S.S. Sodhi, J. - (1.) FILING of the written statement does not invariably constitute a bar to the stay of proceedings under Section 34 of the Arbitration Act, 1940 (hereinafter referred to as the Act). Illustrative of this being the case here.
(2.) THE partnership deed between the parties contained an arbitration clause which reads as under: In case of any dispute or difference between the parties, the same may be referred to an arbitrator who shall be appointed with the mutual consent of the partners and his decision shall be final and binding on the partners. Differences having arisen between the partners, one set of them, namely, Paramjit Singh, Ajmer Singh and Mehar Singh dissolved the partnership and then hide a suit against the other partners Tek Singh and Hari Singh seeking a permanent injunction to restrain them from carrying on the business of the partnership. Along with the suit, an application for temporary injunction was also filed. On receipt of the notice of the suit, on January 23, 1985, the Defendant Tek Singh filed an application under Section 34 of the Act praying therein that proceedings in the suit be stayed in view of the arbitration agreement between the parties. It was also averred that the dispute had already been referred to the arbitrators and the parties had appeared before them.
(3.) ON the next date of hearing, i.e., January, 30, 1985, besides filing a reply to the application for temporary injunction, the Defendant also filed his written statement. The case was then adjourned to February 6, 1985, for reply to the application under Section 34 of the Act. This reply was eventually filed on February 7, 1985. One of the pleas raised in this reply was that the filing of the written statement by the Defendant constituted a step in the proceedings and the application thus deserved to be dismissed on this ground alone. This objection prevailed with both the trial Court as also the lower appellate Court. Stay of proceedings, as sought by the Defendant, was consequently declined. Herein lies the challenge in revision.;