AVTAR SINGH GUJRAL Vs. BOARD OF DIRECTORS

JUDGEMENT

(1.) THE plaintiff is the appellant. THE defendants respondents had filed an application under Section 34 of the Arbitration Act for staving further proceedings in the suit on the ground that the subject-matter of the suit was covered by the arbitration clause in the deed of contract. THE appellant had objected to stay being granted. THE Court below by the impugned order dated the 3rd of October. 1969 has stayed further proceedings in Money Suit 61 of 1960 of the Court of the Subordinate Judge, Darbhanga, out of which this appeal arises.

(2.) THE appellant has filed the aforesaid money suit for recovery of a sum of Rs. 89,951.93P. from the respondents. Out of the aforesaid sum, Rupees 27,540 is said to be lying with the respondents to the credit of the appellant as se- curity deposit. THE balance of the amount claimed was so done as the price of shingles and broken materials supplied by the appellant when he agreed to construct an aerodrome in the vicinity of Darbhaga town under the National Project Construction Corporation Ltd. (hereinafter called the Corporation), respondent No. 1. THE Chief Engineer and General Manager of the Corporation and the Additional Chief Engineer (Planning) thereof are respondents 2 and 3, respectively. THE Union of India required construction of an aerodrome in or about the year 1963 for urgent defence work in the vicinity of Darbhanga under the respondents. THE respondents established an office under the supervision and control of the Darbhanga Unit (Eastern Zone) of the Corporation. THE Construction Superintendent of the aforesaid Unit was given full powers to take all steps for the construction of the aerodrome including the power to enter into and sign and execute contract of collection of materials on behalf of the Corporation. THE appellant entered into an agreement for collection of shingles and transport of the same from quarry side to Darbhanga railway station. THE shape and size of the shingles were mentioned in the deed of agreement This agreement was entered into, according to the plaintiff appellant, with an understanding that the respondents would arrange for transport by rails, for taking shingles and broken materials from quarry side to Bhikhanatori railway station. It is alleged that the respondents did not arrange for transport by providing rail communication from the quarry side. As the work was of urgent national importance, the appellant did it at his own cost and supplied shingles and broken materials from quarry side to Darbhanga railway station. According to the further case of the appellant, he had to pay freight charge at higher rate also besides surcharge. In pursuance of the terms of the agreement, the appellant had to deposit a sum of Rs. 27,540 as security. When the work was finished as per the work orders given to the appellant the respondents' office was shifted from Darbhanga to Delhi. THEreafter, the appellant submitted his bill. According to the appellant, in spite of his repeated request and demand, his bills for various amounts had not been passed, nor had the security money been refunded. THEse amounts and the security money deposited by the appellant constitute the total claim of the appellant in the suit. At this place, it is pertinent to take note of condition No. 4 of the agreement which admittedly runs as follows:--

(3.) THE first two points raised by learned counsel for the appellant should better be dealt with jointly, as the materials on the basis of which submissions in support of those contentions have been made are, more or less, common. THE third point urged by learned counsel be-ing predominantly a question of law, I would like to dispose of that point first and then deal with the first two points raised by learned counsel. But before I do that, I think it worthwhile to recapitulate the law which is well-settled in the matter of application for stay of proceed- ings in a suit under Section 34 of the Act. It is well-established that in order that stay may be granted under the Act the following conditions must be fulfilled :