( 1 ) THIS is an appeal arising out of the judgment and order passed by Salil K. Roy Chowdhury, J. , dated the 20th August, 1971, dismissing an application for stay of a suit under Section 34 of the Arbitration Act, 1940.

( 2 ) ALTHOUGH the facts have been fully noted by the learned trial judge, they may be briefly recorded.

( 3 ) THE appellant Union of India accepted a tender of the respondent with regard to the supply of G, T. Steel tubes of particular specifications. The contract constituted by such acceptance of the tender contained the usual arbitration clause. The contract also contained a Price Increased Clause. The respondent preferred a claim against the appellant based on this clause relating to the increase in the price of steel. Out of this claim, the appellant allowed only a portion. Thereafter a notice under Section 80 of the Civil Procedure Code was served on the appellant for the balance of the claim and a suit was instituted in this Court on the 27th January, 1970 praying for a decree for Rs. 16,46,080. 58p. being Suit No. 67 of 1970. The Writ of summons was duly served on the appellant. The suit appeared in the Warning list of Undefended Suits, o