P.C.MALLICK, J. - (1.) THIS is an application for stayunder Section 34 of the Indian Arbitration Act. Theapplication is resisted on two grounds (i) theapplicant has taken steps in the proceedings and(ii) that the contract containing the arbitrationclause has been modified by subsequent agreementsto such extent that the arbitration clauses have become ineffective and that the arbitration agreement does not cover the disputes raised in thesuit.
(2.) THE suit is for the recovery of the sum of Rs. 2,43,804/13/4. The claim is under a contract for the distribution of a cinematograph film.The plaintiff is the Producer and the defendantNo. 1 is the Distributor. The film proved to bevery successful and had a long run in a largenumber of cinema houses. It is said that the boxoffice receipt was very heavy. After giving creditfor Rs. 10.000/ - paid by the defendant No. 1 tothe plaintiff there was due and owing to the plaintiff a large sum as claimed in the plaint. Thedefendant by his -solicitor's letter dated November24, 1958 contended that the amount due to theplaintiff would not be as much as claimed but would be only Rs. 1,01,048.18. The disputes between the parties not having been settled the plaintiff instituted the instant suit on May 4, 1959 andimmediately thereafter took out a Notice of Motion on May 6, 1959 for judgment on admissionunder Order 12, Rule 6 of the Civil Procedure Codefor the sum of Rs. 1,01,048.18. The notice wasserved on the defendant No. 1 on the same day. On May 11, the Motion appeared as a New Motion in the List of Motions before the learned. Interlocutory Judge when in the absence of the defendants the usual directions were given for filing affidavits. On May 13, 1959 Messrs. T. Banerji and Co. acting for the defendant No. 1 wrote a letter to the plaintiffs solicitor in the following terms : 'Messrs. S.C. Roy Chowdhury and Co.Dear Sirs,Sukumar Kumarv.Deluxe Film Distributors Ltd. We have received instructions from Messrs. The Deluxe Film Distributors Ltd. the defendant abovenamed to act for them in the above suit. Please send us a copy of the plaint free of charge on our usual undertaking to accept service of the writ of summons without such copy plaint. Please also send us a copy of the grounds of the pending application on the usual terms. We understand that the time to file the affidavit in opposition expires tomorrow. As we did not receive our client's instructions before for the affidavit in opposition we shall mention the application tomorrow before His Lordship the Hon'ble Mr. Justice G.K. Mitter at the first sitting of the Court and ask for a short extension of time for filing our client's affidavit in opposition. We trust you will consent. Our Managing Clerk was informed that a copy of the Notice of Motion was sent to our client's office. As the said Notice of Motion is mislaid, we shall thank you to kindly send us a copy of the Notice of Motion also. Yours faithfully,Sd./ T. Banerji and Co.' It is clear from the above letter that even though uptill now the defendants have not entered appearance and did not appear at the time when directions for affidavits were given on May 11, 1959, they kept themselves fully apprised of the proceedings in Court and know that 'time to file affidavit -in -opposition expires tomorrow.' In terms of the request contained in the letter, the plaintiffs solicitor gave consent to the defendant asking for extension of time for filing affidavit -in -opposition. What happened thereafter is stated in paragraph 22 of the affidavit of the plaintiff In the following words : 'On the following day that is 14th May, 1959 the petitioner's solicitors after obtaining verbal consent from my solicitors mentioned and applied to the Court when the Court ordered that the affidavit -in -opposition should be filed by the petitioner by 19th May 1959, affidavit -in -reply should be filed by me by 23rd May 1959 and the Motion should stand adjourned till 25th May 1959. I crave reference to the relevant minutes of the Court at the hearing of this application. Having acted in the said suit in the manner aforesaid the petitioner definitely took steps in the proceedings in the said suit before he took out the Notice of the present application.' That is how it is contended that the petitioner took steps in the proceedings and is thereby debarred from making this application under Section 34 of the Arbitration Act.
(3.) IN answer to the said paragraph 22 of the affidavit -in -opposition one Dipchand Kankaria a director of the defendant company stated as follows in his affidavit -in -reply; '6. With regard to the allegations contained in paragraph 22 of the said affidavit I reiterate the statements in the petition and deny all allegations contrary thereto. It is not understood as to what is meant by the words 'our client's consent'. A limited Warrant of Attorney was given by us to our solicitors for the purpose of acting for us in this suit for opposing the pending application and for obtaining copies of the plaint and petition. I crave leave to refer to the said Warrant of Attorney at the time of the hearing. No Warrant of Attorney was given for the purpose of defending this suit. The letter of our solicitors also makes it quite clear that no Warrant of Attorney to defend this suit was given to them. I deny that any steps were taken by us in this suit. All the steps taken were limited to the pending application and to prevent an ex parte order being passed in the said pending application.' ;