A party who has taken steps in the proceedings in a suit is disentitled from applying for a stay of the proceedings under Section 34 of the Arbitration Act.

( 1 ) THIS appeal is directed against the order of the Principal Subordinate Judge, Guntur, in I. A. No. 1867/76 rejecting the defendant-petitioners application under S. 34 of the Arbitration Act for the stay of suit O. S. 55/76 on his file.

( 2 ) THE respondent filed the suit for recovery of damages for breach of trade agreement, Ex. B-1 dated 27-9-1975 and the finance agreement, Ex. B-2 dated 27-9-1975. The trade agreement was to supply tobacco to the defendants and the Finance Agreement was to advance Rs. 15,00,000. 00. According to the plaintiff, the defendant advanced only a sum of Rs. 8,30,000. 00 and committed a breach of contract by failing to advance the balance of the amount. These two agreements contained a clause under which the disputes arising thereunder had to be referred to an arbitrator.

( 3 ) THE defendants admit the execution of these two agreements but plead that the agreements were rescinded and two other agreements, Exs. A-11 and A-12 dated 28-1-1976 were executed between the parties under which the obligation to advance the loan was reduced from Rs. 15,00,000. 00 to Rs. 8,00,000. 00 and the only agreements subsisting between the Parties were the agreements dated 28-1-1976. The agreement dated 28-1-1976 contains the following clause. "in case of any disputes or differences shall at any time arise between the parties hereto as to the construction, meaning or effect of this agreement or any clause or thing contained therein or the rights and liabilities of the parties hereunder in relation to the terms of the same shall be referred to a single arbitrator in case the parties agree upon one otherwise to two arbitrators, one to be appointed by each. Party to the dispute and in case of their disagreement and in so far as they disagree, to an umpire in accordance with and subject to a the provisions of the Indian arbitration Act, 1940 or any statutory modification or re-enactment thereof in such arbitration in force shall be held in Bombay and not elsewhere and the award or awards in such Arbitration may be made a rule of the High Court of Judicature or other appropriate Court at Bombay at the instance of either party. "

( 4 ) HAVING regard to the arbitration clause, the defendant petitioner pleads that the suit filed by the respondent-plaintiff be stayed u/s 34 of the Indian Arbitration Act. The plaintiff opposed this petition inter alia on the ground: (1) that the petitioner has taken steps in the proceedings before moving for stay of the suit under S. 34 of the Act and (2) that there is no agreed clause to refer the dispute to arbitration. Both the grounds of opposition were upheld by the Court below and the petition for stay was dismissed. Hence this appeal.

( 5 ) THE petitioner-defendant having been served with notice of the suit filed on 3-4-1976 entered appearance before the date of hearing and moved the Court by way of an interlocutory application for raising the attachment of certain properties of the 1st defendant. The case was posted to 3-7-1976 for written statement of the defendants.

( 6 ) SEVERAL adjournments were granted at the request of the defendant-petitioner for filing the written statement and finally time was extended till 3-7-1976 on payment of costs of Rs. 50. 00 to the plaintiff. Even on that day the defendant-petitioner did not file the written statement. Instead he paid Rs. 50. 00 and sought further time till 25-9-1976 for filing the written statement on condition of paying costs of Rs. 100. 00 to the plaintiff. Even on 25-9-1976 the defendant-petitioner did not file the written statement. On that day, instead of filing the written statement, he filed a petition for stay of the proceedings in the suit. The defendant-petitioner thus took steps both in the interlocutory proceedings relating to the attachment before judgment and in the suit itself by seeking adjournments for filing the written statement and paying costs on two occasions. These steps taken by the defendant