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Firm Mangal Chand Banawari Lal Vs. Firm Pyare Lal - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana
Decided On
Reported inAIR1949P& H199
AppellantFirm Mangal Chand Banawari Lal
RespondentFirm Pyare Lal
Cases ReferredNewfoundland Development Co. v. The King
Excerpt:
- sections 100-a [as inserted by act 22 of 2002], 110 & 104 & letters patent, 1865, clause 10: [dr. b.s. chauhan, cj, l. mohapatra & a.s. naidu, jj] letters patent appeal order of single judge of high court passed while deciding matters filed under order 43, rule1 of c.p.c., - held, after introduction of section 110a in the c.p.c., by 2002 amendment act, no letters patent appeal is maintainable against judgment/order/decree passed by a single judge of a high court. a right of appeal, even though a vested one, can be taken away by law. it is pertinent to note that section 100-a introduced by 2002 amendment of the code starts with a non obstante clause. the purpose of such clause is to give the enacting part of an overriding effect in the case of a conflict with laws mentioned with the.....mahajan, j.1. this is an appeal under section 89, arbitration act of 1940, against an order refusing to set aside an award. the facts giving rise to the litigation have been stated in the order of reference of my learned brother dated 19th may 1948 and need not be stated in detail in this judgment. the defendant firm mangal chand-banwari lal of ferozepore were entering into forward contracts in respect of various commodities with the plaintiff firm pyare lal ram sarup of amritsar. the contracts were made on the printed forms of the plaintiff firm when were prepared in triplicate, and in each one of forms there was a clause by which the parties agreed that in the event of any dispute arising out of the contract the dispute would be referred to arbitration, each party being entitled to.....
Judgment:

Mahajan, J.

1. This is an appeal under Section 89, Arbitration Act of 1940, against an order refusing to set aside an award. The facts giving rise to the litigation have been stated in the order of reference of my learned brother dated 19th May 1948 and need not be stated in detail in this judgment. The defendant firm Mangal Chand-Banwari Lal of Ferozepore were entering into forward contracts in respect of various commodities with the plaintiff firm Pyare Lal Ram Sarup of Amritsar. The contracts were made on the printed forms of the plaintiff firm when were prepared in triplicate, and in each one of forms there was a clause by which the parties agreed that in the event of any dispute arising out of the contract the dispute would be referred to arbitration, each party being entitled to nominate one arbitrator, and it being open to either party to appoint the other arbitrator if the other party failed to appoint an arbitrator within a week of the service of notice calling upon it to nominate his arbitrator. Disputes arose between the parties about a number of contracts amounting to 4500 bags of bajra and 2200 bags of rice. A notice was issued by the plaintiff firm to the defendants calling upon them to appoint their arbitrator. This notice was served on one of the partners of the defendant firm Mangal Chand on 22nd December 1944 and it was served on Banwari Lal, the other partner, on 23rd December 1944. On 30th December 1944 the plaintiff nominated the other arbitrator on behalf of the defendants on their failure to do so. The arbitrators gave their award on 10th January 1945 in the sum of Rs. 13,328-1-0 in favour of the plaintiff firm. As a result of this award, the plaintiff firm made an application under Section 14, Arbitration Act of 1940, to the Court of a Sub-Judge at Amritsar for making the award the rule of the Court. The application was opposed by the defendants. They denied the validity of the award on a number of grounds and also denied that there had been any valid reference to the disputes to arbitration. The Court, on 16th March 1945 examined the parties and their counsel and it appears that controversy between them was narrowed down to the transactions entered in sauda bahi marked 'A'. The plaintiff made the following statement on that day:

My dispute relates only with respect to transactions given in sauda bahi, transliteration of which has been marked as 'A'. The respondent failed to send me the confirmatory memorandums on the usual printed forms.

2. Counsel for the respondents stated as follows:

The transaction in dispute recorded in the original of Ex. 'A' were never entered into by the respondents.

3. The learned Subordinate Judge framed the following material issues in the case:

(1) Whether the transactions in question were entered into between the parties on the usual printed forms? (2) If so, whether there was any valid arbitration agreement? (3) Whether there has been any valid reference? (4) Whether the award is liable to be set aside for the reasons given in para. 8 of the objection petitions?

4. The points put into issue were found in favour of the plaintiff firm and the Commercial Subordinate Judge, first class, Amritsar, ordered that the award be made a rule of the Court. On the foot of it, he gave the plaintiff firm a decree in the sum of Rs. 13,328-1-0. The defendant firm appealed to this Court and the appeal was in the first instance heard by my learned brother who in view of the conflicting decisions on one of the points raised in the case referred the appeal to a Division Bench.

5. The first point urged by Mr. Kundan Lal Gosain on behalf of the appellants was that there was no evidence on the basis of which it could be held that the disputed bargains had been made by the defendants with the plaintiff firm. As already pointed out, the dispute relates to a number of bargains amounting to 4500 bags of bags and 2200 bags of rice. Out of the 4500 bags of bajra it was not denied that the transaction regarding 2500 bags was entered into by the defendants with the plaintiff. The defendants themselves produced the voucher Ex. A/27 which had been sent by the plaintiff to them and it is dated the 24th August 1944. Therefore, it must be taken as admitted that there is no further controversy about 2500 bags of bajra, out of the disputed 4500 bags. As regards the rest of the quantity of bajra the matter seems concluded by the statement made by the defendant Banwari Lal in the witness-box, He was examined as R.W. 1 and in the concluding portion of his statement he stated as follows:

The transaction of 4500 bags of bajra is entered in my sauda bahi. The instructions were sent by me to Kesho Ram telegraphically. I do not maintain daily account of the transactions. I only enter them in ledger. The applicants did send me duplicate contract forms in respect of these 4500 bags of bajra.

6. The defendants did not produce their sauda bahi about which reference has been made in the quotation cited above. This statement was made on 2nd April 1947. The case was then adjourned to 22nd May 1947 in order to accommodate the counsel for the defendants. For his benefit again the case was adjourned to 18th June 1947. The arguments were actually partially heard on 22nd July 1947. The case was then adjourned to the 23rd. On that date the Court ordered written arguments to be put in. These notes were handed over to the Court on 25th July 1947. On that date an application was made on behalf of the defendant firm to the effect that the Court had wrongly recorded the statement of Banwari Lal defendant as u. w. 1 and that what he really said was that the transaction of 2500 bags of bajra as entered in the sauda bahi had been made by him and that in the Court's record item of 4500 bags had been written by error in place of 2500 bags. The statement of the defendant in the witness box was read over and was admitted correct by him. In the affidavit and in the application of 25th July 1947 it was not said that the Court had not read out the statement of defendant Banwari Lal to him on 2nd April 1947. This belated application made several months after the statement had been recorded by the Court, and when on a number of occasions the case had been adjourned for purposes of arguments was rightly filed by the learned Judge without any action being taken on it, and, in my opinion, the learned Judge was perfectly right in relying on the admission of the defendant contained in his deposition above mentioned. It may further be observed that the statement of the defendants in the witness-box is amply borne out by the statement of one of the plaintiffs in the witness-box and by his books of account. It must, therefore, be held that the defendants did order 4500 bags of bajra from the plaintiff firm and their denial of this transaction was dishonest.

7. As regards the 2200 bags of rice the defendants have denied that they ever ordered these goods from the plaintiff. The evidence, in the case, however, which has been relied upon by the trial Judge is sufficient to warrant the finding that he has given. The books of the plaintiff which have been exhibited on this record and regarding which nothing really has been said during the arguments fully support the plaintiff's ease. It was further deposed by the plaintiff that he sent duplicate copies of the vouchers to the defendants for their signature but they were never returned by them in spite of reminders. The broker through whom the order was placed by the defendants with the plaintiff is dead. His son was produced as a witness and he produced the broker's chaupatra in which the entries about these bargains exist. The son of the broker also deposed that on the telephone Banwari Lal defendant had asked him to order these goods on his behalf and that he placed the order with the plaintiff. No reason has been suggested by the learned Counsel for the appellants why regarding these two transactions the plaintiff firm would forge their book of account, and the Dalai would enter them in his chaupatra and that in respect of these bargains he would also send hundis for the loss incurred to the defendants. The defendants have not produced their book of account. Even the sauda bahi in which there was an entry regarding 4500 bags of bajra was withheld though its existence was admitted. It is unlikely that the defendants who are businessmen and are dealing in forward contracts would not keep any account of these transactions. The withholding of these books of account by the defendants raised a strong presumption against them, that they have so withheld them because if produced in Court they would support the plaintiff's case and would negative the plea that they have raised as defendants in the suit. In my opinion, therefore, it must be held established that the plaintiff firm purchased on behalf of the defendants 2200 bags of rice and that all the disputed contracts were entered into between the plaintiff and the defendants.

8. The next point argued is the one to settle which this reference was made to a Division Bench. The question is whether there was any valid agreement to refer any dispute arising between the parties to arbitration. As I have already mentioned, the plaintiff firm sent their note, in duplicate which is on a printed form to the defendants and which contained the arbitration clause for their signature. This note was never returned by the defendants to the plain, tiff and was never signed by them. It has to be decided whether without the return of the printed form containing the arbitration clause duly signed by the defendant firm there could be any valid agreement to refer the disputes to arbitration. The lower Court has decided this matter in the plaintiff's favour on the strength of a decision of Addison, J. reported in Jubilee Chamber of Commerce Ltd. Rawalpindi v. Amrit Shah A.I.R 1940 Lah. 180. There are, however, conflicting decisions on this point and it is, therefore, necessary to examine them and to decide whether the view expressed by Addison J. in the above mentioned case states the law correctly on this point.

9. Section 2, Arbitration Act of 1940, in Sub-section (a) defines the 'arbitration agreement' as meaning 'a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not.' The point to decide is whether the printed form containing the arbitration clause and signed by one of the parties to the agreement amounts to a written agreement to submit a present or future difference to arbitration when that form has been received by the other party and he has impliedly or by his conduct accepted the bargain mentioned in it and in pursuance of this the transaction has gone through. The matter came up for consideration before Page, J. in Johan Batt & Co. London Ltd. v. Kanoolal & Co. A.I.R. 1926 Cal. 938. This was a case under Section 4(b) of Act (4 [IV] of 1899) and it was held that it was essential alike under the English Arbitration Act and under the Indian Arbitration Act that the agreement to arbitrate should be contained in a written document signed by the parties to the submission, or by their agent or agents duly authorised in that behalf. Reliance was placed for this view on an earlier decision of the same Court reported in Ramnarain v. Liladhar Lowjee 33 Cal. 1237 and on a Bench decision of the Allahabad High Court reported as Sukhamal Bansidhar v. Babulal Kedia & Co. : AIR1920All258 . Reference was also made to two English cases one of the year 1876 and the other of the year 1891. The learned Judge further observed that the opinion expressed by him was not only in consonance with the authorities in India but was also sound in principle. It was said that

the object of the Legislature in prescribing that a submission to arbitration should be contained in a written agreement was to provide clear and unmistakable evidence of the submission to which the parties had agreed. The desired result, however, would not be obtained unless the parties or their agents signed the agreement to arbitrate, for the terms of an unsigned memorandum in themselves create neither a submission to arbitration nor any other agreement, and it is for this reason that I hold that a valid submission must be signed by both the parties or by their agent or agents authorised in that behalf.

Towards the concluding portion of the judgment it was remarked that

a party to an unsigned submission may have so conducted himself that he is precluded from alleging that the submission has not duly been made as was the case in Baker v. Yorkshire Fire and Life Assurance Co. (1892) 1 Q.B. 144, where the plaintiff who was suing on a policy of insurance was held to be estopped from asserting that he had not assented to an arbitration clause which was one of the terms of the policy. In that case the ratio decidendi was based upon estoppel; See also Hickman v. Kent or Romeny Mash Sheep Breeders' Association (1915) 1 Ch. 881 and Anglo Newfoundland Development Co. v. The King (1920) 2 K.B. 214. The dicta to be found in the English cases are not always consistent, but in India, in my opinion, it must be taken as settled that the true construction of Section 4(b) is that which I have placed upon it and that the general rule is that which I have stated.

This case was examined later on by a Division Bench of the Calcutta High Court at great length in the case of Radha Kanta Das v. Baerlin Brothers Ltd. : AIR1929Cal97 . The judgment was delivered by Rankin C.J., who held that the Arbitration Act does not require that an agreement to submit should be signed by both parties. What is required is that there should be a written agreement to submit. At pp. 122 and 123 of the report the following observations occur:

I am of the opinion that this clause is a submission clause and a part of the bargain. It is a clause in writing and, therefore, the question arises whether as it has not been signed by Baerlien brothers, it is a submission within the meaning of the Arbitration Act.

Upon that point the case-law at one time was in some confusion. The first case was the ease of Ex parte Munro Re Lewis : AIR1947Bom65 which was followed apparently in Caerleon Tinplate Co. (Limited) v. Hughes 1891-60 L.J.Q.B. 640. So far authority was in favour of the view that it was necessary that the agreement should be signed by both parties. Apparently in the case of Ram Narain Gunga Bissen v. Liladhur Lowjee 33 Cal. 1237. Woodroffe, J. assumed that to be the law, though I do not gather that the exact point was relevant to the case before him. In the case of Sukhmal Bansidar v. Babu Lal Kedia and Co. : AIR1920All258 that also was assumed to be the law in the judgment of Walsh J. where he said: 'We agree with the view taken by Woodroffe J. in Ram Narain Gunga Bissen v. Liladhur Lowjee 33 Cal. 1237 and with the majority of the English cases on this point, particularly Caorleon Tinplate Co. (Ltd.) v. Hughes 1891-60 L.J.Q.B. 640 that that provision involves a submission signed by both parties or their agents.'

Later in India the same has been laid down by my learned brother Page, J. in John Batt and Co. (London) Ltd. v. Kanoolal and Co. A.I.R.1926 Cal. 938. Page J. notices certain other English cases. He has noticed the case of Baker v. Yorkshire Fire and Life Assurance Co. 1892-1 Q.B. 144 the ease of Hickman v. Kent or Romney Marsh Sheep-breeders' Association 1915-1 Ch. 881 and the ease of Anglo Newfoundland Development Co. v. The King 1920-2 K.B. 214. Ho says, however, that these cases are to be distinguished on the ground that the plaintiff was estopped from asserting that he had not assented to the arbitration clause.

In my judgment, the law is the other way. The Arbitration Act of 1889 and the Indian Arbitration Act for the best of good reasons have not required that the agreement to submit should be signed by both parties. What has been required is a written agreement to submit and Baiter's case 1892-1 Q.B. 144, Hickman's case 1915-1 Ch. 881 and the ease of Anglo Newfoundland Development Co. v. The King 1920-2 K.B. 214 show that it is illegitimate to import into the statute the requirement of a signature by both parties.

This it seems to me has nothing to do with estoppel. In the case of Baker v. Yorkshire Fire and Life Assurance Co. 1892-1 Q.B 144 the plaintiff brought the suit upon a policy. No doubt he was estopped from asserting that he had not assented to an arbitration clause but he was not estopped from asserting that he had not signed the arbitration clause. In Hickman's case, Astbury, J. lays down the law in the following terms which were afterwards accepted by the Court of Appeal in the Anglo Newfoundland Development Case 1920-2 K.B. 214. The result of these decisions is, I think, that if the submission is in writing and is binding on both parties as their agreement or as the equivalent in law to an agreement between them the statute is 'satisfied,' and as Bankes L.J. pointed out, following the decision in Baker's case, 'it is not necessary that both parties should have signed the written agreement: if a person has accepted a written agreement and acted upon it, he inbound for this purpose, although he may not have set his hand to the document.'

I am, therefore, of opinion that the law as laid down by Page, J. in the ease cited is not accurate and in the present ease I do not think that the mere fact that-Baerlion Brothers have not put their signatures to the indent form is a matter of any consequence.

10. In the Sind Court there has been a conflict of decisions but the latest view is in support of the view taken by the trial Judge. It is in line with the decision of Rankin C.J. quoted above.

11. In the Bombay High Court in the case of Shriram Hanutram v. Mohanlal & Co. : AIR1940Bom93 . Kania, J. took the view that the Arbitration Act requires a submission in writing and that, merely sending contract notes by a party to another without any confirmation notes signed by the other party does not amount to a submission, in writing, as required by the Arbitration Act. In the course of the judgment the following observations were made:

I am not prepared to extend the decision in Mahomad Haji Hamed v. Pirojshaw R. Vekharia & Co. A.I.R.1932 Bom. 341 and hold that in every case where a party sends only a contract note to the other side, because it is retained, there arises a submission in writing. This will be all the more so where the fact of acceptance or retaining the contract note is disputed. To hold otherwise would mean that in every case where a stay application is made the Court will have to inquire whether a contract has been made and whether by conduct there has been acceptance. To decide that considerable evidence, as in the present case, the evidence of the whole transaction and instructions may have to be gone into. Section 19 is in the nature of a summary procedure and does not normally include any lengthy or protracted inquiry of the type suggested.

With due deference to the learned Judge the consideration of expediency could not have been imported in interpreting the language of a statute.

12. Moreover, the observations were made in a stay matter arising under Section 19, Arbitration Act of 1899 and can have really no bearing on interpreting the consolidated Arbitration Statute of the year 1940. This decision was adversely criticised in a later decision of the Bombay High Court by Bhagwati, J. in the case of Lewis W. Fernandez v. Jivatlal Partapshi and others : AIR1947Bom65 and it was held that if the Court on the materials before it comes to the conclusion that the contract notes having been sent by one party to another were accepted by the latter either by signing the confirmation notes or by his conduct it would be a sufficient arbitration agreement; within the meaning of the definition thereof in. the Arbitration Act.

13. In the Allahabad Court also there has been conflict on this point. The earlier case of the Allahabad Court is reported in Sukhamal Bansidhar v. Babu Lal Kedia & Co. : AIR1920All258 . In that case it was held that a submission, or written agreement to submit differences to arbitration provided it is an agreement, may be collected from a series of documents, even though connected by parole evidence, and signature of any document forming part of the agreement is sufficient to bind the person so signing to the submission contained in the agreement. It was assumed in this decision that a written agreement contemplated by Section 4(b), Arbitration Act of 1899 in order to be valid must be signed by both the parties to the same. This decision was considered later on in the case of Shanhar Lal Lachmi Narain v. Jainy Brothers : AIR1931All136 by a Bench of that Court presided over by Sir Shah Muhammad Sulaiman. At p. 387 of the report the matter was discussed in the following terms:

As regards the first point, we are clearly of opinion that the objection is misconceived. Section 4(b), Arbitration Act enacts that a 'submission' means a written agreement to submit present or future differences to arbitration. There must, therefore, be an agreement in writing between the parties. It was urged by the appellants that a 'written agreement' means that each party must sign the document which contains the submission to arbitration, and that as the letter of 10th December 1923, did not refer in specific terms to the clause relating to arbitration, in law this could not amount to an agreement in writing. It is clear on the authorities both in England and in India that the terms of a written agreement may be collected from a series of documents, and a 'written agreement' does not mean that each party has to sign a document containing the terms. The plain acceptance of a document containing all the terms is sufficient. We are satisfied that the letter of 10th December 1923, alludes to the indent contract and accepts it in its entirety. Further, we are of opinion that a written agreement does not in the Arbitration Act mean that the signatures of the parties are a necessary ingredient. We are aware of the case of Sukhamal Bansidhar v. Babu Lal Kedia & Co. : AIR1920All258 , which decided that Section 4(b) required a submission signed by both parties or their agents, but we think that in so far as that case decided that signatures were necessary, we doubt if it was correctly decided. The Act merely specifies a written agreement, and we see no reason to read into the plaint, words of the Act that the execution of a submission to arbitration is necessary. All that is required is that both parties accept a written document as containing the agreed terms, it might be in the form of a signed document by both parties cantaining all the terms, or a signed document by one party containing the terms and a plain acceptance either signed or orally accepted by the other party, or in the third case, an unsigned document containing the terms of the submission to arbitration, agreed to orally by both parties. A written contract does not mean a contract which is proved by documentary evidence, but one in which the terms are expressed in writing in the act of making it. The obvious example of a perfectly valid written contract unsigned by either party is a steamship or railway company's ticket containing the printed terms and conditions of the contract. This ticket is not merely evidence of the contract, but is an operative contractual instrument and subject to rules of law which govern written as opposed to oral contracts. We think some confusion has been imported into the Indian decisions on this point through the analogy of English law in cases where submissions to arbitration may in certain instances be contained in contracts which are subject to the operation of Section 4 of the Statute of Frauds or Section 4, Sale of Goods Act, but of which statutes enact that in order to make the contracts enforceable they must be signed by the party to be charged or their duly authorised agent. Neither of these statutes apply to India and we see no reason to read into Section 4(b), Arbitration Act anything more than is there expressed. Even in England the doctrine that the signatures of the parties or their agents were necessary to a submission to arbitration has been doubted.

14. So far as the Lahore High Court is concerned our attention was only drawn to one Single Bench authority and that is in the case of Jubilee Chamber of Commerce Ltd. Rawalpindi v. Lala Amrit Shah A.I.R.1940 Lah. 180. Addison, J. in this case observed that the law had been correctly stated by the trial Judge in the following terms:

A written contract therefore means a contract, the terms of which are expressed in writing. The terms of this contract must be accepted by both the parties, either in writing or orally.

15. This matter has been discussed in the Law of Arbitration in British India by N.N. Sircar (1942 Edition) at p. 26 in the following terms:

While the definition requires written agreement, it does not require that it should be signed by the party or parties. Possibly it is not easy to completely reconcile all the English authorities on the subject. In Baker v. Yorkshire Fire and Life Assurance Co. (1892) 1 Q.R. 144 and in Anglo-Newfoundland Development Co. v. King (1920) 2 K.B. 214, signature was held to be unnecessary, whereas the opposite conclusion was arrived at in Caerleon Tinplate Co. v. Hughes (1891) 60 L.J.Q.B. 640. That the English decisions are not all reconcilable with one another will appear from the following conclusion in Russel on Arbitration and Award, Edn. 13, p. 303, which appears at the end of the discussion of these authorities, namely,: 'The weight of authority, therefore, appears to support the view that the submission need not be signed by the party charged, unless the contract itself is one which the law requires to be so signed--But the point cannot be looked upon as finally settled'.

We are not, however, troubled by the decisions, as in India the matter has been Bet at rest by the decision of the Judicial Committee in Umed Singh v. Seth Sobhag Mal A.I.R.1915 P.C. 79. The fact that it was a case governed by the Civil Procedure Code does not touch the ratio of the decision inasmuch as their Lordships were considering a statute which used the same language, that is 'in writing'. It is therefore, hardly necessary to refer to the conflicting Indian decisions particularly as many of them were considered by Rankin, C.J. and C.C. Ghose, J., who held that signature was not required and expressly overruled the decision to the contrary of Page J. in John Batt & Co. (London) Ltd. v. Kanoo Lal & Co. A.I.R. 1926 Cal. 938.

16. In Thakur Umed Singh and another v. R.B. Seth Sobhag Mal Dhadha and Anr. A.I.R.1915 P.C. 79 their Lordships held as follows:

Paragraph 1 of Schedule 2, Civil P.C. which provides that the parties to a suit may apply in writing to the Court for an Order of Reference, does not require that the writing should of necessity be signed. Where therefore one of the parties was minor and his guardian was in Court and assented to the application, but the application was not signed by him, the reference was not invalid on that ground.

Here the words used in the section were 'may apply in writing to the Court' and it was held that an application in writing did not mean that it should also be signed by the parties. It was however held essential that it should be accepted by them or it should appear that ii was they who consented to the making of the application either by some act or conduct on their part. By a parity of reasoning it can be said that similar interpretation should be placed on the phraseology employed in Section 2, Arbitration Act of 1940 and that the words 'written agreement' do not in view of this reasoning imply that the agreement should be signed by both the parties to it.

17. In my judgment, the expression 'written agreement' means an agreement, the terms of which are expressed in writing and these terms must be accepted by both the parties either in writing or orally or by some conduct on their part. Mr. Sircar is not quite accurate in saying that the conflict of judicial opinion in India, on this point should be taken to have been settled by this pronouncement of their Lordships in the year 1915. The conflict has been going on right up to the year 1947, but it can, however, be safely said that the reasoning employed by their Lordships of the Privy Council can be appositely used in interpreting the language employed in Section 2, Arbitration Act of 1940.

18. Reference was also made to a decision of their Lordships of the Privy Council in a case which went up in appeal from Palestine. This case is reported as Egged Co-operative Society Ltd v. Levi Geffen A.I.R. 1947 P.C. 32. The question arose as to the admissibility of oral evidence when the terms of a contract had been reduced to writing but that writing had not been signed by one of the parties. The judgment of the Privy Council was delivered by Sir John Beaumont and it was held that where a document is signed only by one of the parties to it, it does not amount to a written agreement and hence oral evidence is admissible to prove that the real intention of the parties was different from that expressed by the terms of the document. In my opinion, this judgment really is not relevant in the enquiry that is before us and is not helpful in the interpretation that has to be placed by us on the phraseology employed in Section 2, Arbitration Act of 1940. The question of the acceptance, of the terms of the agreement by conduct or orally did not arise in that case and was not discussed by their Lordships in all likelihood because the terms of the agreement had not been accepted by the other party and it had not matured into a completed contract.

19. So far as English law on the subject is concerned it has been laid down in the following terms in Hailsham Edition of Halsbury's Laws of England at p. 624 in para. 1072:

The agreement need not, it seems, be signed by both parties it being sufficient that a party has accepted and acted upon the agreement, although he may not have signed it.

The rules laid down by Bankes L.J. in Anglo-Newfoundland Development Co. v. The King (1920) 2 K.B. 214 seems to have been accepted by the eminent writer of this book as enunciating a correct proposition.

20. The result of the above discussion is that it can be safely said that at the present moment both in England and in India the law is well settled. When Section 2(a), Arbitration Act of 1940 speaks of an agreement in writing all that it means is that the terms of the agreement should be expressed in writing and that the agreement should be such that it binds both the parties and that the actual signatures of both the parties on the agreement are not essential. The agreement may be in the form of a signed document by both the parties containing all the terms or a signed document by one party containing the terms and a plain acceptance, signed or orally accepted by other party, or it may be an unsigned document containing the terms of a submission to arbitration agreed to orally by both the parties. It is sufficient if one party signs the submission and the other accepts it. The acceptance may be by word of mouth or may be by conduct.

21. For the reasons given above, I would affirm the decision of the trial Court that in this case by conduct the defendants accepted the arbitration clause contained in the printed form sent by the plaintiff firm to them and which they did not return.

22. Lastly, it was argued before us by Mr. Kundan Lal Gosain that a clear seven days notice was not given by the plaintiff firm calling upon the defendants to appoint their arbitrator and, therefore, the award was invalid. This contention is totally void of force. The indent in clear terms states that if within a week of the service of the notice on them the defendant would fail to nominate an arbitrator then the plaintiff would be entitled to nominate an arbitrator for them. This the plaintiff did. The notice was served on the two defendants on 22nd and 23rd December 1944, and the plaintiff firm appointed an arbitrator for them on 30th December 1944. This the plaintiff clearly did within a week as contemplated by the arbitration clause contained in the printed form. Mr. Kundan Lal Gosain drew our attention to Section 8, Arbitration Act of 1940 wherein it has been laid down that a fifteen clear days notice should be served when an arbitrator has to be appointed for the other party to the case. The language employed in Section 8 'fifteen clear days' is quite different from the language employed in the agreement 'within one week'. This contention of Mr. Gosain, therefore, must be repelled.

23. For the reasons given above, in my opinion this appeal must fail and I would accordingly dismiss it with costs.

Falshaw, J.

I agree.


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