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Gainda Lal Goel Vs. Rameshwar Das - Court Judgment

LegalCrystal Citation
Subject Civil
CourtAllahabad
Decided On
Reported inAIR1937All650
AppellantGainda Lal Goel
RespondentRameshwar Das
Excerpt:
- - the applicant failed so to do and in due course the matter was referred to arbitration as provided by the rules which i have cited which have been framed to meet such an eventuality. the applicant failed to appear before the arbitrators but they conducted the arbitration and in due course made an award in favour of the opposite party. in my judgment, the agreement to refer to arbitration here is a perfectly valid one and is not in that class of agreements contemplated in section 28, contract act......award under para. 20, schedule 2, civil p.c., but this application was rejected. on appeal to the learned civil judge the order of the learned munsif was reversed and an order passed directing that the award be filed and that a decree be prepared in terms of the award. it is against this order of the appellate court that this application in revision is directed. it has been argued in the first place by counsel for the applicant that the opposite party which is a firm is a partnership firm and is not registered. that being so, it is contended that it is precluded by section 69, partnership act, from bringing any proceedings to enforce its rights. the lower court has considered this aspect of the case and has come to the conclusion that the firm chandu lal rameshwar das is a joint family.....
Judgment:
ORDER

Harries, J.

1. This is an application for revision of an order passed by the Additional Civil Judge of Muzaffarnagar dated 21st August 1936 directing that a certain award should be filed and a decree should be drawn up in accordance with such award. The parties to this application had entered into a series of contracts relating to grain. In respect Of each contract the present applicant signed a client's contract form and in each of those forms there appeared the following clause:

In the event of any dispute arising between you and me out of this transaction I agree to put the matter to arbitration as provided by the bye-laws of the Jain Sanatan Sikh Grain Chamber Limited and to abide by the arbitration award.

2. On the back of the contract form are printed extracts from the bye-laws of the said Jain Sanatan Sikh Grain Chamber, Ltd., and in those bye-laws it is provided that should one of the disputing parties appoint an arbitrator and the other refuse or neglect to do so for 24 hours in Muzaffarnagar or 72 hours elsewhere in India, after receipt of notice in writing of the appointment, the question in dispute should upon application of either of the disputing parties stand referred to two arbitrators to be nominated by the Chairman of the Board. It appears that a dispute arose between the parties relating to these contracts and the opposite party nominated his arbitrator and called upon the present applicant to nominate his. The applicant failed so to do and in due course the matter was referred to arbitration as provided by the rules which I have cited which have been framed to meet such an eventuality. The applicant failed to appear before the arbitrators but they conducted the arbitration and in due course made an award in favour of the opposite party.

3. Application was made to the learned Munsif of Muzaffarnagar to file the award under Para. 20, Schedule 2, Civil P.C., but this application was rejected. On appeal to the learned Civil Judge the order of the learned Munsif was reversed and an order passed directing that the award be filed and that a decree be prepared in terms of the award. It is against this order of the appellate Court that this application in revision is directed. It has been argued in the first place by counsel for the applicant that the opposite party which is a firm is a partnership firm and is not registered. That being so, it is contended that it is precluded by Section 69, Partnership Act, from bringing any proceedings to enforce its rights. The lower Court has considered this aspect of the case and has come to the conclusion that the firm Chandu Lal Rameshwar Das is a joint family firm and not a partnership firm. A joint family firm need not be registered and is not subject to the restrictions imposed by Section 69, Partnership Act. It appears to me that there was ample evidence before the learned Civil Judge upon which he could find that this was a family firm. The second and main point taken before me is that the contract between the parties referring their disputes to arbitration was illegal and unenforceable by reason of Section 28, Contract Act. That section reads a3 follows:

Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract by the usual legal proceedings in the ordinary tribunals, or which limits, the time within which he may thus enforce his rights, is void to that extent.

4. To this section there are appended two exceptions of which the first only is relied upon. Exception 1 is in these terms:

This section shall not render illegal a contract by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred.

5. The argument for the applicant is that the contract in this case is one such as is contemplated in Section 28 and that it does not fall within the provisions of Exception 1, That being so, it is said there was no valid agreement to refer to arbitration and consequently the arbitrators had no jurisdiction whatsoever to make an award. Hence it is argued that the order of the learned Civil Judge in this case was wholly without jurisdiction. In my judgment, the agreement to refer to arbitration here is a perfectly valid one and is not in that class of agreements contemplated in Section 28, Contract Act. That section applies to agreements which wholly or partially prohibit the parties from having recourse to a Court of law, but there is no such (prohibition in this case. All that the parties agree to is that any dispute arising between them out of various contracts shall be referred to arbitration as provided by certain rules and there is nothing in that agreement or in the rules which prohibits any of the parties taking proceedings thereafter in a Court of justice.

6. In my judgment this case is entirely covered by the decision in Coringa Oil Co., Ltd. v. Koegler (1875) 1 Cal. 466 where it was held that a contract entered into between the parties which provided that in case of any dispute the same was to be decided by two competent London brokers, one to be appointed by the buyers and the other by the seller's agents and that such decision of the brokers was to be final was not within Section 28, Contract Act, and did not oust the jurisdiction of the Court and was therefore valid, A similar case is that in Ganges ., v. Indra Chand (1906) 33 Cal. 1169 where it was held that a contract referring disputes to arbitration in terms similar to the terms in the present case was valid. In my judgment the agreement here does not oust the jurisdiction of the Court and therefore this is not a contract which falls within Section 28. In my view it was a valid agreement and the arbitrators appointed in accordance with the terms of the agreement had jurisdiction to hear the case and to make their award. The award was one validly made under the terms of this agreement and that being so the learned Civil Judge had jurisdiction to deal with the matter under Para. 20, Schedule 2, Civil P.C. In my view, the order passed by the learned Judge was in all the circumstances of the case a proper one and that being so, I dismiss this application with costs.


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