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Premchand Manickchand Vs. Fort Gloster Jute Manufacturing Co. Ltd. (Oil Mill) - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata High Court
Decided On
Case NumberA.F.O.O. No. 175 of 1957
Judge
Reported inAIR1959Cal620,64CWN103
ActsArbitration Act, 1940 - Sections 13 and 39(1)
AppellantPremchand Manickchand
RespondentFort Gloster Jute Manufacturing Co. Ltd. (Oil Mill)
DispositionAppeal dismissed
Cases ReferredGanpatlal Basdeo v. Mahabir Trading Co.
Excerpt:
- .....appeal from a judgment and order of p. b. mukharji, j. dated the 27th of june, 1956, whereby the learned judge dismissed the appellant's application for setting aside the award made against it by the bengal chamber of commerce. 2. the appellant was the seller of a certain quantity of jute under a contract dated the 3rd of september, 1954, and the respondent was the purchaser. shipment or despatch by rail of the goods was to be between the 3rd of september and october 1954. the appellant's case is that there was a fire and that it was unable to despatch the jute within the stipulated time and that although it appealed to the respondent for some extension of the time within which the contract might be performed, no extension was granted. the respondent then made a claim for rs. 24,500/-.....
Judgment:

Chakravartti, C.J.

1. This is an appeal from a judgment and order of P. B. Mukharji, J. dated the 27th of June, 1956, whereby the learned Judge dismissed the appellant's application for setting aside the award made against it by the Bengal Chamber of Commerce.

2. The appellant was the seller of a certain quantity of jute under a contract dated the 3rd of September, 1954, and the respondent was the purchaser. Shipment or despatch by rail of the goods was to be between the 3rd of September and October 1954. The appellant's case is that there was a fire and that it was unable to despatch the jute within the stipulated time and that although it appealed to the respondent for some extension of the time within which the contract might be performed, no extension was granted. The respondent then made a claim for Rs. 24,500/- as the difference between the market price and the contract price of the jute concerned on the date of the breach, but the appellant refused to pay the same. A dispute having thus arisen, the respondent referred it to the arbitration of the Bengal Chamber of Commerce in accordance with the agreement contained in the contract. In due course, the Chamber appointed an arbitral tribunal and the tribunal fixed the 26th of July, 1955, as the date for holding the arbitration. The usual notices were issued to the parties including the appellant. On the 25th of July, the petitioner asked for an adjournment by a letter on the ground that its representative, one Mr. Jethmal Nahata, had fallen ill and that, therefore, it would not be possible for it to appear or produce evidence at the meeting fixed for the next day. No adjournment was granted and the arbitrators having proceeded to arbitration on that day, closed the proceedings. They made their award on the 8th of August, 1955.

3. The application for setting aside the award was made principally on two grounds. It was alleged that the contract for the sale of jute was void, inasmuch as it was a contract in contravention of the Forward Contracts (Regulation) Act, 1952 and consequently the arbitration agreement contained in the contract was also void. According to the appellant, the whole proceedings of arbitration was thus illegal and the award was liable to be adjudged null and void. The second ground which was spread over Clauses (e) and (f) of the petition was that the arbitrators had misconducted themselves by not granting an adjournment on the 26th of July, 1955, and that they having proceeded ex parte without giving any peremptory notice to the appellant that they would proceed to decide the case in his absence if he failed to appear, the award made by them could not be sustained.

4. The learned Judge has placed it on record that, before him, Mr. Subimal Roy who represented the appellant abandoned all the grounds taken in the petition except the ground taken in clauses or sub-paragraphs (e) and (f) of paragraph 25, Those two grounds, as I have already stated, are grounds on which the award was attacked, because it was ex parts and because, according to the appellant, no ex parte award could be made unless the arbitrators had given previous intimation of their intention to hear and determine the case in the absence of the parties, if they failed to appear.

5. So far as the first ground is concerned, I do not think that it is open to the appellant to urge it in appeal. It is quite true that a ground of law, particularly one which goes to the legal validity of the entire proceedings, can be taken for the first time at any stage, but, in my view, when a party has raised such a ground and then deliberately abandoned it, he cannot be allowed to raise it again, before the court of appeal. This was not a case in which the learned Counsel for the appellant had merely omitted to urge certain points taken in the petition. He expressly abandoned the ground of the illegality of the contract and the learned Judge expressly placed that fact on record. In those circumstances, it seems to me that the appellant must be limited to the only ground which it urged before the trial Judge and must succeed or fail according as that point is established or is not.

6. The date on which the arbitration was held was the first date fixed. We have held in certain cases that an arbitrator is not entitled to proceed ex parte if one or both of the parties are absent, unless he has previously given notice that he intends to do so even if the parties or any of them fails to appear. Mr. R. C. Deb on behalf of the respondent drew our attention to another decision given in the case of Ganpatlal Basdeo v. Mahabir Trading Co. (Appeal No. 36 of 1956) decided on the 25th of April, 1958, (unreported) where it was held that the principle I have just mentioned would not apply to the case of an ex parte decision on the first date fixed by an arbitral tribunal of the Bengal Chamber of Commerce for holding the arbitration. The reason for that view is that the first notice issued by arbitral courts of the Chamber always says, as it did in the present case, that the parties must appear on that date and rule 20 of the Rules of the Bengal Chamber of Commerce further says that the arbitrators may proceed with the reference in the absence of any or both of the parties who, being entitled to appear refuse or neglect to attend after due notice. In the cases I referred a few moments ago, it was held that the effect of such a notice could not subsist beyond the first date if subsequent notices did not repeat its terms and, therefore, the arbitrators would not be entitled to proceed on an adjourned date of hearing ex parte in the absence of any such notice. In the case to which Mr. Deb called our attention we made an exception with respect to the first date of hearing and to the decision given in that case I would adhere. It is true that even the first notice does not say that if the parties do not appear, the arbitrators would hear and determine the case in their absence and we have expressed some doubt in the decision to which I have already referred as to whether in the absence of such a statement the notice would support an ex parte award even on the first date of hearing. There is, however, a further finding in the present case made by the learned Judge. It is well settled that arbitrators are not bound to give the kind of notice I, have mentioned, if they are satisfied that a particular party does not intend to appear and is deliberately keeping away. The learned Judge has found on grounds which appear to me exceedingly cogent that the appellant's excuse for its absence on the 26th of July 1955 was a false excuse and that its conduct clearly amounted to refusal or neglect to attend. He has pointed out that the story set up by the appellant bore clear marks of falsehood and there was the further circumstance that no partner of the firm or any person other than the representative who was supposed to have fallen ill had ever pledged his oath or sought to support the representative. In view of the fact that the date on which the arbitration proceedings were held was the first date of hearing that it was an arbitration held by the Bengal Chamber of Commerce conducted according to the Rules which I have mentioned and in view of the further fact, as found by the learned Judge, that the appellant's conduct amounted to refusal to attend, I am of opinion that the appellant cannot make any grievance that the award was made ex parte.

7. This is the only point which was urged by the appellant before the learned Judge below and which is, as I have already pointed out, open to us in appeal. As that point fails, the appeal must fail as well.

8. The appeal is accordingly dismissed with costs.

Lahiri, J.

9. I agree.


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