FOOD CORPORATION OF INDIA & ANR. vs YADAV ENGINEER & CONTRACTOR

The Supreme Court interpreted Section 34 of the Arbitration Act, 1940, clarifying that entering an appearance and seeking time to file a reply to an interim injunction does not constitute a 'step taken in the proceedings' that would bar a party from applying for a stay under this section. The Court upheld the lower courts' decisions to grant a stay of proceedings, emphasizing the importance of adhering to arbitration agreements. The ruling confirmed that the respondent's actions did not preclude the appellant from invoking arbitration, thereby reinforcing the enforceability of arbitration clauses in contracts.