ivil Appeal No 6729 of 1983
From the Judgment and Order dated 2231983 of the Allahabad High Court in CMWP No 7787 of 1979
Shankar Ghosh RK Jain RB Mehrotra Ms Abha Shar ma Ms Sangita Tripathi Mandal RP Singh Harish N Salve DK Garg Gopal Subramanium Mrs Shobha Dikshit CP Pandey SK Sabharwal MP Sarawala RS Sodhi DD Gupta Shakil Ahmed Syed KRR Pillai MA Firoz RD Upadhyay US Prasad and CM Nayar for the appearing parties
The Judgment of the Court was delivered by RANGANATH MISRA J
This appeal by special leave was heard along with Civil Appeals Nos 776 of 1984 and 4356 of 1986
Those two appeals were disposed of by a common judg ment dated March 1 1990 by remitting the dispute forming the subject matter of those appeals to the UP Public Services Tribunal for disposal on merit and judgment was reserved in this appeal as we were of the view that certain relevant aspects required notice and we should commend to the UP State to bring its Services Tribunal at par with the State Administrative Tribunals set up under the Central of 1985
So far as the merits of the case go we are of the view that it should also be remitted for disposal by the Services Tribunal and we direct that the Tribunal shall dispose of the matter in accordance with its rules by the end of Sep tember 1990
The of 1985 is a legisla tion in terms of article 323A of the Constitution
By setting up a Tribunal under that Act for resolution of service disputes the jurisdiction of the High Court in regard to such matters is intended to be taken away and under 170 the scheme of that Act the jurisdiction of the High Court in regard to service disputes is intended to be vested in the Tribunal
That is the view expressed by the Constitution Bench of this Court in SP Sampath Kurnar vs Union of India  Ors  The Uttar Pradesh Public Services Tribunal which func tions under a different State Act does not have power to make any interim order
In fact exercise of that power is denied to the Tribunal by specific provision
That is why the appellants had taken up the plea before the High Court that filing of a claim in the Tribunal was not an adequate alternate relief
In such setting it had been canvassed that the High Court under article 226 of the Constitution was not debarred from entertaining writ petitions
Under the Admin istrative Tribunals Act it is open to the State to also set up Tribunals for adjudication of service disputes in regard to employees of the State
Several States have already set up their own Tribunals
We commend to the State of Uttar Pradesh to consider the feasibility of setting up of an appropriate tribunal under the Central Act in place of the Services Tribunal functioning at present so that apart from the fact that there would be uniformity in the matter of adjudication of service disputes the High Court would not be burdened with service litigations and the Tribunal with plenary powers can function to the satisfaction of everyone
case the Uttar Pradesh Services Tribunal set up under the UP No 17 of 1976 is continued it would be appropriate for the State of Uttar Pradesh to change its manning and a sufficient number of people qualified in Law should be on the Tribunal to ensure adequate dispensation of justice and to maintain judicial temper in the functioning of the Tribu nal
We find that in Writ Petition No 373 of 1989 relating to the self same question a Bench of this Court has issued notice wherein the proposal for additional Benches at places like Allahabad Meerut and Agra apart from the seat at Lucknow have been asked to be considered
We are of the view that if the Services Tribunal is to continue it is neces sary that the State of Uttar Pradesh should plan out immedi ately diversification of the location of the Benches for the Tribunal so that service disputes from all over the State are not required to be filed only at Lucknow and on account of a single tribunal disputes would not pile up without disposal
There would be no order as to costs
PSS Appeal disposed of


Summary:
Held that in order that a stay may be granted under section 34 of the Indian  it is necessary that the following conditions should be fulfilled 1 The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement 2 the legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred  3 the applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance
It is also necessary that he should satisfy the court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration  and 4 the Court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement
The first and essential pre requisite to making an order of stay under a 34 of the is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed
The question whether the dispute in the suit falls within the arbitration clause really pre supposes that there is such agreement and involves consideration of two matters viz 1 what is the dispute in the suit and 2 what disputes the arbitration clause covers
It is incumbent upon the Court when invited to stay a suit under section 34 of the Indian  to decide first of all whether there is a binding agreement for arbitration between the parties
If in the present case it is held that the arbitration agreement and the contract containing it were between the parties to the suit the dispute in the present suit would be one relating to the rights and liabilities of the parties on the basis of the contract itself and would come within the purview of the arbitration clause 863 worded as it is in the widest of terms
If on the other hand it is held that the plaintiff was not a party to the agreement the application for stay must necessarily be dismissed
Case sent back for the decision of the question whether the respondent was or was not a party to the arbitration agreement
Heyman vs Darwins 1942 AC 356 Khusiram vs Hanutmal 1948  A M Mair and Companay vs Gordhandas 1960 SCR 792 and Patiram Y Kankarah Company 1915 ILR referred to