Facts & Background:

• M.P. Rajya Tilhan Utpadak Sahakari Sangh Maryadit Pachama District Sehore was the Appellant.
• M/S Modi Transport Service was the Respondent.
• The Respondent transported coal to the Appellant's plant at ₹1.42 per tonne per kilometre, pending a new agreement, and furnished a ₹1,00,000 bank guarantee as directed.
• The Appellant withheld transportation charges, made deductions for tonnage, moisture content, and storage expenses, and directed the Respondent to cease transportation, causing storage-related additional expenditures.
• The Appellants alleged substandard coal delivery, deducted amounts for shortages exceeding 1%, delays, and alleged fraud, denied liability for storage charges, and rescinded the rate increase letter.
• Without objecting to the rate cancellation, the Respondent continued transportation at the revised rate, sought account settlement with 2% interest, and filed a suit valued at ₹1,00,000.
• On 23rd December 1994, the Respondent requested the First Additional District Judge, Sehore, to appoint a Chartered Accountant to audit accounts, and the court appointed Sh. S.K. Mantri as Panch.
• On 23rd January 1995, the court directed Sh. S. K. Mantri to audit the accounts. After extensions, he submitted his report on 22nd June 1995, stating that the Appellant owed ₹24,03,300 with interest.
• The Appellant filed objections to the report, which the court rejected on 16th May 1996, affirming Sh. S.K. Mantri’s appointment as an arbitrator under Section 21 of the Arbitration Act.
• The Appellant appealed to the Madhya Pradesh High Court, which dismissed the appeal on 19th September 1996, upholding the trial court's decision and accepting the audit report.
• The Appellant filed the appeal challenging the judgment of the Madhya Pradesh High Court.
  
  

Main Issue:

• Did the parties agree that the subject matter of the suit or a part thereof should be referred to arbitration under Section 21 of the Arbitration Act, 1940?