JUDGMENT Sukumar Chakravarty, J: This appeal is directed against the order dated 31st March, 1981 passed by Sri S. N. Banerjee, the learned Judge, 13 Bench, City Civil Court, Calcutta in Title Suit No. 758 of 1978, rejecting the defendant’s application under s. 34 of the Arbitration Act, 1940. 2. Plaintiffs filed the aforesaid title suit against the defendants for dissolution of the partnership firm under the name and style of Mallick & Co. and for accounts together with the further prayer for injunction restraining the defendant from carrying on business of the said firm in the premises as described in the schedule to the plaint and describing either of them as the sole proprietor of the firm, on the allegation in brief that on the basis of the partnership deed dated 22nd November, 1967. the plaintiffs and the defendants as partners of the aforesaid firm were carrying on the business of the firm and that because of some disputes and differences which arose between the partners since September, 1976, the defendants willfully committed breach of the agreement in the partnership deed relating to the affairs of the firm and that the defendants were carrying on the business of the firm describing themselves as the only owners of the business of the firm and that the defendants opened an account of the firm with the bank describing the defendant no. 2 as the sole proprietor of the firm in violation of the terms of the partnership deed and thereby the defendants made it impossible for the plaintiffs to carry on the partnership business with the defendants. 3. The defendants entered appearance and before taking any steps in the suit, filed the application under s. 34 of the Arbitration Act (hereinafter referred to as the Act) for stay of the proceedings of the suit. Defendant’s case in brief in the said application were as follows:- The plaintiffs and the defendants constituted the aforesaid partnership firm by executing a partnership deed and that they carried on the partnership business in accordance with the terms of the partnership deed. Defendant’s case in brief in the said application were as follows:- The plaintiffs and the defendants constituted the aforesaid partnership firm by executing a partnership deed and that they carried on the partnership business in accordance with the terms of the partnership deed. The disputes and differences arose between the partners in January, 1977 and in the month of February, 1977, through the intervention of the well-wishers of both the partners, the disputes and differences were settled and both the parties arrived at a settlement for dissolution of the partnership firm and accordingly a deed of dissolution of the partnership was approved by both the parties and that approved deed was an annexure to the petition. Non Judicial stamp was purchased by the plaintiff no. 2 for execution and registration of the deed of dissolution. The accounts of the partnership business were also mutually settled as per the balance sheet of the firm duly signed by both the parties. The plaintiffs were delaying the execution and registration on one pretext and the other. In terms of the arbitration clause in the partnership deed, all the disputes and differences of opinion which might arise between the partners would be settled according and subject to the provisions of Arbitration Act. The disputes and differences regarding dissolution of the partnership business and the settlement of accounts to the arbitration agreement, filed the suit for the reliefs as already stated. The defendants after their appearance and before taking any steps in the suit, filed the application for stay of the suit on the specific allegation that they were and are ready and willing to do everything necessary for the proper conduct of the arbitration. 4. The plaintiffs filed the affidavit-in-opposition contending inter alia that the subject-matter of the suit did not come within the scope of the arbitration clause as contained in the partnership deed, and that the right for dissolution of the partnership firm as sought for in the suit was based on s. 44 of the Partnership Act and not on the partnership deed. It was however contended that the disputes and difference was denied and it was also denied that any deed of dissolution of the partnership business was drafted and approved by the partners and that any amount was settled between them. It was however contended that plaintiffs agreed to pay Rs. 15, 000/- to the defendants but not Rs. It was however contended that the disputes and difference was denied and it was also denied that any deed of dissolution of the partnership business was drafted and approved by the partners and that any amount was settled between them. It was however contended that plaintiffs agreed to pay Rs. 15, 000/- to the defendants but not Rs. 30,000/- as mentioned in the deed annexed with the petition for stay. It was contended as well that the plaintiffs did not sign any balance-sheet as a token for settlement of the accounts by the alleged mutual agreement and that the defendants managed to manufacture the signature of the plaintiffs in the balance-sheet. Other allegations in the application for stay were denied. 5. The learned Judge rejected the application for stay on the ground that the plaintiffs as some of the partners had their right to dissolve the partnership and that the said right of dissolution was independent and did not arise out of any contract in the partnership deed. 6. The defendants being aggrieved by the said order of rejection, have preferred this appeal. 7. Mr. Dutta appearing for the appellant-defendants has submitted that the arbitration clause 19 in the partnership deed covers the disputes about the dissolution of the partnership business which is the subject matter of the suit and that s. 44 of the Partnership. Act which deals with the dissolution of the partnership firm by the court has got no scope of its application in the facts and circumstances of the present case. Mr. Dutta has further submitted that when the disputes and differences arose and both parties by mutual agreement settled to refer the disputes of the dissolution of the partnership business and the accounts to the arbitrator, the present suit for dissolution of the partnership firm and for accounts cannot proceed. 8. Mr. Roy Chowdhury appearing for the respondents plaintiffs has supported the impugned order in his submission. According to Mr. Roy Chowdhury, the arbitration clause 19 in the partnership business and the legal proceeding which has been sought to be stayed is not in respect of the matter agreed to be referred by virtue of the said arbitration clause. It has been further urged by Mr. According to Mr. Roy Chowdhury, the arbitration clause 19 in the partnership business and the legal proceeding which has been sought to be stayed is not in respect of the matter agreed to be referred by virtue of the said arbitration clause. It has been further urged by Mr. Roy Chowdhury that in order to ascertain in whether the subject-matter of the legal proceeding covers the subject matter of the arbitration clause, the allegation in the plaint of the legal proceeding alone is required to be looked into and not the averments made in the application under s. 34 of the Act. Mr. Roy Chowdhury has further submitted that the subject-matter of the suit under s. 44 of the Partnership. Act which deals with the dissolution by the Court, cannot be referred to the Arbitrator even if the arbitration clause 19 is interpreted as one covering the dispute of the dissolution of the partnership. Mr. Roy Chowdhury has drawn our attention to several decisions of this court in support of such submission and has submitted that the court in such matter refuses to exercise its discretion to stay the legal proceeding under s. 34 of the Act. 9. Section 34 of the Arbitration Act deals with the power of the court to stay legal proceedings where there is an Arbitration agreement. The power of stay under s. 34 of the Arbitration Act is discretionary and cannot-be claimed by a party as a matter of right. Such discretion is to be exercised by the court properly and judicially. Appellate court can always interfere with the decision of the trial court if it finds that the discretion has not been properly and judicially exercised. 10. In order that a stay may be granted under s. 34 of the Arbitration Act, it is necessary that the following conditions as contemplated in s. 34 should be fulfilled: (1) The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement. (2) The legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred. (3) The applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. (2) The legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred. (3) The applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that be should satisfy the court not only that he is but also he was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration, and (4) The court must be satisfied that there is on sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement. 11. The decision in the case of Anderson Wright Ltd. v. Moran & Co. reported in AIR 1955 SC 53 lends support to the above. There is no dispute to the fulfilment of the conditions No (1) and (3) in the case before us. Let us see whether conditions No. (2) and (4) have been fulfilled so that the stay under s. 34 of the Act may be granted. 12. The arbitration clause 19 in the partnership deed on the basis of which the parties in the instant case constituted the partnership firm runs as follows:- “All disputes and differences of opinion which may arise between the partners shall be settle according and subject to the provisions of Indian Arbitration Act.” 13. According to Mr. Roy Chowdhury, the aforesaid arbitration clause 19 does not cover the dispute relating to the dissolution of the partnership business between the partners. 14. In the case of Arjun Agarwalla v. Baidyanath Roy & ors reported in AIR 1980 Calcutta 354 the partnership deed contained an arbitration clause the relevant portion of which runs as follows:- “If during the continuance of the partnership or any of them afterwards, any dispute, difference or question shall arise between the partners hereto relating to or appertaining to such partnership of these presents, such disputes, differences and question shall be referred to arbitration of two Arbitrators one to be appointed by the First party and the other by other parties………..” 15. The suit involved in the aforesaid case was filed for dissolution of the partnership and accounts as in the instant case. Mrs. Pratibha Bonnerjea, J. has observed in the aforesaid case:-“The dispute is clearly within the scope of the arbitration agreement. The suit involved in the aforesaid case was filed for dissolution of the partnership and accounts as in the instant case. Mrs. Pratibha Bonnerjea, J. has observed in the aforesaid case:-“The dispute is clearly within the scope of the arbitration agreement. In my opinion, the dispute in suit is fully covered by the arbitration clause set out above.” 16. In the case of Nitya Kumar Chatterjee v. Sukhendra Chandra reported in AIR 1977 Calcutta 130 a question arose whether the arbitration clause in the partnership agreement to the effect that all disputes arising out of the partnership shall be referred to the arbitration includes the question of dissolution. The Division Bench of this Court presided over by Salil Kumar Dutta and H. N. Sen, JJ. has observed as follows:- “Assuming that the arbitration clause in the partnership agreement includes the question of dissolution, which we think, it does………” The underline is ours. 17. So placing reliance on the aforesaid two decisions, we are of the view that the arbitration clause 19 in the partnership deed of the present case as already quoted, includes also the question of dissolution of the partnership, in disagreement with the opinion as expressed by Mr. Roy Chowdhury in this respect in his submission. 18. Next comes the question whether the plaint alone of the legal proceeding sought to be stayed, is to be looked into to ascertain if the subject matter agreed to be referred to the arbitration as per the arbitration clause, as submitted by Mr. Roy Chowdhury. Mr. Dutta has however submitted that the court will be required to look into not only the plaint of the suit but also the petition for stay under s. 34 of the Act supported by affidavit and also other affidavits if any along with any correspondence between the partners, and has relied on the decision in the case of Lalchand Dharamchand v. Mlliance Jute Mills Co. Ltd reported in AIR 1973 Calcutta 243. It has been held in the said decision as follows:-“It is true as contended by Mr. Jain that the merit of the suit should not be gone into in an application under s. 34 of the Arbitration Act as observed in Gaya Electric Supply Co. Ltd reported in AIR 1973 Calcutta 243. It has been held in the said decision as follows:-“It is true as contended by Mr. Jain that the merit of the suit should not be gone into in an application under s. 34 of the Arbitration Act as observed in Gaya Electric Supply Co. Ltd. v. State of Bihar reported in AIR 1953 SC 182 , but in order to decide the merits of an application under s. 34, the Court may look into besides the plaint of the suit, affidavits filed by the parties as well as the correspondence that may have passed between the parties.” 19. It has already been stated what conditions are necessary to be fulfilled in order that a stay may be granted under s. 34 of the Act on deciding the application on merit. So both the plaint of the suit and the application under s. 34 of the Act supported by affidavit and other affidavits if any filed by the parties together with the correspondence if any between the parties may be looked into to decide the application under s. 34 of the Act on merit. 20. Next comes the important question whether the court has been satisfied that there is no sufficient reason why the matter should not be referred to the arbitration in accordance with the arbitration agreement. Here Mr. Roy Chowdhury has submitted that the subject matter of the suit under s. 44 of the Partnership Act which deals with dissolution by the court, should not be referred to the Arbitrator and that the court has consistently refused to exercise its discretion to stay the legal proceeding in such matters. Mr. Roy Chowdhury has relied on the decision in AIR 1971 Calcutta 317, AIR 1977 Calcutta 128 and AIR 1977 Calcutta 130. 21. Mr. Roy Chowdhury has relied on the decision in AIR 1971 Calcutta 317, AIR 1977 Calcutta 128 and AIR 1977 Calcutta 130. 21. Before we go into the discussion of the aforesaid decisions, for our guidelines we may quote here the valuable comments as made in the book ‘Indian Partnership Act’ by M. N. Mukherji and Sukuamr Dutt, 3rd Edition, at para 44.29 at page 373:- “Whenever a plaintiff seeks dissolution on grounds coming under s. 44 (f) and (g) whether the power of deciding whether the firm should be dissolved is expressly conferred on the Court under s. 44 and that such a power of the court under s. 44 came up for consideration in a recent judgment in England in Oliver v. Hiller. It was held that the dissolution of a partnership which involves the exercise of a judicial discretion under s. 35 (f) (corresponding to s. 44 of the Indian Act) and which may involve the appointment of a Receiver and manager, is again a matter which perhaps is more conveniently left in the hands of the Court and that when the discretion had been exercised by the trial Court against arbitration, such a discretion had been exercised by the trail Court against arbitration, such a discretion ought not to be interfered with lightly by the Appellate Court” Reference may also be made to the statement of the law in Russel on Arbitration, 17th Edn., page 91. “However, the Court has a discretion to refuse a stay. This discretion must be exercised upon the facts involved, but when a dissolution is claimed, the facts involved are very apt to be such as to call for refusal. This has led to the opinion of the Court in Toplin v. Postlethwaite, that a question of dissolution was not a suitable one to be left to arbitrators to decide. This discretion must be exercised upon the facts involved, but when a dissolution is claimed, the facts involved are very apt to be such as to call for refusal. This has led to the opinion of the Court in Toplin v. Postlethwaite, that a question of dissolution was not a suitable one to be left to arbitrators to decide. Whilst this is not a proposition of law as the cases previously cited show, it may perhaps be regarded as a ‘proposition of good sende’ and the principle is frequently found persuasive” In 28 Halsbury Simond’s (3rd) Edn, page 567, the law is stated in these terms: “Therefore, if charges of fraud or dishonesty or of want of good faith are made bona fide by one partner against the other, or if questions of law are likely to arise which are more fit for the Court than a lay tribunal or if the action claims dissolution on a ground the power of determining the existence of which is expressly within the discretion of the Court, or if the attempted reference is made vexatiously, a stay of the action for dissolution may, and generally will, be refused.” ” 22. In the case of Ganesh Chandra Dey and another v. Kamal Kumar Agarwalla reported in AIR 1971 Calcutta 317 in a suit for dissolution of partnership on the ground that it is just and equitable under s. 44(f) and (g) of the Partnership Act, S. A. Masud J. has held that the dispute relating to dissolution of firm on the ground that it is just and equitable to do so, should be decided by the court and the court should exercise its discretion in not staying the suit in spite of the arbitration clause. 23. In the case of Ramani Mohan Berman v. Gouri Rain Berman and others reported in AIR 1977 Calcutta 128, in a suit for dissolution of partnership, stay of the suit under s. 34 of the Arbitration Act was refused by the same Judge (Masud, J.) on the ground that the suit was comprehensive enough to decide all the issues between the parties in the suit and that the decision on the dispute between the parties before the Arbitrator would delay the matter and would not be advantageous to the parties. The observation of His Lordship in this case does not indicate as in the case reported In AIR 1971 Calcutta 317 that the subject matter of the suit for dissolution of partnership under s. 44 of the Partnership Act should not be referred to the arbitration and that the legal proceeding should not be stayed on that ground. In the case reported in AIR 1977 Calcutta 128 His Lordship found that it would be advantageous to the parties if the dispute is decided in the suit itself without referring the same to the arbitration for decision. 24. In the case of Nitya Kumar Chatterjee v. Sukhendra Chandra reported in AIR 1977 Calcutta 120 (supra) in a suit for dissolution of partnership under s. 44 of the Partnership Act on the ground that it is just and equitable to do so, in spite of the arbitration agreement, this Court did not interfere with the refusal of stay of the suit under s. 34 of the Act. 25. Keeping in view of the principles of the law as discussed above, we have considered the facts and circumstances of the instant case placed before us. It has already been stated while describing the facts on what ground the suit for dissolution of the partnership has been brought by the plaintiffs. It appears that the grounds for dissolution of the partnership as alleged in the plaint came under the ambit of clause (d) of s. 44 of the Partnership Act and not under the clauses of that section. It appears that the suit for dissolution of partnership has been brought on any ground which renders it just and equitable that the firm should be dissolved. So viewed, the decisions in AIR 1971 Calcutta 317 and AIR 1977 Calcutta 130 based on different facts and ground may not be applicable with all its force in the instant case. Placing reliance on the decisions in AIR 1977 Calcutta 128 (supra), we might not have interfered with the refusal of stay of the suit not on the ground as mentioned by the learned Judge in the impugned order but on the ground that the suit is comprehensive enough to decide all the issues at dispute between the parties on the ground in clause (d) of s. 44 of the Partnership Act. But on perusal of the application under s. 34 of the Act together with the plaint of the suit in our case, we find that the facts are quite otherwise in this case. 26. The dissolution of a firm can be had by different ways as per the relevant provisions of the Partnership Act dealing with the dissolution of the partnership. It has already been stated that s. 44 of the Partnership Act deals with dissolution by the court. Section 40 of the Partnership Act deals with dissolution by agreement. It is the definite case of the appellant defendants in the application under s. 34 of the Act supported by the affidavit that when the disputes and differences arose between the partners, through the intervention of some well-wishers, they mutually greed to dissolve the partnership business and settle the accounts and accordingly a deed of dissolution was prepared and approved by both the parties and the balance sheet showing the settlement of accounts was also prepared and signed by both the parties but the plaintiffs were delaying the execution and registration of the said deed on some pretext or other and then they filed the instant suit on false ground. The plaintiffs in their affidavit-in-opposition to the application under s. 34 of the Act have admitted the attempt by common friends to settle the dispute between the partners and it has also been admitted that some deeds were drafted but denied the preparation of the deed of dissolution of partnership and approval thereof by the parties and settlement of any account. It was however been contended by the plaintiffs in the said affidavit-in-opposition that they agreed to pay Rs. 15,000/- to the defendants but not Rs. 30,000/- as mentioned in the deed annexed to the application under s. 34 of the Act. So the main dispute between the parties is now whether they mutually agreed to dissolve the partnership and settle the accounts through the intervention of their well-wishers or common friends and whether the deed of dissolution were prepared and approved by the partners and whether any balance sheet of accounts was prepared and signed by them on their approval. So the main dispute between the parties is now whether they mutually agreed to dissolve the partnership and settle the accounts through the intervention of their well-wishers or common friends and whether the deed of dissolution were prepared and approved by the partners and whether any balance sheet of accounts was prepared and signed by them on their approval. This kind of dispute coming within the scope and ambit of the arbitration clause 19 of the partnership deed can be conveniently decided by the domestic forum like the arbitration as desired and agreed by both the parties in the arbitration clause, and s. 44 of the Partnership Act and the Court's decision relating to the dispute coming within the ambit of Section 44 of the Partnership Act as already discussed, do not stand as bar to the Court's exercise of discretion to grant stay under s. 34 of the Act when all other conditions of the said section are found to have been fulfilled. 27. In the light of the above discussion, we are of the view that the learned Judge has failed to exercise his discretion properly and judicially and accordingly has committed mistake in refusing the stay under s. 34 of the Act. 28. In the result, the appeal is allowed. The impugned order passed by the learned Judge is set aside. The application under s. 34 of the Arbitration Act is allowed and the Title Suit No. 758 of 1978 be stayed under s. 34 of the Arbitration Act. We make no order as to costs. Gobinda Chandra Chatterjee, J.: I agree. Appeal allowed; application under s. 34 allowed and suit stayed.