Sri. Arjun Prasad and Another vs Nutan Savera Sahkari Grih. and Nirman Samiti Ltd. and Others

S.N. Pathak, J.—This appeal is directed against the order dated 7.3.95, Whereby the trial court stayed the proceeding of the title suit No. 346 of 1994 for reference of the dispute to the Arbitrator u/s 34 of the Arbitration Act.

It was submitted by the Appellants lawyer that admittedly there was an agreement between the Appellants and the Respondents for construction of certain house. However, Clause 19 of the agreement stipulated that in case the house plan is submitted to the P.R.D.A. and it is not approved within six months from the date of its submission, the contract shall stand terminated. Of course, there was Clause 10 of the agreement to the effect that disputes elating to the construction, payment of Instruction money etc. shall be referable of an Arbitrator; but the petition filed by the Respondents before the court (Annexure-(sic) on the basis of which the proceeding of the suit was stayed and the parties were corrected to take steps for reference to an arbitrator, did not refer to any dispute. u/s 34 of the Arbitration Act unless there is a dispute, the proceeding the suit cannot be stayed for reference of the Arbitrator. u/s 34 of the Arbitration Act, suit can be stayed only when there is dispute referable to the Arbitrator arising out of a contract. Unless there is such a dispute, proceeding of the suit cannot be stayed u/s 34 of the aforesaid Act. The petition under reference (Annexure-1) did not refer to the dispute arising between the parties relating the contract. So, the impugned order was passed, perhaps, erroneously and without application of the judicial mind to the provisions of law as contained in Section 34 of the Arbitration Act. I am, therefore, of the opinion that the impugned order should not be allowed to stand in the present form.

In the result, this appeal is allowed and the impugned order is set aside.