P L D 1969 Dacca 719 (PLP)

"In these circumstances, and for the reasons stated above, in my opinion, the applicant by doing what he did on January, 11, 1943, acquiesced in the filing of the suit and evinced an intention to fight it out." In the case before us we can never say that the defendants‑respon dents "evidenced an intention to fight it out, for on the date they appeared and prayed for time for filing written‑statement to the injunction, they did not even have a copy of the petition, for A' injunction, nor of the plaint. In the absence of these copies, it cannot be said that they acquiesced to the filing of the suit. In the case before Das, J. the defendants were aware of the contents of the plaint as distinguished from the case before us. It is true, it is pointed out that all the returns of the notices and the endorsement of the process‑server indicate service of notices but it is also true that the defendants appeared in the case without delay and complained about non‑receipt of a copy of the petition and in fact, they obtained on 15‑2‑68, a copy of the petition and the affidavit thereto from the plaintiff. It is stated in paragraph 6 of the affidavit filed on behalf of the defendants "That the plaintiff has supplied copy of the petition and affidavit on 15‑2‑68 to the defendants' Advocate from which the defendants have come to know that the plaintiff had included property in this suit which has already been referred to the arbitration." This affi davit was verified by defendant No. 1 on 17‑2‑

68. It has not been shown to us by learned Advocate for the appellant that the statements contained in paragraph 6 of the petition filed on 17‑2‑68 was ever challenged by him. We, therefore, accept the aforesaid statement and we find that the defendants‑respondents did not receive the copy of the petition for injunction and it was not, therefore, known to them that the properties in respect of which there was an agreement for arbitration was included in the plaint of the suit filed by the plaintiff. A party can never be said to have acquiesced in the filing of the suit unless the party knew about the subject‑matter. It is next argued by Mr. Mozammal Hoque that any step in the proceeding irrespective of any intention would constitute a step in the proceeding and in his opinion, a proceeding in the suit would include interlocutory matters as well. In the very case of Subal Chandra Bhar, on which reliance has been placed on behalf of the appellant, the test for finding out as to whether or not there was a step in the proceeding was laid down by Das, J. in the following terms: ‑ "Applying now the test deducible from the authorities referred to above, to the facts of the present case, I am satisfied that when the applicant by his counsel applied to the Court for obtaining time to file his affidavit‑in‑opposition and for leave to have inspection of the books and records he acquiesced in the method by the plaintiff for having the disputes decided, viz. by the Court and not by arbitration, and that he was quite content that the disputes should be fought out in Court. This conduct, to my mind, clearly implies a statement to the effect that the defendant would proceed to defend the action and would not insist on the right to have the disputes disposed of by arbitration." No such statement can be spelt out from the petitions filed by the defendants in the interlocutory matter in this case. Applying this test it would appear that the defendant in this case never indicated that they wanted to defend the action and as such we are not inclined to hold that the action taken by them would constitute a step in the proceed. Mr. Mozammel Hoque also relies on the decision of the Sind Chief Court in the case of Fleming Shaw & Co. v. Hail Yusuf Ellias (A I R 1917 Sind 12). It was held in that case that any application whatsoever to the Court, even though it might be merely an application for time it would be a step in the proceedings within the meaning of section 34 of the Arbitration Act, irrespective of the intention with which the application was made. In that case the suit was filed on the 16th August and on the 6th September the defendants appeared and applied for postponement on the ground that the document relating to the suit had to be discovered and the time allowed had been too short to permit of this being done. The facts of that case are clearly distinguishable from the present case. In that case it was not urged that the defendants were unaware of the subject‑matter of the suit. They wanted time to find out their document to contest the suit by filing written statement. An application for adjournment in that case in those circumstances was held to be a step in‑the proceeding. Next case relied on by the appellant is F. O. Murimal Santram v. M/s. Baransidas & sons and another (A I R 1935 Sind 62). In that case an application for postponement of the suit itself was made and that application was construed to be a stop in the proceeding. There was no such application in the case before us and this Sind case has also no application. In that case the defendants took various steps in the interlocutory matter relating to an injunction. The defendants, moreover, offered inspection and scrutiny of the books by the auditors in the injunction matter. In that case there was ready offer of inspection of the books of account which would indicate acquiscence in the proceeding. But the learned Judges in that case refused stay under section 34 of the Act on the ground that the defendants took steps in the interlocutory matter. The learned Judges found no difference between the proceeding in the interlocutory matter and the proceedings in the suit itself. We respectfully differ from the learned Judges when they say that the wording of the section 34 refers to the step in the proceeding and not a step in the suit. We have thought it fit to respectfully dissent from the view for the simple reason C that to hold otherwise would work injustice in a case like the one before us and that such an intention cannot be attributed to the Legislature. Mr. B. B. Roy Chowdhury who also addressed us during the temporary absence of Mr. Bhattacharjee, has placed his reliance in the case of Zalinoff v. Hammond ((1898) 2 Ch. D 92). In that case the defendants entered appearance and filed affidavits in answer to a motion for a receiver in an action for dissolution of partnership and it was held that filing of an affidavit in the matter of appointment of a receiver would not constitute a step in the proceeding within the meaning of section 4 of the Arbitration Act, 1884 corresponding to section 34 of our Act. In that case Stirling, J. observed as follows: ‑ "It seems to me that the mere filing of affidavits in defence to a motion for a receiver is not in the nature of an application to the Court, and consequently not a "step in the proceedings" within the meaning of the section. By such a step is meant a substantive step taken by a party. It may be that a very limited application to the Court such as taking out a summons for extension of time would be enough. That has been so decided in Ford's Hoten Co. v. Bartlett 1896 A C 1,

4. In Brighton Maine Place and Pier Limited v. Woodhouse (1893) 2 Ch. 486, before North, J., the motion was ordered to stand over‑ to the trial, and it does not appear whether affidavits had been filed or not. But I do not think in this case the defendant has taken a "step in the proceedings" within the meaning of the Act, and therefore I think I ought to make an order in accordance with the application. That being so, the motion for a receiver will stand over, for it may be useful hereafter, until after the arbitrator has decided all questions in the action, of which this may be one." The above observation fully applies to the facts of the case before us. Reliance has also been placed on behalf of the respondents on the case of Sansarchand Deshraj v. State of Madhya Pradesh. In that case it was observed: ‑ "Thus it is clear that when a party asks for interim relief by way of an appointment of a receiver or by issue of an injunc tion, that is no ground for refusing stay of the suit. To ask the Court to vacate the injunction order passed by it and to request that proceedings in the suit may be stayed under section 34 of the Act are not self‑contradictory or inconsistent of steps. It is clear that the interlocutory application for the appointment of a receiver or for granting of an injunction does not necessarily amount to a proceeding in the suit. Further, mere filing of a reply to any such application does not, in our view, indicate that there is in effect abandonment of the proposal to have the subject of the cause disposed of by arbitration." Mr. Muzammel Hoque learned Advocate for the appellant frankly concedes that a Division Bench decision of this Court in the case of Badsha Meah Sowdagar v. Nurul Haq and others (P L D 1967 Dacca 250) supports the contention of Mr. Bhattacharjee that an intention is a relevant consideration in disposing of an application under section 34 of the Act. In that case the learned Judges observed as follows: ‑ "The primary duty of a Court is to look into the facts of the case fairly and squarely and then to decide whether the conduct of the applicant is such as would amount to a parti cipation in the suit itself or an indication of acquiscence in its proceedings. If so, an application under section 34 would be barred for the simple reason that a party is not allowed to ask for staying the proceeding when he has clearly and willingly participated in them in a manner which can be construed acquiescence therein. If he intends to enforce an arbitration clause, he must do it at the earliest possible moment. If his conduct is such as would indicate that he has acquiesced in the suit, he is shut out from claiming the benefit of section 34 of the said Act." In the facts and circumstances of this case we are clearly of opinion that the defendants never acquiesced in the suit and never took a "step in the proceeding" within the meaning of section 34 E of the Arbitration Act and they are, therefore, entitled to an order of stay as prayed for by them and the learned Judge properly exercised his discretion in staying the suit. In the result, the appeal is dismissed with costs and the order of learned Subordinate Judge is affirmed. The connected rule has become infructuous and it is discharged without any order as to costs. A. H. KHAN, J.‑I agree. K. B. A. Appeal dismissed.