JUDGMENT K.C. Agrawal, J. - This is an appeal preferred by the defendant Sri Madhesia Trading Company Limited, Khalilabad, district Basti, and its proprietor Moti Lal against the judgment and order of the court below refusing to stay the proceedings of the suit under Section 34 of the Arbitration Act. 2. Briefly, the facts are these M/s Ganesh Flour Mills Company Limited, Kanpur, filed suit for recovery of Rs. 2,90,000/- against the defendant, aforesaid, on the ground that the defendant no 1 was its dealer and had been appointed for the purposes of carrying on sale of ghee manufactured by it. For this purpose defendants used to obtain goods from the plaintiff and used to draw Hundis The Hundi drawn on the defendants were sent for collection by the Bank, but some of them were returned uncashed. Consequently, thereafter the defendants were approached by the plaintiff and the defendants agreed to pay the amount due in instalments of Rs. 10,000/- per month. But the defendants failed to comply with the terms of the agreement arrived at between them and the plaintiff and, therefore, the suit for the recovery of the aforesaid amount was filed, 3. The defendants filed an application under Section 54 of the Arbitration Act for stay of the suit on the ground that as the dispute in between the parties was preferable to arbitration, the suit could not be tried on merits and decided by the court. Clause 12 of the agreement, which deals with arbitration, reads that should any dispute between the parties arise under this agreement, or relating to any goods supplied or to be supplied by the Company, or to the prices thereof or the amount due, the same shall be referred to Arbitration of two Merchant members of the Uttar India Chambers of Commerce at Kanpur. 4. In the application the defendants stated that they were ready and willing to send the matter to arbitration in terms of clause 12 of the agreement aforesaid. 5. The application was contested by the plaintiff on the ground that as the defendants had taken time for obtaining copy of the plaint and for further filing of the written-statements they were deprived under law from getting the proceedings of the suit stayed. 5. The application was contested by the plaintiff on the ground that as the defendants had taken time for obtaining copy of the plaint and for further filing of the written-statements they were deprived under law from getting the proceedings of the suit stayed. It was urged by them that taking time for filing of the written statements amounted to taking steps in the suit and that denied the defendants to get the suit stayed. 6. After hearing counsel for the parties we are of opinion that the view taken by the court below is incorrect in law. By means of the U.P. Act 57 of 1976 two Explanations were appended to Section 34 by the U.P Legislature. Explanation 2 which is relevant for our purpose is quoted below : - Explanation 2 : "A mere application for time to file a written statement of a mere contest to an interlocutory application for injunction, appointment of Receiver or the like, shall not amount to taking any step in the proceedings". From this Explanation it would appear that making a mere application for filing written statement will not amount to taking any steps in the proceedings. Consequently, because of this amendment the view taken by the court below is rendered invalid However, it was submitted by the counsel for the appellant that as the amendment came into force on January 1, 1977, it does not apply to the present appeal. Counsel urged that the amendment was not retrospective 7. We are not impressed by the submission of the plaintiff-respondent. It is to be noted that the two clauses appended to Section 34 are Explanations. It is the rule of interpretation of law that an Explanation is retrospective in operation unless there is something in the context which does not require that rule to be applied to. In the instant case Explanation 2 has clarified the intention of the legislature which was intended to be conveyed. The legislature did not want that the Explanation 2 should, only be prospective and be applied to the suits which are filed after the amendment. Even to suits which were filed earlier to the enforcement of t..e U.P. Act 57 of 1976 the Explanation could be applied and the appeal since is a continuous in the suit, the Explanation will apply to the present appeal also. 8. Even to suits which were filed earlier to the enforcement of t..e U.P. Act 57 of 1976 the Explanation could be applied and the appeal since is a continuous in the suit, the Explanation will apply to the present appeal also. 8. Recently in General Electric Company v. Renusagar Power company, 1987(4) SCC 137 , the Supreme Court came to consider the effect of taking of time by a party to file written-statement. It was said : "The step must be such as to manifest the intention of the party unequivocally to abandon the right under the arbitration agreement and instead to opt to have the dispute resolved on merits in the suit.The step must Oe such as to indicate an election or affirmation in favour of the sum in the place of the arbitration". 9. In the instant case we have not been shown anything from the record which court lead us to the conclusion that the defendant did not want the dispute to be resolved through the arbitration. 10. Submission of the Standing Counsel appearing for the Union of India is that the dispute arising out of the suit was not covered by the arbitration clause, is not correct. The arbitration clause is very wide in its nature. It covers within itself all types of dispute ranging from transaction of dealership or payment or non-payment of money due to one party to the other. In the present case the dispute was about payment of money which the defendants had not paid. Hence, clause 12 covers the controversy. 11. In the result, the appeal succeeds and is allowed. The judgment and order of the court below is set aside. The application made under Section 34 of the Arbitration Act is allowed.