RAM NARESH KUMAR SINGH Vs. FOOD CORPORATION OF INDIA LTD

JUDGEMENT

(1.) THIS is an appeal by the plaintiff against an order D/- 17-3-1980, passed by Subordinate Judge I, Patna in Money Suit No. 86 of 1979, staying the proceedings under Section 34, Arbitration Act.

(2.) THE plaintiff filed the money suit for a decree for a sum of Rs. 2,63,204. 34 P. against the defendants with interest pendente lite and future, the plaintiff had taken a contract to execute certain work under the defendants the Food Corporation of India Ltd. and others. THE claim arose out of this contract. This suit was filed on 22-5-1979, impleading the Food Corporation of India Ltd., Regional Officer, Patna and 7 others who appear to be Officers of the Food Corporation of India. THE defendants 1, 2, 6 and 7 appeared on 24-9-1979 and filed a petition stating, inter alia that 24-9-1979 was the date fixed for filing the written statement, but they had to obtain the statements of fact from the department and therefore, it was not possible to file the written statement on that date. A prayer was made to adjourn the case for one month for filing the written statement in the case. On 9-11-1979. defendants 1, 2, 6 and 7, who had filed the petition for time mentioned above, filed another petition under Section 34, Arbitration Act, stating, inter alia, that there was an agreement between the plaintiff and the Food Corporation of India wherein there was an arbitration clause according to which all the disputes arising out of the agreement shall be referred to the sole arbitration of the person appointed by the Managing Director of the Food Corporation of India Ltd. It was further stated that claims were fully covered under Clause 25 of the condition of contract and the petitioners were/are ready to participate in the arbitration and get the dispute decided by the arbitrator. Accordingly, it was prayed that the suit should be stayed under Section 34. Arbitration Act. On the same date, defendants 3, 4, 5 and 8 also appeared and filed a similar application for staying the suit under Section 34 of the Act. It may be relevant here to state that defendants 3, 4 ,5 and 8 had not yet filed any application for time to allow them to file a written statement. On 4-12-1979, a rejoinder was filed on behalf of the plaintiff to the petitions filed by the defendants. In that view of the matter, it was asserted that those defendants had waived their right to file any application under Section 34 of the Act inasmuch as they had taken a definite step in the proceeding within the meaning of Section 34 of the Act. THE matter was heard by the learned Subordinate Judge and after considering facts and circumstances of this case, he found that mere filing of the petition on one date could not be taken as an abandonment of the claim by the defendants of going to the arbitration or filing of any application under Section 34 of the Act. THE court also found that the other defendants, namely, defendants 3, 4, 5 and 8 had not filed any application for time for filing the written statement and had on the very first day filed the application for staying the suit. Upon such a finding, the learned Subordinate Judge stayed the further proceeding of the suit under Section 34 of the Act.

(3.) THE real test for determining whether an act is a step in the proceeding is not so much the question as to whether it is an application filed by the defendants, but whether the act displays an unequivocal intention to proceed with the suit and to give tup the right to have the matter disposed of by the arbitration. Ridley, J. in Austin and Whiteley Ltd. v. S. Bowley and Son (1913) 108 LT 921 (F) observed:--