BINNY LIMITED MADRAS Vs. CONTROLLER OF STORES AND PURCHASE KARNATAKA STATE ROAD TRANSPORT CORPORATION CENTRAL OFFICE KH ROAD BANGALORE 560 027

JUDGEMENT

(1.) PLAINTIFF is the appellant. This is an appeal against the order passed by the learned VIII Additional Judge, City Civil Court, Madras, in the petition C.M.P. No.1301 of 1981 in O.S.No.2889 of 1981 (which was originally numbered as Application No.37 of 1981 in C.S.No.753 of 1980 on the file of this court) filed by the second defendant/first respondent herein under section 34 of the Arbitration Act.

(2.) THE plaintiff filed the suit C.S.No.753 of 1980 on the file of this Court, under O.14, R.8 of the Original Side Rules read with O.39, R.1, C.P.C. praying for an injunction restraining first defendant viz., the State Bank of India, from paying any monies under the suit guarantee and also an injunction restraining the second defendant viz., Karnataka State Road Transport Corporation, from receiving payment under the suit guarantee. THEreupon the second defendant filed Application No.37 of 1981 under S.34 of the Arbitration Act for stay of the further proceedings in the suit C.S.No.753 of 1980. THE plaintiff opposed the application, as not maintainable since the suit has been filed in respect of suit guarantee which is an independent contract between the parties and the arrangement between the plaintiff and the first defendant never matured into a contract and there is no concluded contract even between the plaintiff and the second defendant and as such clause 16 of the agreement will not come into play and the application also is not maintainable since the applicant/second defendant had already taken steps in the proceedings within the meaning of S.34 of the Arbitration Act and cannot therefore file the petition, and in any event the ingredients of S.34 of the Arbitration Act not having been complied with, particularly in the absence of averments that the second defendant is ready and willing to refer to arbitration, the application is liable to be dismissed in limine.

(3.) THE points that now arise for consideration in this appeal are as to