Law: Civil Procedure Code (V of 1908)

Section: O.XXXVIIR.3

Law: Civil Procedure Code (V of 1908)

Section: O.XXXVIIR.3

Law: Arbitration Act, 1940

Section: 34

(a) Civil Procedure Code (V of 1908)-------O. XXXVII R. 3---Arbitration Act (X of 1940), S.34---Suit for recovery of money---Dishonouring of cheque---Stay of proceedings in presence of an arbitration agreement between the parties---"Dispute"---Scope---Defendant-company was proceeded ex parte whereafter it filed application under S.34 of the Arbitration Act, 1940 for stay of proceedings in presence of an arbitration clause in the agreement between the parties---Contention of the defendant was that the agreement between the parties stipulated that all disputes be referred to arbitration, therefore, proceedings of the suit should be stayed---Validity---Defendant, in the application had only relied upon the clause of the agreement which contained general terms and conditions but failed to point out any dispute---Dishonouring of cheque was an independent cause of action and section 34 of the Arbitration Act, 1940 did not apply to stay the suit---Neither the issuance of the cheque was disputed nor its dishonouring and mere dishonouring of cheque due to insufficiency of funds did not create any dispute which was to be resolved through arbitration---When there was no dispute, there could be no arbitration and thus it would be irrational and illogical to stay the proceedings as the dispute was non-existent---Application for stay in proceedings was dismissed, in circumstances. Associated Agencies Ltd., and another v. Industrija Masina/Tractora PLD 1993 Kar. 459; Messrs Cepcon (Pvt.) Ltd. v. Messrs Rizwan Builders Ltd. 1990 MLD 2027; Mrs. Rubby Hameedullah and 3 others v. Dr. Arif and 4 others and 2010 YLR 3331 Director Housing, A.-G.'s Branch Rawalpindi v. Messrs Makhdum Consultants Engineers and Architects 1997 SCMR 988 distinguished. Mrs. Suriya Waseem Usmani v. L&M International (Pvt.) Ltd. 2002 CLD 624 ref. Cotton Export Corporation of Pakistan (Pvt.) Ltd. v. Messrs Asif Cotton Ginners and 5 others 1995 CLC 1024; 2001 CLC 1156; 1999 CLC 1841; PLD 1958 (W.P.) Lah. 208; 1988 CLC 1350 and PLD 1993 SC 42 rel. (b) Arbitration Act (X of 1940)--- ----S. 34---Application for stay of proceedings in presence of an arbitration agreement between the parties--- Scope---…

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