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Jhabbu Mal Jang Bahadur Vs. Nanak Chand Aggarwal and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 596 of 1980
Judge
Reported inAIR1991Delhi55; 20(1981)DLT210
ActsArbitration Act, 1940 - Sections 2
AppellantJhabbu Mal Jang Bahadur
RespondentNanak Chand Aggarwal and anr.
Advocates: A.P.S. Ahluwalia, Adv
Cases Referred and Nand Rarn Hanutram v. Ragu Nath
Excerpt:
.....because in every difference one parly is in the right and the other is in the wrong, and it is only when there has been an effective adjudication that the right to arbitrate under a clause like this ceases to exist :chandan mal v. an award made on such a agreement was good, whether it was made on the original contract or the settlement of accounts:.....air 1968 j & k 86 and nand rarn hanutram v. ragu nath & sons ltd. : air1954cal245 . although it is true that there can be no arbitration -without a difference, yet it appears to me that courts below have fallen into error in invalidating the award on the ground that there was no dispute or difference. (3) i, thereforee, accept this revision petition, set aside the impugned order and direct that the award shall be and is hereby made a rule of the court. decree shall follow in term thereof. cost here and below shall be borne by respondents.
Judgment:

M.L. Jain, J.

(1) The respondent Nanak Chand Aggarwal of M/s. Chet. Ram Nanak Chand of Delhi purchased cloth from the petitioner Jhabbualmal Jang Bahadur, Cloth Commission Agent in the year 1974-1979. The petitioner are members of Delhi Hindustani Mercantile Association. One of the conditions of the membership of said Association is that if any dispute arises between the parties relating to their dealings, it has to be decided by the said Association. This condition was also incorporated in the bills of M/s. Jhabbumal Jang Bahadur. It appears that the bills remained unpaid. The parties settled the accounts on 21.1.1979 and a balance of Rs. 4.900.00 was found due to the petitioner by the respondent. That document Ex. P-3 by which Nanak Chand promised that he will square up the entire account by making easy payments. He further agreed that if there was any misunderstanding or difference about the accounts, then it will be referred for arbitration to the said Association or to an arbitrator appointed by them. Nanak Chand could not comply. A notice was served upon him by the petitioner but without any result. The petitioner applied to the said Association for Arbitration. They appointed one Shri Hardwari La I Gupta as an Arbitrator, who gave his award on 18.9.1979. The arbitrator held that the petitioner were entitled to recover Rs. 5271.88 from the respondent with future interest at the rate of 15^) p. a. Upon a request made by the petitioner, he filed the same in. court praying that notices b' issued to the parties and the award be male a rule of the court. Notice were issued but the respondent choose to remain absent despite service. In this situation, the normal course for the learned Sub-Judge was to make the award a rule of the Court but instead, he held that the award was a nullity for there was no dispute or diffirence to be referred to arbitration. The view of the learned Sub Judge was that the matter had already stood settled by writing Ex. P3 and there was no more any dispute existing between parties except to make the payment. He set aside the award, it seems under clause (c) of Section 30 of the Arbitration Act 1940 (herein the Act). Appeal to the Additional District Judge also proved futile. The courts below thought that failure to make a promised payment is not a difference, so as to give any jurisdiction to the Arbitrator and the 80 called award was nullity. Hence, this revision. Notice was issued to respondent. He again opted to remain absent.

(2) I have heard Mr. Ahluwalia. It appears to me that the present arbitration could even be covered by the original arbitration clause, because in every difference one parly is in the right and the other is in the wrong, and it is only when there has been an effective adjudication that the right to arbitrate under a clause like this ceases to exist : Chandan Mal v. Donald Campbell 23 C.W.N. 707. Moreover, the courts below have overlooked the agreement contained in Ex. P.3 itself by which the parties had agreed to refer any dispute out of their mutual accounts to the arbitration of the said Association or their nominee. An award made on such a agreement was good, whether it was made on the original contract or the settlement of accounts: vide Uttam Chand Saligram v. Mahmoad Jewa Mamooji (1909) 23 Cat.Cw 704. Mr. Ahluwalia also pointed out that in Madan Lal v. Sunder Lal & Others, Air 1976 S.C. 1233, the Supreme Court has held that if a party wants an award to be set aside on any of grounds : mentioned in Section 30 of the Act, it must after receipt of notice make an application to that end. If no such application is made, the award cannot be set aside on any of the grounds specified in that Section. I wonder if the courts can set aside an award sue moto under Section 17 of the Act, but assuming that they can do so, they could not have done so in this case. When a man is under a liability and keeps silence even after service of notice, he should be presumed to be differing with the claimant and that will be a difference within the meaning of S. 2(a) of the Act. Difference is such a wide term that it can include almost everything on which the parties are not at one : vide : Gulam Quadi Baksh v. -State of Jammu & Kashmir & Others, Air 1972 J. & K. 44. Whether a matter should be referred to arbitration or not will also be a difference arising out of the agreement capable of being resolved by arbitration. Relying upon M/s. Pearl Hosiery Mills v. U.O.I, and another : AIR1979Delhi64 , National Small industrial Corporation v Punjab Tin Prints 1979 Rlr 289 and the Hindustan Copper v. Assam Bearing 1980 Rlr 29; I have held in Prem Kumar v. Hurbans Singh Fao 255/80 decided on April 22, 1981 that dispute means that one party has a claim and the other party says for some specific reasons this is not a correct claim. What is to be seen is whether there has been a breach by one side or the other or whether circumstances have arisen which have discharged one or both parties from further performance : U.O.I, v. Birla Cotton Spining & Weaving Mills : [1964]2SCR599 . If one party asserts a right and the other repudiates, that is a dispute. It is amalogous to a cause of action : vide : Jammu Forest Co. v. Stale ofJ.K. Air 1968 J & K 86 and Nand Rarn Hanutram v. Ragu Nath & Sons Ltd. : AIR1954Cal245 . Although it is true that there can be no arbitration -Without a difference, yet it appears to me that courts below have fallen into error in invalidating the award on the ground that there was no dispute or difference.

(3) I, thereforee, accept this revision petition, set aside the impugned order and direct that the award shall be and is hereby made a rule of the Court. Decree shall follow in term thereof. Cost here and below shall be borne by respondents.


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