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Fulchand Dhanraj Vs. Clarke and Smith - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtMumbai
Decided On
Case NumberO.C.J. Appeal No. 32 of 1931
Judge
Reported in(1934)36BOMLR18
AppellantFulchand Dhanraj
RespondentClarke and Smith
Excerpt:
.....o.s., are the same as those of a barrister. counsel in conducting litigation has many powers, duties, privileges and obligations extending beyond the mere duty of acting as an advocate. amongst other things, he has power to refer the matter in dispute to arbitration or to compromise it. those powers and obligations are derived from his retainer as counsel, and not from any contractual appointment as an agent. in non-litigious work, counsel has no such special authority. his authority in that class of work is merely that of an agent and depends on the particular terms of employment.;the special authority of counsel in relation to litigation is confined to litigation in the ordinary course, and does not extend to matters pending before private tribunals. - - but apart from that..........and by john d. essaye on behalf of clarke and smith, the arbitration was proceeded with, and from time to time the period for making the award was extended down to december 15, 1930, and as to those extensions there is no question. on december 13, 1930, a further extension was purported to be agreed to, to january 15, 1931. the agreement for that extension was signed by mr. athavale, who is an advocate, original side, and was acting for the appellant.2. the first point taken against the award is that the agreement to refer is invalid. the contention is that it is not proved that mr. essaye had any authority from clarke and smith to sign the reference, and, secondly, it is said that if he had any authority, it was an authority given by mr. smith only, and that it is not shown that mr......
Judgment:

John Beaumont, Kt., C.J.

1. This is an appeal against a decision of Mr. Justice Rangnekar dismissing a petition to set aside an award. The facts are stated in the judgment of the learned Judge, and I need not repeat them. The agreement for reference to arbitration, which is Ex. F, purports to be made between Clarke and Smith, described as a firm of European merchants, and Dhanraj Fulchand who is the present appellant. It recites in effect that there was a dispute between the parties as to whether the appellant was liable in respect of certain business done by Clarke and Smith for a man named Ganeshdas Rampal, the allegation of Clarke and Smith being that the appellant was really the principal and liable for the losses incurred in that business; then there is a recital that the loss incurred was over Rs. 33,000 ; then there is a recital that the appellant disputes his liability in respect of all or any of the consignments of wool which were the subject-matter of the transactions, and then there is referred to arbitration all matters in difference between the parties touching all the dealings and transactions in wool of Clarke and Smith and all the accounts relating to the dealings between Clarke and Smith and Ganeshdas Rampal. The arbitrator was to make his award within three months from the date on which the matter was referred to him with liberty to him to extend the period for another three months. The agreement of reference was dated March 7, 1930, and it was signed by the appellant and by John D. Essaye on behalf of Clarke and Smith, The arbitration was proceeded with, and from time to time the period for making the award was extended down to December 15, 1930, and as to those extensions there is no question. On December 13, 1930, a further extension was purported to be agreed to, to January 15, 1931. The agreement for that extension was signed by Mr. Athavale, who is an advocate, Original Side, and was acting for the appellant.

2. The first point taken against the award is that the agreement to refer is invalid. The contention is that it is not proved that Mr. Essaye had any authority from Clarke and Smith to sign the reference, and, secondly, it is said that if he had any authority, it was an authority given by Mr. Smith only, and that it is not shown that Mr. Smith was the only partner in the firm of Clarke and Smith, and the general rule is that one partner has no implied authority to refer matters in dispute to arbitration so as to bind a co-partner. The contention of the appellant is obviously a somewhat strange one. He does not dispute that the reference is binding upon him, but he says that the reference does not bind his opponents, who are not challenging the reference and are endeavouring to enforce the award. I agree with the decision of the learned Judge on that point, but I think there is an additional and short ground on which it may be disposed of, and that is this: The agreement of reference on the face of it purports to be signed by John D. Essaye on behalf of Clarke and Smith, and unless it is challenged, the agreement must stand. The person who challenges the agreement is the appellant, and it seems to me that if he wants to attack the agreement he must prove that it is not binding on Clarke and Smith, and he produces no evidence on the subject at all. In the absence of any evidence I see no reason why I should hold that the reference was not validly made on behalf of Clarke and Smith who are affirming it.

3. The second point taken by the appellant is that the extension of time granted on December 13, 1930, to January 15, 1931, was not authorised, his contention being that Mr. Athavale had no power as his advocate to agree to an extension of time which in substance prevented the arbitration proceedings being abortive and in effect amounted to a further reference. On that point the learned Judge discusses the rights of an advocate, O S., to compromise a suit and he expresses the view, with which I entirly agree, that the rights of an advocate O.S. are the same as those of a barrister. It has been determined in many cases that counsel in conducting litigation has many powers, duties, privileges and obligations extending beyond the mere duty of acting as an advocate. Amongst other things he has power to refer the matter in dispute to arbitration, or to compromise it. Those powers and obligations are derived from his retainer as counsel and not from any contractual appointment as an agent. On the other hand in non-litigious work it is clear that counsel has no such special authority. His authority in that class of work is merely that of an agent, and depends on the particular terms of his employment. It seems to have been assumed in the Court below, and the point was apparently not argued, that the special powers of counsel in litigious matters extend to what I may call quasi-litigation, that is to say, to disputes before private tribunals su.ch as an arbitrator. It is not, I think, necessary for the purposes of this case to decide the point, but as the matter was assumed in the Court below, I desire to say that my present opinion is, in the absence of any authority upon the point, that the special authority of counsel in relation to litigation is confined to litigation in the ordinary course, and does not extend to matters pending before private tribunals. Assuming that to be so, and assuming that Mr. Athavale in this case had no authority beyond that of an ordinary agent, I am disposed to think that even that authority justified him in agreeing to an extension of time for making the award, and thus saving his client from having the whole expenses and time expended on the arbitration wasted. But apart from that point it is, I think, perfectly plain in this case that the appellant is estopped from disputing that the time was properly extended. He knew that the time had been extended to December 15, and his contention is that he did not know that the time was extended beyond that date, and gave no authority for such extension. He received, however, letters from Mr. Athavale dated December 17 and 20, referring to the arbitration as still proceeding, and on December 20 he received a wire from Mr. Athavale saying that the arbitrator wanted the appellant and his munim on Monday the 22nd. Subsequently, on January 5, 1931, the appellant himself wired to the arbitrator saying that his munim was starting the next day, and the munim did in fact appear before the arbitrator in January. It is, therefore, in my opinion, perfectly plain that the appellant knew that the arbitration was going on after December 15 and was raising no objection to the time having been extended. I think, therefore, that there is nothing in the second point taken. [The rest of the judgment is not material to this report.]

4. In the result I think the appeal must be dismissed with costs.

Mirza, J.

5. I agree.


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