The dispute must directly or indirectly arise out of or be related to the contract for the arbitration clause to be attracted.

R. P. MOOKHERJEE, J. :- This is an application in revision against an order of the learned Judge, Presidency Small Cause Court, Calcutta, staying a suit under S. 34, Arbitration Act.

2. The plaintiffs case as made in the plaint is that the defendant company had entered into a contract with the plaintiff on 28th February 1946, for the purchase of a certain quantity of jute at Rs. 16-14-0 per maund. Against the said contract the plaintiff had delivered some quantity of jute out of which the defendant company had rejected 28 bales on 14th May 1946 and called upon the plaintiff to remove the same from the defendants custody. After the receipt of the aforesaid letter, the plaintiff repeatedly attempted to obtain delivery of the said 28 bales of jute but on some pretext or other the bales were not delivered. Ultimately, on 29th October 1946, the plaintiff wrote to the defendant company again requesting it to return the said bales. The defendant company had not delivered the bales. The plaintiff accordingly filed the present suit to recover from the defendant company the value of the said bales at the market rate of Rs. 34 per maund as ruling on or about 30th October 1946, when the defendant refused to deliver "as damages for wrongful conversion of the goods as per bill submitted to them." Before filing the written statement, the defendant made an application under S. 34, Arbitration Act, and relied upon the following provision as contained in the contract between the parties :

"Any dispute whatsoever arising out of or in any way relating to this contract or to its construction or fulfillment or payment between the parties hereto and whether arising before or after the date of expiration of this contract will be referred to the arbitration of two persons, one to be appointed by each party."

Before the learned Judge, it was contended on behalf of the plaintiff that the present claim was neither one arising out of or in any way relating to the contract but the learned Judge held that the dispute which gave rise to the suit was one entirely relating to the contract in which the arbitration clause appears. In this view, he allowed the defendants prayer and stayed the suit sine die. It is against this order that the present rule has been obtained.

3. On behalf of the defendant opposite party, it is contended that the order passed by the learned Judge is in the exercise of a discretion allowed under S. 34, Arbitration Act, and this Court ought not to interfere in the exercise of that discretion by the Court below. No doubt the making of an order staying proceedings is a matter largely in the discretion of the Court, but when a strong case is made not only has the Court of appeal or the Court sitting in revision jurisdiction to interfere but ought to do so. In the present case, only if it can be shown, as is contended by the plaintiff, that the dispute is not one which arises out of or is in any way related to the contract then it must be held that the learned Judge had no jurisdiction to stay the suit under S. 34, Arbitration Act. It is therefore necessary to ascertain whether the arbitration clause is really attracted on the pleadings of the present case.

4. If we examine the facts of the present case, it will appear that when the quantity of jute was delivered, by the plaintiff to the defendant that act was in the performance of the terms of the contract. The rejection of a portion of the quantity so delivered as not being of the required quality was also without doubt in relation to the contract itself. After the plaintiff had been requested to take delivery of the rejected jute, that quantity of jute from that moment belonged to the plaintiff and the defendant had no right whatever to retain possession of that quantity of jute. If the defendant does not deliver the jute which he was bound to do after the jute had been rejected, the cause of action which arises is not based upon any provision in the contract at all but on the alleg