AI Drafter 
TaxTMI 
TaxTMI 
1963 (3) TMI 50
X X X X Extracts X X X X
X X X X Extracts X X X X
....028-705 dated December 16, 1949. The Company submitted that there was no such contract and the dispute raised in that behalf by the Union had been referred to the arbitration of the Officer on Special Duty, Directorate General of Supplies and Disposals and Shri Ramniwas Agrawala but had since been adjourned sine die by the arbitrators. The Union by petition dated May 19, 1959 applied under s. 34 of the Indian Arbitration Act for stay of the suit alleging that a dispute had arisen between the parties and there being an arbitration agreement which could be invoked under the circumstances and the Union being ready and willing to do all things necessary for the proper conduct of the arbitration under cl. 21 contained-in form No. WSB133. The Company resisted the petition contending that there was no dispute concerning the contract which was covered by any valid submission arbitration clause, and which attracted the application of s. 34 of the Arbitration Act. The subordinate judge held that before s. 34 could be invoked the suit must raise a dispute in respect of the matter agreed to be referred to arbitration and not independent of it and as no dispute was raised by the Union ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ceeding i.e. before the filing of the written statement or taking any other step in the proceeding. The judicial authority may, if these conditions exist, grant stay, if it is satisfied that the party applying is and has also been at all material times before the proceedings were commenced ready and willing to do all things necessary for the proper conduct of the arbitration and there is no sufficient reason for not referring the matter in accordance with the arbitration agreement. The evidence recorded by the Trial Court discloses that there was no dispute between the Company and the Union arising under the contract on which the suit was filed. The Union accepted liability to pay the amount claimed by the Company in tile suit. The Union still declined to pay the amount asserting that an amount was due from the company, to the Union under a distinct contract. This amount was not sought to be set-off under any term of the contract under which the Company made the claim. The dispute raised by the Union was therefore not in respect of the liability under the terms of the contract 'which included the arbitration clause, but in respect of an alleged liability of the Company un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d has also been at all material times before the proceedings were commenced ready and willing to do all things necessary for the proper conduct of the arbitration and there is no sufficient reason for not referring the matter in accordance with the arbitration agreement. The evidence recorded by the Trial Court discloses that there was no dispute between the Company and the Union arising under the contract On which the suit was filed. -The Union accepted liability to pay the amount claimed by the Company in tile suit. The Union still declined to pay the amount asserting that an amount was due from the Company to the Union under a distinct contract. This amount was not sought to be set-off under any term of the contract under which the Company made the claim. The dispute raised by the Union was therefore not in respect of the liability under the terms of the contract 'which included the arbitration clause, but in respect of an alleged liability of the Company under another contract which it may be noted had already been referred to arbitration. The Union had no defence to the action filed by the Company : it was not contended that the amount of Rs. 10,625/- was not due to the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... amounts due but they will not pay because they have another claim unrelated to the claim in suit against the Company. The decision of the Calcutta High Court in Chundanmull Jhaleria v. Clive Mills Co. Ltd. (I. L.R. (1948) 2 Cal. 297), on which also reliance was placed does not assist the Union. In that case the Court decided that an arbitration clause in a contract, by which the parties thereto agree to refer their disputes to arbitration; may be wide enough to include a dispute whether the contract itself has or has not been frustrated; but in the present case we are not concerned about any dispute relating to frustration of the contract. The principle of the decision of the House of Lords in Heyman v. Darwins Ltd. (L. R. [1942] A. C. 356), on which reliance was placed on behalf of the Union has also no application. It was held in that case that when an arbitration clause in a contract pro- vides without any qualification that any difference or dispute which may arise "'in respect of" or "with regard to" or "under the contract" shall be referred to arbitration, and the parties are at one in asserting that they entered into a binding contract, the clause will apply even if ....