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Ramdayal Rameswarilal Vs. Vissamsetti Chandra Narasimham - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Case NumberCivil Revn. Petn. No. 582 of 1950
Judge
Reported inAIR1951Mad843; (1951)1MLJ49
ActsArbitration Act, 1940 - Sections 2 and 34
AppellantRamdayal Rameswarilal
RespondentVissamsetti Chandra Narasimham
Appellant AdvocateN. Ram Mohan Rao, Adv.
Respondent AdvocateV. Parthasarathy, Adv.
DispositionRevision allowed
Cases ReferredKedarnath v. Sumpatram
Excerpt:
arbitration - agreement - sections 2 and 34 of arbitration act, 1940 - revision against admission suit in view of arbitration agreement in contract - contract provides that matter to be governed by terms and conditions of contract with supplier of goods - parties to contract aware of such terms and condition - terms and conditions of contract with supplier provide for arbitration - held, civil suit not maintainable in view of arbitration clause. - - sumpatram',47 cal 1020 :air 1920 cal 795, are clearly distinguishable from the facts that obtain in the present case......of the nellimarla or chittavalsah jute ir.ill co. did not get incorporated in the terms of the suit contracts. if it was not the intention of the parties that the terms of the nellimarla or chittavalsah jute mill co's contract were to be incorporated, there was absolutely no reason why such a stipulation should have been entered into in the suit contracts, especially, after all the relevant particulars which would ordinarily be sufficient for a contract, had been entered up. as already observed, the ground that the pitf. was not aware of what exactly were the terms & conditions of the contracts of the said mills is not tenable. on the other hand, it was incumbent upon the pltf. who was entering into a contract with the deft. to have acquainted himself with the exac; terms &.....
Judgment:
ORDER

Basheer Ahmed Sayeed, J.

1. The petnr. in this petn. is the deft. in O. S. No. 702 of 1948 on the file of the Dist. Munslf's Ct. at Vijayawada. The pltf. in that suit claimed damages against the deft. for non-performance of the contracts entered into between the parties. The deft. took out an appln. under Section 34, Arbitration Act to have the suit stayed on the ground that the terms of the contract contemplated a settlement of disputes between the parties by reference to arbitration. The learned Dist. Munsif did not agree with the contention of the deft., & even so, the learned Subordinate Judge upheld the decision of the learned Dist. Munsif. This petn. is therefore preferred against the order of the learned Subordinate Judge.

2. It is useful in this connection to refer to the actual terms of the contracts entered into between the parties (Exs. A. 1 & A. 2). After setting out the name of the seller, the name of the buyer, the quality, quantity, rate, place of delivery, time of delivery, terms of payment, etc., the written contract which is signed by both the parties sets out in the clause marked N. B. that the terms & conditions should be as per Nellimarla or Chittavalsah Jute Mill Co's contract. Below this, further particulars are set out which are to this effect, viz., 'Settlement against contract No. 72 dated 21-3-1947 at the rate of Rs. 92-0-6 per hundred bags only'. These contracts are for the supply & purchase of empty gunny bags manufactured by H. D. Nellimarla or Chitavalsah Jute Mills. This is specifically mentioned in the contracts against column 3. In view of the contents of these contracts wherein specific reference is made to the supply of goods manufactured by a particular mill & wherein there is a stipulation that the terms and conditions should be as per the contract of the said Nellimarla or Chittavalsah Jute Mill Co., it cannot be contended for a moment that the pltf. was not aware of the terms & conditions under which the goods were supplied by the Nellimarla or Chittavalsah Jute mills. Besides, it is in evidence that the pltf. has been dealing with such goods manufactured by the said mills, though he has been purchasing the same, as per his own evidence through brokers. It cannot be said that he was a stranger to transactions of the type in question. Both the parties must be stated to be in the full know of the terms & conditions under which supplies & purchases of the products manufactured by either Nellimarla or Chittavalsah Jute Co. are made by those who havedealings in gunny bags manufactured by the said mills. When such is the background, & whenthere is a specific stipulation, which invites the particular attention of the signatories to the contract to the fact that the terms & conditions should be as per Nellimarla or Chittavalsah Jute mill Co's contract, surely there can be no substance in the contention of the pltf. that he was not aware of what exactly were the terms & conditions under which the products manufactured by the said two mills were being supplied or sold in the market. Ignorance on the part of the pltf., of the terms & conditions under which such sales are made by the said manufacturing companies appears to be one of the reasons why the learned Dist. Munsif refused to exercise his discretion in staying the suit as required by the deft. The other reason which has been relied upon by the learned Dist. Munsif in refusing to stay the suit as prayed for by the deft. appears to be that the pltf. gave notice before filing the suit, & that the deft. did not choose to send any reply to the threat of the pltf. held against the deft. that he would file a suit if damages were not paid. These two reasons referred to above can hardly be said to be sufficient for the Dist. Munsif to refuse to exercise the jurisdiction which is vested in him under Section 34, Arbitration Act. In my opinion, the learned Dist. Munsif was not correct in having taken the attitude which he did on these two very flimsy grounds.

3. Even so, the learned Subordinate Judge while upholding the decision of the learned Dist. Munsif has not approached the question from the background that was available to him & as evidenced by the terms of the contract. As the contract after setting out the relevant particulars that have usually to be incorporated in any contracts between the parties who deal in the purchase of goods manufactured by the Mills referred to above, has definitely stipulated that the further terms & conditions of the contract should be those that have been laid down in the contract of the Nellimarla or Chittavalsah Jute mill Co., there is no sufficient ground for the learned Subordinate Judge to come to the conclusion that the terms of the contract of the Nellimarla or Chittavalsah Jute ir.ill Co. did not get incorporated in the terms of the suit contracts. If it was not the intention of the parties that the terms of the Nellimarla or Chittavalsah Jute Mill Co's contract were to be incorporated, there was absolutely no reason why such a stipulation should have been entered into in the suit contracts, especially, after all the relevant particulars which would ordinarily be sufficient for a contract, had been entered up. As already observed, the ground that the pitf. was not aware of what exactly were the terms & conditions of the contracts of the said mills is not tenable. On the other hand, it was incumbent upon the pltf. who was entering into a contract with the deft. to have acquainted himself with the exac; terms & conditions under which the goods were being sold or supplied by the said two companies, when there was a stipulation as to the terms & conditions of the contract.

4. The learned Subordinate Judge nowever has relied on the decision reported in 'Ramlal v. Hari-bux : AIR1934Cal796 , which follows 'Chatturbhuj v. Basdeodas', : AIR1921Cal767 ). I have read through these decisions, & I do not think the facts as disclosed by the present suit contracts are the same as those that are considered in these decisions. In my view, they do not apply to the present case. On the other hand, the learned counsel for the petnr. has relied upon'Temperley Steam Shipping Co. v. Smyth & Co.', (1905) 2 K B 791: 74 L J K B 876; 'Vali Mahomed Ayoob v. Shamdeo : AIR1930Cal774 & 'Mohanlal v. Bisserlal : AIR1947Bom268 . On a perusal of these authorities relied upon by the learned counsel tor the petnr. I am inclined to agree with the rulings laid down in these decisions, as the facts in those cases are on all fours with the facts in the present case. They furnish the proper rule or construction to be followed in such circumstances as those that obtain in the present case. There is of course no direct authority of this Ct. on the point at issue. My attention has however been drawn to a recent decision of my learned brother, Raghava Rao J., which has not yet been reported. That decision is 'in A. A. O. No. 146 of 1948. I have read through that judgment, which has turned upon different points which are not relevant to & have no bearing on the facts of the present case. I must however mention in this connection, that two of the important decisions cited by the learned counsel for the resp., namely, 'Freeman & Sons v. Chester Rural Council', (1911) 1 K E 783 : 80 L. J K B 695 & 'T. W. Thomas & Co., Ltd. v. Portsea Steamship Co., Ltd.', 1912 AC 1 & which are referred to in 'Ramlal v. Haribux : AIR1934Cal795 ; 'Chaturbhuj v. Basdeodas', 47 Cal 799: AIR 1321 Cal 767 & 'Kedarnath v. Sumpatram', 47 Cal 1020 : AIR 1920 Cal 795, are clearly distinguishable from the facts that obtain in the present case. It may also be stated that 'T. W. Thomas & Co., Ltd. v. Portsea Steamship Co., Ltd.', 1912 A C 1, does not refer to an earlier decision in 'Temperley Steam Shipping Co. v. Smyth & Co.', (1905) 2 K B 791 : 74 L J K B 876, the principle of which decision is acceptable to me as doing justice to the circumstances of the present case, & I hold that, the terms of the contract of the Nellirmarla or Chittavalsah Jute Mill Co. got incorporated into the terms of the suit contracts.

5. Mr. Parthasarathi, learned counsel for the resp. invited my attention to the observations of in 'Kedarnath v. Sumpatram', 47 Cal 1020 : AIR 1920 Cal 795, & also to the observations made by the learned author Sircar in his commentaries on the Arbitration Act at pp. 292, 293, & 301, wherein it has been stated whenever there is an ambiguity with regard to the actual terms of the contract the jurisdiction of the Cts. ought not to be ousted. On the facts of the present case, 1 do not think that there is any ambiguity at all with regard to the terms of the contract, so as to justify my adopting the ruling in the authorities cited by the learned counsel for the resp. The circumstances of the present case as set forth above justify the construction that the terms & conditions of the Nellimarla or Chitavalsah Jute Mill Co. did become incorporated into the terms of the suit contracts.

6. The next point urged by learned counsel for the resp. is that in so far as the judicial discretion has been rightly exercised by the Cts. below, there is no scope for this Ct. to interfere in revn. with the orders passed by the two Cts. below. I am afraid I cannot agree with this contention of the learned counsel for the resp I do not think, as already observed, that the Cts. below have exercised the jurisdiction vested in them in a proper manner, on the facts of the case. I do not think there is any substatnce in the contention of the resp. that there is no proper agreement for submission to arbitration. The terms & conditions in question do constitute a sufficient agreement to refer to arbitration. Taking the entire circumstances of the casa, I am inclinedto hold that the deft. is entitled to the benefit ofthe terms of the contract which have been stipulated between him & the pltf., & it is a fit casewherein the matter should be referred to arbitration as per the agreement between the parties,& there will therefore be a stay of the suit under Section 34, Arbitration Act. In the result the revn. petn.is allowed with costs.


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