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Ramlal Murlidhar Vs. Haribux Puranmull - Court Judgment

LegalCrystal Citation
SubjectContract;Arbitration
CourtKolkata
Decided On
Reported inAIR1934Cal796
AppellantRamlal Murlidhar
RespondentHaribux Puranmull
Cases ReferredKedar Nath v. Sumpatram Dooghur
Excerpt:
- .....border of two colours, shipments july, august and september. an entry was made in the plaintiff firm's sowdah book setting out the terms of the contract between the plaintiff firm and the defendant firm which was signed by or on behalf of the defendant firm. the entry contains the following; words:as we bought the goods of punna lal sagoremull we sold to you in the same way. all the terms and conditions are the same as there.2. there was, it is admitted, an arbitration clause in the contract by which the plaintiff firm had bought the goods, which they had sold to the defendants, from punna lal sagoremull, and the applicant relies on the words i have just quoted in the entry in the plaintiff firm's book relating to the sowdah in suit as having the effect of incorporating the.....
Judgment:

Roy, J.

1. This is an application on behalf of the defendant firm under Section 19, Arbitration Act, for an order that all proceedings in this suit be stayed. It appears that on 28th June 1923 the defendant firm entered into a sowdah or contract with the plaintiff firm for the purchase of thirty bales of saris 10 yards 44 inches of Hati border of two colours, shipments July, August and September. An entry was made in the plaintiff firm's sowdah book setting out the terms of the contract between the plaintiff firm and the defendant firm which was signed by or on behalf of the defendant firm. The entry contains the following; words:

As we bought the goods of Punna Lal Sagoremull we sold to you in the same way. All the terms and conditions are the same as there.

2. There was, it is admitted, an arbitration clause in the contract by which the plaintiff firm had bought the goods, which they had sold to the defendants, from Punna Lal Sagoremull, and the applicant relies on the words I have just quoted in the entry in the plaintiff firm's book relating to the sowdah in suit as having the effect of incorporating the arbitration clause in the contract or sowdah in suit. It is on the strength of that arbitration clause that is alleged to have been incorporated in the sowdah in suit that the present application is sought to be maintained.

3. It appears, that the goods, the price of which is the subject matter of the present suit, were delivered to the defendant firm on 11th January 1933. On 5th December 1933 the plaintiff firm through their solicitors made a demand on the defendants for payment of what they claim to be due to them for price of goods delivered. On 11th December 1933 the defendant firm replied to the letter of the plaintiff firm's solicitors. In the letter of 5th December the plaintiff firm's solicitors had threatened that failing payment within 24 hours from the receipt of their letter their instructions were to take steps against the defendant firm. In their reply through their solicitors, Messrs. P. D. Himatsingka & Co., on 11th December 1933, the defendant firm in the last paragraph of their letter wrote:

Please note that if in spite of what is aforesaid your clients take any steps they will do so at their own risk as to costs.

4. The correspondence seems to have ended there so far as the evidence before me goes. On 9th January 1934 the present suit was filed. This is a suit for the recovery of the price of goods sold and delivered to the defendants Summons in the suit was served on the defendant firm on 10th January 1934, and on 13th January 1934 the defendant firm entered appearance. It is admitted that on 25th January 1934 the time for filing the defendant firm's written statement expired. On 9th February 1934 notice of motion was taken out by the defendant firm for their present application. On the same day, it appears that the plaintiff firm's solicitors took out a summons to compel the defendant firm to file their written statement within a particular limited time, and it has been suggested by learned counsel for the respondent that the adjournment of that application amounted to a step in the proceedings. Now, the application for stay has been resisted on various grounds, but the main objection of the respondents is founded on the contention that there was no valid or binding submission under which matters could be referred to the arbitration of the Bengal Chamber of Commerce.

5. There are really two points involved in that contention or objection of the plaintiff. It is said, first of all, that the sowdah in suit being in the form in which we find it, and having been signed only by the defendant firm, there could be no submission within the meaning of the Arbitration Act. In my view there is no substance in this point at all, and I cannot say that this point was very seriously pressed by counsel. To my mind it is clear law that it is not necessary that there should be the signatures of both parties to a written submission. A document signed by one party and accepted by the other party is enough for the purposes of the Act. Reference may be made to the cases of Radha Kanta Das v. Baerlien Brothers, Ltd., 1929 Cal 97 and Shankar Lal Lachmi Narain v. Jaini Bros., 1931 All 136. There is a further point however which requires very careful consideration.

6. It has been submitted that the defendant firm cannot rely on the arbitration clause in the contract between the plaintiff firm and Punna Lal Sagoremull as that clause cannot be said to have been incorporated in the sowdah in suit, having regard to the language of the sowdah. There are two cases of this Court in which this very point has been considered in the case of sowdahs which were practically in the same terms as the sowdah in suit. In Chatturbhuj Chandnmull v. Baseodas Daga, 1921 Cal 767 Mookerjee and Fletcher, JJ., held that the arbitration clause was not incorporated whereas in the case of Vail Mohamed Ayoob v. Shamdeo Gopiram, 1930 Cal 774, Rankin, C.J. and C.C. Ghose, J., held that the arbitration clause was incorporated.

7. In the latter case the learned Judges, though they referred to the case of Chatturbhuj Chandnmull v. Baseodas Daga, 1921 Cal 767, did not say that the judgment of Mookerjee and Fletcher, JJ., was wrong. They contended themselves by saying that it was not necessary for the purpose of their judgment to go into any discussion as to whether or not the decision in that case was right in the particular facts appearing therein. It does not appear from the reports how the particular facts in the case of Vail Mohamed Ayoob v. Shamdeo Gopiram, 1930 Cal 774 differed from the facts of the case of Chatturbhuj Chandnmull v. Baseodas Daga, 1921 Cal 767. The sowdahs seem to have been in the same form and were more or less in the same language. That is the state of the authorities so far as this Court is concerned on the very question which has arisen before me for discussion.

8. Counsel have referred to various English cases in which questions had arisen as to how far clauses in a charter party were incorporated in a bill of lading. I do not think that any useful purpose can be served by discussing the English oases. In most of the cases it was held that the arbitration clause was not incorporated in the subsequent contract contained in the bill of lading between the shipowner and the consignee. It is true that in one of the cases, I mean that reported in Weir & Co. v. Pirie and Co., (1898) 3 Com Cas 263, it was held that the arbitration clause in a colliery guarantee was incorporated into the charter party. In the same volume there is another case in which it was held that the arbitration clause was not incorporated. It seems to me that the question is really one of construction of the particular sowdah in suit, but the English cases are useful for certain observations made by learned Judges in the course of their judgments in those cases. I should like particularly to refer to the case reported in T. W. Thomas and Co. Ltd. v. Portsaa Steamship Co. Ltd., (1912) A C 1, and to the observations of the Lord Chancellor and Lord Loreburn at p. 6, and the observations of Lord Gorell at pp. 8 and 9 of the reports. I may also refer to the judgment of Vaughan Williams, L. J., in the case of (1911) p. 54 The Portsmouth, (1911) P 54, at p. 63. In my view, in this case, the clause for arbitration which is to be found in the plaintiff firm's contract with Punna Lal Sagoremull was not and could not be incorporated in the sowdah in suit. The words of the sowdah are in my view ambiguous and it is certainly open to question whether the words were intended to refer to the arbitration clause at all. I think the arbitration clause constituted a collateral bargain between the plaintiff firm and Punna Lal Sagoremull, and it cannot be said that an arbitration clause is an ordinary incident of a contract for the sale or purchase of goods.

9. In this connexion I should like to quote a passage from the judgment of the Lord Chancellor in T. W. Thomas and Co. Ltd. v. Portsea Steamship Co. Ltd., (1912) A C 1 at p. 6. There the Lord Chancellor observes:

The arbitration clause is not one that governs shipments or carriage or delivery or the terms upon which delivery is to be made or taken.

10. It should be borne in mind that in that case the learned Judges were considering the question as to how far an arbitration clause in a Charter Party was incorporated in the Bill of Lading. I think it is difficult to say on the language of the sowdah that the parties in this case were intending to bind themselves to a clause for arbitration by the Bengal Chamber of Commerce or that they were intending to make the arbitration clause a term or condition of the bargain between themselves. It is common knowledge that goods bought from an importing firm by a particular dealer are often sold in the market to various successive dealers and the ultimate buyer takes delivery from the importer. The sowdahs between successive dealers are more or less always in the same form and in the absence of unambiguous indications in the sowdahs it is hardly reasonable to suppose that the ultimate purchaser was entering into a bargain with the last seller that any disputes between them should be referred to arbitration under the rules of the Bengal Chamber of Commerce, a body of whom perhaps the last purchaser had never known or thought of. To my mind, using the language of Lord Gorell in the case of T. W. Thomas and Co. Ltd. v. Portsea Steamship Co. Ltd., (1912) A C 1 at p. 9:

There is a wide consideration which, I think, it is Important to bear in mind in dealing with this class of cases. The effect of deciding to stay this action would be that either party is ousted from the jurisdiction of the Courts and compelled to decide all questions by means of arbitration. Now, I think, broadly speaking, that very clear language should be introduced into any contract which is to have that effect, and I am by no means prepared to say that this contract was ever intended to exclude, or does carry out any intention of excluding the jurisdiction of the Courts.

11. I am not prepared to say that the language of this sowdah is such as to make it clear that the parties ever in. tended to exclude or that the language ever had the effect of carrying out any intention of excluding jurisdiction of of the ordinary Courts of Law. I have been referred by Counsel for the plaintiff firm to the case of Kedar Nath v. Sumpatram Dooghur, 1920 Cal 795 and my attention has been drawn to a passage in the judgment of Mookerjee, J., at p. 1025. The learned Judge there says:

It is plain that before the jurisdiction of the Court to make an order for stay under Section 19 can be invoked, it must be established beyond doubt that there is a valid submission This is by no means clear in the case before us, for it is at least doubtful whether the arbitration clause in the Japanese Contract Form was or was not incorporated, by reference, as a condition in the contract between the parties.

12. That case also related to a sowdah, more or less in the same terms as the sowdah in the suit and the Japan Cotton Trading Co. Ltd. were the importing firm concerned in that case. In my view unless I am satisfied that the words of this particular sowdah clearly established the incorporation of the arbitration clause in the contract of Punna Lal Sagoremull into the sowdah, I ought to make any order for stay of the suit under Section 19. That being my view, think I ought to refuse this present application. Certain other objections were advanced by counsel for the plaintiff firm to my making any order in favour of the applicants in this case. It was submitted that the defendant firm had taken a step in the proceedings by reason of the application made for adjournment of the summons taken out by the plaintiff firm to compel the defendant firm to file their written statement. I am not prepared to accept that submission as correct. It was further contended that the applicant firm were not when the suit was commenced or at any other time ready or willing to do all things necessary to the proper conduct of the arbitration. It seems to me that it is difficult to say on the affidavits before me that the applicants were at any time ready or willing to go to arbitration, The goods, the price of which form the subject-matter of the suit were as I have already said delivered on 11th January 1933. No payment was made by the defendant firm and when a demand was made by the plaintiff firm's solicitors on 5th December 1933 there was no offer to go to arbitration or any indication at all by the defendant firm that they should like to have their disputes settled by arbitration though it seems that the plaintiff firm's solicitors were threatening to take proceedings in Court. It is true that in their letter of 5th December the plaintiff firm's solicitors had not distinctly stated that they would take proceedings in Court but the reply of 11th December of the defendant firm's solicitors to my mind fairly clearly indicates that the defendant firm's solicitors realised that the plaintiff firm's solicitors had been threatening proceedings in Court. It was at no time before the institution of the suit suggested by the defendant firm, the applicant in the present motion, that the dispute between the parties should be settled by arbitration. Even after the suit had been filed on 9th January 1934 the defendant firm did not evince any desire or intention to go to arbitration though they entered appearance so far back as 13th January 1934. It has been suggested in the affidavit in reply that there were negotiations for settlement between the defendant firm and Punna Lal Sagoremull, and that the defendant firm had only applied for stay of the suit as the negotiations had fallen through. It is not suggested that the negotiations for settlement were on the lines that there should be an arbitration between the plaintiff firm and the defendant firm, or between the plaintiff firm and defendant firm and Punna Lal Sagoremull. It seems to me quite clear that assuming the statements in the affidavits in reply to be correct, the defendant firm only realised that they might have some right to go to arbitration after they definitely ascertained that the disputes between the parties could not be settled amicably, and it was only then that they took action and brought on the present application. I am not satisfied that the defendant firm at any time at all genuinely desired to go to arbitration, and I am inclined to think that this idea of an application for stay of the suit under Section 19 was conceived after the defendant firm had taken the advice of their lawyers, and that they never themselves at any time thought that they had definite rights under the sowdah to go to arbitration. I do not believe they had any desire to have recourse to arbitration until it was apparent that the suit would be proceeded with in Court. In these circumstances I am clearly of opinion that I ought not to exercise my discretion in favour of the applicant. The application will therefore be dismissed with costs.


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