JUDGMENT G.D. Dube 1. These two appeals raise similar questions of law and facts. The common arguments have been advanced in respect of these two cases by learned counsel for the parties. Hence these appeals are decided by this common judgment. F.A.F.O. No 515 of 1975 arises from a judgment in original suit no 181 of 1971 M/s. Agarwal Traders and others v. Food Corporation of India, New Delhi and others. 2. The other Appeal No. 516 of 1975 arises from original Suit No. 152 of 1974; Nawal Kishore v. Food Corporation of India and others. The defendants in both the suits are common. In original Suit No. 181 of 1974, the plaintiffs had prayed for realisation of Rupees 27,574-57 P. It has been alleged that the plaintiffs had been acting as Agents of the Food Corporation of India (hereinafter referred to as the Corporation). While acting as Agents, they had made purchases of food- grains from 21st April, 1971 to 23-8-71. According to the allegations, the plaintiffs were entitled to various commission? towards commission of agents, Commission of Arhatia and other charges regarding lodging, packing etc. of the bags. It has been alleged that the Food Corporation employees had deducted huge amounts towards commission and had also not paid some lodging and packing charges etc. according to the agreement. A notice was sent on 2-12- 1971 which was served on the defendants on 3rd and 4th December, 1971. On receipts of this notice, some inquiry was conducted by Sri Abdul Qaiyum, Senior Manager of the Corporation. The plaintiffs gave another notice on 26-12-1972 when they did not receive any response from the defendants. This was served on the defendants near about on 1-3-1912. It was contended in paragraph 9 of the plaint that even though the notices were served, the Corporation did not ask the plaintiffs to get the matter adjudicated by an arbitrator. On the other hand, they submitted the matter to the Central Bureau of Investigation for investigation after the conclusion of departmental inquiry in the matter. The plaintiffs had sent a final notice on 26th March, 1973 to the Corporation authorities, when the matter was not settled, they filed suit on 18-4-1974 3. In Original Suit No. 162 of 1974 also the dispute relates between the plaintiffs as agents and Corporation as the principal. The plaintiffs had sent a final notice on 26th March, 1973 to the Corporation authorities, when the matter was not settled, they filed suit on 18-4-1974 3. In Original Suit No. 162 of 1974 also the dispute relates between the plaintiffs as agents and Corporation as the principal. He had alleged that, according to the agreement the sole plaintiffs had purchased food-grains from the stockists from 18th April, 1971 to 31-8-1973. On these purchases, he ought to have been paid commission and other charges, the details of which are alleged in Suit No. 181 of 19/4. It is not necessary to repeat them. It was pleaded that contrary to the terms of agreement, the Corporation had made wrongful deductions towards commission and packing charges etc. The plaintiffs had given notices on 2-12-1971 and 16-2-1972 which were served on the Corporation. In this case too the plaintiffs had alleged that despite notice the defendants had neither asked the plaintiff to go for arbitration. No of for was made to refer the matter to arbitration. Therefore, the plaintiffs gave last notice on 26th March. 1973. Thereafter they filed suit on 15-4-1974 for realisation of Rs. 45,482'36 P. 4. It is an admitted case that in both the suits the Corporation had moved an application before the court below after service of the summonses and before filing of the written statement praying the lower court to stay the proceedings of the suit and asked the plaintiffs to proceed In arbitration according to the terms of the agreement. IT has been alleged in the petitions that the Corporation was always ready and willing at the time of the commencement of the proceedings and is willing to do all things necessary for the proper conduct of the arbitration. In both the cases, the learned Judge had directed the Corporation to file an affidavit in support of the application. This affidavit was sworn and filed by one Hasib Ahmad in both the cases on 31-10-1974 in the capacity of District Manager of the Corporation Office at Hapur. In the objection to the petition under section 34 of the Arbitration Act (hereinafter referred to as the Act), the plaintiffs had stated that the arbitration agreements were gut executed by exercising undue influence by the Corporation authorities during the continuation of- the agency on the dictates of the officials of the Corporation. In the objection to the petition under section 34 of the Arbitration Act (hereinafter referred to as the Act), the plaintiffs had stated that the arbitration agreements were gut executed by exercising undue influence by the Corporation authorities during the continuation of- the agency on the dictates of the officials of the Corporation. IT was denied that the Corporation was ready and willing to do all things necessary for the proceedings of the arbitration. The Civil Judge, Bulandshahr came to the conclusion after hearing the parties that the Corporation was not willing to refer the matter to arbitration and do all things necessary for proceedings of the arbitration. IT was also held that the matter of appointment was left to the sole discretion of the Managing Director of the Corporation. On this basis, the learned Jude held that it cannot be expected that the arbitrator so appointed would be free and fair in imparting justice to the plaintiffs. On the basis of these two findings, the lower court rejected petition. Aggrieved by these orders, the present two appeals have been filed. Both the findings of the court below have been challenged by the Corporation. It has been contended that the petition under section 34 of the Act contained necessary averments regarding willingness and readiness of the Corporation to refer the matter to the arbitration. It was urged that the conclusion drawn by the lower court on the basis of the alleged inaction of the appellant Corporation in referring the matter soon after the receipt of the three notices was not justified on the facts and in the terms and spirit of section 34 of the Act. It was further urged that merely because the Managing Director was authorised to nominate the arbitrator, it is not a sufficient ground to reject the application under section 34 of the Act. 5. In support of his contention learned counsel for the appellant Corporation has cited several case laws. Before proceedings to discuss the facts of this case in the light of the rival contention and the case laws cited by both the parties, it would be appropriate to quote section 34 of the Act as well as the agreement itself. Section 34 of the Act is as follows "34. Before proceedings to discuss the facts of this case in the light of the rival contention and the case laws cited by both the parties, it would be appropriate to quote section 34 of the Act as well as the agreement itself. Section 34 of the Act is as follows "34. Where any party to an arbitration agreement or any person claiming under the commences any legal proceedings against any other party to the agreement or any person claiming under him in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time before filing a written statement of taking any other steps in the proceedings, apply to the judicial authority before which the proceedings and if satisfied that there is not sufficint reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration such authority may make an order staying the proceedings." 6. The agreement clauses between the parties as contained is paragraph 13 runs as under : "All disputes and differences arising out of in any way touching or con- cering this agreement whatsoever Except as to any matter the decision or which is expressly provided for in the agreement shall be referred to the sole arbitration of any person appointed by the Managing Director of the Food Corporation of India It will be no objection to any such appointment that the perron appointed is or as an employee of the Corporation that he had expressed views on all or any of the matters In dispute or difference. The award of such arbitrators shall be final and binding on the parties to this agreement. It is a term of this agreement that in the event of such arbitrator to whom the matter is originally referred to being transferred or vacating his office dying or being unable to act for any persons the Regional Manager or the Food Corporation of India, Uttar Pradesh at the time of such transfer vacation of office death of inability to act shall appoint another person to act as arbitrator. Such person shall be entitled to proceed with due reference from the stage at which it was left by the predecessor. Such person shall be entitled to proceed with due reference from the stage at which it was left by the predecessor. It is also a term of this agreement that no person other than a person appointed as aforesaid should act as Arbitrator and if for any reason that is not possible, the matter is not to be referred to arbitration at all. Provided further that any demand for arbitration in respect of any claims from the Agent under this agreement shall be in writing and made within one year of the date of termination or completion (except expiry of the period) of the agreement and where such demand to have waived and absolutely barred and the Corporation shall be discharged or relieved of all liabilities under the agreement in respect of their claims." From the fact discussed above, it is apparent that the appellants were willing and ready both at the commencement of the proceedings and at the time of filling of the application. 7. Reliance has been placed on behalf of the respondents in Anderson Wright Ltd. v. Moran and Co., AIR 1955 SC 53 . In this case, the principles for granting stay under section 34 of the Act were laid down. The following conditions were stated to 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. It is also necessary that he should satisfy the court not only that he is but also was at the commencement of the proceedings ready and willing to do every thing necessary for the proper conduct of the arbitration; and (4) the court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement.'' 8. It was argued that the order under section 34 of the Act is discretionary and after such a long time such discretion should not be exercised. This contention is without force. The delay has occurred on account of pendency of this appeal for a long time. It was argued that the order under section 34 of the Act is discretionary and after such a long time such discretion should not be exercised. This contention is without force. The delay has occurred on account of pendency of this appeal for a long time. This cannot defeat the provisions of section 34 of the Act. The arbitration clause in an agreement is an efficacious means of settling the dispute between the parties. There is no reason why a party should be deprived of such an efficacious relief on the ground of delay in disposal of the application under section 34 of the Act. In view of what has been said above, I come to the conclusion that the appellants had placed sufficient material before the lower court to show that they were ready and willing to refer the matter to arbitration not only at the commencement of the suit but also at the time of making the application under section 34 of the Act. The first point, therefore, succeeds. The finding of the lower court holding that the appellants were not ready and willing is erroneous 9. Learned counsel for the respondents has cited Uttar Pradesh Cooperative Federation v. Sunder Brothers, AIR 1967 SC 249 . In this case, it was held that a party may be relieved from the agreement or arbitration if he can show that it has sufficient reasons to suspect that the selected arbitrator will act unfairly. It was also urged that in the arbitration clause referred to above the arbitrator is to be chosen by the Managing Director. It was urged that such an arbitrator cannot be fair to the plaintiffs. The case law in U. P. Cooperative Federation (supra) lays down that the selected arbitrator should be shown to be biased or reasonably unfair to the party concerned. That stage has not yet arrived. It would be too premature to presume that the arbitrator selected by the Managing Director would not do justice between the parties. 10. Learned counsel for the appellants has relied upon a case in Ardeshar Sorabji v. State of Madhya Pradesh, AIR 1968 MP 13 , wherein the parties were knowing the relation of the arbitrator with one of the parties even at the time of contract. It was held on these facts that this much is not sufficient to refuse arbitration. 10. Learned counsel for the appellants has relied upon a case in Ardeshar Sorabji v. State of Madhya Pradesh, AIR 1968 MP 13 , wherein the parties were knowing the relation of the arbitrator with one of the parties even at the time of contract. It was held on these facts that this much is not sufficient to refuse arbitration. In view of the above, the lower court was not justified in holding that merely because the Managing Director was authorised to appoint an arbitrator and refer the matter to the arbitration will result into appointment of such an arbitrator who will not be fair to the parties. I have already said above that such a conclusion was premature. The second point too should be answered in favour of the appellants. 11. No other point has been pressed. 12. For the reasons mentioned above, the appeal is allowed with costs. The impugned order is set aside. The application under section 34 of the Act is allowed. The case is remanded back to the lower court with a direction to stay the proceedings asking the parties to refer the matter to the arbitration as contained In the arbitration agreement between the parties. Appeal allowed.