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The Raneegunge Coal Association Ltd. Vs. the Tata Iron and Steel Co. Ltd. - Court Judgment

LegalCrystal Citation
Decided On
Case NumberO.C.J. Appeal No. 17 of 1928 and Suit No. 1885 of 1927
Reported in(1929)31BOMLR21; 117Ind.Cas.417
AppellantThe Raneegunge Coal Association Ltd.
RespondentThe Tata Iron and Steel Co. Ltd.
DispositionAppeal allowed
indian arbitration act (ix of 1899), section 19-submission to arbitration-stay of suit -point of law-allegation of fraud whether sufficient ground for stay of suit.;arbitrators are not incompetent to decide questions of law.;english decisions subsequent to the english arbitration act of 1889 should not be applied without qualification to applications for stay under the indian arbitration act 1899.;it is not a good reason for refusing a stay under section 19 of the indian arbitration act, 1889, that the courts in england would refuse a stay where there is a question of law for the decision of the arbitrators, for under the english arbitration act a question of law may always be returned for decision to the court. this consideration is sometimes lost sight of in applying as a ground for a.....kemp, j.1. this is an appeal against an order made by mr. justice blackwell dismissing, on march 5, 1928, a summons taken out by the defendants for stay of the suit under section 19 of the indian arbitration act, 1899.2. the plaintiffs sue the defendants for breach of an agreement, association dated january 16, 1919, for the sale by the defendants to the plaintiffs of the output of coal raised by the defendants from certain seams nos. 12, 13 and 15 in the defendants collieries at kustore and alkusa which, we were informed during the arguments, are situated some ten hours by rail from calcutta. it is unnecessary to refer to the agreement in detail. it is sufficient to state that the plaintiffs contend that under the agreement the defendants were bound to maintain the output of the.....

Kemp, J.

1. This is an appeal against an order made by Mr. Justice Blackwell dismissing, on March 5, 1928, a summons taken out by the defendants for stay of the suit under Section 19 of the Indian Arbitration Act, 1899.

2. The plaintiffs sue the defendants for breach of an agreement, Association dated January 16, 1919, for the sale by the defendants to the plaintiffs of the output of coal raised by the defendants from certain seams Nos. 12, 13 and 15 in the defendants collieries at Kustore and Alkusa which, we were informed during the arguments, are situated some ten hours by rail from Calcutta. It is unnecessary to refer to the agreement in detail. It is sufficient to state that the plaintiffs contend that under the agreement the defendants were bound to maintain the output of the particular seams up to 15,000 tons and deliver to them the output for that amount and over up to 25,000 tons. The plaintiffs do not say in the plaint that the defendants dispute this construction, but on the argument of the summons, the defendants' learned Counsel asserted that the only obligation on the defendants was to supply a minimum quantity of 15,000 tons per month. These contentions arise from the wording of Clauses 3 and 9 of the agreement. Under Clause 5 of the agreement the sellers were to furnish the buyers with weekly particulars of the raisings available for despatch under the agreement. The coal was to be loaded into wagons on the colliery sidings and despatched at the risk of the buyers who were to pay all the freight and railway charges. Shortly put, the plaintiffs contend that recently they came to know that from April 1, 1920, when the agreement came into operation up to 1925-26 and 1926-27, the output of the coal raised by the defendants from the seams in question monthly was considerably larger than the quantity supplied to the plaintiffs. They say that the defendants instead of delivering to them the output up to 25,000 tons, sold that quantity to other people in the market at a higher rate. They also state that the defendants 'fraudulently refrained' from furnishing the particulars required by Clause 5 of the agreement and led the plaintiffs to believe that the total output of the said seams was being supplied to the plaintiffs from month to month. They allege that by this 'fraud' the defendants kept them from a knowledge of their rights until April 1927. They thus seek to take advantage of Section 18 of the Indian Limitation Act. The prayers of the plaint pray for a full and complete discovery of the output of coal 'at all times material to this suit,' damages for fraud and breach of contract and costs.

3. The agreement itself was signed by the defendants at their registered office in Calcutta and by the plaintiffs at their registered office in Bombay. The contract was to be performed at the collieries where delivery was to be given on the wagons at Association the colliery siding. All the evidence in the case will be obtainable either there or in Calcutta where the Head Offices of the railway companies concerned are. The only part of the cause of action which may be said to have accrued in Bombay is that part of the performance which requires the defendants to send to the plaintiffs weekly particulars of the raisings. Presumably they were to be sent to Bombay.

4. Clause 13 of the agreement is the clause relating to arbitration. It is in these terms :-

If any dispute or difference shall at any time arise between the parties touching the construction, effect or meaning of these presents or any matter or thing arising hereunder then and in every such case the matter in difference shall be referred to the Tribunal of Arbitration of the Bengal Chamber of Commerce to be determined in accordance with the rules for the time being of that Tribunal. The award of such Tribunal may at the instance of either party be made a Rule of the High Court of Judicature at Fort William in Bengal.

5. Clearly the parties contemplated Calcutta as the 'venue' for the decision of any dispute.

6. The learned Judge dismissed the summons on various grounds. Section 19 of the Indian Arbitration Act is in these terms:-

Where any party to a submission to which this Act applies, or any person claiming under him, commences any legal proceedings against any other party to the submission, or any person claiming under him, in respect of any matter agreed to be referred, any party to such legal proceedings may, at any time after appearance and before filing a written statement or taking any other steps in the proceedings, apply to the Court to stay the proceedings; and the Court, if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the submission and that the applicant was, at the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of the arbitration, may make an order staying the proceedings.

7. Clearly under that section, the Judge has a discretion to stay the suit pending the arbitration. Russell on Arbitration, 11th Edition at p. 102, referring to this discretion states:-

This discretion, in accordance with the ordinary rules of law, must be judicially exercised, but where it has been so exercised it will not readily be interfered with, even though the tribunal which is asked to review it may feel that, if the decision had rested with them, their own conclusion might have been different.

8. The question is whether the learned Judge has exercised a judicial discretion in this case having regard to the principles by which he must be guided. With all respect to him, I am of opinion that he has not, and that he has taken into account the principles of decisions in England which since the English 1928 Arbitration Act of 1889 make the Courts there reluctant to stay the suit where the main point in dispute is a pure question of law, because such a question must ultimately return by way of a case stated to the Court for decision. The greater control exercised by Courts in England over arbitrations under the English Arbitration Act should not, I think, be applied as a main reason for refusing a stay under the Indian Arbitration Act. Before the English Arbitration Act, the Courts in England did not hesitate to order a stay where there was a pure question of law.

9. The learned Judge refused to stay the suit on the grounds, firstly, that there was an important point of law for determination which would be more properly tried by the Court than by the arbitrators. As he puts it:-

In a case such as this, where there are likely to arise difficult questions of law, I do not think it reasonable to leave the parties to the tender mercies of the arbitrators, seeing that they cannot be compelled to seek the guidance of the Court for determining the difficult questions of law likely to arise before them.

10. Secondly, he finds that there is a plea of fraud which has been set up in the plaint which is a matter that demands that the question in dispute should be determined by the Court, He says;-

An allegation of fraud, however, is in my judgment only one of the elements in a case like the present which an Indian Court should consider having regard to the difference existing between the Courts in England and in India in respect of the control exerdseable by those Courts over arbitrations. In the present case the allegation of fraud made in the plaint is in my opinion likely to give a rise as I have already pointed out to a difficult question of law upon the true construction of Section 18 of the Indian Limitation Act.

The allegation of fraud bringing Section 18 into operation is apparently the concealment of the monthly output by deliberately refraining to send plaintiffs the weekly particulars under Clause 5 of the agreement. It will be noted that the plaint was filed on September 13, 1927, and the claim in respect of the raisings prior to September 13, 1924, would be barred by limitation but for the plea of fraudulent concealment. The third ground is the alleged difficulty the arbitrators would encounter in securing the attendance of witnesses to produce documents and in enforcing discovery. Reference is made in the judgment in this respect to Order XI, Rule 14, by which the Court can punish any refusal to comply with an order for discovery.

11. Before proceeding to deal with these points I wish to point out again that in this particular case the parties deliberately chose a 'forum' to which they were willing to confide any dispute and which would be the most convenient 'forum' for the trial of any matter arising out of the contract. The intention clearly appears have been that the diaputes should be determined in Calcutta association where the railway receipts to be obtained from the railway companies could more easily be applied for and obtained and where the tribunal would have expert knowledge of this kind of business. Indeed there must be many cases in which the Bengal Chamber have had to construe contracts in coal, Bengal is one of the main centres of the industry. Certain terms have been referred to in the agreement which an expert tribunal would be butter able to construe than a Court which would have to take voluminous evidence on their meaning. As it is, the defendants find that they are brought down to Bombay to meet this suit on a cause of action the only real part of which apart, perhaps, from the execution of the agreement by the plaintiffs in Bombay that has arisen within its jurisdiction is that part of the performance which required defendants to send to plaintiffs the particulars in Clause 5 of the agreement. And even this is not clear in the agreement, for Clause 5 of the agreement merely says that the particulars are to be furnished to the buyers, i. e., the plaintiffs. Morever, the defendants have their place of business in Calcutta. It seems inequitable that the defendants should be called upon to meet this claim in a suit filed in Bombay.

12. Now the effect to be given to an arbitration clause in a contract has been clearly stated so far back as the case of Willesford v. Watson (1873) L.R. 8 Ch. 473. where Lord Selborne stated (p. 480):-

If parties choose to determine for themselves that they will have a domestic forum instead of resorting to the ordinary Courts, then since that Act of Parliament (i. e., the Common Law Procedure Act of 1834) was passed, a prima facie duty is cast upon the Courts to act upon such an agreement.

13. Then in Bristol Corporation v. John Aird & Co. [1913] A.C. 241. a passage has been cited by the learned Judge in his judgment where Lord Moulton states (p. 259):-

It (the Court) must consider all the circumstances of the case, but it has to consider them with a strong bias, in my opinion, in favour of maintaining the special bargain between the parties, though at the same time with a vigilance to see that if is not driving either of the parties to a tribunal where he will not get substantial justice.

It cannot reasonably be contended in the present case, apart from the contention as to the possibility of not securing the attendance of witnesses and discovery, that the Bengal Chamber of Commerce is not a tribunal from which the parties would get substantial justice. Then in Produce Brokers Company, Limited v. Olympia Oil and Cake Company, Limited [1916] 1 A.C. 314. a case, I think, not cited to us in the arguments, Lord Sumner states (p. 332) :-

Arbitration clauses, substantially the same as that before your Lordships, are characteristic of all these forms of contract, The system has been devised by mercantile men to suit their needs and they have found it highly beneficial; they have been naturally anxious to establish trade control over the transactions of the trade as completely as possible.

It will be observed that the case referred to was a case where the question to be determined by the arbitrators was a question of construction. Then, in the case of Metropolitan Tunnel and Public Works v. London Electric Ry. Co. [1926] 1 Ch. 371. referred to in judgment, Lord Hanworth M.R., in considering the meaning and proper interpretation of a certain clause in that case, states (p. 385):-

The meaning and proper interpretation of such a clause us that in the present case is that the Court has to be satisfied that sufficient reason exists why the matter cannot or ought not to be referred to arbitration, and that the burden lies upon the party who alleges it to show that such sufficient reason exists.

Further on, in the report, he goes on to say (p. 385):-

It is said that the question raised is one of law, and that if the matter goes to arbitration, it may have to come back to the Court for judicial interpretation of the meaning of this and other clauses of the contract.

This passage is relevant with reference to the distinction drawn by the Courts when deciding cases under the Common Law Procedure Act of 1854 and those subsequent to the English Arbitration Act of 1889. Then Lord Justice Scrutton states at p. 388 of the same report:-

On the one hand, it is eminently desirable, in all business matters, that parties who have made a contract should keep it. Business could not satisfactorily go on if persons were to be at liberty to disregard contracts they had made.

Later on he says (p. 389):-

But undoubtedly a guiding principle on one side, and a very natural and proper one, is that parties who have made a contract should keep it.

Then comes the passage cited in the judgment of Mr, Justice Blackwell:-

On the other hand, the Courts have always firmly adhered to the principle that their jurisdiction is not to be ousted by agreement between the parties, and that in cases where the Courts think it better that the dispute should be decided by the Courts, rather than by a private arbitrator, they will not be fettered in their decision by the fact that the parties have agreed to oust the jurisdiction of the King's Court.

I think it is unnecessary to quote further authorities to establish the well-recognised principle, firstly, that the 'onus' of showing the dispute should not be referred to arbitration lies upon the plaintiffs, and, secondly, that the Courts will, as a rule, refer the parties to the 'forum' which they have deliberately selected as the one to which they wish to refer all their disputes. It is clear from these references that the arbitrator can not only determine a point of law but that he can equally determine a question of the construction of an agreement, and, therefore, unless some special reason is shown why the point of law in this case is beyond the powers of the arbitrator it seems to me that the Court should incline to passing the order asked for in the summons. The learned Judge in his judgment states as a reason why the stay order should not be passed that because under the English Arbitration Act of 1889 the Courts exercise greater control over arbitrators by virtue of Sections 7 and 19 of that Act and Lord Justice Scrutton states that their discretion should not be fettered where they think it better that the dispute should be decided by the Courts notwithstanding an agreement to refer, the Courts in India, which have less control over arbitrators under the Indian Arbitration Act, should be even more ready to refuse a stay of the suit. But, as is pointed out in Halsbury's Laws of England, Volume I, at pages 453 and 454, the Courts in England prior to the English Arbitration Act of 1889 did not consider that the determination of a point of law was a sufficient ground for refusing a stay of the suit. Since 1889 the Courts in England have been less inclined to stay a suit as the arbitrator can be compelled to state a case for the opinion of the Court on any question of law arising in the course of the reference. There would, therefore, be little point in England, since the English Arbitration Act of 1889, in referring a pure question of law to an arbitrator. This was the chief reason apparently why in the case of Barnes v. youngs [1998] 1Ch. 414. Mr. Justice Romer refused to stay the suit. There was only one point and he described it as a simple point of law and saw no use in referring it to an arbitrator when he might ultimately be called upon to decide it. It is erroneous to apply the English decisions subsequent to the English Arbitration Act without qualification to cases under our Arbitration Act and to deduce that applications for stay here should be more strictly dealt with. No doubt, as the Chief Justice in The Toyo Menka Kaisha Limited v. Joomabhai Laljee (1927) O.C.J. App 1926 said, the distinction is one to be borne in mind, Non constat, however, that it decides the Court's discretion.

14. Now, the mere fact that the plaint alleges a difficult point of law is by no means proof that it is so or that a stay should be refused. In The Toyo Menka Kaisha Limited v. Joomabhai Laljee the learned Chief Justice described the case as a very exceptional one and the contention there was that the arbitrators might go wrong on the question as to the admissibility of oral evidence under Section 92 of the Indian Evidence Act. There does not appear to me to be any difficult or complicated question of law regarding the agreement which the Bengal Chamber of Commerce, with its special experience, would not be fully competent to determine. The parties specially provided in the arbitration clause that the Chamber's tribunal should construe the agreement.

15. The plaintiff alleges fraudulent concealment. I think the alleged fraud cannot be properly coupled with the alleged difficult question of law so as to have a cumulative effect justifying the refusal to stay the suit. If neither ground be sufficient in itself it would require a very strong case to say that the combined effect should suffice. Mr, Mulla in his argument has laid more stress on the combined effect of the grounds relied upon by the lower Court than on the weight to be given to each separate ground.

16. Where fraud is alleged, particulars of the fraud must be given. The plaint, which counsel, in my opinion, rightly described as a 'sketchy' one, merely alleges in paragraphs 7 and 8 that defendants fraudulently refrained from furnishing particulars under Clause 5 of the agreement and by reason of that fraud the plaintiffs were kept without knowledge of their rights. Now the con -tract was one for the sale of coal, and the particulars of the fraud are not stated but in effect there is merely a general allegation that by not sending the weekly particulars the defendants intended a fraudulent concealment. The fact that the particulars of fraud have not been stated is clear from the judgment where the learned Judge states: 'The case however is based upon an allegation of fraud and it is vital to the plaintiffs that they should succeed in getting discovery to enable them to make out a 'prima facie' case for the defendants to answer.' Clearly, therefore, he was of opinion that particulars of fraud had not been furnished and plaintiffs could only establish fraud by what is really a 'fishing' inquiry. Moreover, the real cause of action alleged in the plaint is one ex contractu, and a party cannot by merely alleging fraud base a cause of action on fraud when the real cause of action is one ex contractu.

17. Mr. Mulla contends that the fraud consisted in conversion, that all the coal which was to be raised from these seams belonged to plaintiffs up to the limits of the contract, and that the defendants by selling this coal to other persons have converted the plaintiffs' property. But this is not pleaded in the plaint. Nor are any damages sought for conversion. Nor is there anything to show that there was any appropriation of the coal raised to the surface to the plaintiffs.

18. Driven from that position, Mr. Mulla contended that this was a case of agency and that the defendant-agents have misappropriated their principal's goods. The answer to this is that it is not pleaded in the plaint and that on the facts of the case it is clearly a contract between a seller and a buyer and has no reference to agency whatever. Here I would point out that the mere allegation of fraud in a pleading is not sufficient, without furnishing particulars, to give the plaintiffs a right to successfully contest an application for stay.

19. The plaintiffs say they were kept from knowledge of their rights by the fraudulent omission to furnish particulars under Clause 5 of the agreement. An omission of this sort does not amount to a fraudulent concealment but merely to a breach of contract. The plaintiffs, if they had wished, could have asked for these particulars and the means of knowing the amount of coal alleged to have been raised from the seams were within their power. Indeed, until the date mentioned in paragraph 5 of the plaint, they made no efforts whatever to obtain such particulars from the defendants. There is no reason to assume that the defendants would have supplied the plaintiffs with false particulars, In paragraph 2 of the affidavit of Mr, James Gibson Foster, one of the managers of the defendant company, he states that plaintiffs wrote to defendants in March 1923 requesting them to send statements and in accordance with such request the defendants sent to the plaintiffs statements showing raisings, despatches and stocks in the month of February 1923 and similar statements every month thereafter up to the date of the filing of the suit. Had the plaintiffs chosen to ask for statements, which no doubt under the contract there was an obligation on the defendants to supply weekly, the defendants would have in all probability supplied them, Had those statements been false then the plaintiffs might have been in a position to say that having accepted them they were kept in ignorance of their rights. It is to be noted that the plaintiffs made no request for any of these statements prior to that date and it would almost seem as if they had waived the necessity of demanding them. There can, therefore, be no question here of any suppressio veri. There was nothing actively done by the defendants to conceal the true facts from the plaintiffs but there was merely a breach of the contract to supply weekly particulars which breach the defendants do not appear to have taken very seriously.

20. But there is another reason why fraud should not be regarded as a ground for refusing a stay in this case, and I think too little weight has been given to it. The defendants who are charged with the fraud and who might prefer to clear their character in a Court of law do not want to do so in the suit. They are content that their commercial integrity should be submitted to the arbitration of business men.

21. The third ground on which the lower Court refused the order of stay was that the arbitrators would be unable to enforce discovery and the attendance of witnesses. Here I may say, at once, that if this ground were to be considered a sufficient ground to refuse a stay, then all arbitrations under the Indian Arbitration Act would be restricted to cases where there are no witnesses and no discovery is sought. I see no reason to give that limited construction to the Indian Arbitration Act and there are no words in the Act which suggest it. It is obvious that this difficulty may arise in the case of every arbitration but when it does arise and if it seriously prejudices the efforts of the arbitrator in arriving at a fair decision, there is nothing to prevent either party applying to the Court, under Section 5 of the Indian Arbitration Act (IX of 1899), for revocation of the submission. But there is no reason to apprehend that any such difficulty is certain to occur, and in the ordinary course the mere possibility would not be a ground for refusing the stay. Nor could this Court compel the attendance of a witness who resides more than two hundred miles from the Court house (Order XVI, Rule 19(b)).

22. Moreover, the documents which have been referred to in connection with this point, viz., the railway receipts, are all obtainable at Calcutta, and there seems no reason why the railway companies should not allow them to be inspected or copies to be taken. Nor can the plaintiffs state that there are any witnesses who refuse or will refuse to attend.

23. Lastly, with regard to the. power to revoke, it is stated in Russell on Arbitration (11th Edition) at page 61:-'The principle underlying the exercise of the power to revoke is that the parties take the arbitrator for better for worse, that his decision is final both as to law and fact, and that unless a substantial miscarriage of justice will take place in the event of leave to revoke being refused, leave will not be given,' which shows how strong is the principle of law that the matter should be left in the hands of the arbitrator. No doubt the English Act (52 & 53 Vic. c. 49, Section 8) provides for enforcing the attendance of witnesses and the Indian Arbitration Act does not, but this makes no difference in the present cage, for, as I have said, it has not been shown that witnesses are not going to attend, Under the circumstances, I am of opinion that the order for stay should have been granted and that in a commercial case like this, there ought to be very strong grounds for refusing the order. The refusal to stay in this case would, I think, amount to an injustice to the defendants. I would, therefore, allow the appeal and Bet aside the order of the Court below with costs throughout.

Fawcett, J.

24. This Court must, I think, attach considerable weight to the discretion exercised by the learned Judge in the Court below, especially as he has very fully and carefully stated the reasons for the conclusion that he came to. I would myself be very reluctant to interfere, unless I was convinced that there were adequate grounds for saying that his discretion had not been judicially exercised or that the weight of argument is very much against the discretion being exercised in the way it was by the learned Judge. I think, however, that in this case there are grounds for holding that the suit should have been stayed, and that the reasons given by the learned Judge for refusing to stay it are entirely inadequate.

25. The first point that he takes is that a difficult question of law is likely to arise upon the true construction of the agreement in question. It is to be noted, in the first place, that Clause 13 of the agreement between the parties expressly covered a dispute touching the construction, effect or meaning of any part of the agreement, and therefore the parties certainly did contemplate that a question of construction of the agreement might have to be decided by the chosen arbitrators, viz,, the Bengal Chamber of Commerce. But, apart from that, I agree with the contention of the appellants that the question about the construction of Clause 9 of the agreement does not really arise upon the allegations in the plaint on which the suit is based. Paragraph 5 of the plaint only says' that the output of coal raised from these particular seams was considerably larger than the quantity supplied by the defendants to the plaintiffs and the defendants wrongly sold the balance of the said output to third parties. That is a pure statement of fact, viz., that the plaintiffs were not supplied with the full amount of the raisings, as they should have been under the contract, and that the difference between what the plaintiffs got and what was actually raised from the seams was sold to third parties. No question of construction of the agreement can, it seems to me, possibly arise on that statement of the plaintiffs' case. It was answered that the defendants might say that under the agreement, although they raised more than 15,000 tons, they were not bound to supply anything in excess of that quantity to the plaintiffs. That is a contention which it would be hardly open to the defendants to raise, in view of the fact that the details furnished in Exhibit B to the plaint show that from the very first the defendants did in fact supply large quantities over this amount of 15,000 tons in particular months; and in view of the precise terms of Clause 9 of the agreement, which obviously contemplate at least a possibility of 25,000 tons monthly being supplied, it would, in my opinion, be absurd to put any weight upon this supposed plea. Paragraph 6 of the plaint could in fact have been entirely dropped without making the slightest difference to the claim for damages in respect of the alleged fraud of the defendants. The learned Judge must have felt this difficulty because he only says that, if the case did go to the arbitrators, they 'may be' faced at the outset with the necessity of determining this particular question of the construction of the document. Even if they were faced with that difficulty, it does not seem to me that a body like the Bengal Chamber of Commerce, whose members must be constantly having questions of this kind before them in connection with collieries, would find it one of very great difficulty. With every respect to the learned Judge, I cannot agree with him that this is a difficult question which really arises and which could not be dealt with by the arbitrators.

26. With regard to the question of fraud in relation to Section 18 of the Indian Limitation Act, which is the second ground on which the learned Judge's order is based, it seems to me that the mere omission of the defendants to supply particulars of raisings in accordance with Clause 5 of the agreement cannot per se possibly be described as fraud. Both parties were aware of this particular obligation. The plaintiffs, a body of business-men, knew that they had only to write to the defendants if these particulars were not furnished in order to obtain them, or if there was any default they had at any rate remedies which they could adopt. No doubt in certain cases silence or inaction may amount to misrepresentation, and I have considered all the eases of that kind which are colleot-1928 ed in Halsbury's Laws of England, Vol. XX, Articles 1656 to 1658 and in Article 1784. But none of those particular cases, in my opinion, can possibly apply to the present case. There is no question of the plaintiffs being misled by the mere failure to supply these particulars. It is said that they would presume that defendants would supply the full raisings. But that in itself cannot justify an effect being given to mere silence or action, which does not naturally arise from that position. As is stated in Halsbury's Laws of England, Article 1659, of the same volume:-

Except as already stated, mere silence op inaction neither constitutes, nor is equivalent or contributory to, misrepresentation, however amenable it) may be to the consequences which ensue on a breach of that positive duty of disclosure which is imposed, under another head of jurisprudence, on parties standing to one another in certain relations, or engaged in transactions uberrimoe fidei, or however censurable is may be in form conscientioe. The reticance must amount to concealment or suppression, in order to make it an element in misrepresentation.

27. Section 18 of the Indian Limitation Act requires that a person should have been kept from certain knowlege by means of fraud. There must be actual fraud in the means adopted to keep the person out of knowledge, and it is to my mind entirely a misuse of words to say that, merely because defendants did not furnish the particulars which they ought to have done under the contract, there was fraud. The Courts, as is well-known, do not define fraud, But as stated in Pollock's Law of Fraud in British India (p. 17): 'Fraud may be described, for most usual purposes, as the procuring of advantage to oneself, or furthering some purpose of one's own, by causing a person with whom one deals to act upon a false belief.' He points out that that is not a definition, and that there may be fraud without any seeking of personal advantage. But certainly a necessary element in ordinary fraud is deception or deceit and getting somebody to believe something that is not really correct. The exceptional case of concealment by a party standing in a fiduciary relation to the person from whom knowledge is withheld, does not arise here. In my opinion, therefore, the view taken by the learned Judge that another question of law may arise as to whether there was fraud by the defendants within the meaning of Section 18 of the Limitation Act cannot be sustained.

28. As regards the points about disclosure and the Indian Courts not having the same control over the arbitrators as in England, I agree with what ray learned brother has said; and we pass the following order: Summons made absolute. Suit stayed. Respondents to bear appellants' coats of the appeal and of the Court below. Costs to include costs of the petition made before Fawcett J.

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