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Deokinandan Dalmia Vs. Basantlal Ghanshyamdas - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata
Decided On
Reported inAIR1941Cal527
AppellantDeokinandan Dalmia
RespondentBasantlal Ghanshyamdas
Excerpt:
- .....shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this act.3. and section 33 provides that:any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the court and the court shall decide the question on affidavits:provided that where the court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.4. the.....
Judgment:

Lort-Williams, J.

1. In this suit the plaintiff alleges that on or about the 8th September 1939 it was orally agreed between the parties that the plaintiff would enter into contracts by way of gaming and wagering with the defendant firm for the purchase and sale of hessian and gunny bags. In pursuance of that agreement dealings commenced, with the result that the defendant firm has preferred a claim for Rs. 15,100 before the Tribunal of Arbitration, Bengal Chamber of Commerce. The plaintiff alleges that neither party ever intended that there should be any actual transfer of goods, that only differences were to be paid or received, and that all the transactions were wagering transaction, and as such are void, inoperative and unenforcible. He has not submitted to the jurisdiction of the Tribunals, and says that they have no jurisdiction but that he has reasonable apprehension that if the con-tracts are left outstanding he may be caused serious injury. He claims a declaration that the transactions are void, delivery and cancellation of the alleged contracts, and an injunction, by which, presumably, he means an injunction to restrain the Tribunal of Arbitration from proceeding with the arbitration. The contracts were all in writing or print, and contained an arbitration clause to the following effect:

All matters, questions, disputes, difference and/or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract whether or not the obligations of either or both parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or complied shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted.

2. The defendant has applied asking, inter alia, (a) that the suit be marked as a commercial cause, (b) that it be dismissed with costs, and (c) alternatively, for suitable directions for the expeditious hearing of the suit. On his behalf, it has been argued that the suit should be dismissed owing to the provisions of the Arbitration Act, 1940. Section 32 of that Act provides that:

Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act.

3. And Section 33 provides that:

Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:

Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.

4. The prosecution of the claims of the plaintiff will undoubtedly affect the arbitration agreement, and a decision in his favour would result in a declaration that the agreement did not exist, or a decree setting it aside. On behalf of the plaintiff certain cases have been cited, but those decisions were based upon the law existing prior to the passing of the Arbitration Act, 1940. That Act was intended to and did alter the law, and one of the main objects of the Act was to provide that claims to set aside arbitration awards or challenge arbitration agreements should be made by applications to Court and decided on affidavits, or on other evidence if deemed expedient by the Court, and not by means of suit. Having regard to the provisions of these sections this suit does not lie and must be dismissed. But in order to save costs, I will treat the plaint as an application under Section 33, and set it down for hearing with witnesses, because the question whether the contracts were gaming and wagering contracts cannot conveniently foe tried on affidavits. There will be an order for discovery within a fortnight and the case will come into the list for hearing a week after the Easter Vacation. The defendant is entitled to any extra costs which have been caused by filing a suit instead of proceeding under the provisions of Section 33, including the costs of this application.


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