Arbitration clauses do not apply to summary suits based on hundis; disputes unrelated to the contracts under which goods were supplied cannot be arbitrated.

1. Appeals Nos. 652 to 657 of 1981 are filed by M/s. Kishan Swaroop Ashok Kumar and others, defendants in the six suits filed by the Podar Mills Limited, the respondents in these six appeals and Appeal Nos. 735 to 738 of 1981 are filed by M/s. Hazarimal Chhogalal and others, defendants in four suits filed by the respondents in these four appeals viz. The Piramal Spg. and Wvg. Mills Ltd. These appeals arise out of the orders passed by the trial Judge on the notices of motion taken out in their respective suits by the appellants for staying the suits and for referring the matters to arbitration of Mill Owners Association, Bombay. The notices of motion in the six suits filed by the Podar Mills were dismissed by a common order passed on April 24/28, 1981 while the notices of motion in other four suits filed by The Piramal Spg. and Wvg. Mills Ltd. were dismissed on September 15, 1981 for the reasons given in the order dated April 24/28, 1981. As all these appeals involve common questions of fact and identical questions of law they were heard together and are being disposed of by this common judgement.

2. Both the respondent-mills sold cloth to the two appellant-firms under different invoices and drew hundies on the appellant firms for the price of the said goods. The hundies were drawn in favour of the State Bank of India and were duly accepted by the appellant-firms but they were dishonoured by non-payment. The respondent, therefore, filed summary suits under Order 37 Rule 2 of the Code of Civil Procedure for recovering the amounts of the dishonoured hundies. The appellants were duly served with summons of the suits and they put in their appearance whereupon the respondents took out summonses for judgement and after the appellants were served with these summonses they took out the notices of motion for the aforesaid reliefs viz. staying of the suits and reference of the disputes to the arbitration of the Mills Owners Association, Bombay. The learned trial Judge rejected the notices of motion holding that the hundies were not covered by the scope of the arbitration clause and that there was no dispute in respect of the goods which were the subject matter of the suits. It is this order which is the subject matter of challenge in these appeals.

3. It is an admitted position that the hundies in question were drawn by the respondents in favour of the State Bank of India and on the appellants who accepted them but dishonoured them by non-payment. It is also an admitted position that the hundies were drawn by the respondents and accepted by the appellants in discharge of their liability in respect of the goods supplied to them by the respondents under various invoices. It is also an admitted position that the respondents are members of the Mill Owners Association at Bombay, which institution has prescribed a standard form of contract for sale of goods by the member mills. The standard contract form contains the terms and conditions governing such contracts.

4. Clauses 21 and 22 of the standard contract, which are invoked by the appellants in support of their notices of motion, read as follows :
"Clause 21 : All disputes and questions whatsoever which shall arise between the parties hereto out of or in connection with this agreement or as to the construction or application or the respective rights and obligations of the parties hereunder or as to any clause or thing herein contained or any account or valuation to be made hereunder or as to any other matter in any way relating to these presents shall be referred to arbitration in accord