CHAWLA TECHNO CONSTRUCTION LIMITED Vs. PUNJAB NATIONAL BANK

JUDGEMENT

(1.) [Ed. facts : Plaintiff, constructed a building of Deft. Bank and gave final bill of more than Rs.31 lakh. On 21.12.87, the Architect duly certified it for about Rs. 231/2lakh. On 3.5.90, pff. sent a notice demanding this amount and also asked for arbitration. Deft. did not reply this notice. Nor it invoked arbitration clause in the agreement between parties. Pff. then filed instant suit. Deft. applied for its stay u/S 34, Arbitration Act]. After detailing above, Judgment is :

(2.) AN order staying proceeding u/S 34 of the Act can only be made if requirements of the section are fulfilled. One of the requirement ment is that the deft. seeking stay of the suit has to satisfy the court that he was at the time when the proceedings were commenced and at the time when the application for stay is made and till its decision remained ready and willing to do all things necessary to the proper conduct of the arbitration. It is implicit in S. 34 that the deft. has to make a specific averment about its readiness and willingness to do all things necessary for the proper conduct of the arbitration proceedings at the time when the proceedings commenced till its conclusion. Reference may be made to National Research Dev. Corp. vs. Bhupal Mining 1973. DLT. 37 holding that the party applying u/S. 34 of the Act must specifically allege that he was, not only, at the commencement of the suit quite ready and willing to have the dispute resolved by arbitration, but that he was throughout ready and willing for such arbitration and do every thing necessary for the proper and successful conduct of the arbitration proceedings. In this application no such averment has been made. Learned counsel for the deft. concedes that such an averment in the application has not been made but submits that an averment about readiness and willingness has been made in the rejoinder filed by the deft. to the reply of the pff. In order to fulfil the requirement of S.34, such an averment should be made in the application and not in the rejoinder. But assuming the averment in the rejoinder can cause (removal) of defect, it has to be noticed that even in the rejoinder the deft. has not pleaded that it was ready and willing to refer the matter to arbitration at the commencement of the proceeding. The averment in the rejoinder is that he "is ready and willing to refer the matter to arbitration." The readiness and willingness u/S 34 has to be alleged and established not only at the time when the application for stay is made but even at the time of the commencement of the legal proceedings. The application does not fulfil the requirements of S. 34 of the Act and thus the deft, is not entitled to an order staying the proceedings of the suit.