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Issues Involved:
1. Validity of service of summons. 2. Whether the defendant took a step in the proceedings by applying for a copy of the plaint and for leave to enter an appearance. 3. Application for stay of proceedings pending arbitration. Issue-wise Detailed Analysis: 1. Validity of Service of Summons: The defendant contended that the summons was never properly served. The plaintiff alleged that service was effected by substituted service on two occasions. The first alleged service involved the plaintiff's gomasta and the Sheriff's peon attempting to serve the summons at 33, Armenian Street, but failing to effect personal service. The summons was then affixed to the outer door. The court held that this mode of service did not comply with Order V, Rule 17, as the plaintiff did not use reasonable diligence to ascertain the defendant's whereabouts, particularly since no attempt was made to serve at 2, Turner Road, Chitpore, where the defendant was also known to reside or conduct business. The second alleged service took place at 102, Clive Street, where the defendant was sometimes found. Even assuming the defendant was present and refused service, the court found the service inadequate because the summons was only affixed to the outer door without evidence that 102, Clive Street was where the defendant ordinarily resided or carried on business. The court concluded that the necessary preliminary steps were not taken to justify substituted service, thus the service was invalid. 2. Whether the Defendant Took a Step in the Proceedings: The plaintiff argued that the defendant took a step in the proceedings by applying for a copy of the plaint and for leave to enter an appearance. The court referenced Section 19 of the Arbitration Act (IX of 1899) and similar provisions in the English Arbitration Act, 1889, stating that a step in the proceedings means something in the nature of an application to the court, not mere communication between solicitors or seeking information. The court held that applying for a copy of the plaint was merely to seek information to understand the plaintiff's claim and did not indicate acquiescence in the litigation process. Regarding the application for leave to enter an appearance, the court noted that such an application is necessary to fulfill a condition precedent to applying for a stay of proceedings under Section 19. Thus, it did not constitute a step in the proceedings that would prevent the defendant from seeking a stay. 3. Application for Stay of Proceedings Pending Arbitration: The suit was brought to recover damages for the defendant's alleged failure to deliver hessian cloth under two contracts with arbitration clauses. The court noted that the claim fell within the arbitration clause, and the defendant was ready and willing to refer the matter to arbitration. The court emphasized that Section 19 of the Arbitration Act allows the court to stay proceedings if the conditions are met, and the defendant must apply for a stay after appearance and before filing a written statement or taking any other step in the proceedings. The court concluded that the defendant's application for leave to enter an appearance was not a step in the proceedings within the meaning of Section 19. The intention of the Legislature was to avoid unnecessary litigation costs and to enforce arbitration agreements promptly. The defendant's conduct did not indicate an intention to litigate the merits but rather to object to the litigation itself. Therefore, the court granted the defendant's application, staying the proceedings to allow arbitration per the agreement. Conclusion: The court held that the service of summons was invalid, the defendant did not take a step in the proceedings by seeking a copy of the plaint or applying for leave to enter an appearance, and granted the stay of proceedings pending arbitration. The defendant was awarded taxed costs of the motion.
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