ARUN CORPORATION Vs. HYDERABAD PLASTICS

JUDGEMENT

(1.) THE appellant herein is a registered firm doing business as distributors of several products. THEy entered into an agreement with the respondents herein on 20th March 1974 whereby the respondents appointed the appellant as distributors for their product known as 'Air Bubble Film Airplast' for the State of Maharashtra. THE respondents, by their letter dated 26th October, 1974, terminated the distributor-ship. At the time of appointing the appellant as distributors, the respondents had taken a deposit of Rs. 7,000/ and again another deposit of Rs. 2,500/- totalling Rs. 9,500/-. THE respondents had also, according to the appellant, stocked with them goods worth Rs. 55,267.74 for which the appellant had paid the full amount. After the termination of the distributorship, the appellant filed a suit, O.S. 34/75 on the file of the II Addl. Judge, City Civil Court, Hyderabad, for the recovery of a sum of Rs. 82,860/-. This was made up of Rs. 9,500/- together with interest thereon till the date of suit and Rs. 55,267.74 together with interest on that amount till the date of suit. THE appellant claimed also Rs. 4,282.25 with interest thereon being the amount said to have been the value of the goods delivered by them to the respondents' representative, Mr. VJ. Rao.

(2.) THE respondents therein filed I.A.No. 203/76 stating that under the agreement dated 20th March, 1974, it was expressly stipulated that in the event of anyv dispute or difference arising between the parties in connection with the agreement or with espect to its interpretation, construction of any of its clauses or with respect to the rights and liabilities of parties or with regard to any amount payable to or recoverable from either party, the same shall be decided by reference to arbitration and the decision of the arbitrator shall be final and binding on the parties, and, therefore, the suit should be stayed under Sec. 34 of the ARBITRATION ACT, 1940 (hereinafter referred to as the Act). THE respondents also averred in that petition that they were always ready and willing and are still ready and willing to do all things necessary for the proper conduct of arbitration and Jo refer the dispute to an arbitrator for adjudication.

(3.) THE learned II Add.Judge . City Civil Court, held that the suit should be stayed under Sec.34 of the Act. He negatived the contention of the appellant that there was no dispute whatsoever between them and the respondents regarding the amount due to the appellant. He also held that the respondents were ready and willing to refer to arbitration.