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Soorajmull Nagarmull Vs. Asiatic Trading Co. and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Contract
CourtKolkata High Court
Decided On
Case NumberAppeal No. 60 of 1972
Judge
Reported inAIR1978Cal239,82CWN288
ActsArbitration Act, 1940 - Sections 34, 39 and 41 - Order 30, Rule 4
AppellantSoorajmull Nagarmull
RespondentAsiatic Trading Co. and ors.
Appellant AdvocateA.C. Bhabra and ;S.N. Modak, Advs.
Respondent AdvocateS. Das and ;B.L. Jain, Advs.
DispositionAppeal allowed
Cases ReferredKhusiram Bemirsi Lal v. Hanutmal Boid
Excerpt:
- salil kumar datta, j. 1. this is an appeal by the firm soorajmull nagarmull against the judgment and order of salil kumar roy choudhry, j. dated dec. 6, 1971 whereby the appellant's application under section 34 of the arbitration act, 1940 for stay of the connected suit was dismissed. 2. at the material time, the appellant had been carrying on business of a jute mill under the name and style of 'shree hanuman jute mills'. the appellant, a registered partnership firm under the indian partnership act, 1932, had been a member of the east india jute and hessian exchange ltd, by a contract dated march 17, t967 through bought and sold notes, the appellant in his said business of shree hanuman jute mills agreed to sell to the respondent no 1, in the standard form of east india jute and hessian.....
Judgment:

Salil Kumar Datta, J.

1. This is an appeal by the firm Soorajmull Nagarmull against the judgment and order of Salil Kumar Roy Choudhry, J. dated Dec. 6, 1971 whereby the appellant's application under Section 34 of the Arbitration Act, 1940 for stay of the connected suit was dismissed.

2. At the material time, the appellant had been carrying on business of a jute mill under the name and style of 'Shree Hanuman Jute Mills'. The appellant, a registered partnership firm under the Indian Partnership Act, 1932, had been a member of the East India Jute and Hessian Exchange Ltd, By a contract dated March 17, T967 through bought and sold notes, the appellant in his said business of Shree Hanuman Jute Mills agreed to sell to the respondent No 1, in the standard form of East India Jute and Hessian Exchange Ltd, for transferable specific delivery contract for jute goods, 50000 yards (25 bales) of Hessian cloth size 55' side, weight 10 1/2 oz for 40' @ Rs, 70.50 p. per 100 yards. The number of the contract was JG 72213 while the broker was Messrs. Basantlal Mussadi and Sons. The delivery, free alongside export vessel in the port of Calcutta, was to be given and taken within April, 1967.

3. There was a provision for arbitration of the Bengal Chamber of Commerce and Industry under the bye-laws of the said East India Jute and Hessian Exchange Ltd. for Transferable Specific Delivery contracts in jute goods and the aforesaid' contract wasmade subject to the terms and conditions of such T. S. D. Contracts. The said provision is as follows;--

'All matters, questions, disputes, differences and/or claim arising out of and/or concerning and/or in connection with and/or in consequence of or relating to the T. S. D. contracts including the validity thereof 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 completed shall be referred to arbitration as provided in these bye-laws,'

4. Similar contract for supply of another quantity of 50000 yards of Hessian cloth of similar specification and price at Rs. 68.25 p per 100 yards, delivery within May, 1967 was entered into on March 25, .1967 by the appellant in its said business of Shree Hanuman Jute Mills as seller and the said respondent as buyer bearing No. 7221.6. As the other contract, arbitration of the Bengal Chamber of Commerce was provided for in similar terms and the contract was made subject to the bye-laws of such trading of the East India Jute and Hessian Exchange Ltd.

5. Bye-laws 1 of Chapter X of the Bye-laws of the East India Jute and Hessian Exchange Ltd. is as follows:--

'Arbitration of any claims and disputes whether admitted or not arising out of or in relation to all T S. D. Contracts in raw jute and/or jute between members or between members and non-members, under the provisions of these bye-laws, shall be referred to the Tribunal of Arbitration either of the Bengal Chamber of Commerce and Industry or of the Indian Chamber of Commerce, Calcutta as is agreed in T. -S, D. Contract in accordance with the rules framed by the said chamber, for the purpose of arbitration by its Tribunal from time to time, provided where in a T. S. D. contract, the name of the tribunal of Arbitration of either of the aforesaid two Chambers for the purpose of reference to arbitration is omitted, such reference shall be made to the Tribunal of Arbitration of the Bengal Chamber of Commerce and Industry as aforesaid.'

6. The time for delivery under contract of March 17, 1967 was extended to May 10, 1967 by mutual consent of the parties and shipping instructions were given by the respondent on April 28, 1967 but on account of non-completion of customs formalities the goods could not be shipped. The respondentby its letter of June 14, 1967 to the Jute Mills wrote as follows in respect of both contracts.

'Messrs Shree Hanuman Jute Mills,

Calcutta

Dated 14th June. 1987.

Dear Sirs,

Re: Our S. I. No. 137 dt. 28-4-67 for 25 bales of Hessian Cloth 55-10 1/2 oz/40' for shipment to Abidjan per Sections 'Marabank' due May 10, 1967,

With reference to the above please arrange to draw back the above goods from the boat and store the same in your godown. For this purpose we are prepared to pay all your charges, such as boat charges, demurrages, etc. on presentation of your bill to us.

As regards the 50,000 yards due May 1967 please also store the same in your godown till you hear from us to the contrary.

As regards payment of your P. D. O. for 100000 Hessian Cloth, as arranged through broker Messrs. Basantlal Musaddi we are depositing herewith cheque for Rs. 15000/-(Rupees fifteen thousand only) and also we will pay your interest monthly on submission of your bills'.

7. The appellant wrote back to the respondent as follows :

16th June, 1967.

Re: Cont, No. 72213 dt. 17-3-67 for 25 bales of Hessian Cloth 55-10 1/2 oz/40' due 10-5-1967.

Cont. No. 72216 dt. 25-3-67 for 25 B/S. 55-10 1/2 oz/40' due May 1967,

We are in receipt for your letter dated I4th June and the contents thereof.

As per your advice we are taking back 25 B/S Hess, cloth 55-10 1/2 oz-40' shut out per S. S. Marabank and Shirvabank to our mill. Another 25 bales 55-10 1/2 oz/40' are being stored at our mills in your account.

Please therefore note that all boating and reboating charges, demurrages on the above goods will be on your account. Further interest @ 12% will be charged on value of the above goods, Our bill for interest boating and reboating charges and demurrage will follow in due course. Further as Rs. 15000/-is not sufficient to cover all these risks, which we have accepted without prejudice, you are requested to send a further cheque of Rs. 10000/- immediately.'

8. On July 19, 1967 as no instructions were forthcoming the appellant called upon the respondent to make payment against delivery order or to pass shipping instructionsimmediately. It was further stated therein as follows:--

'You are therefore requested either to make payment against our delivery order or to pass on shipping instruction immediately. Should you fail to pay against D/O or alternatively pass your shipping instruction by S/I date for this month we will have no alternative but to auction the goods in open market on your behalf holding you responsible for the losses and consequences that may arise in this connection.'

9. A reminder was sent on July 29/31, 1967 to which the respondent by its letter of Aug. 2, 1967 informed that shipping instruction would be sent 'on the shipping date of the current month.' In the meantime the respondent paid a sum of Rs. 1626.66 p. on July 22. 1967 to the appellant on account of interest boating, reboating and handling charges and again on Aug. 26, 1967 paid another sum of Rs. 1003.40 P on account of interest in respect of the said two contracts, in all Rs. 17630.06 P.

10. No instructions were received by Aug. 1967 and on Sept. 4, 1987 the appellant gave the final notice to the respondent as follows:--

4th September, 1967.

Dear sir,

50 B/S Hess. Cloth 55-10 1/2 oz/40' due 10th May and May 1967. We refer to your letter dated 2-8-1967 whereby you agreed to send your shipping instruction for the above goods by shipping date of last month. But you have failed and neglected to send the same till today,

We therefore give you this last and final notice to send your shipping instruction with-in seven days of the receipt of this letter failing which we shall have no alternative but to auction the goods on your behalf in open market holding you responsible for all losses and consequences arising therefrom......

11. The respondent on Sept. 19, 1987 sent three shipping instructions Nos. 328, 329 and 330 for placing the goods for shipment to Bombay as early as possible. On Nov. 28, 1967 the appellant wrote that the steamer as per shipping instructions was not ready even after lapse of two months. The appellant therefrom called the respondent to pay its bill of charges within 48 hours failing which the goods would be sold on the account and at the risk of the respondent who accordingly would be liable for all losses costs and charges. The auction of the goodswas held on December 8, 1967 at the alleged risk of the respondent. As disputes arose between the parties in respect of the two contracts on account of non-performance of the contracts the appellant in the name of the said business of Shree Hanuman Jute Mills referred on Jan. 17, 1968 the disputes in regard to the contract No. JG 72213 dated March 17, 1967 to the arbitration of the Bengal Chamber of Commerce and Industry claiming Rs. 21082.51 P against the respondent on adjustment o the proceeds of the sale mentioning that a sum of Rs. 15000/-was deposited by the respondent on account. The disputes relating to the contract No. JG 72216 of March 25, 1967 was also referred by the appellant in the name of Shree Hanuman Jute Mills to the said Chamber by a separate reference claiming a sum of Rupees 19239-19 P after such adjustment of sale proceeds.

12. On Feb. 19, 1968 the respondent No. 1 instituted suit No. 440 of 1968 (Asiatic Trading Co. v. Mohanlal Jalan and Ors.) claiming Rupees 17630.06 P as damages for breach of the said two contracts committed by the appellant. The material allegations were that the firm of Soorajmull Nagar-mull, the proprietor of Shree Hanuman Jute Mills, entered into two contracts referred to above but it was since agreed on June 14, 1967 that the said firm would store the goods at its godown subject to payment of interest on value thereof and would ship the same in accordance with the shipping instructions to be issued by the respondent. In pursuance thereof Rs. 15000/- were paid on account together with interest, boating and reboating charges for Rs. 1626.66 P and also further interest of Rs. 1003.40 P totalling Rs 17630.06 P. The firm since dissolved on account of the death of one of its partners Nandakishore on July 10, 1967, wrongfully and illegally failed and neglected to ship the said goods in spite of shipping instruction and caused an auction notice issued in repudiation of the contracts which was accepted by the respondent. As a result of the breach of contract the respondent suffered damages for the aforesaid amount or alternatively the defendants who were the erstwhile partners of the firm and heirs of one partner Nandakishore Jalan who died on July 10, 1967 as aforesaid became liable to pay the amount as consideration for the said payment and deposit failed. The respondent prayed for a decree for the said amount in the suit with declaration that the said firm had no claim on the respondent in respect of the two contracts. On Feb. 20, 1968 Mr. B. K. Dhole, Solicitor of the respondent, gave notice to the Tribunal of Arbitration of the Chamber informing that a suit being the suit aforesaid had already been filed by the respondent 'upon the whole of the subject-matter of the above purported reference' without prejudice to its contention that the reference was illegal and invalid as the reference to arbitration was never agreed to by the respondent. On receipt of the said letter the Registrar of the Tribunal of Arbitration, informed the jute Mills, that arbitration was held in abeyance pending disposal of the suit.

13. The appellant thereupon filed an application, in this Court on or about June 1, 1968 under Section 34 of the Arbitration Act, 1940 for stay of the suit. The said application was opposed by the respondent by filing an affidavit-in-opposition affirmed by Sundarlal Mallo a partner of the respondent affirmed on July 15, 1968, to which the appellant filed an affidavit-in-reply affirmed by Nandalal Bajaj on Nov. 25, 1969. There was a supplementary affidavit as directed by the court affirmed by Kali Charan Gupta on July 19, 1971, annexing a copy of the partnership deed of Soorajmull Nagarmull dated December 6, 1943 to which there was a reply on behalf of the respondent affirmed by Sundarlal Mallo on July 29, 1970 reiterating that the firm stood dissolved as stated above.

14. The learned Judge was of the opinion that there was a likelihood of conflict of decisions as the claims and counterclaims might be heard by four different tribunals arising out of two contracts. Such a situation should not be permitted to take place, particularly when the payment of Rs. 15000/- did not relate to any specified contract. Further there were complex questions of law and fact raised by the respondent as to the constitution of the partnership firm. The partners of the petitioner firm who entered into the two contracts were not the same partners who made the application under Section 34 and referred the disputes to arbitration, and as such the maintainability of the references before the Tribunal of Arbitration was a legitimate question of considerable complexity. The question whether the firm was dissolved or was still continuing was also a question not free from difficulty. In such a situation the Court was of opinion that it would not be fair and just to stay the suit which was a comprehensive one and against alt interested parties. In the result the application under Section 34 was dismissed, and the court gave further directions in the suit. The appeal is by Surajmull Nagarmull against this decision.

15. under Section 34 of the Arbitration Act, 1940 In order that a stay may be granted, the following conditions should be fulfilled as laid down in Anderson Wright Ltd. v. Moran and Co. : [1955]1SCR862 .

(a) The proceeding must have been commenced by a party to an arbitration agreement against any other party to the agreement

(b) The legal proceeding which is sought to be stayed must be in respect of a matter agreed to be referred;

(c) The applicant for stay must be a party to the legal proceeding and he must have taken no step in the proceeding after appearance. It is also necessary that he should satisfy the Court not only that he is but also was at the commencement of the proceedings ready and willing to do everything necessary for the proper conduct of the arbitration; and

(d) The court must be satisfied that there is no sufficient reason why the matter should not be referred to an arbitration in accordance with the arbitration agreement.

16. The pre-requisite for making an order of stay under Section 34 is that there is a binding arbitration agreement between the parties to the suit which is sought to be stayed. When the existence of a binding arbitration agreement is disputed and accordingly the jurisdiction of the arbitrators is a matter of controversy, such question is one which the arbitrator cannot obviously deal with. It has been held in the above case that it is incumbent upon the court when invited to stay a suit under Section 34 of the Arbitration Act, 1940 to decide first of all whether there is a binding agreement for arbitration between the parties to the suit, although such decision may involve incidentally a decision as to the validity or existence of the parent contract, as held in Khusiram v. Hanutmal (1949) 53 Cal WN 505. On the above authorities it is incumbent on the court firstly to decide if there was a binding agreement between the parties to the suit. As otherwise, as noticed in Heyman v. Darwins Ltd 1942 AC 356 (60) in every case a claim that an arbitrator has no jurisdiction would always defeat an agreement to submit disputes to arbitration at any rate until the question of jurisdiction had been decided.

17. In this case, we have seen that the admitted original contracts of March 17, 1967 and March 25, 1997 contained provisions forarbitration in wide terms in respect of all disputes arising out of or in relation to such T. S. D. contracts. The appellant's case is that the original contracts continued to govern the field and only the delivery time was extended with certain provisions regarding payment of interest and storage charges on account thereof. On the other hand the contention of the respondent is that there was a third contract between the parties, superseding the earlier agreement and as the original contracts ceased to govern the field the arbitration agreement thereon also perished with them. Learned counsel relied on authorities in support of their respective contentions.

18. In Rungta Sons P. Ltd. v. Jugometal Trg. Republike : AIR1959Cal423 referred to by the appellant the Court held that terms of the subsequent arrangement were merely modification of the original contract and the two together formed one agreement comprising the original terms including the arbitration clause and its subsequent modification. In such a case the arbitration clause applied to the disputes arising out of the contract and its subsequent modification. Our attention was drawn to the decision in Union of India v. Kishorilal Gupta, : [1960]1SCR493 in which the Court laid down that the con-tract may be non est in the sense that it never came legally into existence or it was void ab initio; there may be cases in which though the contract was validly executed, the parties may put an end to it as if it had never existed and substitute a new contract for it solely governing their rights and liabilities thereunder. In the former case if the original contract has no legal existence, the arbitration clause also cannot operate, for along with the original contract, it is also void; in the latter case, as the original clause is extinguished by the substituted one, the arbitration clause of the original contract perishes with it.

19. Examining the original contracts as also the subsequent arrangement for delivery of the goods in this case, it appears that there is no case for substitution of the original con tracts by a new contract but the case is one of modification of the original contracts in respect of delivery, keeping alive the other terms of the contracts. The price and specification of the Hessian cloth in the original contract were maintained and the terms about delivery were only altered by subsequent terms. There was no provision altering, amending, substituting Or excluding other terms of the original contracts either expressly or by implication, Though the plaint ostensibly is based on an alleged third contract and its repudiation the provisions of the alleged new contract were nothing more than amendments or modifications of the terms of delivery subject to payment of extra charges. These would appear from delivery instructions relied on by the respondent which referred to original contracts in express terms. In the plaint of the connected suit, the respondent had prayed, in addition to the money decree on the alleged third contract, for a declaration that the firm Soorajmull Nagarmull since dissolved had no claim against the respondent in respect of the original contracts. Such prayer would be unnecessary if the original contracts perished or were substituted by the third contract without any arbitration clause. Accordingly we are of opinion that the original contracts with all its clauses in the standard T. S. D. contract form as aforesaid remained and continued to remain effective except in respect of delivery the terms whereof were amended by mutual consent. The arbitration agreement between the parties as contained in the original contracts and all other clauses except delivery remained live clauses which were thus enforceable in law. The case here is thus one of variation and not a rescission of the earlier contracts.

20. The disputes in controversy arose out of and under the contracts of sale of Hessian cloth as amended and modified by subsequent arrangement. According to the appellant who made the two references to the Tribunal of arbitration, there were no shipping arrangements by the respondent according to the modified terms of delivery, leading to the auction sale of the goods upon notice and to the consequent loss in value which the appellant was entitled to recover from the respondent. The respondent's case on the other hand was that the goods were sold contrary to the shipping instructions issued by him according to amended arrangement for delivery and he claimed the refund of the amount of Rs. 15000/- paid by him on account to the jute mills without specifying the contract to which the amount was to be appropriated apart from some other payment for other charges. The subject matter of the references thus were the disputes which arose out of the contracts as varied or modified in respect of delivery only wherein it would be open to the respondent to plead that his delivery instructions as modified were disregarded and as such the respondent was entitled to refund, of the amounts paid by him. The unspecified payment of Rupees 15000/- would present no insurmountable difficulty as such amount would obviously be adjusted against mutual claims as and when the occasion would arise either before the Tribunal or the court while passing the judgment on awards. One or more unspecified payments on account can be no ground for defeating arbitration to which the parties solemnly agreed to at the time of making the contracts.

21. In this application under Section 34 of the Arbitration Act, 1940 it is also necessary to decide if the proceedings have been taken by a party to the arbitration agreement against any other party to the agreement. Further the applicant under Section 34 must show that not only he is but also was at the commencement of the proceeding ready and willing to do every thing necessary for the proper conduct of the arbitration. There is no dispute that at the time the contracts were entered into on March 17 and 25, 1967, the firm Soorajmul Nagarmull was a firm registered under the Indian Partnership Act 1932. In the statement issued by the Registrar of Firms, the firm of Soorajmull Nagarmull bears No. 6979 in the Register with nine partners as a partnership at will. Nandakishore Jalan one of the partners died on July 10, 1967 and according to the respondent, the firm stood dissolved on that date so that the application under Section 34 of the Arbitration Act being in the name of a dissolved firm was not maintainable in law in absence of the heirs of the deceased partners as it was submitted was held in Devji Goa v. Tricumji Jiwandas 49 Cal WN 299 : (ATR 3945 PC 71) which was however a partnership registered outside India,

22. The appellant on the other hand referred to the deed of partnership dated Dec. 6, 1943 whereby the partnership on reconstitution was to be deemed to have commenced from Ramnawami of S. Y. 2000 (April 14. 1943) and was to continue until determined by mutual agreement. It was further provided that the death of any partner would not automatically dissolve the partnership but the legal representatives might be admitted to the partnership by mutual consent. Further in case of the death of any partner during the continuance of the partnership, the partnership would be deemed to exist upto the end of the accounting period of the year ending with Ramnavami during which the death or retirement occurred. . On the basis of the above provision it was contended that there was no automatic dissolution of the partnership and the firm continued even after the death of Nandakishore and the disputes had been rightly referred to arbitration by the said firm. It was further contended that in view of the provisions of Order 30 Rule 4 of the Code it was not necessary to implead the heirs of the deceased partner in this proceeding.

23. The point for determination is whether the present application under Section 34 of the Arbitration Act in the name of the firm even on the death of one of its partners, was maintainable. Under provisions of Order 30, Rule 1 of the Civil P.C., 1908 a firm of two or more persons as partners may sue or be sued in the name of firm, of which such persons were partners at the time of accruing of the cause of action and any pleading or document required by the Code to be signed or verified by the plaintiff or defendant can be signed or verified by any of such persons. Rule 4 of Order 30 provides again that notwithstanding Section 45 of the Contract Act, 1872 where two or more persons may sue or be sued in the name of a firm under the foregoing provisions and if any of such persons dies, whether before or during the pendency of any suit, it shall not be necessary to join the legal representative of the deceased as a party to the suit. The cause of action in this case arose in part on the date the original agreements were entered into as also in part when there were modifications regarding delivery and also breach in the performance of the obligations under the contracts though the case of each party in respect thereof is different, blaming the other. While the former went took place when Nandakishore was alive, he was no longer when the latter event took place as modification regarding delivery took place after Nanda's death. Even so a suit under Rule 1, Order 30 of the Code against the partners could be instituted in the name of the firm in respect of the said contracts as part of the cause of action arose (which is synonymous with accrued) when the partners were carrying on business as such partners of the firm Soorajmul Nagarmull. If the suit thus could be brought by or against the partners in their firm name, on the death of any such partner whether before the institution or pendency of the suit it is not necessary to join the legal representatives of the deceased as a party to the suit. Accordingly as the legal representatives of a deceased partner are not necessary parties to this proceeding, the application, under Section 34 of the Arbitration Act, 1940, in thename of the firm is maintainable in law as under its Section 41 the provisions of the Civil P. C. 1908 shall apply to proceedings before the Court and to all appeals thereunder.

24. It may be noted here that, as has been held in Willesford v. Watson (1873) 8 Ch. App. 473 (80), the Act gives right to one of several defendants to make such application to court and it is not necessary that all parties should concur in the application. As we have seen, by virtue of provisions of Order 30 Rules 1 and 4 of the Code at the material time the existing members of the firm Soorajmull Nagarmull who are defendants 1 to 7 in the suit are represented by the firm name. The application under Section 34 cannot be defeated even if the legal heirs of the deceased partners or even some partner do not concur in the application or even oppose the same

25. Even so, the court also is required to examine if in the event that happened namely the death of a partner of the appellant on July 10, 1967, the T. S. D. contracts with arbitration clause still continued to be valid and enforceable contracts between the parties. The appellant's case is that the partnership firm did not dissolve by the death of its partner but was subsisting during the material period and references by the Jute Mills through the firm were valid in law. Reliance was placed on certain clauses in the partnership deed of Dec. 6, 1943 which in Clause 4 provided that the death of the partnership would not automatically dissolve the partnership but the surviving partners were entitled to admit the legal representatives by mutual consent. Clause 6 provided that in case of death or retirement of any partner dining the continuance of the partnership the partnership shall be deemed to exist up to the end of the accounting period of the year during which the death or retirement took place and the estate of the deceased partner or the re-tiring partner would be entitled to receive and be responsible for all profits and losses of the partnership upto the end of the ac-counting period.

26. It appears that the position seems to be that notwithstanding the death or retirement of any partner the partnership would continue upto the end of the accounting year. The legal representatives of the deceased partner by mutual consent of surviving partners could be admitted to partnership and if this was not done, such legal representatives of the deceased partner and in any event the retiring partner would be entitled to receive profits or be responsible for lossesof the partnership upto the end of the accounting period as the case might be but to any event the partnership would continue to exist notwithstanding the death or retirement of any partner.

27. It is not clear on the affidavits if the legal representatives of the deceased partner Nandakishore were admitted to the partnership but whether they were admitted or not, the partnership continued either with them or without them. It could not accordingly be said that on account of the death of one partner the partnership stood dissolved as Section 42 of the Partnership Act is always subject to contract between the partners. This position is borne out by the statement recorded in the register of the Registrar of Firms, which records admission of Sm. Shanta Devi in place of Keshordeo Jalan on his death or simply the death of Baijnath Jalan without admitting any one in his place. Further it is to be noted that the allegations as to delivery dale and shipping instructions under the original contracts were issued by the respondent long after the alleged dissolution. Accordingly in view of the challenge to the application under Section 34 made by the respondent the Court has to come to this incidental but unavoidable and necessary finding that the partnership did not dissolve with the death of Nandakishore and continued during the material period as a partnership as before. The contracts between parties with the arbitration clause were thus valid and enforceable when the suit was instituted and even thereafter.

28. There is no dispute that Other conditions for a stay order were present and it there was no sufficient reason otherwise, the court should leave the parties to their bargain and stay the suit. The trial court was of the View, as we have seen, that there was a possibility of conflict of decisions, since under the relevant rules for every contract there could be one reference and as the respondent had their claims, the possibility of four separate references on the two contracts could not be excluded with equal possibility of con-Sequent awards thereon which might be in conflict with each other. Further payment of Rs. 15000/- being Unspecified, it might lead to curious result and the proper remedy would be in a comprehensive suit like the one instituted by the respondent.

29. We have seen that the appellant had already made references for each of the eon-tracts and in those references, the respondent could lodge his counter claim or make separate reference for his claims. Even so,as the parties are the same and common question of law and fact are involved, there is no bar for analogous or simultaneous hearing of the references before the same tribunal, which might obviate conflict of decisions, On the application of parties. Even if there be no such hearing the tribunal hearing the reference could take into account the award in an earlier reference on the same contract and mould its decision accordingly. If the unspecified payment of Rs. 15000/-had been given credit of by the appellant in the earlier reference and it remained for the respondent to appropriate payment in either contract or otherwise. Such payment would accordingly be appropriated by the Tribunal as it may deem fit and the Tribunal considering subsequent references would obviously take the same into account while making the awards. Ultimately it will be for the court passing judgment upon awards to reconcile the position in all respects, We accordingly do not think that there is any possibility of conflict of awards, which may frustrate any arbitration agreement. The question of the respondents' claim being time barred is also of no consideration for a decision under Section 34

30. It has been submitted on behalf of the respondent that the power to stay the suit under Section 34 of the Arbitration Act, 1940 is a discretionary power and when the trial court has exercised its discertion in a particular way after considering all aspects of the controversy the court should not interfere with the exercise of the discretionary power. In our view, as has been held by the Supreme Court in Anderson Wright's case : [1955]1SCR862 approving the proposition of law laid down by S. R. Das, J. (as he then was), in Khusiram Bemirsi Lal v. Hanutmal Boid (1949.) 53 Cal WN 505 that when issues are raised, the court should not decline, and according to the Supreme Court it is incumbent, for the court to decide the existence or validity of the arbitration agreement between the parties even though it may involve incidentally a decision as to the validity or existence of the patent agreement That was not done by the trial court, which it was incumbent on the said court to decide on the above authorities and we find no reason to permit any party to resile from the bargain of arbitration they made in the contracts under which the disputes between the parties have arisen.

31. The respondent has taken out a notion of motion dated Aug. 2, 1977 for taking into consideration certain events that took placeafter the order under appeal was passed. It appears that an application for recording death of defendant No. 2 and substitution of his heirs was filed in the trial court on or about Jan, 28, 1972 and the application was lastly adjourned by consent till 20th April, 1972. This application obviously will come up for disposal at the appropriate stage, in view of the order passed herein. As to the suit for dissolution of partnership of the appellant, filed by some partners the same is yet pending and cannot in any way affect the decision of this appeal. The respondent also referred to the letter of the Solicitor of the defendant No. 3 dated March 22, 1977 wherein it has been stated that the said defendant would enter appearance and the written statement but no summons had yet been served. Unless the summonses are served, there is no occasion for taking steps and, as such the said letter has no relevance, while other letters included in the paper book have also no relevance. As to the other certified copy of the register of Registrar of Firms filed by the respondent it appears that firm Soorajmull Nagarmull established in 1934 bears number 1375 in the register, the last entry being of the same year. We are concerned here with the firm Soorajmull Nagoor-mull which bears number 6979 registered in 1938 and it has been averred in the affidavit-in-apposition on behalf of the appellant affirmed by Mohanlal Jalan on Aug. 24, 1977 that the firm was governed by the partnership deed dated Dec, 6, 1943 on reconstitution which were disclosed before the trial court the recitals whereof support the statement in the register of firms, and, there is nor could be any effective denial of the said position. Further even if some steps are taken by the legal heirs of some deceased partners when is also not clear or unequivocal, such steps, which obviously were taken after the dismissal of the application under Section 34 cannot in any way affect or prejudice the appeal before us, filed by the partnership firm as such steps cannot be said to be steps taken by the firm. Accordingly the application filed by the respondent does not reveal any Fact to reconsider our decision as indicated above and the application may accordingly be treated as disposed of.

32. The appeal in the circumstances is allowed and the impugned order is set aside. The application by the appellant under Section 34 of the Arbitration Act 1940 is allowed and the suit No. 440 of 1968 is stayed. There will be no order for costs in the circumstances.

Sankar Prasad Mitra, C.J.

I agree.


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