1. This is an appeal from the judgment of my learned brother Mr. Justice C.C. Ghose. The order of the learned Judge was made on the 8th January 1924, whereby he dismissed an application made by the Karnani Industrial Bank under Section 19 of the Indian Arbitration Act that the suit in question should be stayed.
2. The circumstances of this case, as far as my experience goes, are certainly out of the ordinary.
3. It appears that the suit in question was brought by Satya Niranjan Shaw and another for arrears of rent, mesne profits, damages and other reliefs against the Bank which was holding certain premises under a lease granted by the Plaintiffs. The summons was served upon the. Defendant Bank and the Bank entered appearance on the 19th of November last year. It then appeared that the Bank had brought a suit against one of the Bank's sub-tenants; and the learned Judge, apparently thinking that it was desirable that these two suits should be disposed of at or about the same time, made an order that the suit against the Bank by the Plaintiffs and the suit by the Bank against the sub-tenants should be placed in the daily list before the learned Judge to be mentioned. On the 22nd of November those two suits were placed in the learned Judge's daily list; and, then what happened may be taken from the affidavit which has been filed on behalf of the Plaintiffs. Mr. H.D. Bose on behalf of the Plaintiffs mentioned this suit to the Court when Mr. Justice Ghose asked the learned Counsel appearing for the Defendant Bank when his clients would file their written statement, whereupon the said learned Counsel asked for a certain time, but the learned Judge directed that the Defendant Bank should file their written statement on Monday following, i.e., on the 26th November, and the learned Counsel for the Defendant thereupon pressing for a little longer time, the Court ordered the defendant Bank to file their written statement by Wednesday following, i.e., on the 28th November and also made a cross order for discovery by Friday following, i.e., to say on the 30th November and also an order for inspection. The learned Judge summarised the proceedings as follows : - ' This case was set down on the list on a particular date last month to be mentioned. Counsel on behalf of the present applicant appeared and informed me that no written statement had been filed. Upon that there was a discussion as to how much time was wanted for the purposes of filing the written statement. Learned Counsel asked for a longer time than I was prepared to give and ultimately I allowed a certain period to the applicant to file his written statement and there was cross order for discovery.'
4. In my judgment the question in this case depends upon whether the application by the learned Counsel for the Defendant Bank for further time to file the written statement under the circumstances, which I have mentioned, amounted to 'taking a step in the proceedings' within the meaning of Section 19 of the Indian Arbitration Act. The section provides that the party against whom any legal proceedings have been taken may at any time after appearance and before filing a written statement or taking other steps in the proceedings, apply to the Court to stay the proceedings. The notice of the application in the present case was served on the 3rd of December and the date for which the notice was given was the 10th of December. I do not see how it is possible for us to hold that the application which the learned Counsel for the Defendant Bank made for further time to file the written statement was not a step in the proceedings. The learned Advocate-General appearing for the Appellant Bank has pointed out that the suit was put on the list at the instance of the learned Judge and it was the learned Judge who in the first instance asked the learned Counsel what time he would require for the written statement. However, if the Bank were intending to object to the jurisdiction of the Court and were intending to make an application to stay the suit on the ground that the matter should be referred to arbitration, the proper answer to the learned Judge's question for the learned Counsel would have been that the Bank did not intend to file any written statement, inasmuch as they were going to apply for a stay of the suit and that they did not desire to take any step in the proceedings. With respect to that the learned Advocate-General has stated that the learned Counsel was not aware of the facts and was not properly instructed. The answer to that is that if that were so, the learned Counsel ought to have applied for an adjournment before taking any step at all, but he did in fact apply for further time to file a written statement. I am unable to say that that was not taking a step in the proceedings. It may be said in a sense that the learned Counsel was unexpectedly put into a somewhat awkward position and that the point is a technical one. On the other hand, the position is governed by the words of the section and the only question at issue at the present moment is whether the dispute between the parties should be tried by, arbitrators or by a Judge of the Court. For these reasons in my judgment this appeal should be dismissed with costs.
5. I agree.
6. The point is a technical one and I see no escape from the words of Section 19 of the Act. The party who appears by Counsel in a suit and applies by such Counsel for time to file a written statement appears to me to be taking a step in that suit. The case differs in that respect from the case of Ives & Barker v. Willans (1894) 2 Ch. 478 to which we were referred, where there was no such application. It is quite true that the step here was taken before a copy of the plaint was received; but surely the concise statement of claim which had been received coupled with the notice to quit the premises which had also been received should have put the Defendant Bank on their guard. They knew of course all about the arbitration clause in the lease and, after all, if the point is a technical one, we are not deciding the dispute between the parties on the merits; the only question now is whether the dispute should be tried by the Court or by arbitrators.