ORDER
S.K. Jha, C.J.
1. On a difference of opinion between B. C. Varma, J. recorded on 13-2-1991 and that of R.D. Shukla, J. recorded on 24-6-1991, the case has come up before me.
2. The question for determination in this appeal is as to whether the legal proceedings (the suit) be stayed and the matter for adjudication be referred to an arbitrator, by invoking the power of the Court under Section 34 of the Arbitration Act, 1940 (hereinafter to be referred to as the Act). The Court below has directed that further proceedings in the suit be stayed and the dispute within the parties be referred to arbitration. The plaintiff preferred this appeal against the order of the trial Court. B. C. Varma, J. by his order dated 13-2-1991, was of the opinion that the appeal be allowed and the order dated 24-11-1987 passed by the lower Court staying the proceedings in the suit be set aside and the application under Section 34 of the Act be rejected, and the trial Court should now proceed with the suit in accordance with law. R. D. Shukla, J, by his order dated 24-6-1991, on the contrary, has recorded that there being no conscious participation in the proceedings in the suit, mere request for filing the power and the written statement should not be deemed to be a step in the proceedings, and that, therefore, the appeal be dismissed.
3. Shorn of all details, the facts which are admitted and on the basis of which this appeal can be decided are these:
On 29-4-1983, the plaintiff/appellant instituted the suit for recovery of Rs. 2,02,000/-. The appellant/plaintiff alleged in the plaint that there was no dispute between the parties as to the work done by the plaintiff; that there was no cause for defendants/respondents to withhold payment of the bills shown in Schedule-A who never disputed the payment of those bills and the plaintiff was assured of such payment. The suit was registered as Civil Suit No. 11-A of 1983 in the Court of District Judge, Rajnandgaon. The suit having been so filed, summons were directed to be issued by the trial Court to the defendants. On 3-8-1983, the defendants appeared after the writ of summons through Shri M. K. Shrivastava, Advocate who filed his memo of appearance. The order dated 3-8-1983 reads thus:
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4. On 6-9-1983, Shri K. N. Bhardwaj, appeared for the plaintiff. Shri M. K. Shrivastava, filed his vakalatnama in due form on behalf of the defendants. Learned counsel for the defendants also filed a petition for time for filing an application under Section 34 of the Act which was allowed; and 7-10-1983 was fixed for framing the issues. On 7-10-1983 the respondents filed an application praying for stay of the suit and for referring the matter to an arbitrator in accordance with the arbitration clause of the agreement. As had already been stated earlier, the learned District Judge allowed the application and stayed further proceedings in the suit. The plaintiff having appealed, Varma, J. held that the trial Court ought not to have allowed the prayer for stay of the suit whereas Shukla, J. held to the contrary.
5. On these facts, it has to be determined as to whether the defendants/respondents at any time before filing a written-statement or taking any other steps in the proceedings had applied to the Court for staying the proceedings. It is well settled that the term 'taking any other steps in the proceedings' connotes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy in the suit. The authorities on the point are legion. If any authority be needed for the purpose, suffice it to refer to the case of State of U. P. and Anr v. Janki Saran Kailash Chandra and Anr., AIR 1973 SC 2071. In the state of U.P., however, in all fairness, it must be stated that this was the law as it stood before the addition of the two Explanations after the main Section 34 of the Arbitration Act under the U. P. Civil Laws (Reforms and Amendment Act 57 of 1976) with effect from 1-1-1977 which inter alia added Explanation-II and laid down that a mere application for time to file a written statement or a mere contest to an interlocutory application for injunction for appointment of receiver or the like shall not amount to taking any steps in the proceedings. Nonetheless, the law as laid down by the Supreme Court in the case of M/s. Janki Saran (supra) dehors the amended provision which fact has been duly taken note of by the Supreme Court in a subsequent decision in the case of Rachappa v. Gurusiddappa, AIR 1989 SC 635 in paragraphs 8 and 9. The reason is obvious. The mere existence of an arbitration clause in an agreement does not by itself operate as a bar to a suit in the Court. It does not, by itself, impose any obligation on the Court to stay the suit or to give any opportunity to the defendants to consider the question of enforcing the arbitration agreement. The right to institute a suit for enforcement of a civil right in some civil Court or competent jurisdiction is a right inherent in a person under the general law which is incorporated in Section 9 of the Code of Civil Procedure. Such an inherent right can be limited or circumscribed by the Legislature only expressly or by necessary implication. A party to a suit can curtail such a general right of the plaintiff but has a heavy onus to discharge of establishing before the Court his right to do so by referring to any law. Such a law has to be strictly complied with for it is well settled that a civil Court is always jealous of protecting its right to deciding and adjudicating upon the civil disputes between parties before it once a party seeks shelter behind it for a relief. That is why the conditions, inter alia, laid down in Section 34 of the Act enjoin that a defendant praying for stay does not submit to the jurisdiction of the Court and presents an application for stay before taking any step in the legal proceedings i.e. the suit. The question to ask in such cases is as to whether the defendant has done something in aid to the progress of the suit or has submitted to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy. The legal proceedings in a suit, ordinarily and generally, commence by filing a plaint. A plaint or a written-statement is a pleading. Order VI, Rule 1 of the Code of Civil Procedure, hereinafter to be referred to as the Code, only puts it in black and white that a pleading shall mean plaint or written-statement and every pleading must contain a statement in a concine form of all the material facts on which the party relies for his claim or defence, as the case may be (Order VI, Rule 2). Where the plaintiff sues upon a document in his possession or power, he must, at the same time, deliver the document or a copy thereof to be filed with the plaint (Order VII, Rule 14). There being no averment or material to the contrary on the record, it has to be taken as granted that the deed of agreement on which the plaintiff/appellant has founded his claim, he had produced it in the Court along with the presentation of the plaint and had delivered the document or a copy thereof. When a suit has been duly instituted, a summons has ordinarily to be issued to the defendant to appear and answer the claim on a date to be therein specified. ...(Order V, Rule l(i) and a defendant to whom a summons has been issued may appear by a pleader duly instructed and able to answer all material questions relating to the suit. ....(Order V, Rule l(2)(b). Every summon has to be accompanied by a copy of the plaint or if so permitted by the Court, by a concise statement (Order V, Rule 2). The defendant shall in answer of the summons on the date fixed has to appear and he shall at or before the first appearance or within such time as the Court may permit present a written-statement of his defence (Order VIII, Rule 1). He must raise by his pleading all matters which show the suit not to be maintainable and all such grounds of defence as if not raised would be likely to take the opposite party by surprise, or would raise issues of fact not arising out of the plaint (Order VIII, Rule 2). It will, thus, be seen that the plaint having been annexed to the summons to be served to the respondents, for there is no case to the contrary, the respondents appeared on the date fixed and while so appearing, albeit through Shri M. K. Shrivastava, Advocate who had filed his memo of appearance, had in their possession a copy of the plaint which was supplied along with the summons and then had applied for time to file a written-statement. In other words, being in possession of the plaint alongwith copy of the agreement having an arbitration clause, the defendants/respondents had taken time to answer the claim through a lawyer by setting out the material facts on which they would rely for their defence. When a prayer for time was made on their behalf for filing a written-statement, it must be presumed that they were making a prayer for such time to set out the material facts which they wanted to plead and rely upon for their defence to the claim of the plaintiff/appellant. Can there he any doubt, then that the defendants/respondents were not conscious of the claim against them and of the defence that they would put forth by statement of material facts concisely in order to nonsuit the appellant/plaintiff? Can it be said that they had not acquiesced in and waived their objection to the jurisdiction of the Court? The answer to both the questions must be against the respondents/defendants. In such circumstances, the Court has to zealously guard against the usurpation of its power and ouster of its jurisdiction to try the suit on merits and to adjudicate upon the merits of the claim. The discretion of the Court under Section 34 of the Act in such circumstances cannot be exercised in favour of the respondents and the learned District Judge has, with all respect, not fully appreciated either the letter or the spirit or the raison d'etre of Section 34 of the Act.
6. When it is said that the applicant must have taken no other step in the proceedings after appearance at any time before filing a written statement, it is an universally accepted principle of law that such a step can be not taken by an authority notwithstanding his ignorance at the time of the existence of the arbitration agreement or clause. A party who makes an application whatsoever to the court, even though it be merely an application for time, takes a step in the proceedings. In that it evinces an unambiguous intention to contest the material facts necessary for adjudication of the claim on merits. Shri M. K. Shrivastava, Advocate, having put in his appearance on 3-8-1983 on behalf of the defendants/respondents and having made a prayer for time for filing a written-statement was conscious of the fact that he was seeking time to put forth before the Court the material facts in a concise form on which the defendants/respondents would rely for their defence in order to defeat the claim of the plaintiff/appellant.
7. It is settled law that each Court must find out from the context of each case whether a step has been taken in the suit which would disentitle the party from obtaining stay of proceedings. It is also well settled that such a step has displayed an unequivocal intention to proceed with the suit and must be a clear and an unambiguous manifestation of the intention to waive the benefit of arbitration agreement. Seeking an adjournment specifically for filing the written-statement and obtaining time for such a purpose is not only the time taken to consider whether a written-statement should be filed as a defence or not but was a clear manifestation to enter into the arena of controversy and have the matter decided by the suit. This obviously evinced the intention of the defendants/respondents to have the subject matter of controversy adjudicated upon by the Court thereby disentitling them to ask for stay of the suit.
8. Without multiplying decisions on the point, suffice it to refer to the cases of State of U. P. v. Janki Saran Kailash Chandra (supra) and Rachappa v. Gurusiddappa (supra). The decisions of the Supreme Court in Food Corporation of India v. Yadav Engineer and Contractor, AIR 1982 SC 1302 and Sadhu Singh Ghuman v. Food Corporation of India, AIR 1990 SC 893, do not lay down any law to the contrary. All that the Supreme Court has said in the case of Yadav Engineers (supra) is that the expression 'taking any other steps in the proceedings' must be given a narrow meaning in that the step must be taken in the main proceedings of the suit. It must be such step as would clearly and unambiguously manifest the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings. Taking any such step, it has been held, does not cover an application for the purpose of vacating an ex parte order of stay or discharging the order appointing a receiver or even modifying the interim orders passed in the suit before a written statement is filed. In that case, the suit was instituted on June 1, 1981, and a notice of motion was taken out purporting to be under Order 39, Rules 1 and 2 read with Section 151 of the Code for an interim injunction restraining the defendants from committing a breach of contract and from interfering with the working of handling and transporting of goods of the first defendant Corporation by the plaintiff during the pendency of the suit. A notice of motion of the interim application was served and was made returnable on the next day i.e. June 2, 1981 on which date the second defendant who was the District Manager of the first defendant Corporation appeared through an Advocate and prayed for time for 'reply argument to the plaintiffs application for temporary injunction.' This was held not to be embraced within the term 'taking any other steps in the suit.' The case was posted on June 3, 1981 for reply arguments in the temporary injunction matter awaiting the service on June 3, 1981 on which date the defendant invited the attention of the Court to the subsisting arbitration agreement and evinced its intention to have the dispute resolved by arbitration. So also in the case of M/f2s. Sadhu Singh Ghuman (supra), it was held that step in the proceeding should be a step to abandon the right to have the suit stayed and, therefore, should be a step in the aid of the progress of the suit. The step must be with a view to submit to the jurisdiction of the Court for the purpose of adjudicating the controversy on the merits. In M/s. Sadhu Singh's case, the defendant merely sought a direction from the court to the plaintiff to produce the original agreement and other documents so that a written-statement may be filed. It was, however, not stated that a written-statement would be filed and no step had been taken to submit to the jurisdiction of the Court to decide the case on merits. In such circumstances, it was held that the right to have dispute settled by arbitration had not been given a go-bye.
9. There is absolutely no conflict in the ratio decidendi of the cases referred to above. It is, by now, well settled that if an unequivocal intention is evinced to file a written statement which means putting forth material facts in defence of the plaintiffs claim, it amounts to an abandonment and waiver of the right of the defendant to have the matter settled through arbitration and is a clear manifestation of the intention to have the merits of the disputes or controversy decided by the Court which has otherwise plenary power and jurisdiction so to do. If on the contrary some step is taken for the purpose of knowing exactly what the claim is or for the purpose of obtaining a document before which a written statement can be filed which means before which material facts are pleaded in defence or a rejoinder to interim applications by way of contesting the claim to have an interim injunction or an order for appointment of a receiver is filed, it does not amount to taking any step in the suit for fighting out the claim of the plaintiff on merits or to have the claim adjudicated upon through the instrumentality of the Court and not through arbitration. That makes all the difference. An application for time to file a written-statement without anything further is a clear expression of an intention to plead all material facts for the purpose of contesting the claim of the plaintiff on merits before the Court where the legal proceedings are taken. Howsoever limited the meaning of the term 'taking any other steps in the proceedings' may be and even adopting the principle of ejusdem generis, the propositions as above mentioned are fully applicable to the facts of the present case and as already stated above, such principles admit of no exception.
10. For the reasons aforesaid, I respectfully agree with the view of B. C. Varma, J. and take a view contrary to that of R. D. Shukla, J. This appeal is accordingly allowed but without costs as per the majority view. The trial Court shall now proceed with the suit in accordance with law. Let the records of this case be sent down as the suit has been pending since 1983.