JOY LALL AND CO Vs. GOPIRAM BHOTICA

JUDGEMENT

(1.) This is an appeal against an order dismissing an application for stay of proceedings under Section 19 of the Indian Arbitration Act.

(2.) The facts as set suit in the judgment of the Court below are shortly as follows. On the 6th December 1917, a contract was entered into whereby the defendants, Joy Lall and Co., sold on behalf of Gopiram Bhotica the plaintiff, for their order and on their account to their principal certain goods which are set out in the document. The contract contains an arbitration clause providing that any dispute whatsoever arising on or out of the contract shall be referred to arbitration. Disputes arose with regard to the contract and thereupon the brokers, Joy Lall and Co., on the 18th November 1919, referred the matters in dispute to arbitration of the Bengal Chamber of Commerce. Before any arbitration had taken plane, on the 18th December 1918, the plaintiffs instituted the present suit, asking for a declaration that there was no contract and seeking to restrain the defendants from proceeding with the arbitration. A rule was issued for the grant of an interlocutory injunction, was heard in December 1918, and judgment was reserved, but it was not till the 4th June 1919 that Mr. Justice Chaudhuri restrained the defendants from proceeding with the arbitration. An appeal was presented by the defendants against this order of Mr. Justice Chaudhuri; that appeal was allowed on the 2nd December 1919, See 55 Ind. Cas. 778--Ed. and as a result, the interlocutory injunction was dissolved. Thereupon, the present application was made on the 4th December 1919 for stay of proceedings under Section 19 of the Indian Arbitration Act. Mr. Justice Greaves has held that the application must be refused on the ground that the applicants had taken steps in the proceedings within the meaning of that section. In our opinion this view cannot be supported.

(3.) Section 19 of the Indian Arbitration Act is in these terms:-- "Where any party to a submission to which this Act applies, or any person claiming under him, commences any legal proceedings against any other party to the submission, or any person claiming under him, in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other steps in the proceedings, apply to the Court to stay the proceedings , and the Court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission end that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings."