An application under Section 34 of the Arbitration Act can be made as long as a decree has not been passed and before any application has been made indicating that the defendant wants his rights to be determined by the civil court and not by the domestic forum of choice.

( 1 ) THE respondent plaintiff brought a suit under Order 37 Civil Procedure Code against the appellant, the Food corporation of India, for recovery of Rs. 3 lakhs and odd, on the allegation that he submitted on 27-1-1978 a tender for the supply of 500 rolls of black polythene film at the rate of Rs. 13. 87 per kg. and his tender was accepted on 28-3-1978. In pursuance of the terms of the contract, inspection of the goods was carried out from 16-5-1978 to 18-5-1978 by the said Corporation s regional office, Lucknow. The goods were then sealed and samples were taken for testing according to relevant ISI specification. The defendant communicated approval of the goods on 15-11-1978 and directed on 12-12-1978 that the goods be despatched to Patiala. Later on, the inspection note dated 19-1-1979 was also issued. The plaintiff then despatched the rolls on 25-1-1979. 95 per. cent of the price was immediately payable, but the defendant failed to pay. Meanwhile 5 per cent balance price had also become due. Hence, the suit for recovery of the price with interest at 15 per cent per annum.

( 2 ) THE defendant made two applications on 25-1-1980 one under section 34 of the Arbitration Act (herein the Act) for stay of the suit along with one other under section 5 of the Limitation Act. In the latter, it was stated that the summers of the suit were received by the defendant on 27-12-1979, but their counsel was available for consultation only on 23-1-1980. They urged that the period of 20 days prescribed under Rule 2 of the Delhi High Court (Original Side) Rules (herein the Original Side Rules) does not apply to an application under section 34 of the Act and if it does, the delay may for reasons aforesaid, be condoned. It was also contended that the suit was not covered by Rule 1 of the Original Side Rules and was also outside the purview of Order 37 Rule 2 (6) of Civil Procedure Code because the amount in question was not a debt and there was no stipulation for interest in the written contract which was necessary for a suit to be covered by Order 39 Civil Procedure Code It also appears to be the case of the defendants that the goods supplied upon subsequent examination were found deficient and inferior in quality.

( 3 ) THE plaintiff respondent contended that the defendant should have put in appearance within ten days of the service of the summons and sought permission to defend the suit. The application under section 34 of the Act could also be moved only within those ten days. The grounds on which the delay was sought to be condoned were also controverted. The plaintiff further moved an application under Order 37 Rules 2 and 3 and section 151 of the Code of Civil Procedure, praying for a decree.

( 4 ) THE learned single Judge held that Order 37 Rule 1 (2) C. P. C. envisages suits where plaintiff seeks to recover a debt with or without interest arising on a written contract, and, therefore, it is implied that interest amounts too can be claimed on the debt irrespective of whether such interest is permissible under the contract itself or not. The learned Judge further held that ordinarily an application under section 34 of the Act can be moved before filing the written statement or taking any other step, but since Order 37 Civil Procedure Code deals with specific types of suits and provides a special procedure and if the defendant fails to obtain permission from the court to defend the suit, decree in favour of the plaintiff follows as a matter of course. Taking recourse to arbitration clause in the agreement in order to seek stay of the suit can as well be treated as raising a defence to the suit. Therefore, a defendant seeking protection of the Act must act within the limitation prescribed under Order 37 Civil Procedure Code or as enlarged by the Original Side Rules. The learned Judge relied upon Pench Valley Coal Co. Ltd. v. The Indian Cable Co. Ltd. AIR 1975 Cal. 284 (1), for the view taken by him.

( 5 ) AS regards condona