A.P.V.Engineering Company vs State of J & K

(1) In civil suit No. 48 of 1966 for recovery of Rs. 2239631 instituted on 31101966 the defendant has made an application under Section 34 of

the Arbitration Act praying that proceedings in the suit be stayed and the matter in dispute be referred to arbitration interims is of the arbitration

clause contained in the agreement which the basis of the suit.

(2) The application has been contested by the plaintiff mainly on the ground that the defendant having taking ""a step in the proceedings"" the suit

cannot be stayed.

(3) For a proper appreciation of the matter, a few facts material for the purpose of this application may be stated.

(4) Pursuant to a summons from the court, the defendant appeared through Mr. A. K. Malik, on 27467 and asked for time to file the written

statement. The prayer for adjournment was granted and the defendant was directed to file the written statement on or before 10th June 1967. The

matter could not, however, be taken up on 10th June 1967 and on its coming up before the court on 12121967, Mr. Karim submitted that as

there was a fair prospects of settlement of the case outside the court, he might be given an opportunity to finalise the settlement. While granting the

opportunity sought for and adjourning the case at the request of Mr. Karim, it was observed that in case the settlement was not arrived at between

the parties, by 12168, the State must file the written statement on that dare on 12168 a request for time to file the written statement was again

made when the following order was passed.

(5) ""Mr. Karim appearing for the defendant submits that he has not been able to file the written statement as some papers which were expected

from Srinagar have not been received due to blockade of road on account of snow fall. He requests for further time for filing the written statement.

The request for adjournment is not opposed by the learned counsel for the plaintiff. The written statement shall be filed by the defendant by the end

of February 1968 and the case put up for further proceedings on 1st March 1968 as agreed to by the learned counsel for the parties."" Instead of

filing the written statement within the time, granted by the aforementioned order, the defendant made the present application under section 34 of the

Arbitration Act on the 28th February 1968.

(6) From the resume of the facts, given above, it is abundantly clear that time for filing the written statement was sought for and given at least on

2741967 and 1211968.

(7) The main question for determination in this case is whether the application under Section 34 of the Arbitration Act has been made by the

defendant without taking any other step in the proceedings. It is well recognized that asking for time to file the written statement does amount to

taking such a step. Reference in this connection may be made to an authority reported in (1896) A. C. where it was held as follows by the House

of Lords :

Where a defendant takes out a summons and obtains an order for further time for delivering his defence he takes step in the proceedings within

the meaning of the Arbitration Act, 1889, Section 4 and is not afterwards entitled to apply under that Section for a stay on the ground that

proceeding were brought in respect of a matter agreed to be referred.''

This authority was followed in 34 Calcutta, 443, 40 Indian Cases 81, 155 Indian Cases 895 and AIR 1955 Allahabad 24. ;

(8) Again in AIR 1949 Allahabad 61 their Lordships of Allahabad High Court have observed as follows:

An application for time to file written statement is a step in the proceeding within the meaning of Section 34.

The following observations made in AIR 1954 Nagpur, 322 may also be reproduced herewith advantage :

Making an oral application for time to file a written statement is undoubtedly taking a step in the proceedings. It is not necessary that the necessary

step in the proceedings must be taken by a written application.

(9) Reference in this connection may also be made to a ruling of our own High Court, reported in AIR 1964 J&K 75.

(10) Examining the matter in the light of the principles set out above, I am of the opinion that the prayer for time to file written statement amount to

a step in the proceedings and the present application has not been made without taking such a step.

(11) Another contention of Mr. Malik that he was not aware of the arbitration clause and hence he con not be deemed to have taken a step in the

proceedings is met by an authority reported in Parker Gaines and Co. V/s Turpin (1918) I. K. B. 358, wherein it was held that a step will be

deemed to be taken by a party notwithstanding his ignorance at the time of the existence of the arbitration clause.

(12) Further contention of Mr. Karim that he had no authority to appear in the suit as no power of attorney had been executed in his favour by the

State also does not merit any consideration in view of the provisions contained in the Rules of the court as also the observations made in AIR 1964

J&K 75 (Supra). Whereas the Rules enjoin that it would be necessary for a Vakil to file his Vakalatnama, for appearance before a court, there is

no similar provision in respect of the Advocates.

(13) For the foregoing reasons, the application for stay of the suit cannot be granted and is hereby rejected. There shall, however, be no order as

to costs of this application.

(14) The defendant shall now file his written statement on or before the 17th August, 1968, on which date the case shall be listed for further

proceeding.