Short Note : 1. The plaintiff non-applicant has filed a suit for recovery of Rs. 1,000 on account of brokerage for transaction in the year 1969-70. The plaintiff alleged that on settlement of the accounts in October 1970, Rs. 848.50 were found due from the defendant applicant, which he has failed to pay inspire of repeated demands. Hence, this suit for recovery of Rs. 1,000 including interests and notice charges. 2. The defendant applicant submitted an application dated 22-3-74 under section 34 of the Act praying that the defendant is a member of Vypar Samiti, Dal Bazar, Gwalior and the plaintiff is a registered and licensed broker of the said Samiti. According to rule No. 9 and 28 of the said Samiti, Nyay Samiti of the Vyapar Samiti has been constituted to decide the dispute between broker and dealer. The defendant claimed to be a dealer and prayer was made by the defendant applicant to stay the suit on the ground of existence of an arbitration agreement between the parties to get the dispute decided by the Nyay Samiti. 3. This application was opposed by the plaintiff non-applicant and has been disallowed by the impugned order. Aggrieved by this order the defendant applicant has filed this revision. Held : Section 21 referred in section 40 of the Act provides that where in any suit all the parties interested agree that any matter, in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference. 4. An application contemplated by section 34 of the Act for stay of the suit cannot fall within the ambit of the words, "any arbitration proceedings or an application arising thereout," pre-existence of which is since-qua-non, for application of section 40 of the Act. In this view of the matter, the contention that the application under section 34 of the Act cannot be entertained by a Small Causes Court appears to have no force. 5. Section 34 and section 40 of the Act deal with two different and distinct matters. They are not overlapping. The fields of their operation are distinct and separate.
In this view of the matter, the contention that the application under section 34 of the Act cannot be entertained by a Small Causes Court appears to have no force. 5. Section 34 and section 40 of the Act deal with two different and distinct matters. They are not overlapping. The fields of their operation are distinct and separate. In order to attract the applicability of section 34 of the Act, it has to be pointed out that (1) a judicial proceeding is pending before a judicial authority (2) the person making an application for stay of judicial proceedings is party to an arbitration agreement and (3) the other party who has commenced the judicial proceedings is also a party to the arbitration agreement of that the person commencing the legal proceedings in question is a person claiming under a party to an agreement. 6. An application for stay of proceedings under section 34 of the Act can be moved by a person on showing co-existence of the aforesaid three conditions. It is thereafter that the Court has to satisfy himself on the followings matters :- (a) That there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement. (b) That the applicant was at the time when the proceeding were commenced and still remains ready and willing to do all things necessary to the proper conduct of the arbitration. 7. On being so satisfied, the judicial authority before whom the legal proceedings in question are pending may make an order of stay of the proceedings. 8. For applying section 40 of the Act, to work ouster of jurisdiction it is necessary to point out that the matter sought to be adjudicated upon in a Small cause Court is :- (a) either an arbitration proceedings, or (b) an application arising thereout (out of any arbitration proceedings). 9. Thus the object of both the provision viz, section 34 and 40 of the Act is different. The powers of granting of stay conferred on legal authority is exercisable by a judge of Small Cause also and the same is not taken away or set at naught by section 40. 10. This brings me to the question touching merits of the revision.
The powers of granting of stay conferred on legal authority is exercisable by a judge of Small Cause also and the same is not taken away or set at naught by section 40. 10. This brings me to the question touching merits of the revision. The facts constituting cause of action are that the amount sought to be recovered by the plaintiff is due against the defendant applicant in respect of the year 1969-70. The alleged agreement for arbitration is stated to be contained in Rules of Vyapar Samiti (a voluntary association) framed on 12-12-71. These are rules of a voluntary association. These rules have no statutory force. They cannot have any retrospective effect. No agreement is shown to exist between the parties; to the effect that the dispute relating to earlier period were agreed to be referred for decision of arbitration. On this short point the impugned order deserves to be maintained. Since it is not shown that an arbitration agreement exists between the parties within the contemplation of section 34 of the Act. AIR 1949 Cal. 684 and AIR 1968 Delhi 75 relied on. Revision dismissed.