27 April 1960
Supreme Court
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THE PRINTERS (MYSORE) PRIVATE LTD. Vs POTHAN JOSEPH.

Case number: Appeal (civil) 107 of 1960


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PETITIONER: THE PRINTERS (MYSORE) PRIVATE LTD.

       Vs.

RESPONDENT: POTHAN JOSEPH.

DATE OF JUDGMENT: 27/04/1960

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. WANCHOO, K.N. GUPTA, K.C. DAS

CITATION:  1960 AIR 1156            1960 SCR  (3) 713  CITATOR INFO :  R          1973 SC2071  (5)  R          1989 SC 839  (19)

ACT: Arbitration   Agreement-Power   of  court  to   stay   legal proceedings-Order   by   trial  court   refusing   stay   of proceedings  affirmed in appeal--supreme Court, if and  when can interfere with concurrent exercise of discretion by  the courts  below-Arbitration  Act,  1940 (x  Of  1940),  s.  34 Constitution of India, Art. 136.

HEADNOTE: The  respondent was the Editor of the Deccan  Herald,  owned and  published  by  the appellant,  and  the  two  contracts executed by the parties contained an arbitration clause that if in the interpretation or application of the contract  any difference  arose  between  the parties the  same  shall  be referred  to  arbitration  and the award  shall  be  binding between  the parties and also provided for, apart  from  his monthly  salary,  the payment of 10% of the profits  to  the respondent.   Upon  the termination of his services  by  the appellant,  the respondent brought a suit for  accounts  and payment  of the profits found due to him.  The appellant  by an 714 application  pleaded that the suit ought to be stayed  under S. 34 of the Arbitration Act, 1940, and the dispute referred to arbitration in accordance with the agreement between  the parties.  The trial judge refused to exercise his discretion in favour of the appellant and refused to stay the suit.  On appeal  the High Court confirmed the decision of  the  trial court.  The appellant came up to this Court by special leave under Art. 136 of the Constitution: Held, that the power conferred on the court by S. 34 Of  the Arbitration Act, 1940, is discretionary and even though  the conditions  specified therein were fulfilled no party  could claim there under a stay of legal proceedings instituted  in a court as a matter of right.  But the discretion vested  in the court is a judicial discretion and must be exercised  as such  in  the  facts and circumstances  of  each  case.   No inflexible  rules  can,  therefore, be laid down  f  or  its

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exercise and the court has to act according to common  sense and justice. Gardner v. Jay, (1885) 29 Ch.  D. 50, referred to Where the discretion under the section has been properly and judiciously exercised by the trial court the appellate court would not be justified in interfering with such exercise  of discretion  merely on the ground that it would have taken  a contrary  decision  if it had considered the matter  at  the trial stage.  But if it appears to the appellate court  that the trial court has exercised its discretion unreasonably or capriciously or has ignored relevant facts or has approached the matter unjudiciously, it would be its duty to interfere. Charles  Osenton  &  Co.  v. jhanaton,  (1942)  A.  C.  130, referred to. The  words " interpretation and application of the  contract frequently used in arbitration clauses, as they have been in the contracts in question, cover not only disputes  relating to  the construction of the relevant terms of  the  contract but  also  their effect, and unless the  context  compels  a contrary construction, a dispute relating to the working  of the contract falls within such a clause. But the Supreme Court would not lightly interfere under Art. 136 of the Constitution with the concurrent exercise of dis- cretion of the courts below under s. 34 Of the Act.   Before it  can justly do so, the appellant must satisfy the  Court, on the relevant facts referred to by the courts below,  that they exercised their discretion in a manifestly unreasonable or  perverse  way  which was likely to defeat  the  ends  of justice.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal No. 107 of 1960. Appeal  by special leave from the judgment and  order  dated September 21, 1959, of the Mysore High Court, Bangalore,  in Misc.  Appeal No. 68 of 1959. Purshottam  Prikamdas,  S.  N.  Andley,  J.  B.  DadaChanji, Rameshwar Nath and P. L. Vohra, for the appellant. 715 K. R. Karanth and Naunit Lal, for the respondent. 1960.  April 27.  The Judgment of the Court was delivered by GAJENDRAGADKAR,  J.  The respondent, Pothan Joseph, who  was working  as  the  Editor  of the  Deccan  Herald  owned  and published  by the appellant, The’ Printers (Mysore)  Private Ltd., in Bangalore has filed a suit against the appellant on two contracts executed between the parties on April 1, 1948, and  February  20,  1953,  respectively,  and  has   claimed accounts of the working of the Deccan Herald newspaper  from April 1, 1948, to March 31, 1958, as well as payment of  the amount  that  may  be found due to him  from  the  appellant tinder  the  provisions of cls. 2(d) and 1(d)  of  the  said contracts.   The services of the respondent were  terminated by the appellant by its letter dated September 28, 1957,  in which  the  respondent was told that the  termination  would take  effect from March 31, 1958.  However, by a  subsequent letter  written by the appellant to the respondent on  March 17, 1958, the respondent was told that his services had been terminated  with immediate effect and he was asked  to  hand over  charge  to his successor, Mr. T. S.  Ramachandra  Rao. Thereafter  on  July  14, 1958, the  respondent,  filed  the present suit against the appellant. The appellant contended that the two contracts on which  the respondent’s claim was based were subject to an  arbitration agreement, and so it was not open to the respondent to  file

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the  present  suit against the  appellant.   The  appellant, therefore,  requested  the Court under s. 34 of  the  Indian Arbitration Act, 1940, (hereinafter called the Act), to stay the  proceedings initiated by the respondent and  refer  the dispute  to arbitration in accordance with  the  arbitration agreement between the parties. The   learned   trial  judge  who  heard   the   appellant’s application,  however, exercised his discretion  against  it and  refused  to stay the proceedings  in  the  respondent’s suit.   Thereupon the appellant preferred an appeal  in  the Mysore  High Court but his appeal failed and the High  Court confirmed  the  order passed by the trial court  though  for different reasons.  The High 716 Court,  however,  thought that the learned trial  judge,  in dealing  with  the appellant’s application " bad  gone  much further than he should have done, and hence it was desirable that  the  case should be tried by some other judge  ".  The respondent  did not object, and so the High  Court  directed that  the  suit  may  be transferred  to  the  file  of  the Additional  Civil  Judge,  Bangalore.   The  appellant  then applied   to  the  High  Court  for  a   certificate.    His application  was, however, rejected on the ground  that  the decision under appeal could not be considered as a judgment, decree or final order under Art. 133(1) of the  Constitution ; on that view it was thought unnecessary to decide  whether on the merits the case was fit to be taken in appeal to this Court.  Then the appellant applied for and obtained  special leave  from  this Court.  That is how this appeal  has  come before  us; and the substantial point which arises  for  our decision  is  whether  the courts below  were  in  error  in refusing  to stay the suit filed by the  respondent  against the  appellant in view of the arbitration agreement  between them. Before we deal with the merits of the contentions raised  by the  parties  in  this appeal it is  necessary  to  set  out briefly   the   relevant  facts  leading  to   the   present litigation.  The appellant is a printing company and it owns and publishes the Deccan Herald in English and Prajavani  in Kannada  at Bangalore.  By a contract dated April  1,  1948, the appellant engaged the respondent as Editor of the Deccan Herald  for a period of five years on terms  and  conditions specified  in the said contract.  As provided by el. (5)  of the said contract the period of the respondent’s  employment was extended by another five years by a subsequent  contract entered  into between the parties on February 20, 1953.   As we  have  already mentioned the services of  the  respondent came  to  be  terminated abruptly on  March  17,  1958.   It appears  that  by  his letter dated October  16,  1957,  the respondent  made certain claims against the appellant  under the provisions of the Working Journalists Act.  Besides,  he demanded  1/10th  of the profits made by the  Deccan  Herald from  1948 up to the date of the termination of his  service under the two respective contracts.  This claim was 717 denied by the appellant.  Correspondence then ensued between the  parties  but  since no  common  ground  was  discovered between  them  the respondent filed the present  suit.   His case is that the two contracts entitled him to claim  1/10th of  the profits made by the Deccan Herald during the  period of his employment,, and so he claims an account of the  said profits and his due share in them. The   learned   trial  judge  found  that   the   respective contentions  raised  by the parties before him  showed  that there  was  no  dispute as such  between  them  which  could

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attract  the  arbitration agreement.  He also held  that  an attempt was made by the parties to settle their  differences amicably through the mediation of Mr. Behram Doctor but  the said  attempt failed because the appellant was  not  serious about it and was just trying " to protract, defeat and delay the  plaintiff  ’s moves".  According to the  learned  trial judge  a plea of limitation would fall to be  considered  in the  present  suit and it was desirable that the  said  plea should  be  tried  by  a  competent  court  rather  than  by arbitrators.    He  was,  however,  not  impressed  by   the respondent’s   contention  that  his  character   had   been impeached  by the appellant and so he should be  allowed  to vindicate  his  character in a trial before a  court  rather than before the arbitrators.  In dismissing the  appellant’s claim  for stay of the suit the learned judge observed  that if the accounts of the Deccan Herald had not been separately maintained it would be competent for a qualified  accountant to   allocate  expenses  and  capital  expenses  among   the different  activities of the appellant and then very  little would  be left for arbitrators to decide.  He had  no  doubt that  the contract by which the respondent was  entitled  to claim  1/10th  share  in the profits of  the  Deccan  Herald necessarily  postulated  that  the accounts  of  the  Deccan Herald   would   be   separately   maintained.    On   these considerations the trial judge refused to stay the suit. When the matter went in appeal the High Court held that  the dispute  between  the  parties  did  not  fall  within   the arbitration  agreement.  The High Court also considered  the other  points decided by the trial court; it held  that  Mr, Behram Doctor had not been 93 718 appointed as an arbitrator between the parties and that  the proceedings  before him merely showed that the parties  were exploring  the  possibility of having  an  arbitration.   It observed  that the appellant company was a big  concern  and referred  to the respondent’s apprehension that it was in  a position to dodge the respondent’s claim.  However, the High Court  was not impressed by these apprehensions, and it  was not inclined to find fault with the conduct of the appellant in  the  trial court.  It was also not  satisfied  that  the question of limitation which would arise in the suit as well as  the question of interpreting the contracts could not  be properly tried by arbitration.  It recognised that there had been a complete change of front on the part of the appellant in  regard  to the pleas raised by the appellant  under  the arbitration  agreement when the matter was discussed  before Mr. Behram Doctor, and when it reached the court in the form of  the present suit.  The High Court then considered  other facts which it thought were relevant.  It stated that  there was  great deal of bad blood between the parties  and  there was  no meeting ground between them.  The  appellant’s  plea that  recourse to arbitration may help an early disposal  of the  dispute did not appeal to the High Court as sound,  and so,  on  the whole, the High Court thought  that  the  order passed  by the trial court refusing to stay the  proceedings in  suit should be confirmed.  The appellant  contends  that the reasons given by the High Court in refusing to stay  the suit  are not convincing and that the discretion vesting  in the  High  Court  in that behalf has not  been  properly  or judiciously exercised. Section  34  of the Act confers power on the court  to  stay legal  proceedings where there is an  arbitration  agreement subject  to  the conditions specified in the  section.   The conditions thus specified are satisfied in the present case,

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but the section clearly contemplates that, even though there is  an  arbitration agreement and the  requisite  conditions specified  by it are satisfied, the court  may  nevertheless refuse  to  grant  stay if it is satisfied  that  there  are sufficient reasons why the matter should not be referred  in accordance with the arbitration agreement.  In other  words, the power to 719 stay  legal proceedings is discretionary, and so a party  to an arbitration agreement against whom legal proceedings have been   commenced  cannot  by  relying  on  the   arbitration agreement claim the stay of legal proceedings instituted  in a  court as a matter of right.  It is, however,  clear  that the  discretion  vested in the court, must be  properly  and judicially  exercised.  Ordinarily where a  dispute  between the parties has by agreement between them to be referred  to the  decision of a domestic tribunal the court would  direct the  parties to go before the tribunal of their  choice  and stay  the legal proceedings instituted before it by  one  of them.  As in other matters of judicial discretion, so in the case  of the discretion conferred on the court by s.  34  it would  be  difficult, and it is indeed inexpedient,  to  lay down  any inflexible rules which should govern the  exercise of the said discretion.  No test can indeed be laid down the automatic application of which will help the solution of the problem  of  the exercise of judicial  discretion.   As  was observed  by  Bowen,  L. J., in Gardner v. Jay  (1)  "  that discretion,   like  other  judicial  discretion,   must   be exercised  according  to  common  sense  and  according   to justice.  " In  exercising its discretion under s. 34 the  court  should not refuse to stay the legal proceedings merely because  one of the parties to the arbitration agreement is unwilling  to go  before an arbitrator and in effect wants to resile  from the  said agreement, nor can stay be refused merely  on  the ground that the relations between the parties to the dispute have  been  embittered or that the  proceedings  before  the arbitrator  may cause unnecessary delay as a result  of  the said  relations.  It may not always be reasonable or  proper to  refuse  to stay legal proceedings  merely  because  some questions  of  law  would arise  in  resolving  the  dispute between  the  parties.   On  the other  hand,  if  fraud  or dishonesty is alleged against a party it may be open to  the party  whose character is impeached to claim that it  should be  given  an opportunity to vindicate its character  in  an open trial before the court rather than. before the domestic tribunal, and in a proper case the. court may consider  that fact as relevant for deciding (1)  (1885) 29 Ch.  D 30 58, 720 whether stay should be granted or not.  If there has been  a long  delay in making an application for stay and  the  said delay  may  reasonably be attributed to the  fact  that  the parties  may  have abandoned the arbitration  agreement  the court may consider the delay as a relevant fact in  deciding whether  stay  should  be granted  or  not.   Similarly,  if complicated questions of law or constitutional issues  arise in  the decision of the dispute and the court  is  satisfied that  it would be inexpedient to leave the decision of  such complex issues to the arbitrator, it may, in a proper  case, refuse  to grant stay on that ground; indeed, in such  cases the  arbitrator  can and may state a special  case  for  the opinion  of the court under s. 13(b) of the Act.  Thus,  the question  as to whether legal proceedings should  be  stayed under  s.  34  must  always be decided by  the  court  in  a

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judicial  manner  having regard to the  relevant  facts  and circumstances of each case. Where  the  discretion vested in the court under s.  34  has been exercised by the trial court the appellate court should be  slow  to  interfere  with  the  exercise  of  the   said discretion.  In dealing with the matter raised before it  at the  appellate stage the appellate court would normally  not be justified in interfering with the exercise of  discretion under appeal solely on the ground that if it had  considered the  matter  at  the trial stage it would  have  come  to  a contrary  conclusion.  If the discretion has been  exercised by  the trial court reasonably and in a judicial manner  the fact  that the appellate court would have taken a  different view  may  not justify interference with the  trial  court’s exercise of discretion.  As is often said, it is  ordinarily not  open  to  the appellate court  to  substitute  its  own exercise  of discretion for that of the trial judge; but  if it  appears  to the appellate court that in  exercising  its discretion  the  trial  court  has  acted  unreasonably   or capriciously  or has ignored relevant facts and has  adopted an  unjudicial approach then it would certainly be  open  to the appellate court-and in many cases it may be its  duty-to interfere with the trial court’s exercise of discretion.  In cases falling under this class the exercise of discretion by the trial 721 court  is  in  law  wrongful and  improper  and  that  would certainly  justify  and  call  for  interference  from   the appellate  court.   These principles are  well  established; but,  as  has  been observed by Viscount Simon,  L.  C.,  in Charles  Osenton & Co. v. Johnston (1) " the law as  to  the reversal  by a court of appeal of an order made by a,  judge below in the exercise of his discretion is well established, and   any  difficulty  that  arises  is  due  only  to   the application  of  well settled principles  in  an  individual case". In  the present case there is one more fact which has to  be borne in mind in dealing with the merits of the  controversy before us.  The appellant has come to this Court by  special leave  under Art. 136; in other words, the appellant is  not entitled to challenge the correctness of the decision of the High  Court  as  a  matter of right.   It  is  only  in  the discretion of this Court that it can be permitted to dispute the correctness or the propriety of the decision of the High Court,  and so in deciding whether or not this Court  should interfere  with the order under appeal it would be  relevant for us to take into account the fact that the remedy  sought for   by  the  appellant  is  by  an  appeal  which   is   a discretionary matter so far as this Court is concerned.   It is  in the light of these principles that we  must  consider whether  or not the appellant’s complaint against  the  High Court’s order can be upheld. The  first point which calls for a decision relates  to  the construction  of the contracts between the parties.   As  we have already stated two contracts were executed between them but  their  terms are substantially the same and so  we  may deal  with  the subsequent contract which  was  executed  on February 20, 1953 (P. 2). Under this contract the respondent was  engaged  as  the Editor of the Deccan  Herald  and  his salary  was fixed at Rs. 1,500 permensem under  paragraph  1 (a).   Paragraph 1(b) and (c) deal with the other  amenities to  which  the  respondent  was  entitled.   Clause  (d)  of paragraph 1 provides that when the newspaper shows a  profit in  the  annual  accounts the Editor shall  be  entitled  to 1/10th  share of it is on this clause that the  respondent’s

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claim in the present proceedings is (1)  [1942] A.C 130, 138. 722 based.   The terms on which the respondent had to remain  in the service of the appellant are specified in paragraph 2(a) and  (b).   Paragraph  3 provides for  the  renewal  of  the contract  for a further period of five years if it is  found that  such  renewal  is  for the  mutual  advantage  of  the parties.   This  paragraph  also provides  that  during  the continuance  of  his  employment the  respondent  shall  not directly or indirectly be interested in any other  newspaper business   than   that  of  the  appellant  or   any   other journalistic  activities  in competition with  that  of  the appellant.   It  also  stipulates that if  the  contract  is determined  the respondent shall not for a period  of  three years thereafter be directly or indirectly interested in any newspaper business of the same kind as is carried on by  the appellant  within the Mysore State.  It would thus  be  seen that  this  paragraph  shows the liability  imposed  on  the respondent  as a consideration for the benefit conferred  on him  by  paragraph  1 in general and cl.  (d)  of  the  said paragraph   in   particular.   Paragraph   4   contains   an arbitration   agreement.   It  provides  that  if   in   the interpretation or application of the contract any difference of  opinion  arises between the parties the  same  shall  be referred  to  arbitration.  The arbitrator can be  named  by both  the  parties  but if they failed to  choose  the  same person each side will choose an arbitrator and the two  will elect  another  person to complete the panel.   Their  award shall be final and binding on both the parties. The High Court has held that the present suit is outside the arbitration  agreement  because neither party  disputes  the applicability  of the terms of the contract in the  decision of the dispute.  The High Court thought that in the  context the  words ’application of the contract’ meant a dispute  as to  the  applicability  of  the  contract,  and  since   the applicability  of  the contract was not in question  and  no dispute as to the interpretation of the contract arose,  the High  Court  held that paragraph 4 was inapplicable  to  the present suit.  Mr. Purshottam, for the appellant, con. tends that the construction placed by the High Court on the word " application   "  is  erroneous.   According  to   him,   any difference  of opinion in regard to the application  of  the contract must in the context mean 723 the,  working  out of the contract or giving effect  to  its terms.   In  our opinion, this contention is  well  founded. The  words ’interpretation or application of  the  contract’ are  frequently  used  in arbitration  agreements  and  they generally  cover disputes between the parties in  regard  to the  construction of the relevant terms of the  contract  as well  as their effect, and unless the con-’ text  compels  a contrary construction, a dispute in regard to the working of the  contract  would  generally fall within  the  clause  in question.  It is not easy to appreciate what kind of dispute according to the High Court would have attracted paragraph 4 when it refers to a difference of opinion in the application of  the  contract.  Since both the parties have  signed  the contract  the question about its applicability in that  form can  hardly arise.  Differences may, however, arise  and  in fact have arisen as to the manner in which the contract  has to  be worked out and given effect to, and it  is  precisely such  differences  that  are  covered  by  the   arbitration agreement.   We would accordingly hold that the  High  Court was  in error in coming to the conclusion that  the  present

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dispute  between  the  parties  was  outside  the  scope  of paragraph 4 of the contract. If   the  High  Court  had  refused  to  stay  the   present proceedings only on this ground the appellant would no doubt have  succeeded; but the High Court has based  its  decision not  only,  nor  even mainly, on  the  construction  of  the contract.  The tenor of the judgment suggests that the  High Court  considered  the  other relevant facts  to  which  its attention was invited and the material findings recorded  by the  trial  judge, and though it differed from some  of  the findings  of  the  trial  judge, on the  whole  it  felt  no difficulty  in  coming to the conclusion that there  was  no reason  to  interfere  with the trial  court’s  exercise  of discretion  under  s.  34.  That is  why,  even  though  the appellant  has  succeeded before us on the question  of  the construction of the arbitration agreement, having regard  to the limits which we generally impose on the exercise of  the jurisdiction  under Art. 136, he must still satisfy us  that we  would  be justified in interfering with  the  concurrent exercise  of  discretion by the two courts below,  and  that would inevitably depend upon the other 724 relevant  facts to which both the courts have referred,  and on which both of them have relied though in different ways. What  then are the broad features of the case on  which  the trial judge and the High Court have respectively relied ? It is  clear that the present dispute is not the result  of  an ordinary  commercial transaction containing  an  arbitration clause.   The contract in question is between  a  journalist and his employer by which the remuneration of the journalist has been fixed in a somewhat unusual manner by giving him  a specified  percentage in the profit which the Deccan  Herald would  make from year to year.  According to the  respondent he  was  surprised  when the General Manager  of  the  paper informed him that 75% of the overall expenditure incurred in the several activities of the appellant was being charged to the  Deccan  Herald, and that the capital  liabilities  were charged in the same proportion; he thought that this  system of accounting adopted by the appellant was repugnant to  the material  provisions  in his contract.  Indeed his  case  is that after he came to know about this system he protested to the  Director, Mr. Venkataswamy, who has been taking  active part  in the affairs of the appellant, and Mr.  Venkataswamy assured him that as from the beginning of 1955 the  accounts were being separately maintained.  It would appear that  the information  received  by the respondent  from  the  General Manager  disillusioned  him  and  that  appears  to  be  the beginning   of  the  present  dispute,  according   to   the respondent’s  letter of May 24, 1955, (D. 1).   On  February 18,  1956, the respondent invoked the arbitration  agreement and told Mr. Venkataswamy that Mr. Behram Doctor had  agreed to  work  as  arbitrator and give his  award  (D.  2).   Mr. Venkataswamy  who  was addressed by the  respondent  as  the Managing  Director told him by his reply of March  5,  1956, that he was not the Managing Director and added that in his’ view  it was not open to the respondent to invoke cl.  4  of the  contract  because  he was aware  that  no  monies  were payable to the respondent under el. 1(d).  It would thus  be seen that Mr. Venkataswamy’s immediate response to the  res- pondent’s request for arbitration was that the respon- 725 dent could not invoke the arbitration clause (D. 3).  It  is true  that on April 23, 1956, Mr. Venkataswamy attempted  to explain  this statement by saying that all that he  intended to suggest was that no occasion for invoking the arbitration

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agreement  had  arisen.   That, however, appears  to  be  an unsatisfactory   explanation   (D.  10).    Even   so,   Mr. Venkataswamy  agreed  to meet Mr. Behram Doctor  and  so  on March  9, 1956, the respondent gave to Mr. Venkataswamy  the address  of Mr. Behram Doctor and asked him to see  him  (D. 5).   He informed Mr. Behram Doctor accordingly (D. 6).   It appears  that subsequently Mr. Behrain Doctor met  both  the respondent  and  Mr.  Venkataswamy  on  May  9,  1956.   The proceedings  of  this meeting which have been  kept  by  Mr. Behram Doctor and copies of which have been supplied by  him to  both  the  parties  indicate  that  Mr.  Behram   Doctor attempted to mediate between the parties and presumably  the parties were agreeable to secure the mediation of Mr. Behram Doctor  to  resolve the dispute.  We ought to add  that  the copy  of  the  said proceedings produced  by  the  appellant contains  a  statement that Mr. Venkataswamy at  the  outset told  Mr. Behram Doctor that he had; come on  an  unofficial visit  and  was speaking without the consent  of  the  other directors.   This statement is, however, not to be found  in the  copy supplied by Mr. Behram Doctor to  the  respondent. Prima  facie  it is not easy to understand  why  Mr.  Behram Doctor  should have omitted this material statement in   the copy supplied by him to the respondent.  That, however, is a matter  which  we do not propose to pursue  in  the  present appeal.  It is thus clear that though Mr. Behram Doctor  was not appointed an arbitrator and no reference in writing  was made to him an attempt was made by the parties to settle the dispute  with the assistance of Mr. Behram Doctor, and  that attempt failed.  Having regard to the facts which have  come on  the record it may not be unreasonable to infer that  the appellant was not too keen to pursue the matter on the lines originally  adopted  by both the parties before  Mr.  Behram Doctor. It  also  appears that for some years the, accounts  of  the Deccan Herald had not been separately kept as 94 726 they  should have been according to the  respondent’s  case. The  respondent  alleges  that  they  have  not  been   kept separately  throughout the ten years ; but that is a  matter which  is yet to be investigated.  If the accounts  are  not separately kept the question of allocating expenditure would inevitably arise and that can be decided after adopting some ad  hoc principle in that behalf.  A plea of limitation  has also  been  indicated  by  the appellant  and  it  has  been suggested  that  the  first contract having  merged  in  the second  it  is  only  under the  latter  contract  that  the respondent may have a cause of action.  "Thus the effect  of the  two  contracts  considered  together  may  have  to  be adjudged in dealing with the question of limitation.  It has also  been  suggested  that  the  respondent  knew  how  the accounts were kept from year to year and in substance he may be deemed to have agreed with the method adopted in  keeping the  accounts.  If this point is raised by the appellant  it may involve the decision of the question about the effect of the  respondent’s conduct on his present claim.  The  appel- lant  has also suggested that the respondent has adopted  an attitude  of blackmailing the appellant and  the  respondent treats that as an aspersion on his character.  The relations between  the parties have been very much embittered and  the respondent  apprehends that the appellant, being a  powerful company, may delay and seek to defeat the respondent’s claim by  protracting the proceedings before the arbitrators.   It now looks impossible that the parties would agree to appoint one  arbitrator,  and  so  if the  matter  goes  before  the

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domestic  tribunal the two arbitrators appointed by the  two parties  respectively  may have to nominate a third  one  to complete the constitution of the domestic tribunal, and that it  is  said may easily lead to a deadlock.   In  the  trial court attempts were made to settle this unfortunate  dispute but  they failed and the respondent’s grievance is that  the appellant adopted an unhelpful and noncooperative  attitude. It  appears fairly clear that when the parties entered  into the  present  contract and agreed that  differences  between them in regard to the interpretation and application of  the contract should be referred to 727 arbitration they did not anticipate the complications  which have  subsequently  arisen.   That  is  why  an  arbitration agreement  may  have  been introduced  in  the  contract  in question.  All these facts have been considered by both  the courts,  and  though it is true that in their  approach  and final  decisions  in respect of these facts the  two  courts have  differed  in material particulars, they  have  in  the result agreed with the conclusion that the discretion vested in them should be exercised in not granting stay as  claimed by the appellant.  Under these circumstances we do not think we  would  be justified in substituting our  discretion  for that of the courts below.  It may be that if we were  trying the  appellant’s application under s. 34 we might have  come to  a  different  conclusion;  and also  that  we  may  have hesitated to confirm the order of the trial court if we  had been dealing with the matter as a court of first appeal; but the matter has now come to us under Art. 136, and so we  can justly  interfere  with  the  concurrent  exercise  of   the discretion by the courts below only if we feel that the said exercise   of   discretion  is   patently   and   manifestly unreasonable, capricious or perverse and that it may  defeat the ends of justice.  Having regard to all the circumstances and  facts of this case we are not disposed to hold  that  a case  for  our  interference  has  been  made  out  by   the appellant.   That is why we dismiss this appeal but make  no order as to costs throughout.                                   Appeal dismissed.