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Bengal National Textile Mils Ltd. Vs. M.J. Textile Agencies and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Revn. No. 413 of 1979
Judge
Reported inAIR1981P& H226
ActsArbitration Act - Sections 20
AppellantBengal National Textile Mils Ltd.
RespondentM.J. Textile Agencies and ors.
Excerpt:
.....or any other contract/order made between the parties hereto shall be referred for arbitration at faridabad. bhatia himself in his statement be is a partner both of the agency-firm as well as of the buyer-firm......directed that the dispute be referred to arbitration at faridabad.2. it appears that the agency--firm messrs. m. j. textile agencies as also the buyers-firm messrs. chhoga lal and company felt dissatisfied with the order of the trial court and both of them joined to file an appeal before the district judge, gurgaon. this appeal was heard and the learned district judge set aside the order of the trial court and in consequence dismissed the application of the petitioner-firm for reference to the arbitration. the present revision petition seeks to impugn the order the district judge aforesaid.3. it may be mentioned here that the respondent have been served in this revision petition but no one has chosen to appear on their behalf not is there any indication on the record that some counsel.....
Judgment:
ORDER

1. The business triangle which is involved in the present case consists of the petitioner-Firm Messrs. Bengal National Textile Mills (herein after referred to as the principal Firm) Messrs. M. J. Textile Agencies (respondents 1 to 3)(hereinafter referred to as the Buyer-Firm). It is not disputed that the petitioner-Firm has appointed the Commission Agent-Firm as their sole selling representatives for certain brands of the cloth manufactured by the petitioner firm. In pursuance of the said agency the Agency Firm is said to have sold some cloth on various occasions to the Buyers Firm by means of various work, order, one of which has been exhibited as Exhibit P4 by the trial Court. The pro forma of the wok orders contained on the reverse of the same a clause for reference to arbitration in case of dispute between the parties. It transpires that in the process of business dealings, a dispute arose inter se these three Firms in regard to the amount due to the petitioner-Firm either from the Commission Agents Firm or from the Buyers-Firm. The petitioner Firm, therefore, filed an application under Section 20 of the Arbitration Act before the trial court i. e., subordinate Judge First Class Ballabgarh with a prayer that the dispute between the parties may be referred to arbitration in accordance with law. This application was considered by the Trial Court and after the parties were permitted to lead evidence in the case, the trial court directed that the dispute be referred to arbitration at Faridabad.

2. It appears that the Agency--Firm Messrs. M. J. Textile Agencies as also the Buyers-Firm Messrs. Chhoga Lal and Company felt dissatisfied with the order of the trial Court and both of them joined to file an appeal before the District Judge, Gurgaon. This appeal was heard and the learned District Judge set aside the order of the trial Court and in consequence dismissed the application of the petitioner-firm for reference to the Arbitration. The present revision petition seeks to impugn the order the District Judge aforesaid.

3. It may be mentioned here that the respondent have been served in this revision petition but no one has chosen to appear on their behalf not is there any indication on the record that some counsel represent them. In these circumstance, the revision petition has to be considered ex parte against them.

4. Mr. Atul Jain, learned counsel appearing for the petitioner--Firm in his case has taken me through the orders of both the courts below and has also referred to certain vital aspects of the evidence in this case. The submission is that the learned District Judge had denied the petitioner-firm an opportunity to take the matter to Arbitration misconception that the Buyer-Firm Messrs. M. Chhoga Lal and company was not bound by any Arbitration agreement and hence they could not be forced to go for Arbitration. In this behalf, the learned District Judge observed in Para 10 of the judgment that in Exhibit P2, which is the agreement between the principal Firm and the Agency Firm there was no mention of the Arbitration Clause. However, he further observed that Exhibit P4 which is the work order is signed by Shri S. C. Bhatia as a buyers and for Messrs. M. J. Textile Agencies, i. e. the Agency Firm. The next observation made by the learned District judge is that Shri S. C. Bhatia is alleged only to be a partner of the Agency--Firm but he is not alleged to be a partner of the Agency-Firm i. e. Messrs. M. Chhoga Lal and company. Acting on this wrong notion, the learned District judge concluded that Shri S. C. Bhatia could not bind the Firm-Messrs. M. Chhoga lal and company and in turn the said company could not be forced to go for Arbitration Mr. Atul Jain has however produced a photostat copy of the Work Order Exhibit P4. The photostat copy is indeed of the front page of the document but as regards the terms and conditions which are said to be printed on the reverse of the document some of the relevant terms have been noticed by the trial court in para 12 of the judgment. According to clause 13 which has been reproduced, it is clearly stated that all matters, question disputes differences and/or claims in respect of or arising out of or concerning or in connection with or in consequence of or relating to the contractor order or any other contract/order made between the parties hereto shall be referred for arbitration at Faridabad. A perusal of the work order Ext. P4 also indicates that Shri S. C. Bhatia, did sign not only at the place earmarked for the representative of broker, i. e. Agency-Firm Messrs. M. J. Textile Agencies, but he also signed the form at the place meant for the Buyers-Firm and the buyers who are mentioned at the top of the work order, are Messrs., M Chhoga Lal and Company It is therefore more than apparent that Shri S. C. Bhatia and signing at two different places bound not only the Agency-Firm but also the Buyers-Firm There is nothing unnatural about the same because as alleged by the petitioner and also admitted by Shri S. C. Bhatia himself in his statement be is a partner both of the Agency-Firm as well as of the Buyer-Firm. In this state of affairs the document Exhibit P4 assume great importance and the learned District Judge was not right in ignoring the same and merely holding on conjectures that shri. S. C. Bhatia could not bind the Buyers-Firm for the purpose of Arbitration. This being the main ground on which the judgment of the trial Court was reversed, the verdict of the District Judge cannot be sustained.

5. Another point which was taken by the learned District Judge against the petitioner-Firm is that they had not been able to prove that any goods had passed by virtue of the work Order Exhibit P4. The observation is however, in negation of the very fact which is in dispute because according to the petitioner-Firm these goods had been supplied through the Agency-Firm to the Buyers-Firm, whereas the other Firms are denying the same. Their denial itself creates a dispute which requires to be referred to the arbitration. In these circumstances, for the purpose of referring the matter to Arbitration, it was not incumbent upon the petitioner to prove that any goods had really passed under the Work Order P4 the observation made in this behalf by the learned District judge are, therefore, a misappreciation of the actual controversy.

6. Normally, this court is not called upon to upset finding of the lower appellate court in such matters, but when the same is based on clear misreading of the evidence ad misappreciation of the circumstances on the record, it becomes the duty of this Court to interfere and set the error right.

7. The result is that this Revision Petition succeeds and the order of the District Judge dated September 4, 1978 is set aside and that of the trial Court dated February 5, 1977, is restored. The direction given by the trial court in regard to the appointment of Arbitration shall now be given effect to immediately.

8. In view of the fact that the Revision Petition is not contested, there shall be no order as to costs.

9. Revision allowed.


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