ORDER: This application had been token out by Tamil Nadu Water Supply & Drainage Board S. 34 of the Arbitration Act for stay of the suit being Suit No. 697 of 1983 filed by Pragati Engineering Pvt. Ltd against the petitioner, for an order of injunction restraining the said company Pragati Engineering Pvt. Ltd. from taking any steps whatsoever in the said suit and for other consequential reliefs. 2. The said Pragats Engineering Pvt. Ltd. filed a suit before this Court for various reliefs, including a decree for Rs. 19,31,000/- and for other loss and damages stated to have been suffered by the plaintiff. In the said suit the plaintiff company stated that its claim arose out of eight several contracts entered into by and between the said Pragati Engineering with Tamil Nadu Water Supply and Drainage Board for supply of various pipes of agreed specifications. Each of the said contracts contained an arbitration clause to the following effect : "Arbitration: In case any dispute or differences between the parties to the contract either during the progress or after the completion of the works or after the determination, abandonment or breach of the contract as to the interpretation of the contract as to the interpretation of the contract as to any matter or thing arising thereunder except as to the matters left to the sale discretion of the Executive Engineer under clauses 20, 22, 27(c), 29, 36, 37 and 40 of the Preliminary Specifications, or as to the withholding by the Executive Engineer of payment of any bill to which the contract may claim to be entitled, then either party shall forthwith give to the other notice of such dispute or difference and such dispute or difference shall be and is hereby referred to the arbitration of the Superintending Engineer of the nominated circle mentioned in the 'Articles of Agreement' (hereinafter called the 'Arbitrator') and the Award of such arbitrator shall be final and binding on the parties. Provided however that in cases where the executive Engineer has entered into the contract on behalf of the Governor, the dispute or difference shall, in the first instance be referred to by or through the Executive Engineer to the Superintending Engineer of the Circle in which the work lies and his decision thereon obtained before referring such dispute or difference to arbitration under this clause. Progress of the work shall not be suspended or delayed on account of the reference of any dispute or difference to the Superintending Engineer of the Circle in which the work lies or to arbitration under this clause. The decision of the Executive Engineer or the Superintending Engineer of the Circle in which the work lies, as the case may be on such dispute or defference shall be conclusive until reversed by the Superintending Engineer or the arbitration. Either party may within a period which shall be fixed by the arbitrator file before the Arbitrator a statement of the case and also the documents relating to or having a bearing on the case The Arbitrator shall see that the award is passed, if reasonably possible within a period of four months from the date of his entering upon the reference but if any extension of that period is considered by him to be necessary, either suo motu or on the application of either party to the reference the parties hereby agree and consent to such extension as the arbitrator may from to time consider reasonable necessary and any such extension shall forthwith be communicated by him in writing to each of the parties hereto The Arbitrator shall not be bound to observe the ordinary rules of procedure applicable to trials before judicial tribunals nor to hear or receive formal evidence but may pass an award on the documents or statements of the case filed by both the parties and/or on personal inspection. The arbitrator shall have power to view the subject matter of the dispute with or without the parties or their agents. The arbitrator shall have power to view the subject matter of the dispute with or without the parties or their agents. The arbitrator shall also have power to open up, review and revise any certificate, decision, requisition or notice save in regard to the matters expressly excepted and to determine all matters in dispute which shall he submitted to him and of which notice shall have been given as aforesaid in the same manner as if no such certificate, opinion, decision, requisition or notice had been given Upon every and any such reference the costs of and incidental to the reference and Award respectively shall be in the discretion of the arbitrator, subject to the condition that the amount of such costs to be awarded to either party shall not in respect of a monetary claim exceed the percentage set out below of any such Award irrespective of the actual fees, costs expenses incurred by either party, provided that where a monetary claim is disallowed in full, the said percentage shall be calculated on the amount of the claim The arbitrator may determine that amount of the costs to be awarded or direct the same to be taxed as between solicitor and client or as party and party shall direct by whom and to whom and in what manner the same shall be home and paid. The percentage above referred to in this Clause or 5 per cent on any such monetray Award which does not exceed Rs 10,000 3 per cent on the next 40,000 or any part thereof 2 per cent on the next Rs 50,000 or any part thereof and 1 per cent on any excess over Rs. 1,00,000 Provided that Government shall not be liable to any claim in respect of any such dispute or difference until the liability and the amount thereto shall have been referred to and decided by the arbitrator" 3. Each of the said contracts a 1so provided that the Project Engineer, Special Project, Circle, Coimbatore shall be the Arbitrator for any dispute arising out of the transactions The arbitration agreement in each of the contracts were in common form and the subject matter of the dispute, the power of the arbitrators and the procedure to be adopted were identical. Each of the said contracts a 1so provided that the Project Engineer, Special Project, Circle, Coimbatore shall be the Arbitrator for any dispute arising out of the transactions The arbitration agreement in each of the contracts were in common form and the subject matter of the dispute, the power of the arbitrators and the procedure to be adopted were identical. Under the said arbitration clause the arbitrator had jurisdiction to enter into reference and make one award in respect of the disputes relating to the said eight contracts. The petitioner was ready and willing to do whatever was necessary to refer the dispute to arbitration and for the proper conduct of the said proceedings. The Writ of Summons of the suit was served upon the petitioner on 25th of December, 1983. Since then the petitioner had neither taken any steps in the suit nor filed any written statement On an earlier occasion when the said company Pragati Engineering Co. Pvt. Ltd. filed a suit before this Court being Suit No. 538 of 1982 whereunder it claimed a sum of Rs 17,26,64.57P on an application taken out by the petitioner under S. 34 of the Arbitration Act, this Court granted an order of stay upon such application. In the said suit, the company made a claim on account of five several contracts and five contracts had also been made the subject matter of the instant suit. Subsequently the said suit was withdrawn on 8th of November, 1983 and leave was granted to withdraw the suit subject to the right of the petitioner to make an application under the Arbitration Act, in the event a fresh suit was filed by the said company Prior to the withdrawal of the suit the plaintiff company made an application before this Court under S. 33 of the Arbitration Act praying for various reliefs including the determination of the existence and/or the validity of the arbitration agreement between the parties and in the event the Court came to the conclusion that there was an arbitration agreement it prayed that the said arbitration agreement be declared void, and incapable of being given effect to. The Said application was moved before Mrs Justice Protibha Bonerjea when the learned Judge on 9th of February, 1984 passed an order of injunction restraining the petitioner in this application from enforcing the arbitration clause. 4. The Said application was moved before Mrs Justice Protibha Bonerjea when the learned Judge on 9th of February, 1984 passed an order of injunction restraining the petitioner in this application from enforcing the arbitration clause. 4. In terms of the said agreement, the petitioner on 4th of January, 1984 duly referred the dispute between the parties to the appointed arbitrator, namely, the Project Engineer, T.W A. D. Project, Special Project Circle, Coimbatore in respect of the said five agreements and on 6th of February 1984 the petitioner further referred the dispute between the parties to the said appointed arbitrator in respect of the two agreements. In view of the injunction order passed by Mrs. Justice Protibha Bonerjea could not refer the dispute in respect of the remaining contract due to subsistence of the injunction order. That the arbitrator in respect of the said reference by letters dated 11th January, 1984 and 11th February, 1984 duly intimated the said company and the other respondents of such reference. 5. The petitioner's grievance was that the respondents have no claim whatsoever against the petitioner on the contrary as the respondent No. 1 did not supply the pipes in accordance with the specifications under the contract. Hence the goods were rightly rejected by the petitioner when suddenly and surreptitiously according to the petitioner to avoid their own liabilities the instant suit had been filed before the Calcutta High Court knowing fully well not only of the existence of the Arbitration clause very wide in nature embracing all disputes whatsoever the respondents filed a suit before the Calcutta High Court when the petitioner this no local office at Calcutta. All the witnesses including papers and documents voluminous in nature were lying in the State of Tamil Nadu. It was further the case of the petitioner that the respondent no. 2 to 5 had been deliberately made parties to the present suit, when they were wholly unnecessary parties on the plea that the claim of the respondent no. 1 Pragati Engineering Pvt. Ltd could be decided in their presence when no relief had been claimed against them but they have been added as defendants to the suit with an ulterior purpose of avoiding the arbitration proceeding. 1 Pragati Engineering Pvt. Ltd could be decided in their presence when no relief had been claimed against them but they have been added as defendants to the suit with an ulterior purpose of avoiding the arbitration proceeding. From the contracts and/or the orders placed by the petitioner it was made clear that there was an arbitration clause whereunder the Project Engineer, Special Project Circle, Coimbatore shall be the Arbitrator for any dispute arising out of such transaction. In their tender letters given for Pragati Engineering it had been specifically stated that before submitting their tender they distinctly and expressly acknowledged and had carefully followed the instructions in the tender notice and had read the M.D.S.S. and the preliminary specifications therein and understood the instructions contained therein in the agreement including stipulations etc The articles of agreement provided for the settlement of the dispute by arbitration clause by setting out therein the arbitration clause of the standard preliminary specifications whereunder the Project Engineer, Special Project Circle, Coimbatore was the named arbitrator. 6. It was the case of the respondents first of all that there was no arbitration agreement Secondly even if there was any agreement it was void for uncertainty Thirdly, the petitioner had taken steps in the proceedings and the petitioner was also not ready and willing to agitate the grievances before the named arbitrator and apart from that there being charges of fraud, cheating etc made in the suit by the respondents in the plaint the Civil Court should be the proper forum for adjudication of such disputes The condition of arbitration as contained in the tender did not form part of the agreements hence the standard preliminary specification was not the subject of the agreement. 7. The case of the respondents was that the petitioner from time to time invited tenders for cast ironflanged pipes. The petitioner accepted the tender submitted by the respondents. The parties entered into various agreements but the respondents denied that those agreements contained any arbitration clause. Even assuming that there was such a clause according to the respondents it was vague and void for uncertainty. The petitioner accepted the tender submitted by the respondents. The parties entered into various agreements but the respondents denied that those agreements contained any arbitration clause. Even assuming that there was such a clause according to the respondents it was vague and void for uncertainty. According to the respondents each consignment before despatch was inspected and accepted by D.C. D. D. on behalf of the petitioner and certificates were granted in respect thereof Apart from that the respondents contended that the petitioner was not ready and willing to go to arbitration in as much as after the first suit was filed, the petitioner did not take any steps for resolving the dispute by arbitration. Apart from that the respondents contended that serious charges had been made regarding the commercial integrity and morality of the entsrespond in as much as tl1e petitioner has charged the respondents with cheating and has threatened with criminal prosecution In the affidavit, the petitioner stated that the respondent no. 1 had committed or perpetrated fraud on the petitioner Hence such statement was defamatory In nature for a reputable concern like the respondent no. 1 who has various dealings and transactions with Government at different places in the country of the value of over Rs. 4 crores Apart from that the respondents further contended that all the officers and staff of the petitioner are biased and prejudiced against the respondents hence if the matter was referred to arbitration, the respondents could not expect justice or fairness from such officers. 8. The respondent's first contention was that there was no arbitration clause in as much as the condition of arbitration in the tender did not form part of the agreement, more so the standard preliminary specification of such arbitration clause had not been made party of the proceedings. Under the circumstances the court in the absence of such documents could not come to a definite finding as to the nature and extent of the arbitration clause. Apart from that the said arbitration clause was vague and unintelligible hence could not be enforced In the case reported in AIR 1955 SC p. 53 Anderson Wright Ltd. v. Moran & Co. Apart from that the said arbitration clause was vague and unintelligible hence could not be enforced In the case reported in AIR 1955 SC p. 53 Anderson Wright Ltd. v. Moran & Co. it was held : "The first and essential pre-requisite to making an order of stay under S. 34 is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed The question whether the dispute in the suit falls within the arbitration clause really pre-supposes that there is such agreement and involves consideration of two matters, viz. (1) what is the dispute in the suit and (2) what disputes the arbitration clause covers. Where on an application made under S. 34 for stay of a suit, an issue is raised as to the formation, existence or validity of the contract containing the arbitration clause Court is not bound to refuse a stay but may in its discretion on the application for stay, decide the issue as to the existence or validity of the arbitration agreement even though it may involve incidentally a decision as to the validity or existence of the parent contract. Thus, where the question raised by the plaintiff in the suit is that the contract containing the arbitration agreement was really between the defendant and another party and not between him and the defendant and consequently he was not bound by the contract and the defendant files an application under S 34 for stay of the suit, the Court has undoubted jurisdiction to decide the question for the purpose of finding as to whether or not there is a binding arbitration agreement between the parties to suit. If the person whose concern with the agreement in question is a signatory to the contract and formally a contracting party, that will be sufficient to enable the Court to hold for purposes of S. 34 that he is a party to the agreement" 9. There the four tests and/or conditions had been set out in paragraph 7 which had to be satisfied before granting a stay of the suit. 10. The respondents further contended that in as much as there was a charge of fraud under the circumstances the matter should be decided in a Court of law and not through arbitration. There the four tests and/or conditions had been set out in paragraph 7 which had to be satisfied before granting a stay of the suit. 10. The respondents further contended that in as much as there was a charge of fraud under the circumstances the matter should be decided in a Court of law and not through arbitration. In the case reported in AIR 1962 SC p. 406 Abdul Kadir Sharnsuddin Bubete v. Madhav Prabhakar Oak & Anr. it was held : "Where serious allegation of fraud are made against a party and the party who is charged with fraud desires that the matter should be tried in open court that would be a sufficient cause for the Court not to order an arbitration agreement to be filed and not to make the reference. But it is not every allegation imputing some kind of dishonesty, particularly in matters of accounts, which would be enough to dispose a Court to take the matter out of the forum which the parties themselves have chosen. Merely because some allegations have been made that accounts are not correct or that certain items are exaggerated and so on that is not enough to induce the Court to refuse to make a reference to arbitration It is only in cases of allegations of fraud of a serious nature that the Court will refuse to order an arbitration agreement to be filed and will not make a reference" 11. The respondents further contended that the petitioner was not ready and willing to go for arbitration when the demand was made and also when the first suit was filed by the respondents. It was only after the filing of the second suit by the respondents that the present application had been taken out by the petitioner for stay of the suit The respondents further contended that they were apprehensive of bias in as much as the named arbitrator being the officer of the petitioner would not be fair in resolving the dispute in favour of the respondents. In that respect the respondents craved reference to the case reported in AIR 1967 SC p 249 U.P. Co-operative Federation Ltd. v. Sunder Bros, Delhi where it was held : "The strict principle of sanctity of contract is subject to the discretion of the Court under S. 34 of the Indian Arbitration Act, for there must be read with every such agreement an implied term or condition that it would be enforceable only if the Court having due regard to the other surrounding circumstances thinks fit in its discretion to enforce it. It is obvious that a party may be released from the bargain if he can show that the selected arbitrator is likely to show bias or by sufficient reason to suspect that h., will act unfairly or that he has been guilty of continued unreasonble conduct. Consequently, an order of stay of suit under S. 34 will not be granted if it can be shown that there is good ground for apprehending that the arbitrator will not act fairly in the matter or that it is for some reason improper that he should arbitrate in the dispute between the parties Although it is the normal duty of the Court to hold the parties to the contract and to make them present their disputes to the forum of their choice, an order to stay legal proceedings in a Court of law will not be granted if it is shown that there is good ground for apprehending that the arbitrator will not act fairly in the matter or that it is for some reason improper that he should arbitrate in the dispute". 12. Last of all the respondents submitted that by taking time the petitioner had taken steps in the proceedings. As a result it had waived its right to agitate the dispute by arbitration. So far the question of taking steps in the proceedings is concerned, save and except asking for adjournment of the undefended suit Mr. B K. Chatterjee on behalf of the petitioner did not take any step on behalf of the petitioner. It was recorded on that day while granting adjournment of the undefended suit that Mr. Chatterjee prayed for time to take out an application under S. 34 of the Arbitration Act which prayer would not be considered as taking any steps in the proceedings. It was recorded on that day while granting adjournment of the undefended suit that Mr. Chatterjee prayed for time to take out an application under S. 34 of the Arbitration Act which prayer would not be considered as taking any steps in the proceedings. The learned lawyer took precaution while asking for adjournment of the suit of having it recorded that such prayer made by him would not be construed in future as taking steps in the proceedings By virtue of an injunction order granted by Mrs. Justice Protibha Bonnerjea the petitioner could not take out an application earlier, nor they could take any steps in the suit as a result the suit appeared in the undefended list. In the case reported in AIR 1982 SC p. 1302 F.C I & Anr v. Yadav Engineer & Contractor where it was held : "When in breach of an arbitration agreement a party to the agreement rushes to the Court, unless a clear case to the contrary is made out, the approach of the Court should be to hold parties to their bargain provided necessary conditions for invoking S. 34 are satisfied One of the conditions to be satisfied before an order under S. 34 can be obtained is that the party to the legal proceeding has at any time before filing a written statement or taking any other steps in the proceedings applied to the judicial authority for stay of proceedings. General words "taking any other steps in the proceedings" just follow the specific expression filing a written statement and both are used for achieving the same purpose Therefore, the latter general expression must be construed ejusdem generic with the specific provision just preceding to bring out the ambit of the latter. Therefore, unless the step alleged to have been taken by the party seeking to enforce arbitration agreement is such as would display an unequivocal intention to proceed with the suit and acquiesce in the method of resolution of dispute adopted by the other party, namely, filing of the suit and thereby indicate that it has abandoned its right under the arbitration agreement to get the dispute resolved by arbitration, any other step would not disentile the party from seeking relief under S. 34. Contesting the application for interim injunction or for appointment of a receiver or for interim relief by itself without anything more would not constitute such step as would disentitle the party to an order under S. 34 of the Act. Giving the expression "taking any other steps in the proceedings" such wide connotation as making an application for any purpose in the suit such as vacating stay, discharge of the receiver or even modifying the interim orders would work hardship and would be inequitous to the party who is willing to abide by the arbitration agreement and yet be forced to suffer the inequity of ex parte orders Therefore, the expression "taking any other steps in the proceedings" must be given a narrow meaning in that step must be taken in the main proceeding of the suit and it must be such step as would clearly and unambiguously manifest the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings. Each and every step taken in the proceeding cannot come in the way of the party seeking to enforce the arbitration agreement by obtaining stay of proceedings" 13. Under the circumstances it could not be held in the instant case that the petitioner had not taken any steps in the proceedings. So far the question of readiness and willingness is concerned, the notice of demand was served on 11th of July, 1983. In the letter of Mr. Gaggar dated 2nd of August, 1983 there was indication of the arbitration clause, but in view of the injunction order passed by Mrs. Justice Protibbha Bonnerjeea restratining the petitioner from taking any steps, the petitioner was debarred from taking out an application under the Arbitration Act So far question of fraud is concerned the suit filed by the respondents are for defamation and for a declaration to vindicate their right and/or to establish their reputation. Under the circumstances the question of fraud did not arise Apart from that bald allegations of cheating without any particulars of fraud is general in nature and there was no specific case of any fraud made out under the circumstances the petitioner contended that in view of that bald allegations of fraud the suit cannot go on In the case reporsed in AIR 1951 SC p. 280 Bishundeo Narain & Anr. v. Seogeni Rai & Ors. v. Seogeni Rai & Ors. it was held : - "Though pleas of undue influence and coercion may overlap in part in some cases they are separable categories in law and must be separately pleaded. In cases of fraud, undue influence and coercion, the parties pleading it must set forth full particulars and the case can only be decided on the particulars as laid. There can be no departure from them in evidence General allegations are insufficient even to amount to an averment of fraud of which any Court sought to take notice however strong the language in which they are couched may be, and the same applies to undue influence and coercion". 14. So far the allegation of bias is concerned, it was the case of the petitioner that there was no basis for such apprehension while making allegations of bias. Have that been the position, then no government officer would ever be able to act as Arbitrator in a dispute over a contract with the Government. The respondent's allegations that there was no arbitration agreement or that in any event such agreement is vague, unceratain and unintelligible is refuted by various documents relied upon by and between the parties. Tender notices had been signed by the respondent no. 1 under clause 20 provided for arbitration by the Project Engineer Special Project Circle, Coimbatore to decide any dispute that may arise out of the transaction. Similarly the tender submitted by the respondents also provided that the respondents had carefully followed the instructions in the tender notice and also read the MDSS and has understood the requirements. Agreements, stipulation and/or restrictions contained therein and had referred to the Standard Preliminary Specificatsons The Articles of Agreement as annexed to the petition dated 22nd of November, 1980 contained the recital that the contractor had agreed to execute the contract subject to the conditions as set forth in the preliminary specifications as forming part of the contract. There under clause 2 it had been referred that the arbitrator for fulfiling the duties set forth in the Arbitration clause of the standard preliminary specification shall be the Project Engineer, Special Project Circle, Coimbatore Out of eight contracts entered into by and between the parties five of them contained the said arbitration clause as depleted under clause 2 of the agreement. Under the circumstances, the respondent's contention that there was no arbitration clause seemed to be untenable. In the case reported in A I R 1958 AP p 537 Dhulipudi Namayya v. The Union of India it was held :- "Where a party who had undertaken to do a certain work had the means, if he had been ordinarily diligent to know everything about the work there can be no question of his having been induced by any misrepresentation or fraudulent non-disclosure of the facts so as to entitle him to avoid the contract under the section It was further held that where a party assailing the contract does not seriously suggest that it was vitiated by mutual mistake but alleges that he was labouring under the mistake as to the nature of the work to be done under the contract that would not entitle him to avoid the "contract". "On the question whether the agreement formed by the acceptance of the defendant’s tender was provisional and subject to the execution of another formal document, the averment in the plaint was that no separate agreement was intended or contemplated and this Was traversed in the defendant's written statement. 15. The position of the law on the subject has been summarised by Parker J. in Von Hatzfeldt Wildenburg v Alexander, 19]2-1 Ch 284 at. p. 283(E) in the following passage which bas been approved by the Judicial Committee in Hukum Chand v. Ran Bahadur Singh, ILR 3 Pat 625; (AIR 1924 PC 156)(E) Harichand Mancharam v Govind Laxman ILR 47 Bom 335 (: AIR 1923 PC 47) (G) and Currimbhoy & Co Ltd v. L A. Creet ILR 60 Cal 980 (: AIR 1638 PC 29) (H). "It appears to be well settled by the authorities that if the documents or letters relied on as constituting a contract contemplated the execution of a further contract between the parties it is a question of construction whether the execution of the further contract is a condition or term of bargain or whether it is a mere expression of the desire of the parties as to the manner in which the transaction, already agreed to, will in fact go through. In the former case there is no enforceable contract either because the condition is unfulfilled or because the law does not recognise a contract to enter into a contract In the latter case there is a binding contract and the reference to the more formal document may be ignored". 16. The Arbitration Clause although not happily drawn but could not be held to he vague or unintelligible Under the circumstances, the petitioner is entitled to an order as prayed for in terms of prayers (a) and (b). Application allowed.