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TMI Blog1963 (3) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... JUDGMENT The Birla Cotton Spinning and Weaving Mills Ltd.- hereinafter called 'the Company'-supplied to the Union of India goods of the value of Rs. 1,06,670.89 nP. under a contract dated January 30, 1956 and received Rs. 93,727/- as part payment of the price. The Union declined to pay the balance of Rs. 12,943.89 nP. The Company then commenced Suit No. 386 of 1958 in the Court of the Senior Subordinate Judge, Delhi, against the Union of India for a decree for Rs. 10,625/- and Rs. 2, 762.50 nP. as interest from October 12, 1956 till date of suit and interest pendente lite and costs of the suit. The Company alleged that the Union had withheld payment of the balance of Rs. 12,943. 89 nP. on the plea that an amount of Rs.10, 625/- was due to the Union under another contract between the parties for a bulk purchase order No. PBI/ 7028-705 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any Statutory modification thereof shall be deemed to apply to and be incorporated in this contract. The arbitration clause is wide and includes not only disputes arising under the covenants of the contract but also to disputes under conditions general or special or in connection with the contract. But before an order for stay of a proceeding maybe made under s. 34 of the Arbitration Act, the following conditions must co-exist : (i) there must be a subsisting and binding arbitration agreement capable of being enforced between the parties ; (ii) the subject-matter in dispute in the proceeding sought to be stayed must be within the scope of the arbitration agreement and (iii) the petition must be made to the judicial authority by a party to the arbitration agreement or some person claiming under him at the earliest stage of the proceeding 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputes under conditions general or special or in connection with the contract. But before an order for stay of a proceeding maybe made under s. 34 of the Arbitration Act, the following conditions must co-exist : (i) there must be a subsisting and binding arbitration agreement capable of being enforced between the parties ; (ii) the subject-matter in dispute in the proceeding sought to be stayed must be within the scope of the arbitration agreement and (iii) the petition must be made to the judicial authority by a party to the arbitration agreement or some person claiming under him at the earliest stage of the proceeding 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 dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spute may be either in the acknowledgement of the debt or as regards the mode and time of satisfying it. In that case the Court held that the defence of the applicant applying for vacating the award was that he was not under any obligation to pay the amount due. This is clear from the observation made on 1). 540 where the learned judge observed : x x x but in truth the petitioner's later letters to the Chamber, his petition itself in paragraphs 5, 6 and 12, paragraph 6 of the affidavit filed in this behalf in reply all show conclusion that he was withholding payment under a claim of right so to do. That the claim has little substance makes his case so much the worse. The Union is however not seeking to withhold payment under a claim of right so to do. What the Union contends is that under the contract they are liable to pay the 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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