Harish Chandra, J.:— This is an appeal from an order of the First Civil Judge, Kanpur, refusing to stay the proceedings on the application of the appellant against whom a suit has been instituted by respondent 1 in which he prays for the appointment of a receiver with respect to the property of the partnership firm of Buddhu Lal Jagannath of which the appellant and respondent I were the partners. The appellant made an application under section 34 of the Indian Arbitration Act, 1940 (Act X of 1940), for the stay of proceedings on the ground that the partnership deed which had been entered into between the appellant and respondent 1 contained in paragraph 13 of the agreement that all disputes and questions in connection with the partnership or the deed of partnership arising between the partners shall be referred to arbitration. This application was resisted by respondent I on various grounds, one of them being that the appellant had obtained his signature on the so-called partnership deed by deceiving him and without explaining to him “its contents and its import”, the respondent being himself ignorant of the English language in which the document had been drawn up. The learned Civil Judge framed the following issue:

“Should the suit be stayed under section 34, Indian Arbitration Act?”

And gave the parties an opportunity to produce evidence. The appellant gave evidence and produced one witness. Respondent 1 did not go into the witness-box. After considering the evidence and the arguments advanced on behalf of the parties, the learned Civil Judge rejected the application for the stay of proceedings.

The learned Civil Judge was, however, of opinion that the partnership deed had been duly executed by the partners and did not accept the respondent's contention that it had been obtained from him by undue influence or misrepresentation. He refers to the evidence of the appellant who denied on oath that any undue influence or misrepresentation had been exercised upon respondent 1 in connection with the execution of the document. Respondent 1, as I have just said, did not come into the witness-box. There is also an affidavit of the appellant on the record in which these allegations have been denied and no counter-affidavit seems to have been filed on behalf of respondent 1 to refute the allegations contained in the appellant's affidavit. The learned Civil Judge therefore found no reason to hold that there had been any underhand activity in connection with the execution of the deed on the part of the appellant. I see no reason to differ from the learned Civil Judge that the partnership deed dated the 15th April, 1942, is a validly executed document. The arbitration agreement contained in paragraph 13 of this document is reproduced below:

“13. All disputes and questions in connection with the partnership or this deed arising between the partners or between any one of them and legal representatives of the other or between their respective legal representatives and whether during or after the partnership shall be referred to the sole arbitration of Mr. Walter Dutt, Barrister-at-law, Nagpur and his decision shall be final and binding on both partners provided always that if Mr. Walter Dutt does not agree to act as arbitrator or for any reason cannot so act then the partner shall each appoint one arbitrator and on failure of agreement between the arbitrators the arbitrators shall appoint one umpire to whom the disputes shall be referred and the decision of the Umpire shall be final.”

The learned Civil Judge has referred to certain facts which seem to indicate that Mr. Walter Dutt may himself be a witness in the case as the managing agent or managing partner of the firm Macpherson & Co. and that there are indications that he is partial to and in collusion with the appellant. As such, he will not in his opinion, be a fit person to act as arbitrator in the case. But even if the reasons given by the learned Civil Judge for holding that Mr. Walter Dutt will not be a suitable person to act as arbitrator are correct, the arbitration agreement contains an alternative provision in regard to arbitration. Paragraph 13 provides that if “for any reason” Mr. Walter Dutt “cannot so act then the partner shall each appoint one arbitrator.” It is said that the unfitness of Mr. Walter Dutt to act as arbitrator on the grounds stated in the judgment of the learned Civil Judge would not bring the alternative provisions of paragraph 13 of the partnership deed into play. In my view the words contained in this paragraph to the effect that if Mr. Walter Dutt cannot, for any reason, act as arbitrator then the partner shall each appoint one arbitrator are very general and would cover the case of Mr. Walter Dutt's unfitness to act as arbitrator on account of his being a witness in the case or his alleged partiality and collusion with the appellant. In my opinion this is not sufficient reason for refusing to stay the proceedings.

Another reason given by the learned Civil Judge for refusing to stay the proceedings is that the plaint contains serious allegations of fraud and dishonesty against the appellant and following the Calcutta case of Maharajah Sir Munindra Chandra Nandy v. H.V Low & Co. Ltd. and the case of Russel v. Russel the learned Civil Judge is of opinion that this is a case in which the court, should refuse its discretion to stay the proceedings. A perusal of the judgment in Maharajah Sir Manindra Chandra Nandy's case, however, shows that unless a prima facie case of fraud is made out, the proceedings should, when an arbitration agreement exists, be stayed. If the plaintiff objects to the case being referred to a domestic tribunal in accordance with an arbitration agreement between the parties he must make out a substantial and bona fide case of fraud. In the present case respondent 1 has, no doubt, made serious allegations of fraud against the appellant. But he did not come into the witness box and the statement on oath of the appellant and the affidavit filed on his behalf stand unrebutted. On the other hand, the appellant, has filed two affidavits sworn by respondent 1 in which he has denied the allegation of fraud. No doubt, it is said on behalf of respondent 1 that these affidavits had been obtained from him by undue influence and misrepresentation. But, as I have said before, respondent 1 has not appeared in the witness-box to state these facts on oath and there is also no affidavit on his behalf in support of these allegations.

Learned counsel for the respondents has also referred us to an order of the Income Tax Officer in which he charges the firm with under statement of sales in the account-books. We have been referred to the reasons given by the Income-Tax Officer for coming to this conclusion, but the grounds upon which the order is based are not admissible in this case. Moreover, there is nothing in the order to show that the appellant was guilty of fraud apart from an understatement of the sales in the account-books with the object of evading the payment of income-tax by the firm. I am, therefore, not satisfied that respondent 1 has made out any substantial or bona fide case of fraud against the appellant.

The learned Civil Judge then refers to the nature of the relief sought by respondent 1 in the suit brought by him against the appellant and respondent 2. He says that the court may be required to consider the prayer of the plaintiff for the grant of an interim relief by way of appointment of a receiver or the issue of an order of injunction and that if the case is referred to arbitration, the arbitrator will not be able to give these reliefs to the plaintiff. The learned Civil Judge has apparently overlooked the provisions of clause (b) of section 41 of, the Arbitration Act and paragraph 4 of the Second Schedule to that Act. It is clear that even when proceedings have been stayed, “the Court shall have, for the purpose of, and in relation to, arbitration proceedings, the same power of making orders in respect of any of the matters set out in the second Schedule as it has for the purpose of, and in relation to, any proceedings before the Court.” In paragraph 4 of the Second Schedule the power to grant interim injunctions or to appoint a receiver are mentioned.

It is, however, argued on behalf of the respondents that the only relief in the suit of respondent 1 being one for the appointment of a receiver, if the case is referred to arbitration the arbitrator will not be able to grant that relief. We are referred in this connection to the case of Surendra Kumar Roy Chowdhury v. Sushil Kumar Roy Chowdhury. But the points that arose in that case were entirely different and the case has no bearing upon the question that is before us. There is nothing in the Arbitration Act to show that an arbitrator has no power to grant relief by way of appointment of a receiver. It is argued that a relief given by an arbitrator or arbitrators by way of appointment of a receiver will be without effect as he has no power to enforce it, but this would apply to any award given by an arbitrator. But when an award is filed in court and the court pronounces its judgment according to the award and upon the judgment so pronounced a decree follows, the decree would be enforceable like any other decree of a court and I see no force in this contention.

It is unnecessary in this appeal to consider whether it is permissible to a plaintiff to pray for the appointment of a receiver by way of substantial relief. But assuming that it is, I do not see how the case is taken out of the purview of a domestic tribunal. The learned Judge also refers to a notice given to the firm by the Government that the leases would be cancelled if the work of the firm is not carried on properly. But that can hardly be a matter to be considered in an application under section 34 of the Arbitration Act.

No doubt, an appellate court is generally unwilling to interfere with an order passed by a court either staying-proceedings or refusing to stay proceedings on an application being made to it under section 34 of the Arbitration Act. But if it finds that the discretion which is given to the court under section 34 in regard to the exercise of its powers under that section has not been judicially exercised, it is its duty to interfere.

I would accordingly allow this appeal with costs and setting aside the order of the learned First Civil Judge of Kanpur dated the 2nd March, 1948, refusing to stay the proceedings would allow the appellant's application dated the 25th September, 1947, under section 34 of the Arbitration Act and make an order staying the proceedings.

Sapru, J.:— I agree.