Withdrawal of an application under Section 34 of the Arbitration Act amounts to a waiver of the right to arbitration.

B. C. Varma, J. - The applicants and non-applicants constituted a partnership styled as "Kishanchand Bhagchand". The non-applicants filed a suit bearing No. C.S. No. 18-A of 1982 for accounts of partnership. Applicants were defendants in that suit. They filed an application under Section 34 of the Arbitration Act praying for stay of proceedings in suit in view of a term in the contract agreement providing for settlement of disputes through arbitration. That application, however, was not prosecuted and was withdrawn. Consequently, the suit proceeded and is pending a adjudication.

2. The applicants then filed a separate application under Section 8(2) of the Arbitrator Act for appointment of an arbitrator to settle the disputes arising out of the partnership agreement. That application was registered as C.S. No. 34-B of 1982. By the impugned order, dated 6.5.1987, the application has been rejected on the ground that the applicants withdrew their application under Section 34 of the Arbitration Act made in Civil Suit No. 18-A of 1982. The view taken by the District Judge is that the withdrawal of that application under Section 34 tantamounts to waiver of their right to get the matter resolved through arbitration. This revision is directed against the rejection of that application under Section 8(2) of the Arbitration Act.

3. Shri H. B. Agarwal, in support of the revision application, contended that withdrawal of application under Section 34 praying for stay of the suit is inconsequential and is no impediment to move the court under Section 8(2) to get an arbitrator appointed and to get the matter adjudicated by the arbitrator. Ordinarily, a suit of civil nature has to be instituted in and dealt with by a Civil Court of competent jurisdiction. Any enactment or contract between the parties taking away this jurisdiction must be strictly construed. The Arbitration Act undoubtedly contains provisions permitting the parties to settle their disputes by person/persons of their choice and arbitrator/arbitrators may be appointed in accordance with the agreement between the parties either with or without the intervention of the Court. The award given by the arbitrator so appointed can be challenged on very limited grounds. Such agreement between the parties, however, does not oust the jurisdiction of a competent Civil Court to deal with the dispute and a suit to have the dispute resolved by Civil Court can be filed despite such agreement. Section 34 of the Arbitration Act, however, enables the other party to the arbitration agreement to object, without participating in proceedings in such a suit, and to insist that the matter should be decided by the arbitrator in accordance with the agreement. That Section 34 of the Arbitration Act reads thus :

"34. Power to stay legal proceedings where there is an arbitration agreement. - Where any party to an arbitration agreement or any person claiming under him commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement or taking any other steps in the proceedings, apply to the judicial authority before which the proceedings are pending to stay the proceedings; and if satisfied that there is no sufficient reason why the matter should not be referred to accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced and still remains, ready and willing to do all thinks necessary to the proper conduct of the arbitration, such authority may make an order staying the proceedings."

4. The terms of this section clearly permit a party to the arbitration agreement to oppose adjudication of the matter by a court if the other party to the agreement approaches that court. All the same, on receiving notice of the institution of such a suit, the defendant, viz., the other party to