Sarjoo Prosad, C. J. - (1.) THIS is an appeal under sec. 39 of the Arbitration Act, 1940, and is directed against the order of the District Judge of Bikaner passed on the 13th of August, 1957.
(2.) IT relates to a suit instituted by the respondent Bhojraj, a contractor in Bikaner, against the Union of India, the defendant and appellant before us, for recovery of a sum of Rs. 11,623/11/-, said to be due on the basis of certain contracts dated 29th October; 1954, and 12th November, 1954 The defendant before filing any written statement in the suit presented an application under sec. 34 of the Indian Arbitration Act alleging that the subject-matter in dispute in the said suit was covered by clause 24 of an Arbitration Agreement between the parties. The petition presented was not supported by any affidavit and only clause 24 of the Agreement in question has been quoted therein. The order sheet shows that various adjournments were obtained by the defendant for producing all the necessary documents, but the Arbitration Agreement itself was never produced at my stage, and the Court was left to speculate as to what the terms of the Arbitration Agreement were so as to cover the subject-matter of the suit. We will presently refer to clause 24 of the Arbitration Agreement as quoted in the defendant's petition to see what meaning can be conveyed to the Court on the terms of the clause itself. On the presentation of the petition, the defendant claimed that it was ready and willing to appoint an arbitrator both before and after the suit, and, therefore, the proceeding in. question should be stayed in order to enable the parties to have the matter decided by an arbitrator nominated by the General Manager of the Railway Administration in terms of the said arbitration clause referred to in the petition. The plaintiff objected to the application for stay, and contended that the defendant had persistently neglected and disregarded any reference to arbitration even within the terms of the alleged arbitration clause. He pleaded that in consequence of the defendant's attitude, it had become impossible for the plaintiff to wait indefinitely for the settlement of his claim, and was compelled to seek the assistance of the Court. The plaintiff, therefore, repudiated the version of the defendant that it was ready or willing to do every thing necessary for the proper conduct of the arbitration proceeding, either before or after the commencement of the suit. IT was also pleaded by the plaintiff that there were certain claims which did not form the subject-matter of the Arbitration Agreement at all. He therefore, prayed that the application for stay of proceedings should be rejected. The objection petition of the plaintiff as distinguished from that of the defendant was duly supported by an affidavit also. The Court below has rejected the stay application. The court found that although the plaintiff had as early as on 31st October, 1955, requested for appointment of an arbitrator, the defendant took no action thereon, and even after the notice under sec? 80 of the Code of Civil Procedure had been served on the defendant, the defendant took no steps in that regard, which clearly showed that the defendant was not willing before the commencement of the legal proceedings to appoint an arbitrator. In these circumstances the Court rejected the prayer for stay. In our opinion, the decision appears to be perfectly justified. I Two questions arise in this appeal. Firstly, whether the defendant was ready and willing to do all things necessary for the proper conduct of arbitration within the meaning of the alleged clause 24 of the Arbitration Agreement both before and after the commencement of the legal proceeding; and secondly, whether the subject-matter in dispute in the suit itself fell within the terms of the Arbitration Agreement so as to justify a reference to arbitration. On both these points, in our opinion, the defendant has completely failed to satisfy the Court that it is entitled to obtain a stay order in its favour. Sec. 34 of the Arbitration Act provides that a party to any legal proceeding may at any time before filing a written statement or taking any steps in the proceedings apply to the judicial authority before which the proceedings are pending to stay the proceedings provided he satisfies the authority concerned: (1) that there is no sufficient reason why the matter should not be referred in accordance with the Arbitration Agreement; and (2) that the applicant was at the time when the proceedings were commenced and still remains ready and willing to do all things necessary for the proper conduct of the arbitration. If the above conditions are fulfilled, the Court may make an order staying the proceedings. The power to grant or refuse stay is a matter within the judicial discretion of the authority concerned, and the discretion may be exercised in favour of a party if the requisite conditions are found to exist. Mr. Magraj submits that so far as the first condition is concerned, the burden of proof lies upon the respondent, and he had to make out that there was no sufficient cause for not staying the proceedings. Before any such burden can be thrown upon the plaintiff, it was the duty of the defendant to satisfy the Court that the subject-matter in dispute fell within the arbitration clause. The Arbitration Agreement itself has not been produced, and the argument is based merely upon the reproduction of clause 24 in the petition which was filed by the defendant, and which was not even authenticated by an affidavit. Clause 24 runs thus : - "in the event of any dispute or difference of opinion between the Railway Administration and the contractor as to the respective right and obligations of the parties hereunder or as to the true intent and meaning of these presents or any articles or conditions thereof, such dispute or difference of opinion (except the matter regarding which the decision has been specially provided for in this contract) shall be referred to the sole arbitration of an officer who shall be nominated for the purpose by the General Manager, Northern Railway, for the time being and his decision shall be final, conclusive and binding on the parties. For the purpose of this contract the General Manager will mean the head of the Railway Administration. " The very wording of the clause indicates that any dispute or difference of opinion as to the respective rights and obligations of the parties as mentioned in that document or as to the true intent and meaning of the various terms of the agreement or conditions thereof were to be referred to an arbitrator nominated by the General Manager of the Northern Railway. Unless, therefore, the other terms of the document were known, how could it be possible for any Court to come to a decision that the subject-matter of the suit was covered by the terms of the Arbitration Agreement ? The objection petition filed by the plaintiff supported by an affidavit says that some claims in the suit were not covered by the Arbitration Agreement at all, and in clause 24 itself, as quoted by the defendant, exceptions have been provided. It was, therefore, not possible for the Court to hold on the materials placed by the defendant that a case had been made out or that there was sufficient reason for staying the proceedings in order to enable the patty to have the dispute decided by an arbitrator. Mr. Magraj submits that in earlier stages the plaintiff himself wanted the matter to be referred to arbitration. That may be so; but where the suit has been filed with certain prayers and reliefs and on a definite cause of action, and the plaintiff says that some of the matters in dispute fall outside the ambit of the arbitration clause, it was necessary for the defendant to satisfy the Court that all the matters in dispute were so covered before any order could be passed under sec. 34 of the Arbitration Act. The second condition to which we have referred required that the party applying for stay of proceedings, as the language of the section stands, "was at the time when the proceedings were commenced and still remains" ready and willing to do all things necessary for the conduct of arbitration. The use of the past tense "was" and the present tense "still remains" go to indicate that both before and after the commencement of the proceedings the party applying for stay must have shown his willingness and readiness to go to arbitration and the Court should be satisfied on that point. After all the Court has to exercise its judicial discretion in the matter, and it is for the Court to be satisfied about the conduct of the defendant. It is not enough to say that after the commencement of the proceedings the defendant has come forward and filed an application for stay of proceedings before filing any written statement or taking any other steps in the case. If that were so, then the whole significance of the other requirement of sec. 34 to which we have referred, namely, that at the commencement of the proceedings also the applicant was ready and willing to go to arbitration would be lost. That clearly refers to a stage or point of time earlier than the stage of the institution of the suit itself, and in our opinion must at any rate refer to the stage when a notice under sec. 80 of the Code of Civil Procedure was served upon the defendant for taking action in the matter. Mr. Magraj has drawn our attention to a decision of a Single Judge in Punjab State vs. Mojiram (1 ). In our opinion, that decision emphasises only upon one aspect of the matter, namely, that even after the commencement of the proceeding, the person applying for stay should be ready and willing to do every thing necessary for the proper conduct of the arbitration. The case, however, does not deal with the other aspect of the matter that even before the commencement of the suit the party concerned must show his willingness to resort to arbitration. The Legislature advisedly used the expressions "was" and "still remains" with reference to the commencement of the legal proceedings and was not merely content to say "is ready and willing to perform". We agree that mere silence before the commencement of the proceeding does not indicate unwillingness. In this case, however, we find that the works under contracts in question appear to have been completed some time on 31st July, 1955, and on the 3lst of October, 1955, the plaintiff sent a letter to the Divisional Engineer for settlement of his claim. At the end of this letter he requested that the four items mentioned in the letter may be correctly interpreted and their true meaning enunciated, and in case his contentions were not accepted, he prayed that action may be taken under paragraph 24 of the contract, and requested that the General Manager, Northern Railway, may be moved to fix up an early arbitration on those issues. Even at that early stage the plaintiff categorically asked for arbitration regarding some items of his claim. It is futile to suggest that the prayer should have been made to the General Manager, because in any case the matter had to go through the Divisional Engineer or the Divisional Superintendent who knew about the facts and the Officer failed in his duty in not informing the General Manager of the plaintiff 's prayer. We do not find that any reply was sent to this letter. The plaintiff then sent another letter in November, 1955, (Ex. C. 41) in which he again invoked arbitration, but no action was taken. Subsequently on the 10th of April, 1956, the plaintiff was compelled to send a notice under sec. 80 of the Code of Civil Procedure to the Divisional Superintendent for being forwarded to the General Manager of the Railways. In this notice he says payments were deliberately with held and not made, and no notice was taken of his request invoking the arbitration clause. He, therefore, claimed that the money payable to him should be paid with interest within two months of the delivery of this notice. A reply was sent to this notice by the Divisional Superintendent on the 17th of April, 1955, in which he merely said that if the plaintiff was not satisfied with the decision of the Divisional Engineer conveyed in the letter of 14th April, 1955, copy of which is not on the record, the plaintiff was entitled to take action under clause 24 of the Tender Conditions; while the reply of the General Manager simply was that the matter was receiving attention. These replies in the context of facts stated earlier were clearly evasive. The learned District Judge after having taken into consideration all these matters has rightly come to the conclusion that the General Manager or the Divisional Superintendent was never serious in getting an arbitrator appointed; and that) they were merely trying to delay the matter; and even after the notice given under sec. 80 of the Code of Civil Procedure, no steps were taken by the defendant. He therefore, thought that the replies showed no readiness or willingness on the part of the defendant's agents who had authority to act at the commencement of the proceedings, to take action for the proper conduct of the arbitration. We think that the learned Judge has exercised a proper judicial discretion in the matter, with which we shall not be justified in interfering in this appeal. There are two other points to which we must refer before we part with this appeal. When the paper book in this appeal was prepared we noticed that several documents on which the Court below relied for the purpose of coming to its conclusions had not been included in the paper book. Unfortunately, this appears to be a general feature in some other appeals also, where a practice has grown up of not including necessary documents in the paper book of the appeal and referring to them at the last moment from the records of the case according to the convenience of the counsel appearing in the appeal. This practice calls for serious disapproval by the Court, and has to be stopped. The attention of the parties is drawn to the relevant rules on the point. Rule 234 of the High Court Rules requires that certain documents must be included in the paper book of a First Appeal from an order other than an order of remand. Mr. Magraj submits that in view of this Rule he did not think it necessary to include the other papers in the paper book to which reference was made in the order under appeal, and on which the Court below relied for Its decision; but Rule 234 does not conclude the matter. The two other relevant rules on the point are rules 180 and 247. Rule 234 occurs in Chapter XIV of the Rules, and Rule 247 in that Chapter further says that the rules contained in Chapter XIII shall apply mutatis mutandis to the preparation and use of paper books under this Chapter in regard to matters for which no provision is contained in this Chapter. We need not refer to the other parts of the rule. This shows that the relevant rules of Chapter XIII also are applicable to the preparation of paper books in connection with matters for which no provision is made under Chapter XIV. Rule 180 of Chapter XIII provides further that it shall be the duty of the appellant to apply for the translation and printing of all the evidence and papers, whether produced by him or by the respondent, to which he wishes to refer at the hearing either for the purpose of showing that the decision appealed against is erroneous or for the purpose of supporting his case. This is a very important rule which applies by virtue of Rule 247 of the Rules in Chapter XIV, and there is no reason why the application of this rule should be overlooked. Rule 180 should apply to the preparation of paper books even in cases of first appeals from orders as contemplated by Rule 234. It was, therefore, essential for the learned counsel for the appellant to include all those papers whether produced by himself or by the respondent, if he intended to show that the decision appealed against was erroneous or for the purpose of supporting his arguments in appeal. In future we require strict compliance with these rules, and if these rules are not followed, the Court shall be amply justified in excluding those papers from consideration and taking the findings in the judgment or order under appeal to be correct in the absence of the relevant papers. The counsel for the party who ignores these rules may be, therefore, taking a very serious risk to the detriment of his client. Since, however, we have often noticed this laxity in the preparation of paper books, we have condoned it on the present occasion, and allowed Mr. Magraj to file a supplementary paper book in this appeal, and we have accordingly refe-red to the documents included in that supplementary paper book in deciding the appeal as we have done.
(3.) THE other point is a matter which affects the conduct of cases in subordinate courts, and the tendency to procrastination discern able in many cases on account of unnecessary adjournments often granted by some courts even in interlocutory matters. We desire to point out that this practice which unnecessarily prolongs litigation must be seriously discouraged. In this particular case the suit was filed on the 12th of July, 1956. On the 26th of September, 1956, the defendant presented the application under sec. 34 of the Arbitration Act. On 5th November, 1956, the plaintiff filed his objection to the above application of the defendant. THE Court instead of hearing the parties immediately on that point allowed the defendant to take an adjournment, and the case was adjourned for arguments on 12th December, 1956. On the 12th of December the lawyer for the defendant again applied for time and the Court adjourned it to 28th January, 1957. On 28th January, 1957, the defendant again applied for time,- and 19. 3. 57 was fixed for hearing arguments in the matter of the application under sec. 34. On the 19th of March, 1957, the case was adjourned again to 20th of April, 1957. On the 20th of April, the Presiding Officer appears to have gone on leave and then the case was fixed for argument in the above matter on 13th July, 1957. THEn on 13th July the arguments were heard, but orders were reserved until the 23rd, though actually the orders were passed on the 13th of August, 1957, after two other adjournments. It is an unfortunate state of affairs that interlocutory matters of this kind should have dragged on for such a long period and the Court should have so easily acceded to prayers for adjournment at the instance of the defendant instead of insisting that the matter should be disposed of at an early date. We accordingly dismiss this appeal with costs. The record should go back to the Courts below for early disposal of the suit. .;