SADHU SINGH GHUMAN vs FOOD CORPORATION OF INDIA & ORS.

The Supreme Court interpreted 'a step in the proceeding' under Section 34 of the Arbitration Act, 1940, clarifying that not every action by a defendant in a suit disqualifies them from seeking a stay for arbitration. The Court held that a step must indicate an intention to submit to the court's jurisdiction for adjudication on merits, and since the appellant only sought production of documents without indicating intent to file a written statement, they had not abandoned their right to arbitration. The appeal was allowed, reinstating the stay on the suit proceedings.