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Konda Anthiah Vs. Madan Rao and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtAndhra Pradesh High Court
Decided On
Case NumberCivil Revn. Petn. No. 1745 of 1965
Judge
Reported inAIR1969AP211
ActsIndian Contract Act, 1872 - Sections 186 and 188; Power of Attorney Act, 1882 - Sections 2; Code of Civil Procedure (CPC), 1908 - Order 3, Rule 4 - Order 23, Rule 3
AppellantKonda Anthiah
RespondentMadan Rao and anr.
Appellant AdvocateM. Seetha Ram Rao, Adv.
Respondent AdvocateGovinda Rao and ;S. Menthi, Adv.
Excerpt:
arbitration - power of attorney - sections 186 and 188 of indian contract act, 1872, section 2 of power of attorney act, 1882 and order 3 rule 4 and order 23 rule 3 of code of civil procedure, 1908 - agreement to supply drawn in favour of respondent executed by power of attorney (poa) holder - agreement contained arbitration clause - whether poa holder competent to refer matter to arbitrator - poa conferred power to compromise but not power to refer matter before arbitrator - reference to arbitrator involves delegation of power which was not contemplated by poa - held, poa holder not competent to refer matter before arbitrator. - motor vehicles act (59 of 1988)section 149 (2): [v. gopala gowda & jawad rahim, jj] insurers entitlement to defend the action joint appeal by insured and..........determination in this c. r. p. is with regard to the construction to be placed on the powers of general power of attorney stated to have been appointed by konda aruna (the second respondent) in o. p. no. 19 of 1962. the general power of attorney, fateh mohammad, is the first respondent and the petitioner in the original petition. madan lal is the person in whose favour the agreement has been drawn. madan rao filed the petition under ss. 9(1) and 8(2) of the arbitration act, 1940 praying that the dispute between the parties regarding failure to supply fire wood as agreed to may be referred to a named arbitrator for settlement. his case was that he had entered into an agreement with first respondent who holds the power of attorney on behalf of the second respondent whereunder the agent.....
Judgment:

1. The short question that fails for determination in this C. R. P. is with regard to the construction to be placed on the powers of General Power of Attorney stated to have been appointed by Konda Aruna (the second respondent) in O. P. No. 19 of 1962. The General Power of Attorney, Fateh Mohammad, is the first respondent and the petitioner in the original petition. Madan Lal is the person in whose favour the agreement has been drawn. Madan Rao filed the petition under Ss. 9(1) and 8(2) of the Arbitration Act, 1940 praying that the dispute between the parties regarding failure to supply fire wood as agreed to may be referred to a named arbitrator for settlement. His case was that he had entered into an agreement with first respondent who holds the power of attorney on behalf of the second respondent whereunder the agent undertook to supply fire-wood for Rs. 6, 400 within a specified time. The contention is that the respondent failed to supply the fire wood and refund the amount in spite of the notice on behalf of the petitioner. A condition was imposed of the terms of the agreement that in case of dispute, the matter would be referred to arbitration and it was this condition that was sought to be enforced by the petitioner. The first respondent petitioner did not contest the petition. The second respondent, however, urged that the petition was not maintainable as the first respondent, the power of attorney holder was not competent to refer the matter to arbitration. The question, therefore, before the Court was whether the reference to an arbitration was within the competency of the General Power of Attorney. The lower Court on a consideration of the terms of the General Power of Attorney held that the first respondent was competent to entertain an agreement of the nature refereed to above. In other words, it held that the reference to arbitrator was within the powers delegated to the General Power of Attorney. the revision petition is filed by the second respondent in the lower Court against the decision of the lower Court.

2. The learned Counsel for the petitioner (second respondent) contends that the original document contains the word `compromise' and reference to arbitration is not specifically mentioned thereunder. It may be useful to reproduce the relevant portion of the General Power of Attorney.........Therefore, we on our behalf appoint Sri Fateh Mohammad son of Shaik Ahmed, caste Muslim, aged 53 years, occupation business, resident of kachiguda, Hyderabad as our General Power of Attorney to the extent of the above said lease and agree to the effect that the said lease and agree to the effect that the said gentleman on our behalf is entitled to do pairavi and submit replies in all the Departments of Forests, Revenue, Civil Court, Criminal Court, etc., in the State of Andhra Pradesh, admit or deny documents, compromise or withdraw, settle the accounts, file documents, deposit or draw money, file petitions, suits, appeal or revision in any Court of law obtain possession of above-said lease or obtain par-chittiaht (permit books) and issue permits, cut the jungle wood and sell it, sell away or transfer the above lease, appoint on his own accord any Advocate or Barrister or appoint a special power of attorney or cancel their power'.

The General Power of Attorney in his turn seemed to have entered into an agreement with the respondent-petitioner in the lower Court agreeing to supply fire wood within the specified time and received an amount of Rs. 6,400. In clause 2 of the agreement, he stated as hereunder:

'In default, the said bargain would be deemed as cancelled and the executant shall be bound to pay back the advance of Rs. 6,400 to the purchaser, and if the executant fails to pay back the said advance to the said purchaser, the mater would be referred to the Arbitrator, Sri Prabhakar Rao Apsingikar, B.A. LL. B., Advocate, Hyderabad as wished by the said purchaser for the settlement of the repayment of the said advance plus the costs and damages'.

3. It is this part of the condition which was sought to be enforced by the petitioner herein.

4. The lower Court on a consideration of the argument held that the General Power of Attorney Holder was competent to refer the matter to arbitration and in that view allowed the petition. The C. R. P. is directed against this order.

5. The learned counsel for the petitioner contends with reference to the terms that under the powers delegated Fateh Mohammed was only competent to admit or deny the documents, compromise or withdraw. Reference to arbitration was not specifically mentioned therein. As such, the agreement entered into by the said person. viz., Fateh Mohammed to refer the matter to arbitration was beyond his competence. With reference to the decision in Desappa Nayanim v. Rama Bhaktula Ramaiah, : AIR1952Mad559 , it has been urged that the Deed of General Power of Attorney has to be strictly construed and adjustment or compromise did not include arbitration. In Para. 3 of the said judgment it has been observed with reference to Bowstead on Agency that:

'Powers of attorney must be strictly pursued, and are construed as giving only such authority as they confer expressly or by necessary implication'.

6. Some important rules of construction have been reproduced in the above ruling. It is conceded, in the instant case, that in the deed conferring genera power of attorney on Fateh Mohammed which is in Urdu, the words `reference to arbitrator' (Supard Salsi) are not found but from the trend of the document it is urged that this power also would be deemed to be included in the said deed, for the deed authorise Fateh Mohammed `to compromise or withdraw, settle the accounts.............file petitions, suits, appeals, or revisions in a Court of etc. The Urdu word `Sulah' in the deed has a different connotation from the words `Supard Salsi'. No doubt the English equivalent of `Sulah' is compromise, but even compromise does not normally mean reference to arbitration be said that reference to arbitration is mode of compromise. it is to be noted that in a compromise it is the discretion of the person to whom the power has been delegated that has to be exercised one way or the other, but a reference to arbitration involves delegation of power of that discretion to a third party. It is this delegation which is not contemplated by the deed under reference.

7. This is the view taken by a Bench of the Madras High Court in Ramanathan v. kumarappa, AIR 1940 Mad 650, wherein it has been held that:

'A power of attorney authorising the agent to adjust a matter does not include a power to refer the matter to arbitration on the principle underlying the maxim delegata potestas non potest delegari'.

8. The learned counsel for the respondent has relied on a decision of Nagpur High Court in Jiwibai v. Ramkumar, AIR 1947 Nag 17, to substantiate his contention that the word `compromise' is comprehensive enough to include the word `arbitration'. I am not inclined to accept this interpretation as the said judgment is based on the interpretation of a particular deed. It appears that in the said case it was held that:

'Compromise included the power to refer the suit to arbitration because the deed set out in separate phases the two aspects of compromise which the single English word normally connoted'.

It is not possible to spell out the same interpretation by reference to the word `Sulah' in the present deed. I am, therefore, of the opinion that the lower Court was not justified in holding that Fateh Mohammed was competent to refer the matter to arbitration. The C. R. P. is accordingly allowed with costs.

9. Revision allowed.


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