( 1 ) THE appellant (defendant) has been assailing the order dated 31. 1. 1996 passed by the learned Additional District Judge, Delhi in Suit No. 31/95 rejecting the application under Section 34 of the Arbitration Act (hereinafter REFERRED TO to as `the Act ) for the stay of further proceedings in the suit.

( 2 ) THE facts leading to the present appeal, shortly stated are that the respondent (plaintiff) filed the suit claiming to be the landlord/owner of the premises bearing Flat No. 207, admeasuring 740 sq. ft. in the building known as Surya Kiran at 19 Kasturba Gandhi Marge, New Delhi, alleging that the said property was given on rent to the appellant/defendant at a monthly rent of Rs. 7,400. 00 for a period of four years, vide Rent Note dated 1. 1. 1980; that thereafter, the defendant had been enhancing the rent unilaterally and the plaintiff had been accepting the same and that finally the rent was increased to Rs. 9,849. 40 w. e. f. 1. 11. 1990 that the enhancement of the rent by the defendant was not agreed to by the plaintiff, who never wanted the defendant to continue the tenancy after 30. 11. 1994; that the plaintiff terminated the tenancy of the defendant vide notice dated 26. 11. 1994 and the tenancy of the defendant stood terminated on 31. 10. 1994/1. 11. 1994; that the tenancy of the defendant was monthly tenancy terminable by 15 days notice; that the occupancy of the defendant after termination of tenancy was unauthorised and accordingly, the plaintiff claimed possession of the suit property and also the mesne profit for the period the defendant continues to be in possession of the suit property. The appellant/defendant filed application under Section 34 of the Act contending that there is an arbitration agreement between the parties, as contained in lease agreement dated 1. 11. 1980, which is on a stamp paper of Rs. 2. 00 and is not registered; that the arbitration clause in the unregistered lease deed dated 1. 11. 1980 provides for the resolution of all disputes arising between the parties to the agreement during the pendency of the agreement or thereafter by the arbitration of Indian Council of Arbitration, New Delhi; that the initial lease to the appellant/defendant was for a period of four years at a monthly rent of Rs. 7,400 renewable for a further period of four years on the same terms and conditions contained in the agreement upon the enhancement of rent 10% over and above that which was paid during the previous tenure of the lease; that as per Clause 4 (II) of the lease deed upon each such extension, the lease tenure stands extended at the enhanced rent at 10% over and above the rent payable for the previous period; that pursuant to Clause 4 (II) the appellant/defendant enhanced the rent of the suit premises w. e. f. 1. 11. 1992 and the rent is being paid at Rs. 9,849. 40, which has been accepted by the defendant for the last two and half years; that since the lease deed dated 1. 11. 1980 contains an arbitration clause for determination of any dispute arising between the parties, the same has be decided by way of arbitration as per arbitration-clause contained in the lease. Hence the prayer under Section 34 of the Act.

( 3 ) THE Additional District Judge dismissed the application under Section 34 of the Act and there by refused the prayer to stay the further proceedings in the suit. It is this order, which is assailed in this appeal under Section 39 of the Arbitration Act by the appellant/defendant.

( 4 ) IT is not in dispute that the defendant was inducted in the suit premises pursuant to the unregistered lease deed dated 1. 11. 1980 by a writing on a stamp paper of Rs. 2. 00 at a monthly rent of Rs. 7,400. 00. It is also not disputed that the said unregistered lease deed contained Clause 4 (II) where by the lessee reserved the right to extend the lease for further periods of four year s on the same terms and conditions as of the initial lease deed by paying 10% increased rent over the r