A partner cannot enter into an agreement to submit disputes to arbitration on behalf of the firm without the authority of other partners, and an application under Section 34 of the Arbitration Act, 1940, must specify the disputes that the applicant is ready and willing to refer to arbitration.

( 1 ) THIS is an application under Section 34 of the Arbitration Act for stay of suit. Three questions arise in this case :

WHETHER a partner of a firm can enter into an agreement to submit disputes to arbitration on behalf of the firm without any authority from other partners ? Whether in an -application under Section 34 of the Arbitration Act, it is necessary to mention the alleged disputes which the defendant was ready and willing to submit to arbitration at the lime when the proceedings commenced ? Whether a partner of the firmis deemed to have taken steps in the proceedings when a request is made on behalf of the firm seeking time to file written statement ?

( 2 ) THE plaintiff filed the present suit for recovery of Rs. 1. 05,4 ()2. 57 p. on the allegations that defendant No. 1 is a partnership firm consisting of its partners defendants 2 to 9, that defendant No, I entered into a hire-purchase agreement dated 17th May, 1965 signed by defendant No. 5 only on behalf of the firm defendant No. 1, It is alleged that the defendants failed to pay the instalments and therefore the agreement was terminated by a notice dated 31st August, 1972. The present suit was filed on 25th May, 1973 and it came up before the Deputy Registrar on various dates. On 6th May, 1974, Mr. Y. K. Sabharwal, Advocate appeared for defendants I and 2 and the following order was passed : Defendants 1 and 2 shall file the written statement before that date" i. e. 29th August, 1974.

( 3 ) OIL 29th August, 1974, Mr. Bikram Singh appeared for counsel for defendants I and 2 anil the Deputy Registrar passed the following order :

". . . . . . Defts. I and 2 arc granted final opportunity to file written statement before the said date" i. e. 15th October, 1974.

( 4 ) OM 20th November, 1974, Mr. Y. K. Sabharwal put in appearance on behalf of defendants I and 5 and filed an application (IA 152/75) under Section 34 of the Arbitration Act on behalf of defendan No. 5 alleging as under :

"that the claim made by the plaintiff in the present suit is covered by the Arbitration Agreements ; that the applicant has always been ready and willing to refer the matter to arbitration and was. at the time when the present proceedngs were commenced and still is ready and willing to do all things necessary to the proper conduct of the arbitration. "

( 5 ) HE prayed that the suit be stayed. The arbitration clause in the hire-purchase agreement dated 17th May, 1965 is as follows :

"16- That any dispute or difference which may arise between the parties with regard to the constructions, meaning and effect of this deed or any part thereof or- any other matter under this agreement shall be referred to the arbitration of two arbitrators one to be nominated by each party, and in case of difference of opinions between them by an umpire selected by them before they enter into the reference- Such proceedings and any legal proceedings arising out of them shall take place in the town where the owners registered office is situated. The provisions of Indian Arbitration Act, 1940 or any statutory modification or re-enactment there of and the rules thereunder shall apply".

( 6 ) THE plaintiff filed its reply on 3rd February, 1977, alleging that the defendants have taken steps in the proceedings and have not availed of the arbitration clause, that the suit has become validly instituted against the defendants that proceedings cannot be stayed at the instance of one of defendants particularly when the other defendants have not joined defendant No. 5 in the present application. The other allegations in the said application are also denied by the plaintiff. Section 19 of the Indian Partnership Act. 1932 is as follows :

"19. (1) Subject to the provisions of section 22, the act of a partner which is done to carry on, in the usual way. business of the kind carried on by the firm binds the firm. The authority of a partner to bind the firm conferred by this section is called his "implied authority". (