.) This appeal has arisen out of the order dated 20-5-77 passed by Shri S.P. Das Ghosh, learned Judge, Second Bench, City Civil Court, Calcutta in Misc. Case No. 332 of 1974, whereby the learned Judge allowed the application under section 34 of the Arbitration Act and stayed the further proceedings of the Title Suit No. 1094 of 1973 filed by the plaintiff-appellant against the defendants-respondents.
(2.) The facts, in brief, leading to the filing of the application under section 34 of the Arbitration Act are as follows : "The defendant No. 1 Samar Singh Jaiswal (P) Limited (hereinafter referred to as the Buyer company) purchased 4400 Kgms, of T.N. shellac 3 per cent (Marks MRA) at the rate of Rs. 800 per package of 750 Kgs. from the plaintiff Motiram Agarwalla (P) Ltd. (hereinafter referred to as the Seller Company) on the basis of the terms of the Contract No. 2093 dated 17-2-73 (Annexure 'A' to petition) through Shellac broker M/s. Shyamlal Ramlal. The transaction was subject to the Rule and Regulations and bye-laws of the Indian Lac Exporters Association. The Buyer company took delivery of the goods on 26-2-73 and paid the seller company's bill dated 26-2- 73 for Rs. 46,933.33P by the cheque dated 2-3-73 drawn on National and Grindlays Bank Ltd.
(3.) The contract guaranteed that the Shellac in question would not contain more than 3 per cent impurities and if the impurities exceeded that limit, the seller company would be liable to pay allowance on percentage value of the goods in accordance with the terms of the contract. A representative sample of the goods so delivered, duly sealed, was sent by the buyer company to M/s R.V. Brigg and Co.(P) Ltd. on 1-3-73 to determine the percentage of the impurity in accordance with the terms of "guarantee allowance" as stipulated in the contract. On test being carried out by M/s R.V. Brigg and Co. (P) Ltd. (hereinafter referred to as the testor company), it was found that the Shellac contained 15.48 per cent impurities instead of 3 per cent. The seller company did do avail itself of the re-testing clause of the contract within the time as stipulated in the contract but did so after the expiry of the time. The seller company was therefore liable in terms of the contract to pay the allowance for the excess impurities in terms of the contract. The certificate of impurities at given by the tester company was annexure 'D'. The total allowance calculated on the basis of the allowance-percentage in terms of the contract stood at Rs. 44,596.66P being the 95 per cent of the value of the goods. The buyer company submitted the bill for Rs. 44,596.66P to the seller company on 3-4-73 for payment. The seller company did not pay the amount in spite of repeated demands.;