Judgment

GAJENDRAGADKAR, J. : The respondent Pothan Joseph who was working as the Editor of the Deccan Herald owned and published by the appellant. The Printers (Mysore) Private Ltd., in Bangalore has filed a suit against the appellant on two contracts excluded between the parties on April 1, 1948 and February 20, 1953, respectively, and has claimed accounts of the working of the Deccan Herald newspaper from April 1, 1948 to March 31, 1958, as well as payment of the amount that may be found due to him from the appellant under the provisions of Cls. 2 (d) and 1(d) of the said contracts. The services of the respondent were terminated by the appellant by its letter dated September 28, 1957, in which the respondent was told that the termination would take effect from March 31, 1958. However, by a subsequent letter written by the appellant to the respondent on March 17, 1958, the respondent was told that his services had been terminated with immediate effect and he was asked to hand over charge to his successor Mr. T. S. Ramachandra Rao. Thereafter on July 14, 1958, the respondent filed the present suit against the appellant.

2. The appellant contended that the two contracts on which the respondents claim was based were subject to an arbitration agreement, and so it was not open to the respondent to file the present suit against the appellant. The appellant, therefore, requested the Court under S. 34 of the Indian Arbitration Act, 1940 (hereinafter called the Act) to stay the proceedings initiated by the respondent and refer the dispute to arbitration in accordance with the arbitration agreement between the parties.

3. The learned trial Judge who heard the appellant s application, however, exercised his discretion against it and refused to stay the proceedings in the respondent s suit. Thereupon the appellant preferred an appeal in the Mysore High Court but his appeal failed and the High Court confirmed the order passed by the trial Court though for different reasons. The High Court, however, thought that the learned trial judge, in dealing with the appellant s application "had gone much further than he should have done, and hence it was desirable that the case should be tried by some other Judge". The respondent did not object, and so the High Court directed that the suit may be transferred to the file of the Additional Civil Judge, Bangalore. The appellant then applied to the High Court for a certificate. His application was, however, rejected on the ground that the decision under appeal could not be considered as a judgment, decree or final order under Art. 133(1) of the Constitution; on that view it was though unnecessary to decide whether on the merits the case was fit to be taken in appeal to this Court. Then the appellant applied for and obtained special leave from this Court. That is how this appeal has come before us; and the substantial point which arises for our decision is whether the Courts below were in error in refusing to stay the suit filed by the respondent against the appellant in view of the arbitration agreement between them.

4. Before we deal with the merits of the contentions raised by the parties in this appeal it is necessary to set out briefly the relevant facts leading to the present litigation. The appellant is a printing company and it owns and publishes the Deccan Herald in English and Prajavani in Kannada at Bangalore. By a contract dated April 1, 1948, the appellant engaged the respondent as Editor of the Deccan Herald for a period of five years on terms and conditions specified in the said contract. As provided by Cl. (5) of the said contract the period of the respondents employment was extended by another five years by a subsequent contract entered into between the parties on February 20, 1953. As we have already mentioned the services of the respondent came to be terminated abruptly on March 17, 1958. It appears that by his letter dated October 16, 1957, the respondent made certain claims against the