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Meghraj Sampatlall Vs. Raghunath and Son - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 106 of 1953 and Award No. 184 of 1952
Judge
Reported inAIR1955Cal278
ActsJute Goods (Export Control) Order, 1949; ;Partnership Act, 1932 - Section 69 and 69(3)
AppellantMeghraj Sampatlall
RespondentRaghunath and Son
Appellant AdvocateB.C. Dutt, Adv.
Respondent AdvocateD.C. Sethia and ;S. Tibriwalla, Advs.
DispositionAppeal dismissed
Cases ReferredBabulal Dhandhania v. Messrs. Gauttam
Excerpt:
- .....of the court. as i have said, it seems to me to be implicit in the various sub-sections of the section that the bar contained in it is intended to apply only to proceedings in court and) that so far as contracts themselves- are concerned or so far as private forums for the decision of disputes are concerned, the liberty of contract or proceeding is in no way restricted by the imposition of a requirement of registration. 9. in my view, the decision of chatterjee, j., in the case i have already cited, was correct and in following that decision s. r. das gupta, j.,, applied the correct law. for the reasons given above, this appeal is dismissed with costs. lahiri, j. 10. i agree,
Judgment:

Chakravartti, C.J.

1. Three points have been taken by Mr. Dutt in support of this appeal. They did not find favour with S. R. Das Gupta, J., and do not commend themselves to us.

2. There was a contract entered into betweenthe parties on the 26th of August, 1949, underwhich the appellant was to sell and the respondents were to buy 150,000 yards of hessian cloth. The respondent's case is that on 20-9-1949, the contract of August was settled by second contract under which they were to sell and the appellant was to buy precisely the same quantity of -hessian cloth. The price fixed under the first contract was Rs. 51-2-0 per 100 yards, but that fixed under the second contract was Rs. 60-8-0 also per 100 yards. On a reference being made to arbitration under a clause which is in the usual form to be found in the Indian jute Mills Association contracts, the arbitrators have made an award computed on the difference between the rates fixed under the two contracts.

3. Mr. Dutt's first point before us was that since his client disputed the existence of the second contract altogether, the arbitrators had no jurisdiction to take notice of it or to determine the question of its existence. S. R. Das Gupta, J., held that the shape of the case was not as put forward by Mr. Dutt, but that the respondent's pleading was that the first contract had been settled by the second contract and, therefore the arbitrators had jurisdiction under the arbitration clause contained in the first contract to decide whether the first contract had been settled in the manner alleged, just as they would have jurisdiction to decide if the liabilities under the first contract had been paid off. In my opinion, that view is plainly right and, in fact, Mr. Dutt did not seriously contend to the contrary.

4. The second point taken by Mr. Dutt was that the arbitrators should not have made any award in respect of the contract at all, inasmuch, as the contract was for the sale of goods for export and it was hit by the provisions of the Jute Goods Control Order, 1949. Reference was made to the terms of the first contract and it was pointed out that delivery was to be given by placing the goods alongside an export vessel and it was contended that since the respondents purchased the jute for export and since they held no licence, the contract was an illegal one and therefore could not be the basis of an award. This contention can be disposed of on the short ground that the Jute Goods Control Order came about a month and a half after the date of the contract and there is nothing in its provisions to show that it was retrospective in operation.

In the second place, the Jute Goods Control Order does not seem to have anything to do with the contract as between a local buyer and a local seller. The local buyer may, on purchasing the goods, require a licence to export them out side India and if he has no licence, he will be unable to export. That, however, does not mean that he cannot buy in the local market and that any contract between him and persons selling to him will be invalid, simply because he does not procure or is unable to procure an export licence. The first branch of the second point of Mr. Dutt must, therefore, fail.

5. The second branch of the second point was that the arbitrators were wrong in computing the amount of their award on the difference between the rates fixed by the two contracts. This argument again was based upon the provisions of theJute Goods Control Order, and the argument was that since the order laid down a ceiling price and since the rate alleged by the respondents to have been fixed by the contract of September was above that ceiling, the arbitrators had acted illegally in computing the measure of the damages by reference to a rate not warranted by ' Jaw. Again, it is impossible to see that the Jute Goods Control Order has any relevancy at all. In the first place, it is not retrospective in operation. In the second place, it merely prescribes a ceiling price, but does not say that any contract for sale and purchase of jute at a rate above the ceiling price shall be void and inoperative. Lastly, and this is the point which is fatal to Mr. Dutt's contention, the Order deals only with the price at which the exporter will be allowed to sell and not with the price at which the exporter may buy. The price fixed by the contract of September, 1949, to which Mr. Dutt objects, was not the price at which the exporters intended to sell the goods to purchasers outside India, but the price at which they themselves purchased. The provisions of the Jute Goods Control Order leave such rates and such contracts entirely untouched.

6. The last contention of Mr. Dutt was that the whole reference to arbitration was invalid, inasmuch as the respondent-firm was not a registered firm and therefore it was prevented by Section 69(3) of the Indian Partnership Act from making any reference to arbitration. The argument was that whilst Sub-sections (1) and (2) of Section 69 were limited to proceedings in Court, Sub-section (3) was not similarly limited, but referred to 'other proceeding to enforce a right arising from a contract'. Such proceeding, it was contended, might be any proceeding, including the proceeding of reference to arbitration, and it was further said that to refer a dispute to arbitration under an arbitration clause contained in a contract was certainly to enforce a right arising from a contract and, therefore, such a reference was hit by the clear words of Sub-section (3) of Section 69.

7. The argument was advanced before S. R. Das Gupta, J., as well, but was repelled mainly on the authority of the decision of Chatterjee, J., in the case of -- 'Babulal Dhandhania v. Messrs. Gauttam & Co,', : AIR1950Cal391 . It appears to me that the reasons given by Chatterjee, J., in the very careful judgment, are extremely cogent and completely negative the construction sought to be put by Mr. Dutt upon the words of Section 69(3) of the Partnership Act. Chatterjee, J., referred in extenso to the definition of 'proceeding' as given, in several decided cases and came to the conclusion that Section 69(3) did not preclude a reference to arbitration without the intervention of a Court, inasmuch as a reference to arbitration 'aliunde' the Court could not be said to be a proceeding within the meaning of the section.

8. Quite apart from the reasons given by the learned Judge, it appears to me to be implicit in the terms of Section 69 itself that the proceedings contemplated by it are proceedings in Court. Those contemplated by Sub-sections (1) and (2) are expressly so. Sub-section (3) begins with a reference to the provisions of Sub-sections (1) it (2) and says signi- ficantly that they 'shall apply also to a claim to set-off or other proceeding to enforce a right arising from a contract'. It appears to me than when Sub-section (3) draws in the provisions of Sub-sections (1) and (2), it draws in the whole of those provisions,' including the reference to proceedings in Court, and when it says that the provisions of the earlier two sub-sections shall apply 'also' to a claim of set-off or other proceeding, it. seems to make it abundantly clear that the proceedings it is contemplating are of the same class as the proceedings contemplated in -Sub-sections (1) and (2). That limitation also appears from the provisions of Sub-section (4)(b) which mentions certain proceedings to which the section shall not apply. It is laid down that the section shall not apply 'to any suit or plaim of set-off not exceeding one hundred rupees in value' etc. It will be noticed that the proceedings from which the application of the section is excluded are all proceedings in Court.

Mr. Dutt's contention was that the words 'other proceeding to enforce a right arising from a contract' were perfectly general and that it could not be said on any reasonable construction of the words that a reference to arbitration was outside their scope and intendment. In aid of his argument, he referred also to the provisions of Sub-section (3)(b) and contended that the proceedings contemplated by that clause were not proceedings in Court. -I do not think that in his last contention Mr. Dutt was right, for all that clause (b) of Sub-section (3) says is that the provisions of the section shall not affect the powers of an official Assignee, or, an Official Receiver to realise the property of an insolvent partner. In other words, the clause says that if there is an insolvent partner of an unregistered firm, an official assignee or an official receiver, stepping into his shoes and taking over his assets, will not be precluded from realising his property by the reason that the firm itself was not registered.

I cannot see how it cart be said that when the section speaks of realising the property of the insolvent partner, it has in its contemplation anything other than the realisation through the processes of the Court. As I have said, it seems to me to be implicit in the various sub-sections of the section that the bar contained in it is intended to apply only to proceedings in Court and) that so far as contracts themselves- are concerned or so far as private forums for the decision of disputes are concerned, the liberty of contract or proceeding is in no way restricted by the imposition of a requirement of registration.

9. In my view, the decision of Chatterjee, J., in the case I have already cited, was correct and in following that decision S. R. Das Gupta, J.,, applied the correct law.

For the reasons given above, this appeal is dismissed with costs.

Lahiri, J.

10. I agree,


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