A party seeking a stay of a civil action under Section 34 of the Arbitration Act, 1940, must demonstrate readiness and willingness to do all things necessary for the proper conduct of the arbitration. Conduct that repudiates the arbitration agreement, such as instituting a suit to supersede the agreed-upon arbitration procedure, negates such readiness and willingness.

P. A. CHOWDARY, J.

( 1 ) THE appellant was one of the defendants in O. S. No. 1045 of 1980 on the file of the VI addl. Judge, city civil Court Hyderabad. That suit was filed by the A. P. State Electricity Board for recovery of a huge sum of Rs. 60 lakhs and odd from the appellant as due towards damages for failure to perform a contract entered into by the appellant with the A. P. state Electricity Board on 15-5-1978 agreeing to supply electrical transformers that agreement concluded between the A. P. state electricity Board on one hand and the appellant on the other provided for claiming payment up to Rs. 2 lakhs by the punjab national Bank, Bhuvansewar, orissa state towards damages which will become payable by the appellant in the event of his committing breach of that agreement the A. P. state electricity Board had therefore sued both the appellant in the event of his committing breach of that and the punjab national Bank, Bhuvaneswar for damages for the nonperformance of the agreement dt 15-5-1978 and also for the relief of a decree against the punjab national bank for recovery of Rs. 2 lakhs the appellant had filed I. A. No. 1369/80 under S. 34 of the Arbitration Act, 1940 seeking stay of the trial of the above-mentioned O. s. No. 1045 of 1980 on the ground that the matter of dispute between the state Electricity Board and the appellant forming the subject of controversy in O. s. No. 1045 of 1980 should only be resolved and decided in the arbitration as provided for in the agreement between the parties entered into on 15-5-1978. That application was dismissed by the VI Additional Judge. City civil Court, Hyderabad on 14-9-1981 against which this appeal has been filed,

( 2 ) THE lower Court, in refusing to stay the trial of the suit filed by the state electricity board and in dismissing the above mentioned I. A. No. 1369 of 1980, took into account the fact that the appellant herein had first filed O. s. No. 95 of 1979 on the file of the subordinate Judges Court Bhuvaneswar for a declaration and a permanent injunction restraining the state Electricity Board from encashing the bank guarantee and subsequently filed O. S. No. 101 of 1979 for a reference of the dispute between the appellant and the state Electricity board to a single arbitrator to be appointed by the Court the lower Court considered these acts of commission on the part of the appellant as constituting justification for refusal to stay the trial of the suit filed by the state electricity Board on the ground that the appellant was not ready and willing to do all things necessary for the proper conduct of the arbitration. The lower Court referred to and relied upon several decisions of the Supreme Court but mainly followed a decision of this Court in Easun Engineering co. V. Andhra pradesh state Electricity Board (1977 ALT 734 ).

( 3 ) IT is now argued for the appellant that the lower Court has erred in refusing to stay the trial of the above mentioned O. S. No. 1045 of 1980. It is said that, where the subject matter of a suit is governed by an arbitration clause the Court should normally direct the parties to settle their disputes through an arbitration, as agreed to and that therefore refusal to stay a suit filed by one of the parties in civil Court for the settlement of the same dispute should not be the rule but should be an exception. The exceptional circumstances, according to the argument of the learned counsel for the appellant that would justify such a refusal are those where the parties seeking stay of the trial of the civil action had forsaken the arbitration agreement inasmuch as the appellant was not only ready and willing but was even anxious to go through the arbitration, it was said the lower courts judgment should be reversed. It may be mentioned that the appellant, after he had filed O. S. No. 95 of 1979 had also instituted O. S. No. 101 of 1979 on 27-8-1979 for appointment of a single arbitrator by the Court. That has been cited by the appellant i

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