Under the Arbitration and Conciliation Act, 1996, the civil court has no jurisdiction to stay arbitration proceedings, and the aggrieved party can challenge the arbitral award under Sec. 34 of the Act.

1. This order shall dispose of the above mentioned two revision petitions, having common questions of law and fact. For the purpose of convenience, the facts of Civil Revision No. 29 of 1999 being given below.

2. This is a revision petition against the orders dated 22-9-1998 and 16-5-1997 passed by the Courts below restraining the defendants form proceeding with the arbitration proceedings with the Arbitrator and staying the proceedings before the arbitrator till the decision of the suit.

3. The facts which are relevant for the decision of the present revision petition are that M/s. Shiv Rice and General Mills (plaintiff) had filed a suit for declaration and injunction against the defendants (Punjab State Co-operative Supply and Marketing Federation Limited and another), challenging the recovery notice dated 8-9-1995 issued by the defendant-Federation and for restraining the defendants from recovering the disputed amount during the pendency of the suit and order dated 10-11-1996 was passed restraining the defendants from recovering the suit amount from the plaintiff during the pendency of the suit. It was alleged that in order to make the suit infructuous, the defendants had referred the matter in dispute to the Arbitrator vide order dated 22-11-1996 and the Arbitrator had summoned the plaintiff to appear before him and to file a claim. It was accordingly prayed that the defendants be restrained from proceeding with the arbitration proceedings during the pendency of the suit. The said application was contested by the defendants, taking up various preliminary objections, including the maintainability of the said application, alleging therein that initiating arbitration proceedings even during the pendency of the suit was not a bar, especially when there was no stay in referring the matter to the Arbitrator and it was prayed that the application be dismissed. The learned trial Court, after hearing both sides, vide order dated 16-5-1997, allowed the application of the plaintiff and granted ad-interim injunction, restraining the defendants from proceeding with the arbitration proceedings. Aggrieved against this order of the trial Court, the defendants filed an appeal, which was dismissed by the Additional District Judge vide judgment dated 22-9-1998. Aggrieved against these orders of the Courts below, defendant No. 1 has filed the present revision petition in this Court.

4. Notice of motion was issued. Counsel for the parties have been heard and record perused.

5. The learned counsel appearing for the defendant-petitioner submitted before me that the arbitration proceedings were initiated while appointing the Arbitrator vide letter dated 22-11-1996 and these arbitration proceedings were covered under the provisions of the Arbitration and Conciliation Act, 1996 (for short, "the 1996 Act") which came into force with effect from 25-1-1996. It was submitted that under the provisions of this Act, the Civil Court has no jurisdiction to stay the arbitration proceedings pending before the Arbitrator. It was submitted that only an application to the arbitrator was competent in this regard and even his decision could not be challenged except by way of an application under Sec. 34 of the 1996 Act. Reliance has been placed on the law laid down by a Division Bench of this Court in the case reported as M/s. Herike Rice Mills, Mehalkalan, District Sangrur V/s. State of Punjab, (1998) 118 Pun LR 395. On the other hand, learned counsel appearing for plaintiff-respondent No. 1 submitted before me that in the present case, the provisions of the Arbitration Act, 1940 (hereinafter referred to as "the 1940 Act") would apply. Reliance was placed on M/s. Shettys Constructions Co. Pvt. Ltd. V/s. M/s. Konkan Railway Construction, AIR 1999 SC 1535. It was further submitted that since the defendants had failed to raise the objection regarding the jurisdiction of the civil Court in the civil suit filed by the plaintiff and the defendants had joined th