( 1 ) THIS order will dispose of the application of the defendants under Section 34 of the Arbitration Act for stay of the suit on the ground that there exists between the parties an agreement to refer the disputes to arbitrator. Brief facts giving rise to this application are:

( 2 ) THAT on or about 9. 1. 1991 the defendants issued a notice inviting tenders for the printing and supply of lottery tickets. The plaintiff submitted its tender and pursuant to negotiations, the terms for printing and supply of lottery tickets were agreed between the parties. Under the agreement, the defendants continued to issue print orders/release orders for printing of tickets of various lottery draws alongwith the art work and the details to be printed on the tickets. Certain amount in respect of the printing of the lottery tickets allegedly remained unpaid to the plaintiff despite reminders issued to the defendants and by letters dated 8th and 17th September,1992, the plaintiff expressed its inability to print the lottery tickets for the draw commencing 556 to 585 due to the break down of the machinery and the defendants were requested to make alternate arrangements for printing of tickets for those draws. By a letter dated 9. 9. 1992 the defendants called upon the plaintiff to continue to print the lottery tickets till the defendants could make alternate arrangements. Vide letter dated 25. 9. 1992 the plaintiff was informed that the print orders for printing of lottery tickets of Draws 572 to 599 were given to another printer @ Rs. 3,000. 00 per lac and consequent thereto the plaintiff agreed to bear the difference in rates of Rs. 260. 00 per lac as a special case. This arrangement, according to the plaintiff, was agreed to only for the draws 572 to 599 due to exceptional circumstances that were not anticipated and were beyond the control of the plaintiff i. e. force majeure conditions in terms of the agreement. Inspite of the plaintiff communicating to the defendants vide letters dated 7th and 8th October,1992 their readiness to resume printing of lottery tickets from Draw No. 600 onwards giving the time schedule therefor, the defendants chose to get the tickets printed from other printers for Draw No. 600 onwards. Though the print order for the said draws was also issued in the name of the plaintiff but in the absence of the supply of art work by the defendants the tickets could not be printed by the plaintiff. On 18. 3. 1992 the plaintiff issued a reminder to the defendants for release of Rs. 22,08,539. 00 as the principal amount due for printing and supply of lottery tickets, a sum of Rs. 10,61,546. 00 as the interest and a sum of Rs. 3,33,009. 00 on account of loss of interest on issue of paper stock and loss due to wastage and cost of conversion of reels to sheets and a sum of Rs. 1,35,507. 00 being the earnest money and interest thereon. This amount having not been paid, the plaintiff filed the suit for recovery against the defendants.

( 3 ) ON the suit being filed the defendants filed the application (I. A. No. 10073/95) under Section 34 of the Arbitration Act contending inter-alia that an agreement dated 18. 11. 1992 was executed between the parties in terms of which the terms and conditions of the tender were to form part of the memorandum of agreement and were to be binding on both the parties. In terms of the said conditions dated 16. 1. 1991 duly signed by an authorised representative of the plaintiff the disputes and differences between the parties were liable to be REFERRED TO to the Director (Lotteries) whose decision was held to be final and binding. It is submitted that the said clause constituted an arbitration agreement between the parties and as the defendants were always ready and willing to do all things necessary for the proper conduct of the arbitration in terms of the arbitration agreement between the parties, the suit was not liable to be proceeded with and was liable to be stayed.

( 4 ) THE arbitra