' The plaintiff had filed a suit for specific performance of contract of sale and for a permanent injunction against defendant No,1. Defendant No,2 is only a pro forma defendant. According to the averments made in the plaint, the plaintiff had purchased the suit-land from defendant No,1 through an agreement dated 31st May, 1992 for a consideration of Rs,30,00,000 and at the same time he had paid Rs,25,00,000 as part-payment and the possession was delivered to him, the balance of Rs,5,00,000 was to be paid after the original title papers of defendant No,1 were handed over to the plaintiff. This exchange of the title documents was to be made within two weeks of 31st May, 1992. Since defendant No,1 did not deliver the title documents within the stipulated period, the plaintiff instituted the present suit. On 23rd August, 1992 injunction application under Order 39, Rules 1 and 2, C.P.C. filed by the plaintiff came up before the Court. In this application the plaintiff sought a temporary injunction till the disposal of the suit restraining defendant No,1 from evicting him from the suit-land. Notice of this application was issued to defendant No,1 who was also directed to maintain, in the meantime, status quo as to the possession of the suit-land. This application thereafter did not come before the Court for further action and on 24th September, 1992 defendant No,1 moved C.M.A. No,5699/92 in which he alleged that he had not sold the suit land to the plaintiff nor had executed any agreement of sale or received the alleged amount of Rs,25,00,000 by way of part-payment. He stated that there was no such thing as "land" because there was a fulfledged poultry farm on the land and he (defendant No,1) was running his poultry business and was in possession of the premises until 18th September, 1992 when Sultan Ahmad Baloch and Bacha Gul Khan, with the help of a number of persons including the plaintiff, had trespassed into the poultry farm and had forcibly occupied it. According to defendant No,1, the plaintiff is a non-entity and a man set up by Sultan Ahmad Baloch and Bacha Gul Khan. He has filed copy of plaint in Suit No,353/90 which he had filed against Sultan Ahmad Baloch, Bacha Gul Khan and others seeking a permanent injunction restraining Sultan Ahmad Baloch, Bacha Gul Khan and others from in any way trespassing on the poultry farm and in any way disturbing his possession. He also pointed out that the Official Assignee was appointed Commissioner to go at the site and make a report as to the prevailing position and it was after the report of the Local Commissioner that a temporary injunction was granted to defendant No,1 restraining the defendants of that suit from in any way disturbing the possession of defendant No,1 till the decision of that suit. This present application (C.MA. No,5699/92) was moved under Order 40, Rule 1, C.P.C. read with section 151, C.P.C. in which defendant No,1 has prayed for evicting the plaintiff and for the restoring the status quo ante and also for appointing him (defendant No,1) the receiver of the property till the decision of this suit.
Before issuing notice to the plaintiff the Official Assignee was again appointed Commissioner to visit the site and prepare an inventory of the property, including the birds, and also submit a general report as to the change in the site since his last visit as Commissioner on 30-7-1990 in Suit No,353/90. The matter came up before this Court on 29-9-1992 when learned counsel for the plaintiff appeared and sought time to file counter-affidavit to the application filed by defendant No,1. Report of the Official Assignee/Commissioner had also been received. The matter was adjourned for today for hearing. The plaintiff had, in the meantime, filed counter-affidavit to this application (C.MA. No,5699/92). Today defendant No,1 has filed his affidavit-in-rejoinder alongwith copies of the following documents:--
(1) Copy of letter, dated 26-9-1992 from S.S.P. East Karachi to Commander, 12 Indep. Armd Brd. Gp.
Malir Cantt.
(2) Copies of the cutting of various newspapers.
(3) Copy of F.I.R. dated 23-9-1992 recorded at P.S. Ibrahim Hyderi at the instance of Manager of the Poultry Farm of defendant No,1.
(4) Copy of pre-arrest bail application dated 27-9-1992 moved by six persons, including the plaintiff and the abovementioned Muhammad Sultan Baloch before Sessions Judge Karachi East.
(5) Copies of statements of witnesses in private complaint filed by defendant No,1 against the plaintiff and others (Annexures 5 to 7).
(6) Bailable warrants issued against the plaintiff and others in the private complaint instituted by defendant No,1.
(7) Defendant No,1 has also filed affidavits (Annexures 9 to 14) from persons who used to purchase poultry products from defendant No,1 in the past showing that they had made purchases from defendant No,1 till as late as 13th September, 1992 but on 19th September, 1992 they did not find defendant No,1 or his employees on the poultry farm.
' The last affidavit Annexure 14 is in respect of poultry feed sold by the deponent to defendant No,1 and according to the deponent the last sale was made by him to defendant No,1 in September, 1992.
2. Learned counsel of the plaintiff and of defendant No,1 have been heard.
3. It is an admitted position that defendant No,1 had obtained 30 acres of land on lease-hold rights from Deputy Commissioner, Karachi East on 21st March, 1983 for poultry farming as mentioned by the plaintiff himself in para. 1 of the plaint. After hearing the learned counsel of the parties, and going through the various documents placed on record I am satisfied that the plaintiff was not in possession of the suit property, which cannot be described as "land" because it is a full-fledged poultry farm and that the plaintiff had forcibly occupied it on 18th September, 1992 as claimed by defendant No,1.
4. This is not the stage to determine the genuineness or otherwise of the agreement of sale Annexure 'A' alleged to have been executed between the plaintiff and defendant No,1 although I cannot refrain from observing that the circumstances in which it is alleged to have been executed are indeed suspicious. There is no denying the fact that defendant No,1 was apprehending danger at the hands of Sultan Ahmad Baloch, Bacha Gul Khan and others and that is why he had filed Suit `No,353 of 1990. Annexure 'D/2' is the copy of the plaint in the said suit. If defendant No,1 had sold the suit-property to the plaintiff, the agreement of sale would have stipulated the withdrawal of the said suit because in that case that suit would have become infructuous but the said suit is still pending, as stated at the bar by learned counsel of the defendant No,1. This very person Bacha Gul Khan who is defendant No,6 in Suit No,353/90 was found present at the suit premises when the Official Assignee/Commissioner visited it on 24-9-1992 and his presence creates suspicion as to the genuineness of the agreement. However, as I have stated, these things are to be decided on the basis of the evidence to be recorded during the hearing of the suit. Here we are only concerned with the fact as to whether the plaintiff was in possession on the date of filing of the suit and as I have already noted above there is overwhelming evidence that it was not so.
5. Annexure D-5/a/1 to Annexure D-5/a/35 are the vouchers in respect of the sale made by the poultry farm which was known as Churamani Poultry Farm and they are for the various dates from 4th July, 1992 to 25th July, 1992. Then there are cash memos. in respect of poultry feed purchased by defendant No,1 in the name of the farm. These cash-memos. are Annexure D/5/B/I to Annexure D/5/B/33 ranging in dates from 1st June, 1992 to 8th September, 1992. These vouchers and cash memos. may not be reliable evidence showing the possession of defendant No,1 because it can be argued that these are manipulated documents. However, there are some other documents which cannot be so labelled. It appears that there were persons after the land of defendant No,1 and an application under the alleged signatures of defendant No,1 was submitted to the Chid Minister for the conversion of the land for residential to industrial purposes. A copy of this application, with the endorsement of the Member Land Utilization that Chief Minister desired to have the case processed and to have the summary submitted to him,-is on record as Annexure 'D/6'. The case of defendant No,1 is that he had never moved any such application and it was moved under his forged signatures. However, Deputy Secretary to the Chief Minister vide his letter, dated 15-8-1992 moved the Member Land Utilization Board of Revenue for preparing a case and for submission of a summary for conversion of this land to commercial/industrial purposes. It appears that defendant No,1 somehow came to know about it and vide his application dated 18th August, 1992 Annexure 'D/9', which was addressed to Mr. Atta Muhammad M. Memon, Deputy Secretary-V to Chief Minister, Sindh, Karachi, informed him that the said application was not given by him and that it bore his forged signatures. Annexure 'D/10' is a copy of written complaint dated 18th September, 1992 submitted by Maulvi Muhammad Ilyas Care-taker of Churamani Poultry Farm to S.H.O. Ibrahim Hydari Police Station, complaining that on that day Sultan Baloch and Fakir Muhammad Baloch alongwith about 100 persons, all armed with deadly weapons entered the farm and after beating him occupied the same. The grievance of defendant No,1 is that the police did not record the F.I.R. and did not take any action whereafter, on the very next day, defendant No,1 sent telegrams to the Chief Justice, Chief Minister, Corps Commander, Home Secretary, Inspector-General of Police and Commissioner, Karachi (Annexure 'D/11') incorporating verbatim the complaint Annexure `D/10'. On that very day (19-9-1992) the Manager of the Farm instituted private complaint No,220/92 in the Court of A.C.M. II, Karachi East against the trespass and illegal possession by eight persons named as accused, including the plaintiff who was shown as accused No,4. As I have already noted above, Annexure '1' to the rejoinder-affidavit filed by defendant No,1 is the letter, dated 26-9-1992 from S.S.P., Karachi East to the Commander 12 Indep. Armed. Brd. Gp. Malir Cantt. It appears that as the result of the complaints made by defendant No,1 to the Corps Commender, amongst others, the matter was referred to the Commander 12 Independent Group Malir Cantt. who, in turn, had referred the matter to S.S.P. East who held an enquiry and then apprised the Commander 12 Independent Brd. 'Group Malir Cantt. of the action taken by the police. By this time the police had also recorded the F.I.R. on 23-9-1992 (F.I.R. No,180 of 1992 of P.S. Ibrahim Haideri). It is disclosed in this letter that Sultan Ahmad and others had trespassed on the suit land on 18-9-1992 but since the matter was sub judice in this Court no action was taken by the:police. The newspaper cutting of Daily Dawn in its issue of 20th September, 1992 carries a news-item under the date September 19 about the alleged forcible occupation of the suit-property. It is impossible to believe that all this evidence was concocted by defendant No,1 to show his possession. However, the most important piece of evidence to establish that defendant No,1 was in possession till as late as 18th September, 1992, as claimed by him, is the report of the Official Assignee/Commissioner. It may be noted that Mr. Bashir Ahmad Memon, Official Assignee, was especially made Commissioner because he had visited the suit premises in 1990 also, when he was made Commissioner during the hearing of Suit No,353 of 1990 so that he could also point out to the Court any changes seen by him on the premises since his last visit. His report dated 27-9-1992 shows that he visited the suit premises on 26-9-1992 in the company of his staff. He states that one Shafiullah, representating defendant No,1, had accompanied him up to the place but refused to go inside with the Commissioner for fear of his life and stayed out. The. Commissioner found that there were 10 to 15 persons on the disputed property but plaintiff Sachal Muhammad was not one of them. Three of the persons found there disclosed their names as Saleh Muhammad, Ali and Bacha Gul. Thre was a mobile telephone on which Saleh Muhammad received a telphone-call from plaintiff and Saleh Muhammad duly informed the plaintiff about the visit of Official Assignee,. The Official Assignee also talked with the plaintiff and asked him to come to the place but he refused to come and asked Official Assignee to complete his enquiry. This report shows that the plaintiff himself was not present there but one of the defendants in Suit No,353 of 1990, namely, Bacha Gul Khan, was there. This would rather suggest that the plaintiff is closely connected with the defendants of that suit. The Official Assignee/Commissioner found 7 sheds, 12 small-roomed quarters, 3 store type rooms, 1 office block and 1 library room, 1 electric sub station, 1 water reservoir, 1 ground tank, 1 over-head tank, 1 mosque and one thatched hut. All the sheds were found empty and there were no birds. The Commissioner also did not find any books whereas in July, 1990 he had found large number of books. The Commissioner also found that the mosque and northern wall of the land from inside were freshly white-washed and that the over-head tank showed that the name "Sachal Poultry Farm" was freshly painted. The Commissioner also found that on the Eastern side of the disputed land a lengthy wall was under construction and large construction materials like cement, bricks, Bajri, etc., were lying on the ground and a Chowkidar's room was also under construction. It was also found that the office block was occupied by the families. A thatched but was freshly built and was used as an Otaque and the iron fencing on Western side of the disputed land, which was found by the Commissioner on his first visit in 1990, was missing now. If the plaintiff had been in possession since May, 1992, he would not have only recently painted the name "Sachal Poultry Farm" he would have done so long ago. There is every evidence that Churamani Poultry Farm of defendant No,1 was a well-developed farm which was selling poultry products to the tune of something like more than Rs,20,000 a day and was purchasing poultry feed in bulk quantity as evidenced by copies of cash- memos. and other vouchers already referred to above but the Commissioner did not find a single bird on the premises which shows that wanton distruction had been perpetrated on the farm.
According to learned counsel of the plaintiff, Sultan Ahmad Baloch is not a party in the present suit although he was a party in the previous suit filed by defendant No,1 being Suit No,353 of 1990 and, therefore, the previous suit is not in any way relevant to the present dispute. I am of the view that the previous suit is very much relevant because it discloses that a group of persons were bent upon dispossessing defendant No,1 in an illegal manner and out of the defendants of that suit at least one (Bacha Gul Khan) was found on the premises when the Official Assignee/Commissioner visited the place on 26-9-1992. Learned counsel of the plaintiff then argued that a lot of time has passed between 23-8-1992, when the suit had come before this Court for the first time and status quo order was passed, and 24-9-1992 when defendant No,1 approached this Court for the first time and on that account a lot of changes may have taken place in the meantime and, therefore, the possession of defendant No,1 on 18-9-1992 cannot be inferred. I have not been able to follow the logic of this argument. Evidently, after obtaining the status quo order on 24-9-1992, the plaintiff and other persons behind him must be waiting for an opportunity which they found on 18-9-1992.
6. Learned counsel of the plaintiff also stated that the plaintiff has filed objections to the report of the Commissioner. However, "the objections" which are appended to the counter-affidavit filed by the plaintiff to C.M.A. No,5699 of 1992 (which is entitled as "rejoinder") hardly say anything against the report of the Commissioner. It is just the narration of the facts which had already been given by the plaintiff in the plaint as well as in his counter-affidavit. In any case, learned counsel could not point out any material irregularity committed by the Commissioner while undertaking the inspection of the disputed premises or while preparing the report. I, therefore, have no hesitation in accepting the report and placing the same on the file.
7. It may also be noted that there is an electric sub-station on the premises. At any rate, there is electric connection. If the plaintiff had been in possession since 31st May 1992, he should have paid electricity bills for the month of May 1992 onwards but he has not been able to produce even one single electricity bill. This further goes to show that the plaintiff was not in possession of the disputed premises since 31st May, 1992.
8. For the above-noted reasons I would hold that when the status quo order was passed by this Court on 23-8-1992, the plaintiff or for that matter anyone else was not in possession of the suit- premises and that defendant No,1 was in possession and continued to be so until 18th September, 1992 when he was dispossessed.
9. It is now to be decided as to whether defendant No,1 should be made receiver of the suit premises and possession be delivered to him or any other appropriate order should be passed.
10. Learned counsel of the plaintiff vehemently argued that a party to the suit cannot be made receiver of the suit property. He did not show any reported judgment in support of his view but after the conclusion of the hearing he has submitted certain books and stated that it is laid down in them that a party to the suit cannot be made a receiver. I have gone through these judgments which are noted below:--
(1) PLD 1977 Kar. 280 Asghar Ali v. Abdul Hussain and 3 others.
(2) PLD 1978 Kar. 401 Yakhtiar Khan and 2 others v. Rahim Bux and 2 others.
(3) 1982 CLC 1044 Mst. Salma Zaheen and another v. Anwar H. Pirbhai and 6 others.
(4) PLD 1973 Kar. 491 Muhammad Ismail Ali Charan v. Pakpor Ceramics Ltd.
(5) PLD 1977 Lah. 830 Mst. Ghulam Zainab and 7 others v. Mst. Tahira Sultana and 3 others.
(6) PLD 1978 Kar. 1093 Motherwell Bridge Contracting & Trading Co. Limited v. Riaz Ali Khan.
(7) 1985 CLC 2600 Rais Tayyab and 2 others v. Raza Muhammad and another.
(8) PLD 1975 Lah. 492 Sardar Wali Muhammad v. Sardar Muhammad lqbal Khan Mokal.
10-A. None of the above-noted judgments lays down the law that a party to the suit should not be appointed a receiver. All these judgments, however, lay down the principles which should be kept in mind by the Court while appointing a receiver in respect of the suit property and the general principle governing the appointment of a receiver is that if it is alleged, and shown to the satisfaction of the Court, that a party to the suit, which is in possession of the suit property, is wasting it to the detriment of the interest of the other party which has a good prima facie case as to its entitlement, then a receiver should be appointed. I would, however, not go into the details of the principle laid down in these judgments because 1 am of the view that it having been sufficiently shown to the satisfaction of the Court that defendant No,1 was dispossessed on 18-9-1992, after the plaintiff had obtained status quo order,lt is a fit case in which status quo ante should be restored and defendant No,1 should be put- in possession in his own right without being appointed receiver and, therefore, appointment of receiver is not necessary in the present case.
11. For the above-noted-reasons, I would decline to appoint a receiver for the suit property and would direct that defendant No,1 should be put in possession thereof so as to establish status quo ante as it existed on the date when the suit was filed as well as on the date when status quo order was granted as to the possession of the suit property. It is evident from the facts narrated in this order that the plaintiff is a desperate character and it is not likely that the possession could be restored to defendant No,1 by the bailiff without police aid and I would therefore authorise the Nazir to seek police aid if from the report of the bailiff it appeared that resistance is offered in the execution of this order.
12. This order disposes of C.M.A. No,5132 of 1992 as well as C.M.A. No,5699 of 1992.
Order accordingly.
1993 M D 1074 [Lahore] Before Ausaf Ali Khan, J M/s. AL-FARIDIA INDUSTRIES---Appellant versus M/s. ALFA INSURANCE COMPANY LID. and 4 others---Respondents F.A.O. No,24 of 1992/BWP, decided on 18th January, 1993.
Arbitration Act (X of 1940)-- ----S.34---Civil Procedure Code (V. of 1908), O.VIII, R.1---Stay of proceedings in suit for referring dispute to arbitration under S.34, Arbitration Act, 1940-,-- Prayer for adjournment for filing written statement on more than one date would not amount to "steps in proceedings" where application for stay of suit was filed by defendant before filing the written statement or taking any other "steps in proceedings"---Delay in submitting application under S.34, Arbitration Act, 1940, stood explained inasmuch as, service of defendants had completed on specified date, and thereafter, Presiding Officer went on long leave---Arbitration agreement between parties still subsisting and dispute raised in suit falling within scope of that agreement, order of Court to stay proceedings before filing of written statement, was unexceptionable. [pp. 1075, 10781 A & B Muhammad Idris and others v.
Tobarak Hussain PLD 1965 Dacca 260; G.M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore and 3 others PLD 1970 Lah. 184; Government of Balochistan and others v. Mir Qadir Bakhsh and Sons PLD 1978 Quetta 215; Ghulam Sarwar and others 'v. Mazharullah 1988 SCMR 310(2) And Pakistan Interpational Airlines Corporation v. M/s. Pak Saaf Dry Cleaners PLD 1981 SC 553 ref. M.M. Bhatti for Appellant.
Bashir Akhtar Khan for Respondents Nos.1 and 2.
Sh. Liaquat Majid and Malik Saeed Ijaz for Respondent No,3. Muhammad Shafiq Ch. for Respondents NoS".4 and 5.
Date of hearing: 13th January, 1993.
' The question that falls for determination in this first appeal (after having been converted from Civil Revision) is if the prayer for adjournment for filing written statement on more than one date amounts to taking "steps in proceedings" to disentitle the defendant to ask for stay of proceedings under section 34 of the Arbitration Act (X of 1940).
2. The appellant had sued the defendants for recovery of fifty-seven lacs forty-two thousand four hundred and seventeen rupees (Rs,57,42,417). The suit was brought on the 27th of February, 1990.
Service on the defendants, however, could be completed on the 20th of June, 1990. Request for filing written statement was made. The case was adjourned to the 1st of September, 1990, for the purpose. The learned Civil Judge was on leave on that day and he remained on leave till the 22nd of January, 1991, and the suit was adjourned on the intervening dates. On this date certain counsel appeared on behalf of the original counsel of the defendants and again the case was posted to the 9th of March, 1991, for submission of the written statement. On this date, an application under section 34 of the Arbitration Act (hereinafter referred to as the Act) read with section 151 of the Code of Civil Procedure, was submitted with a prayer to stay the proceedings for reference of the matter to arbitrator as per clauses 18 and 19 of the Insurance Policy Agreement. This petition was opposed by the appellant mainly on the ground that by seeking adjournments for filing written statement for a period of about one year, the defendants had forfeited their right to stay the matter.
3. The learned trial Court, by virtue of order dated the 2nd of December, 1991, impugned, in this appeal, spurned the objection of the appellant and stayed the proceedings till decision of the arbitration.
4. It need not be gainsaid that the Court before which proceedings are pending may make an order staying the proceedings if the condition inter alia is fulfilled that the application is made at any time before filing a written statement or taking any other step in the proceedings.
5. The learned counsel for the appellant has reiterated the contention, raised before the learned trial Court, that the act of seeking adjournments to file the written statement by the defendants amounted to taking "steps in proceedings" and, therefore, they shall be deemed to have submitted to the jurisdiction of Civil Court and waived their right to arbitration. In support of the contention the learned counsel relied upon the following precedents:
(1) Muhammad Idris and others v. Tobarak Hussain PLD 1965 Dacca 260;
(2) G.M. Pfaff A.G. v. Sartaj Engineering Co. Ltd., Lahore and 3 others PLD 1970 Lah. 184; Government of Balochistan and others v. Mir Qadir Bakhsh and Sons PLD 1978 Quetta 215;
(4) Ghulam Sarwar and others v. Mazharullah 1988 SCMR 310(2).
6. In the case of Muhammad Idris, the defendant had filed the petition under section 34 of the Act with the words "that the defendants will contest the suit instituted by the plaintiff and submit a written statement in the suit and in the prayer portion was stated:--- "It is, therefore, prayed that your honour would be pleased to grant an adjournment for filing of written statement in the interest of justice."
' The view taken was that the request was indicative of preparation for contest and the petitioner had submitted to jurisdiction of the Civil Court.
6. In G.M. Pfaff A.G.'s case, an application under Order XXXIX, rules 1 and 2, C.P.C., and section 53 of the Specific Relief Act was also filed alongwith the plaint. A "written statement" on behalf of the defendants was presented with preliminary objection about reference of the dispute to the arbitrators. In fact, what was submitted was a reply to the said injunction petition and not written statement. The objection of the plaintiff that the defendants had submitted to jurisdiction of the Court was repelled with the observations that there was a subsisting agreement between the parties to refer the dispute to arbitration, that the dispute raised in the litigation fell within the scope of that agreement, and that the application was filed before filing "a written statement or taking any other steps in the proceedings". An observation as obiter dicta was also made that such an application was after all a procedural matter and the rules of law relating to procedure have always to be construed so as to suppress the mischief and advance the remedy and are not to be utilized as clogs in the way of advancing the cause of justice. This ruling, in fact, goes against the appellant and favours the view taken up by the learned counsel for the defendants-applicants.
7. The facts of the Government of Balochistan and others' case are entirely different from the facts of the present one as Government Pleader appearing on behalf of the Government of Balochistan, defendant in that case, had sought several dates of hearing making several applications, requesting adjournments, applying for setting aside ex parte order, moving application under Order VII, rule 19, C.P.C. In such a situation the defendant was rightly held to have taken "steps in proceedings".
8. In the last case, the Supreme Court had upheld the order of the High Court disentitling the defendant to invoke arbitration clause and ask for stay of suit as "The High Court, on the basis of the evidence on the record, found that the petitioners had taken steps in the proceedings. In this short order the Supreme Court had not granted even leave to appeal.
10. The learned counsel for the respondents has defended the impugned order by making reference to the Supreme Court case Re: Pakistan International Airlines Corporation v. M/s. Pak Saaf Dry Cleaners PLD 1981 SC 553. In this case the Supreme Court fully illuminated the questions as to when proceedings are to be stayed to respect the arbitration clause and how the application and concomitant circumstances are to be examined to determine "steps in proceedings". The facts of the case were that on the date fixed for submission of written statement, the counsel applied for extension of time to file written statement on the ground that the Law Officer concerned, who was dealing with the case, had gone out of the country and was expected back by the end of the next month. On the next date the counsel again filed another application for extension of time on the ground that written statement could not be prepared due to the Officer Incharge being out of Karachi. A request was again granted and next date of hearing was fixed and in the meantime the party informed its counsel about existence of arbitration clause whereupon the learned counsel submitted the petition under section 34 of the Act for stay of the proceedings on the date fixed. The learned Judge of the High Court rejected the petition on the ground that the defendant in applying for the time to file the written statement had displayed submission to jurisdiction of the Court and had taken steps in the proceedings. The Supreme Court did not agree to this view and held that in the circumstances request for adjournment was not a step in proceedings. And so because non- submission of copy of agreement alongwith the plaint in suit had fundamentally contributed to the seeking of adjournment by the counsel and as soon as the party had drawn attention of its counsel to arbitration clause the counsel had filed the petition under section 34 of the Act. Here, it would be profitable to quote below the observation of the Supreme Court laying down the guidelines for dealing with such a situation:--- "In my opinion, the true test for determining whether an act is a step in the proceedings is not so much the question as to whether the party sought an adjournment for filing the written statement- --although of course that would be a satisfactory test in many cases---but whether taking into consideration the contents of the application as well as all the surrounding circumstances that led the party to make the application display an unequivocal intention to proceed with the suit, and to give up the right to have the matter disposed of by arbitration."
10. In the instant case, although the defendants had submitted the petition under section 34 of the Act after considerable time, yet the conduct could not be taken as palpable as to disentitle them to benefit of availing the arbitration clause. The service of the defendants in this case had completed on the 20th of June, 1990 and thereafter the learned trial Court remained on long leave. The order dated the 22nd of January, 1991, suggests that the learned Civil Judge had resumed the duties by that time and on that day the case was adjourned and posted to the 9th of March, 1991, for filing the written statement as requested by the learned counsel. On the 9th of March, 1991, instead of filing the written statement, the application in question was filed. Whether a particular act of the defendants amounts to a step in the proceedings is necessarily a question of fact and the Court while determining has to take into account the contents of the petition as well as the surrounding circumstances of the case. The learned trial Court was not far wrong in answering the question of fact in favour of the applicant. There was no evidence on the record that the appellant had tiled Insurance Policy Agreement alongwith the plaint under Order VII, rule 14, C.P.C., or that its copy was sent to the defendants or their counsel so that they could invoke the arbitration clauses 18 and 19.
The agreement appended with the application under section 34 of the Act expressly stipulated that reference to an arbitration was a condition precedent to any right of action or suit upon that insurance policy.
11. The upshot of the discussion is that there was a subsisting arbitration agreement between the parties, that the dispute raised in the present litigation fell within the scope of that agreement, and that the application under section 34 of the Act was made by the defendants before filing the written statement or taking any other "step in proceedings". The delay in submission of the application under section 34 of the Act stood explained. The impugned order of the learned trial Court to stay the proceedings in the circumstances is unexceptionable. The appeal, therefore, stands dismissed. The parties are, however, left to bear their own costs.