The main legal point established in the judgment is the interpretation of what constitutes a step in the proceedings under S. 34 of the Arbitration Act of 1940, emphasizing the intention to proceed with the suit and give up the right to arbitration.

ORDER :- This is a notice of motion for stay of the suit on the ground that there is a valid agreement for reference to arbitration. It is resisted on the plea that the defendant has taken a step in the proceedings in that he has filed an unconditional appearance in Court. The question for decision, therefore, is whether filing of an unconditional appearance is a step in the proceedings.

2. Such a question has not arisen for determination either in England or in India for the simple reason that both under S. 4, English Arbitration Act, and under S. 19, Arbitration Act of 1899, a step in the proceedings taken "at any time after appearance" disqualifies the defendant from applying for stay, with the result that, whether or not filing of an appearance was a step in the proceedings, it was manifestly inarguable that it prevented the defendant from applying for a stay of the suit. Section 34, Arbitration Act of 1940, which takes the place of S. 19 of the Act of 1899, omits the words "at any time after appearance" and the relevant words of the section now are :

"Any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings."

It is argued, in the first instance, that as the words "at any time after appearance" which still appear in the English Act, and which appeared in the Indian Act of 1899, have deliberately been deleted, it must have been the intention of the Legislature that filing of an appearance, which, before the amendment, was not a step in the proceedings for the purposes of the section, should, after the amendment, be considered to be one. This argument to my mind is wholly untenable. The old Act in effect provided that nothing done prior to and inclusive of the filing of an appearance should debar a defendant from applying for stay irrespective of whether such act or acts were steps in the proceedings or not. In my opinion it does not help us to determine whether or not any of such Acts was a step in the proceedings. The amendment changes the law by providing that the step in the proceedings may be taken at any stage; but it cannot possibly bring about the result that every act done prior to and inclusive of the filing of an appearance, which up to the date of the amendment did not constitute a bar to an application for stay, becomes ipso facto a step in the proceedings after the amendment. In the case of every such act, as in the case of acts subsequent to appearance, one has to consider in each case the nature of the act, and to determine whether it is or is not a step in the proceedings.

3. Attempts have been made both in England and in India to lay down a ratio for determining what is a step in the proceedings. Those decisions must of necessity be read with the reservation that the ratio was sought to be laid down in relation to the section as it stands in England to-day and as it stood in India, before the amendment, which precludes the possibility of the ratio being sought to be applied to acts done up to and inclusive of the filing of an appearance. They do not, therefore, necessarily afford a dependable test for determining whether the filing of an appearance is a step in the proceedings.

4. In Ives S. Barker v. Willans, (1894) 2 Ch. 478 : (63 LJ Ch. 521), the plaintiffs issued a writ against the defendant who entered an appearance and by a formal document required the statement of claim. The question arose as to whether this was a step in the proceedings which precluded the defendant from making an application for stay. It was held that it was not. Lindley L.J. stated (p. 483) :

"I cannot say that is taking a step in the proceedings which precludes the defendant making the application, and I do not think it would be good sense if we held that it was."

The learned Law Lord further observed (p. 484) :

"Quite apart from the case not being within the