Judgment :- 1. This revision is filed under Article 227 of the Constitution of India, against the order in I.A. No. 4 of 1997, passed by the Presiding Officer of the Debt Recovery Tribunal, Madras. 2. The 1st respondent herein has filed an Original Application before the Tribunal, for recovery of more than Rs. 10 lakhs against the petitioners. It is seen that petitioners have availed the loan from the 1st respondent herein and they defaulted in paying the dues. 3. For securing the loan, the 1st respondent has taken security from the petitioners. It is the case of the petitioner that at the instance of the bank, the security was insured and the necessary policy was also taken from the 2nd respondent herein. Whileso, the security was lost due to a fire accident. Since the 2nd respondent/Insurance Company, did not settle the transaction, the petitioners herein moved the Consumer Forum. The Insurance Company assessed the damage, and the amount was fixed. The petitioners herein without satisfying with the assessment, have moved before the National Consumers Redressal Commission, New Delhi. The National Commission has held that since the Insurance Company has already assessed, and whatever the amount that is to be payable to the petitioner was quantified, and there is no deficiency in service, and since there is an arbitration clause in the insurance policy, between the petitioners and the Insurance Company it is better for the petitioners to invoke the Arbitration clause for deciding the amount payable to them under the policy. 4. While the matter was thus between the Petitioners and the Insurance Company, the 1st respondent filed the above Original Application for the recovery of the amount so due to it. At that time, the petitioners herein filed I.A. No. 4 of 1997 to stay all the proceedings in the Original Application, under Section 34 of the Arbitration on 25.2.1997. The same was seriously opposed by the 1st respondent herein, on the ground that it is not a party to the Arbitration agreement, and the matter sought to be arbitrated has nothing to do with the claim in the Original Application, which is now pending before the Debt Recovery Tribunal, and there are no grounds to stay the proceedings. By the impugned order, the Tribunal dismissed the application, which is sought to be revised under Article 227 of the Constitution of India, in this revision. 5. By the impugned order, the Tribunal dismissed the application, which is sought to be revised under Article 227 of the Constitution of India, in this revision. 5. After having heard the counsel appearing for both the sides, I do not think that the petitioners are entitled to any relief in this revision. I give the following reasons for the same. 6. I have already stated that the application was filed under Section 34 of the Arbitration Act, 1940, on 25-2-1997. That Arbitration Act was repealed as per the Arbitration and Conciliation Act, 1996. Therefore, the old Act has no application, unless the Arbitrator has commenced his proceedings and the parties chose to agree in terms of the old Act. In a recent decision of the Andhra Pradesh High Court, reported in 1997 (5) A.L.T. 421 (M/s Marshall Corporation Ltd. Visakhapatnam v. Union of India, Rep. by the Engineer-in-chief, Army Head Quarters, New Delhi and another), His Lordship has considered the similar question. In paragraph 12 of the said Judgment, His Lordship considered the scope of Section 85 of the Arbitration and Conciliation Act, 1996, which deals with Repeal and saving, and held as follows:— “It is clear from the above said provisions of Section 85(2) that the provisions of the old Arbitration Act shall continue to apply in relation to arbitral proceedings which commenced before the new Act came into force unless otherwise agreed upon between the parties, and the new Act will, however, apply in relation to arbitral proceedings which commenced on or after the new Act came into force. Section 21 of the new Arbitration Act provides that unless otherwise agreed by the parties, the arbitral proceedings in respect of a particular dispute commences on the date on which a request for that dispute to be referred to arbitration is received by the respondent. In view of such provisions of Section 21 r/w Section 85(2) of the new Arbitration Act, the learned counsel for the respondents tries to contend that the arbitration proceedings in the present case shall be deemed to have commenced in the year 1992 and 1993, as the case may be, when a request made by the applicant was, served on the respondents seeking appointment of an arbitrator and as such the old Act alone applies to the present cases. But this argument is quite untenable and cannot be accepted. But this argument is quite untenable and cannot be accepted. The earliest notices issued by the petitioner to the respondents requesting them to appoint the arbitrator were not after the commencement of the new Arbitration Act but only when the old Arbitration Act was in force. Section 21 of the new Act can be considered only with reference to the actions that may arise under the new Act. But regarding the question as to at what stage the arbitral proceedings under the old Act had commenced, no reference can be made and no ‘ support can be derived from the provisions of Section 21 r/w Section 85(2) of the new Arbitration Act. The same view was expressed by a Single Judge of this Court in a recent decision reported in Y. Parthasarathy Firm v. General Managers, Rly. Electrification ( 1997(2) ALT 307 ) after referring to the decisions of the Supreme Court and Kerala High Court. In the decision of the Supreme Court reported in Secretary, Govt, of Orissa v. Sarbeswar Rout (A.I.R. 1989 S.C. 2259), while dealing with the question as to when it can be said that arbitral proceedings can be said to have commenced, it is observed by their Lordships: ‘As soon as the arbitrator indicates his willingness to act as such, the proceeding must be held to have commenced. 1 In the decision of the Kerala High Court reported in Baby Paul v. Hindustan Paper Corporation (A.I.R. 1978 Kerala 223), dealing with a similar question, it was observed: ‘for arbitration begins and arbitration proceedings commence only on the arbitrator getting an authority to act. The arbitrators authority to act arises by actual submission of particular dispute or disputes to the authority of a particular arbitrator by the parties, or by one of the parties to an arbitration agreement requesting the arbitrator appointed by the arbitration agreement itself or subsequent thereto to enter upon the reference in respect of particular dispute or disputes or by the Court making an order of reference to the arbitrator as contemplated by Section 20 of the Act or where the Court by order refers the matter or matters in difference to the arbitrator as provided for in Chap. IV of the Act.’ In the present case, in spite of the request made by the applicant when the old Act was in force, the respondents failed to appoint the arbitrator and as such, the question of the arbitrator indicating his willingness to function as such arbitrator did not arise when the old Act was in force and the arbitral proceedings cannot therefore, be said to have commenced when the old Act was in force. Therefore, the new Arbitration Act alone is applicable to the present cases and the applications filed under the new Arbitration Act are maintainable.” In view of the said legal position, the reliance of Section 34 of the Arbitration Act, 1940, is not correct. 7. Section 8 of the new Act provides for stay of proceedings. It reads thus:— “S. 8. Power to refer parties to arbitration where there is an arbitration agreement:— 1. A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. 2. The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. 3. Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.” 8. From a reading of the Section, it is seen that the stay of the suit can only be had if the subject matter of the arbitration agreement and the proceedings before the judicial authority are one and the same, and it is further clear from sub-Sec. (3), that it is not obligatory on the part of either the judicial authority or on the Arbitrator to stay the respective proceedings. Even when an application or a suit is pending before the judicial authority, it is clear from sub-Section (3), that the arbitration may be commenced, continued and an arbitral award can be made. It is further clear from Section 8 of the Act, that there must be an arbitration agreement between the parties. Even when an application or a suit is pending before the judicial authority, it is clear from sub-Section (3), that the arbitration may be commenced, continued and an arbitral award can be made. It is further clear from Section 8 of the Act, that there must be an arbitration agreement between the parties. In this case, as between the bank and the petitioners, there is no arbitration agreement, and the bank cannot be said to be a party to the arbitration agreement. The claim of the bank is based on the financial assistance given to the petitioners, and their relationship is debtor and creditor. In so far as the Insurance Company is concerned, it has only insured the security given by the petitioners. So long as the bank is not a party to the arbitration agreement, there is no scope for staying the recovery proceedings before the Tribunal. 9. It could be further seen from Section 8 of the Act, that the subject matter of the arbitration agreement as well as the proceedings before the judicial authority must be the same. In this case, the 1st respondent has instituted the original application for the recovery of the amount due to it, on the basis of the financial assistance given by it. But the arbitration agreement is entirely for a different purpose. The petitioners are not satisfied with the award of damages, which was occasioned due to a fire accident. The value of security lost due to the fire accident is the matter in issue before the Arbitrator. If that be so, the other ground under Section 8 of the Arbitration and Conciliation Act, 1996, also cannot apply. 10. Learned counsel for the petitioner submitted, on the basis of the hypothecation agreement in insurance policy, that it was at the instance of the bank, the policy was taken, and that too, in the name of bank only. On that ground, it is contended that there is agreement between the bank and the Insurance Company, and therefore, the arbitration clause could be enforced. The said argument cannot hold good. Section 7 of the new Act defines “arbitration agreement”. It means, an agreement by the parties to submit to arbitration, all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. The said argument cannot hold good. Section 7 of the new Act defines “arbitration agreement”. It means, an agreement by the parties to submit to arbitration, all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. It is not the case of the petitioner that the bank took the insurance policy or at the request of the bank, the petitioner has taken it, and for the purpose of security, it is taken in the name of the bank. The parties to the agreement are only the petitioner and the Insurance Company. Therefore, the said contention also fails. 11. In this connection, the scope of the Recovery of the Debts Due to the Banks and Financial Institutions Act, 1993, is also relevant to be considered. In a recent decision of the Supreme Court reported in 1996 (4) SCC 165 (Industrial Credit and Investment Corporation of India Ltd. v. Srinivas Agencies and others), this point has been considered. In paragraph 10 of the said Judgment, at page 172, an argument was taken, regarding the purpose of the enactment. The argument as put forward before the Honble Supreme Court reads thus:— “Shri Salve has referred to us the Recovery of Debts due to Banks and Financial Institutions Act, 1993, which was recently enacted because of the considerable difficulty being experienced by financial institutions in recovering loans and enforcement securities charged with them. Earlier, recovery procedure used to block a significant portion of their funds in unproductive assets, the value of which deteriorates with the passage of time. An urgent need was, therefore, felt for successful implementation of the financial sector reforms, to work out a suitable mechanism, through which dues to these institutions could be realised without delay. To achieve, this purpose, the aforesaid Act visualises establishment of the Debts Recovery Tribunal(s) by the Central Government, with its own procedure which is speedy in nature. An urgent need was, therefore, felt for successful implementation of the financial sector reforms, to work out a suitable mechanism, through which dues to these institutions could be realised without delay. To achieve, this purpose, the aforesaid Act visualises establishment of the Debts Recovery Tribunal(s) by the Central Government, with its own procedure which is speedy in nature. Section 18 of this Act has barred jurisdiction of other Courts, except the writ power of the higher courts, in relation to the matters specified in Sec. 17 - the same being recovery of debts due to such institutions.” The said argument of the counsel was accepted by the Honble Supreme Court, as could be seen from paragraph 13 of the said Judgment, wherein Their Lordship have held that “While exercising this power we have no doubt that the company Court Would also bear in mind the rationale behind the enactment of Recovery of Debts Due to the Banks and Financial Institutions Act, 1993, to which reference has already been made.” 12. If this is the purpose for the establishment of the Debts Recovery Tribunal, with its own procedure which is speedy in nature, and if the same is allowed to be stayed, the very purpose of the enactment is defeated. 13. In this case, there is one more reason to reject the claim of the petitioners. As between the bank and the petitioners, there is no dispute, agreed to be referred to Arbitrator, and in this case, they do not dispute the liability to the bank, If the liability is not disputed, as between the bank and the petitioners there is no scope for any arbitration. Taking into consideration all these facts, I do not think that the Tribunal went wrong in dismissing the application filed by the petitioners. 14. In the result, the order of the Tribunal is confirmed and the revision is dismissed. However, without any order as to costs. Consequently, the connected C.M.P. is also dismissed.