Judgment :- The appellant has been doing business under the trade name and style ‘Satish Weaving Factor/at Manalmedu village, Karur Taluk She had insured with the second respondent “under a fire insurance policy for the period 27-1-1989 to 26-1-1990 for a total sum of Rs. 95,000/. On 31-7-1989, there was a fire accident in the appellants factory. The machinery and accessories were all burnt. The appellant informed the third respondent immediately and a survey was made by the respondents through their surveyor on 3 1-7-1989 and 2-8-1989. The appellant was required to furnish the details of the machinery and their value to the surveyor. The appellant had also sent a consent letter on 16-10-1989 as instructed by the respondents agreeing to receive a sum of Rs. 87,500/- without prejudice. As the claim was not settled, the appelant issued a notice on 27-11-1989 which was received by the third respondent on 30-11-1989. The appellant did not receive any reply. She filed a suit on 11-1-1990 in the Court of the Subordinate Judge, Karur for recovery of Rs. 95,100/- as compensation with interest thereon. She prayed for permission to file the suit as an indigent person. The proceeding was taken on file as O.P. No. 7 of 1990. 2. The Court ordered notice in the petition on 15-2-1990 and made it returnable by 21-3-1990. On 21-3-1990 Sri. K. Meenakshisundaram, Advocate, filed vakalat for all the three respondents and took time for counter. The matter was posted to 20-4-1990. The Court ordered notice to the Government Pleader returnable by 20-4-1990. On 20-4-1990 a petition was filed by the respondents under S. 34 of the Indian Arbitration Act for stay of all further proceedings in O.P. No. 7 of 1990. In the affidavit filed in support of the petition it was stated that the respondents had sent a reply to the appellants notice claiming benefits of the Arbitration clause. The affidavit did not disclose the date of the notice. Nor did the respondents file the notice along with the affidavit. It is now represented before me that the reply notice was issued on 10-1-1990. 3. The appellant filed a counter to the application on 20-6-1990. It was stated specifically in the counter that the respondents had taken time in the original petition for filing counter on 21-3-1990 and thus they were ready to proceed with the suits. It is now represented before me that the reply notice was issued on 10-1-1990. 3. The appellant filed a counter to the application on 20-6-1990. It was stated specifically in the counter that the respondents had taken time in the original petition for filing counter on 21-3-1990 and thus they were ready to proceed with the suits. It was also stated that the respondents were not ready and willing to do all things necessary for a proper conduct of arbitration at the commencement of proceedings and they were not entitled to apply for stay subsequently. The application was being adjourned from time to time. It is seen from the entries made by the Court below on the application that the respondents were not ready for enquiry on 21-8-1990 and 2-4-1991. On the latter date, the matter was adjourned to 30-4-1991 as a last chance. On 30-4-1991, the Court allowed the application with a one line order as follows: “Heard both, According, to S. 34 of Indian Arbitration Act 1940, petition is allowed.” 4. It is the said order which is challenged by the appellant in this appeal. The appellant filed C.M.P.No-9111 of 1991 for stay of the operation of the order of the Court below. In the affidavit filed in support of the petition it was alleged that on 30-4-1991 counsel for the respondents prayed for an adjournment and the learned Subordinate Judge passed over the matter to enable them to file a petition for adjournment. It was stated that to the shock and surprise of the appellants counsel, he found from the ‘A’ Diary, immediately after the reopening of the court that the petition had been allowed on 30-4-1991 and orders were passed as if both part ies were heard. It should be mentioned here that 30-4-1991 was the last working day before the summer vacation. In the counter affidavit filed in the said Civil Miscellaneous Petition, the Deputy Manager of the first respondent denied the allegations made by the appellant. It is better to extract the relevant portion in the counter affidavit, which reads as follows: “The allegations in para 4 of the affidavit are specifically denied. In the counter affidavit filed in the said Civil Miscellaneous Petition, the Deputy Manager of the first respondent denied the allegations made by the appellant. It is better to extract the relevant portion in the counter affidavit, which reads as follows: “The allegations in para 4 of the affidavit are specifically denied. On 30/4/91 our counsel did not seek time to file counter in the O.P. On the other had it is our case that we would not take any step if the proceedings in the O.P. and had always pursued the stay petition only. The same had been adjourned repeatedly for enquiry and as a last chance on 30/4/91, on which date the Court passed orders after hearing both sides.” 5. While in paragraph 4 of the affidavit filed by the appellant in C.M.P. No. 9111 of 1991 there is a specific averment that counsel for the Insurance Company sought for an adjournment and the Subordinate Judge passed over the matter for their filing a petition for adjournment, that averment has not been traversed in the counter affidavit. The statement found in the counter affidavit does not pertain to the specific allegation made on behalf of the appellant, but is an evasivereply given relating to something which according to the respondents did not happen in the main original petition and incidentally stating that the Court Passed orders after hearing both sides. Though I do not propose to hold any enquiry as to whether the Subordinate Judge heard counsel on both sides and passed orders, I must express my disapproval of the casual and cavalier manner in which the counter affidavit is filed in this Court by a responsible official of the respondent company. 6. In spite of this Court repeatedly frowning on one line orders being passed by the subordinate Courts without giving any reason in support of the conclusion and without disclosing whether the Court applied its mind to the questions which arise for consideration, the learned Subordinate Judge has chosen to pass one such order in this case. By now it is too well settled that under S. 34 of the Indian Arbitration Act, an order for stay is not a matter of course and it shall not be passed on the mere asking for it. By now it is too well settled that under S. 34 of the Indian Arbitration Act, an order for stay is not a matter of course and it shall not be passed on the mere asking for it. It is a matter in which the court should ascertain whether the conditions set out in the Section are fulfilled and then exercise its judicial discretion before passing an order. In Rachappa v. Gurusiddappa AIR 1989 SC 635 the law is stated thus: “The section stipulates that in order that stay may be granted under the section, it is necessary that the following conditions are fulfilled; (i) The proceedings must have commenced by a party to an arbitration agreement against any other party to the agreement; (ii) the legal proceeding, in this case the suit, which is sought to be stayed must be in respect of a matter agreed to be referred; (iii) the applicant for stay must be a parry to the legal proceeding, the suit in this case; (iv) the applicant must have taken no steps in the proceedings after appearance; (v)the applicant must satisfy that only the applicant was at the time when the proceedings were commenced, ready and willing to do everything necessary for the proper conduct of the arbitration; and (vi) the court must also be satisfied that there was no sufficient reason why the matter should not be referred to arbitration.” The order of the learned Subordinate Judge does not disclose whether he kept in mind anyone of the conditions set out above. Normally, I would have set aside the order of the lower Court and remanded the application for fresh disposal. But, having regard to the fact that the accident took place in July 1989 and the proceedings instituted by the appellant are kept at the threshold! for more than fifteen months and the question whether the respondents are entitled to invoke the provisions of S. 34 of the Arbitration Act could be decided here with the materials now on record, I proceeded to hear counsel on both sides on the merits of the application under S. 34 of the Arbitration Act. 7. I have already referred to the fact that the advocate for the respondents entered appearance in the Original Petition on 21-3-1990 and prayed for time to file counter. 7. I have already referred to the fact that the advocate for the respondents entered appearance in the Original Petition on 21-3-1990 and prayed for time to file counter. It is argued by learned counsel for the appellant that taking time for counter in the Original Petition would tantamount to taking a step in the proceeding and it would disentitle the respondent from invoking S. 34 of the Arbitration Act. In support of his contention, he places reliance on a judgment of the Delhi High Court in K.K. Mathai v. Motor Dai School, Tilak Lane, New Delhi and others AIR 1977 NOC 242 (Delhi). It was held in that case that an application under Order XXXIII, Code of Civil Procedure is a legal proceeding within the meaning of S. 34 of the Arbitration Act and filing of a reply by the respondents alleging that the applicant is possessed of sufficient means to pay the requisite Court-fee on the plaint is a stage in the advancement of the suit and amounts to taking steps in the proceedings. 8. It is submitted by learned counsel for the appellant that even if a reply is not filed actually and counsel had only taken time to file a reply or counter in the proceeding under OrderXXXIII, Code of Civil Procedure, it would be a step in the proceedings within the meaning of S. 34 of the Arbitration Act. For this purpose, reliance is placed n J. Sreenivassalu v. V. Parthaasarathi AIR 1980 Madras 194 In that case, the defendant entered appearance in the suit through counsel and a vakalat was filed. The suit was adjourned to a further date for filing of written statement. Before the adjourned date, he filed an application under S. 34 of the Arbitration Act to stay all further proceedings in the suit. It was opposed on the ground that the defendant had requested time for written statement which would amount to participation in the proceedings and a submission to the jurisdiction of the Court. Before the adjourned date, he filed an application under S. 34 of the Arbitration Act to stay all further proceedings in the suit. It was opposed on the ground that the defendant had requested time for written statement which would amount to participation in the proceedings and a submission to the jurisdiction of the Court. The District Munsif expressed a view that the Court had automatically in the usual course adjourned the suit to a particular date for filing written statement and no oral representation was made by the counsel for the defendant for filing the written statement and therefore, it could not be said that the defendant had participated or taken any steps in the proceedings as contemplated under S. 34 of the Arbitration Act. On that basis, the District Munsif allowed the application. On appeal, the Subordinate Judge held that the grant of time for filing written statement indicated that it must have been only on request of the defendant and, therefore, he was not entitled to maintain an application under S. 34 of the Arbitration Act as he had participated in the proceedings. Consequently, he reversed the order of the District Munsif and dismissed the application filed by the Defendant. It was that order which was challenged in this Court. Ratnam, J. upheld the view taken by the Subordinate Judge and dismissed the revision petition. It is necessary to extract the following passage in the judgment in order to reject one of the arguments advanced before me by learned counsellor the respondents: “Under order 9 Rule 1 the Code of Civil Procedure, it ii the duty of the defendant to be in attendance of the court eithei in person or through advocate on the day fixed in the summons and unless the hearing is adjourned to a future day fixed by Court, the suit shall be heard. In the present case, the fact remains that time had been granted for filing of the written statement up to 17-7-1978. Such grant of time would indicate that it ‘must have been only pursuant to a request made by the learned counsel for he petitioner, who had filed the vakatal on 16-6-1978. Otherwise, the court would have proceeded with the hearing of the suit. Such grant of time would indicate that it ‘must have been only pursuant to a request made by the learned counsel for he petitioner, who had filed the vakatal on 16-6-1978. Otherwise, the court would have proceeded with the hearing of the suit. It is thus evident that the petitionei being fully aware that having regard to the provision for resolving the disputes by reference to arbitration, yet chose to instruct his counsel to appear in the Court and pray for time; foi filing the written statement which was also granted by the court. This, in my view, is a clear manifestation of a desire on the part of the petitio ner to take almost the first step in the suit indicating that he intended to go on with the suit and not to resort to the arbitration provision. Under these circumstances, the lower appellate court was perfectly justified in holding that the petitioner had participated in the proceedings and had also submitted to the jurisdiction of the court, which would disentitle him from invoking the proceeding under S. 34 of the Act.” 9. In this case an argument was advanced by learned counsel for the respondents that Sri. Meenakshisundaram, the advocate who appeared for them in the trial Court did not pray for time to file counter in the Original Petition, but the Court mechanically adjourned it to another date for filing counter. The reasoning of Ratnam, J. found in the passage extracted above will apply here also. Apart from that, the materials on record prove that the contention of learned counsel is factually wrong. The entry on the Original Petition made on 21-3-1990 by the Subordinate Judge discloses that he granted time for counter and at the same time ordered notice to Government Pleader returnable by 20.4.1990. If learned counsel for the respondents had informed the Subordinate Judge that he would not be proceeding further with the Original petition 1 but would be filing an application; under S. 34 of the Arbitration Act for stay of the proceedings, the Subordinate Judge would not have ordered notice to the Government Pleader. In the counter affidavit filed by the appellant in I.A. No. 21 of 1990, it was specifically alleged that the respondents took time on 21-3-1990 for counter and again took time on 21-4-1990 for counter. The maintainability of the application was challenged on that ground. In the counter affidavit filed by the appellant in I.A. No. 21 of 1990, it was specifically alleged that the respondents took time on 21-3-1990 for counter and again took time on 21-4-1990 for counter. The maintainability of the application was challenged on that ground. Though the counter affidavit was filed on 20-6-1990 by the appellant, the respondents did not choose to file any reply affidavit denying the averment made in the counter affidavit. Hence, it is not open to the respondents to contend that their counsel did not pray for time in the Original Petition to file counter, but the Court mechanically adjourned the matter for filing counter to another date. 10. A similar situation was considered by the Supreme Court in The State of Uttar Pradesh v. M/s. Janaki Saren Kailash Chandra and another AIR 1973 SC 2071 . A contention was raised by the Government that an application filed by the District Government Pleader for adjournment for filing written statement was not made on instructions and was unauthorised. The Supreme Court rejected that contention. The following observations made by the Supreme Court are very relevant to the present case: “If the said counsel wanted time for the purpose of having fuller instructions, he could have asked for it specifically, for he was not a layman ignorant about the legal position but a professional lawyer retained by the Government for the pur pose of acting and pleading on behalf of the Government as a recognized agent. He, however, chose instead to ask for time specifically for filing written “statement and this act he pur ported to do on behalf of the State Government which he was fully empowered to do. The State took benefit of his ap pearance and his successful prayer for adjournment of the case by one month for the purpose of filing the written state ment “ “If he wanted time for further consultations, he could and should have specifically made a prayer to that effect. It is, however, idle to contend that he can be considered to have merely volunteered without authority to appear and ask for time for filing the written statement.” Earlier in the judgment, the Supreme Court act out the legal position under S. 34 of the Arbitration Act. It is, however, idle to contend that he can be considered to have merely volunteered without authority to appear and ask for time for filing the written statement.” Earlier in the judgment, the Supreme Court act out the legal position under S. 34 of the Arbitration Act. It would be advantageous to refer to the same; “The legal position with respect to the scope and meaning of S. 34 of the Arbitration Act admits of little doubt, the language of this section being quite plain. When a party to an arbitration agreement commences any legal proceedings against any other party to the said agreement with respect to the subject-matter thereof, then the other party is entitled to ask for such proceedings to be stayed so as to “enable the arbitration agreement to be carried out. It is, however, to be clearly understood that t he mere existence of an arbitration clause in an agreement does not by itself operate as a bar to a suit in the Court. It does not by itself impose any obligation on the Court to stay the suit or to give any opportunity to the defendant to consider the question of enforcing the arbitration agreement. The right to institute a suit in some Court is conferred, on a person having a grievance of a civil nature, under the general law. It is a fundamental principle of law that where there is a right there is a remedy. S. 9 of the Code of Civil Procedure confers this general right of suit on aggrieved person except where the cognizance of the suit is barred either expressly or impliedly. A party seeking to curtail this general right of suit has to discharge the onus of establishing his right to do so and the law curtailing such general right has to be strictly complied with. To enable a defendant to obtain an order staying the suit, apart from other conditions mentioned in S. 34 of the Arbitration Act he is “ required to present his application praying for stay before filing his written statement or taking any other step in the suit proceedings. In the present case the written statement was indisputably not filed before the application for stay was presented. In the present case the written statement was indisputably not filed before the application for stay was presented. The question is whether any other step was taken in the proceeding as contemplated by S. 34 and it is this point with which we are directly concerned in the present case. Taking other steps in the suit proceedings connotes the idea of doing something in aid of the progress of the suit or submitting to the jurisdiction of the Court for the purpose of adjudication of the merits of the controversy in the suit.” 11. It is then argued by learned counsel for the respondents that in a proceeding under Order XXXIII, Code of Civil Procedure, the merits of the controversy in the suit are not to be considered and the only question is whether the petitioner has sufficient means to pay the Court-fee which will have no bearing on the issues arising in the suit. According to learned counsel, even if a counter affidavit had been filed in the Original Petition and it had been contested by the respondents, it would not have prevented them from invoking the benefits of S. 34 of the Arbitration Act. He draws inspiration for making the said submission from the observations of the Supreme Court in Vijai Pratap v. Dukh Haran Nath AIR 1962 SC 941 The question which arose for consideration was whether the provisions of OrderI, Rule 10 of the Code of Civil Procedure would apply to a proceeding under Order XXXIII, Rule 1 of the Code of Civil Procedure and an application by a defendant to be transposed as an applicant was maintainable. The contention was that the claim made in the original application was personal to the applicant as he depended on his inability to pay the court-fee due on the plaint. That contention was rejected by the Supreme Court and it was held that the claim was not personal to the original applicant and the provisions of Order I, Rule 10 ot the Code of Civil Procedure would apply to such a proceeding, while doing so, the Supreme Court considered Rule 5 (d) of Order XXXIII of the Code of Civil Procedure under which the Court shall reject an application for permission to sue as a pauper where the allegations do not show a cause of action. Referring to the express terms of Rule 5 Clause (d), it was observed by the Supreme Court that the Court was concerned to ascertain whether the allegations made in the petition disclosed a cause of action and the court had not to see whether the claim made by the petitioner was likely to succeed. It was pointed out that the only function at that stage for the court was to satisfy itself with the allegations made in the petition, if accepted as true, would entitle the petitioner to the reliefs he claims. The Court also observed as follows: “If accepting those allegations as true no case is made out for granting relief no cause of action would be shown the petition must be rejected. But in ascertaining whether the petition shows a cause of action the court does not enter upon a trial of the issues affecting the merit of the claim made by the petitioner. It cannot take into consideration the defences which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact. If the allegations in the petition, prima facie, show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact, or whether he petitioner will succeed in the claims made by him. By the Statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown; the “jurisdiction does not extend to trial of issues which must fairly be left for decision at the hearing of the suit.” Relying on the above passage, it is contended by learned counsel that any step taken by the respondents to contest the petition under Order XXXIII, Rule 1 of the Code of Civil Procedure would not be a step in the suit and it cannot be placed on the same pedestal as an application for time to file written statement. 12. I do not agree with the said contention. The Supreme Court had no occasion to consider whether a proceeding under Order XXXIII, Rule 1 of the Code of Civil Procedure would be a legal proceeding under S. 34 of the Arbitration Act. The said Section uses the expression “suit” as well as the expression “legal proceedings”. 12. I do not agree with the said contention. The Supreme Court had no occasion to consider whether a proceeding under Order XXXIII, Rule 1 of the Code of Civil Procedure would be a legal proceeding under S. 34 of the Arbitration Act. The said Section uses the expression “suit” as well as the expression “legal proceedings”. A proceeding under O. 33, R. 1 of the Code of Civil Procedure is undoubtedly a legal proceeding to fall within the scope of S. 34 of the Arbitration Act. But, even the above judgment of the Supreme Court points out unmistakably that on the presentation of the application under O. 33, of the Code of Civil Procedure, the suit is initiated. The following passage in the same judgment towards the end of it puts an end to the arguments of learned counsel: “The suit commences from the moment an application for permission to sue in forms pauperis as required by 0.33 of the Code of Civil procedure is presented, and O. 1, R. 10 of the Code of Civil Procedure would be as much applicable in such a suit as in a suit in which court fee had been duly paid.” 13. In M.L. Sethi v. R.P. Kapur AIR 1972 SC 2379 it was held that the provisions of Order XI, Rule 12, Code of Civil Procedure relating to discovery of docu ments could be invoked in a proceeding under Order XXXIII, Rule 1 of the Code of Civil Procedure. Thus, there can be no doubt that a proceeding under Order XXXIII, Rule 1, Code of Civil Procedure is a’ suit within a meaning of S. 34 of the Arbitration Act. 14. Further, in Vijay Pratap Singhs case AIR 1962 SC 941 , which was considered by the Supreme Court, the matter went from Allahabad. The provisions of R. 5 of O. 33, of the Code of Civil Procedure are set out in the judgment of the Supreme Court. It is seen that there was no clause in the rule as clause (d-1) introduced in our State in 1940. Clause (d-1) in R. 5 of O. 33, of the Code of Civil Procedure enables the Court to reject an application, if the suit appears to be barred by any law.. It is seen that there was no clause in the rule as clause (d-1) introduced in our State in 1940. Clause (d-1) in R. 5 of O. 33, of the Code of Civil Procedure enables the Court to reject an application, if the suit appears to be barred by any law.. If the Court comes to the conclusion that on the facts set out in the petition under Order XXXIII of the Code of Civil Procedure, the suit is barred by any law, for instance law of limitation, it will certainly be a decision on the merits of the controversy. To that extent, the Court has to decide the question, which will undoubtedly be one of the issues in the suit. Hence, it is futile to contend that even if a counter statement or counter affidavit is filed in the Original Petition contesting the maintainability of the same, it will not be a step in the proceeding. I have no hesitation to hold that it is a step in the proceeding. 15. In the present case, the request for time to file a counter in the original petition made by counsel for the respondents in the trial court, was a step in the proceedings within the meaning of S. 34 of the Arbitration Act. Learned Counsel for the respondents relies on a Division ‘ Bench Judgment of Punjab and Haryana High Court in Sahib Dayal v. Food Corporation of India AIR 1988 NOC 16 Punjab & Haryana). A full report of the judgement is not available. From the notes of Cases it is seen that the Court held that the action of the defendant in getting an adjournment for filing a reply to an application under Order XXX111, Rule 1 of the Code of Civil Procedure, did not constitute a step in proceeding disentitling him to the relief of stay of the proceedings under S. 34 of the Arbitration Act. It is seen from the Notes that the Division Bench applied the judgment of the Supreme Court in Food Corporation of India v. Yadav Engineer and Contractor AIR 1982 SC 1302 I do not agree with the said decision of the Punjab and Haryana High Court. It is seen from the Notes that the Division Bench applied the judgment of the Supreme Court in Food Corporation of India v. Yadav Engineer and Contractor AIR 1982 SC 1302 I do not agree with the said decision of the Punjab and Haryana High Court. The decision of the Supreme Court referred to in the Notes related to an application for time to file counter in an injunction petition under O. 39, R. 1 of the Code of Civil Procedure. The Supreme Court held that an application for vacating stay, discharge of receiver or modifying interim orders would not be covered by the expression “taking any other steps in the proceedings” under S. 34 the Arbitration Act. It was observed t hat the said expression should be given a narrow meaning that the 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. The observations of the Supreme Court should be understood in the context of the facts of the case. The dictum of the Supreme Court in that case will not apply to a proceeding under O. 33, R. 1 of the Code of Civil Procedure, which is itself a suit as held in Vijai Pratap Singhs case AIR 1962 SC 941 . Hence, an application in the Original Petition under O. 33, R. 1 of the Code of Civil Procedure for time to file counter is a step in the main proceeding, which clearly and unambiguously manifests the intention to waive the benefit of the arbitration agreement and to acquiesce in the proceedings. Otherwise, counsel for the respondents ought to have informed the Subordinate Judge on 21-3-1990 that he would be filing an application under S. 34 of the Arbitration Act and there was no necessity for any enquiry in the original petition, which was the main proceeding. He would not have allowed the court to issue notice to Government Pleader and adjourn the matter for filing counter. 16. Learned Counsel for the respondents placed reliance on Binny Limited. Madras v. The Controller of Stores 1989-1-L.W. 106. That was again a case of taking time for filing counter in an injunction application. He would not have allowed the court to issue notice to Government Pleader and adjourn the matter for filing counter. 16. Learned Counsel for the respondents placed reliance on Binny Limited. Madras v. The Controller of Stores 1989-1-L.W. 106. That was again a case of taking time for filing counter in an injunction application. P.K. Sethuraman, J. followed the ruling of the Supreme Court in Food Corporation of Indias case AIR 1962 SC 1302 and held that it was not a step in the proceeding 17. My attention is drawn to a recent pronouncement of the Supreme Court in Sadhu Singh Gauman v. Food Corporation of India and others (1990) 2 SCC 68 On receipt of summons in the suit, the defendant entered appearance and filed an application for a direction to the plaintiff to produce the original agreement and other documents filed with the plaint so that the defendant could peruse the same. The Supreme Court held that the filing of the said application was not a step in the proceeding, as there was no statement in the application that the defendant would file the written statement. The Supreme Court observed that it should be a step to abandon the right to have the suit stayed and a step in aid of the progress of the suit, which must have been consciously taken with a view to submit to the jurisdiction of the Court for the purpose of adjudicating the controversy on merits. 18. The test prescribed by the Supreme Court is satisfied in the present case. The step taken by the respondents in this case is to pray for time to file counter in the original petition, which is beyand doubt a step in aid of the progress of the suit. Consequently, it is a step to abandon the right of the respondents to have the suit stayed. There is no doubt that the step had been taken consciously as the respondent who claim to have referred to the clause in the insurance policy in their reply notice said to have been issued on 10-1-1990 ought to have informed the Court at the time when they entered appearance that there was no necessity for any enquiry in the original petition and they would be filing an application for stay of the same. Hence, the ruling of the Supreme Court does not help the respondents in this case. 19. Hence, the ruling of the Supreme Court does not help the respondents in this case. 19. In the course of arguments, I pointed out to learned counsel for the respondents that their failure to send a reply to the notice issued by the appellant on 27-11-1989 would disentitle them to the benefits of S. 34 of the Arbitration Act. Learned counsel for the respondents submitted that mere-failure to send a reply to the notice before the institution of the proceedings will not stand in the way of the respondents claiming the benefits of the said Section. He relied on the judgments in K.V. Nagaraja Iyer and Bros. v. The Union of India rep by General Manager 1973 T.L.NJ. 522 = (1974)87 L.W. 612 , Southern Railwav M. Palaniappan v. A. Amsaveni Ammal and others 1981) I.M.LJ. 167 and State of Punjab v. M/s. Geeta Iron & Brass Works Ltd. AIR 1978 SC 1608 . It is not necessary for me to consider that question in the present case as the materials available to me at present are not sufficient to decide that question. Suffice it to point out that if there are circumstances in a particular case in addition to the failure of the defendant to send a reply to the notice issued by the plaintiff, they can be taken into account by the Court to decide whether the suit could be stayed under S. 34 of the Arbitration Act. In the view I am taking on the other question, which was argued at length before me/, by both counsel, I am not expressing any opinion on this question. 20. I hold that the respondents have taken a step in the proceeding within the meaning of S. 34 of the Arbitration Act and they are, therefore, not entitled to invoke the said section and pray for staying the proceeding. 21. In the result. The Civil Miscellaneous Appeal is allowed. The order of the Subordinate Judge, Karur in I.A. No. 21 of 1990 is set aside and the said application is hereby dismissed. The respondents shall pay the costs of the appellant in the appeal.