Step in the proceedings under arbitration law bars a stay application after authorised counsel seeks time to file a written statement.

A party seeking stay under Section 34 of the Arbitration Act, 1940 must apply before filing the written statement or otherwise taking a step in the proceedings. A step in the proceedings is an act in aid of the suit's progress showing submission to the court's jurisdiction on the merits. Where duly authorised Government counsel, after service of summons, asked for time to file the written statement and obtained the adjournment, that request was treated as a conscious step in the suit. The plea that counsel acted without instructions was rejected, and the stay application was therefore incompetent; the High Court's interference with the stay order was upheld.

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Issues: Whether an application by Government counsel for time to file a written statement amounted to taking a step in the proceedings so as to bar a stay of the suit under Section 34 of the Arbitration Act, 1940.

Analysis: The governing principle is that a party seeking stay under Section 34 must apply before filing the written statement or taking any other step in the proceedings. A step in the proceedings means an act done in aid of the progress of the suit and indicating submission to the court's jurisdiction for adjudication on merits. On the facts, the District Government Counsel had been served with summons and was a recognized agent authorised to appear and act for the Government under the Code of Civil Procedure, 1908. He sought time specifically for filing the written statement, and the State took the benefit of that adjournment. The request was therefore treated as a conscious step in the suit proceedings, and the plea that the counsel acted without instructions was rejected. The trial court's stay order was also not shown to rest on a proper exercise of discretion once the application itself had become incompetent.

Conclusion: The application for stay was incompetent because the defendant had already taken a step in the proceedings; the High Court rightly set aside the stay and the objection to interference failed.

Ratio Decidendi: A request for time to file a written statement, made by duly authorised Government counsel after service of summons, constitutes a step in the proceedings under Section 34 of the Arbitration Act, 1940 and bars a stay application filed thereafter.

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