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Radha Kissen Khetry Vs. Lukhmi Chand Jhawar and anr. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in56Ind.Cas.541
AppellantRadha Kissen Khetry
RespondentLukhmi Chand Jhawar and anr.
Cases Referred and Worrall v. Deane
Excerpt:
arbitration act (ix of 1899), section 14 - award, suit to impeach, maintainability of. - .....except on the basis that it be treated both as the trial of the action and as a petition under the indian arbitration act. ' he further thought that counsel on both fides consented to this, and thereafter heard the matter on the affidavits, as he saw no reason to exercise the power of taking oral evidence. on the 19th august, judgment which had been reserved was delivered, whereby the motion and the action were dismissed with costs. the plaintiff has now appealed against this judgment. we have not been invited to consider the propriety of the order in so far as it dismissed the application for interlocutory injunction during the pendency of the suit. the plaintiff has, it was stated, brought into court the money due on the award and no longer desired an ad interim order. the substantial.....
Judgment:

Asutosh Mookerjee, J.

1. This is an appeal by the plaintiff in a suit for declaration that a contract for sale of piece goods, alleged to have been made between him and the defendants on the 2nd August 1918, was invalid, and that an award made by the arbitration tribunal of the Bengal Chamber of Commerce in their favour on the 5th June 1919 for damages for breach of the said contract was equally void and inoperative. The plaintiff also prayed for a perpetual injunction to restrain the defendants from enforcing the award. The suit was instituted on the 16th June 1919. On the 20th June, the plaintiff applied for an interlocutory injunction during the pendency of the suit and an ad interim injunction during the pendency of the Rule on the application. A Rule was issued and an ad interim injunction was granted on terms as to security. The Rule for interlocutory injunction was heard on the 25th July 1919. Mr. Justice Rankin, as appears from his judgment, declined to entertain the hearing of the motion ' except on the basis that it be treated both as the trial of the action and as a petition under the Indian Arbitration Act. ' He further thought that Counsel on both fides consented to this, and thereafter heard the matter on the affidavits, as he saw no reason to exercise the power of taking oral evidence. On the 19th August, judgment which had been reserved was delivered, whereby the motion and the action were dismissed with costs. The plaintiff has now appealed against this judgment. We have not been invited to consider the propriety of the order in so far as it dismissed the application for interlocutory injunction during the pendency of the suit. The plaintiff has, it was stated, brought into Court the money due on the award and no longer desired an ad interim order. The substantial question argued in the appeal is, whether the suit has been properly tried without oral evidence, as if the plaint were a petition under the Indian Arbitration Act.

2. We have at the outset to consider whether the procedure adopted in the Court below was followed with the consent of Counsel on both sides, for, as Lord Hardwicke held in Bradish v. Gee (1754) 1 Keny, 73 at p. 76 : Ambl. 229 : 96 E.R. 920, it is well settled that a judgment obtained by consent of Counsel acting in Court, in a matter within their authority, cannot form the subject of an appeal. To determine this question, we shall refer to the Minute Book where we find the following entry:

Friday, the 25th July, 1919.Before the Hon'ble Mr. Justice Rankin. Radha Kissen Khettryv. Lukhmi Chand Jhawar.Mr. James, for the Defendant.

Mr. A.K. Ghose, for the Plaintiff appears with Mr. Chukerbutty.

Mr. James--I consent that this motion should be treated as petition under the Arbitration Act.

Mr. Ghose--I have no objection, but to prove fraud Your Lordship will have to hear oral evidence.

Mr. James--Let Mr. Chukerbutty open the motion.

Mr. Chukerbutty opens.

Mr. James reads his affidavits.

Mr. Chukerbutty replies. Midday Adjournment

Mr. Chukerbutty addresses the Court and refers to cases Sardarmull Jessraj v. Agarchand Mahata & Co 52 Ind Cas. 588 : 28 C.W.N. 811, Gajanand v. Shaik Taleb Jalaluddin 46 Ind. Cas. 178 : 22 C.W.N. 536, Hurdwary Mull v. Ahmed Musaji 1 Ind. Cas. 371 : l3 C.W.N. 63.

Mr. James addresses the Court on the Rules of Bengal Chambar of Commerce.

The Court--I reserve judgment.

3. The only matter for consideration before the Court on the 25th July 1919 was, as already stated, the application by the plaintiff for an interlocutory injunction. Mr. Landlord James, who appeared on behalf of the defendants, gave his consent that the motion should be treated as petition under the Arbitration Act. Mr. Ghose, who appeared for the plaintiff, did not give his unqualified consent, for while he stated that he had no objection, he expressly added that to prove fraud the Court would have to hear oral evidence. The case was then opened, the affidavits were read and reference was made to the decisions in Hurdwary Null v. Ahmed Musaji 1 Ind. Cas. 371 : l3 C.W.N. 63, Gajanand v. Shaik Taleb Jalaluddin 46 Ind. Cas. 178 : 22 C.W.N. 536 and Sardarmull Jessraj v. Agarchand Mahata & Co. 52 Ind Cas. 588 : 28 C.W.N. 811. After the addresses of the Counsel, judgment was reserved. Judgment was delivered, twenty-five days later, on the 19th August. The entries in the Minute Book do not support the statement in the judgment that Counsel on both sides had Consented that the hearing of the motion should be treated both as the trial of the action and as a petition under the Indian Arbitration Act. We cannot, in these circumstances, hold that the procedure followed was adopted by consent of Counsel on both sides.

4. But it is material to add that even if the Minute Book had shown the factum of consent, it could not be treated as consent freely given by Counsel in the exercise of his discretion as an Advocate invested with a general control over the conduct of the case of his client. The learned Judge states in his judgment that the consent (which he thought was given) was accorded only when he intimated that he would otherwise decline to entertain the motion. If Counsel had consented, after the expression of such determination by the Court, the consent could not be deemed free and fair, and might well be regarded as constrained and involuntary acquiescence in a mode of trial which the Court had decided to adopt. The respondents have argued that, even in such circumstances, the Counsel should not yield, hut let the Judge dismiss the case and then appeal with a view to obtain a reversal of his order. It may be conceded that this is a possible course for Counsel to adopt. But it is important to observe that whichever course were followed, the ultimate result would make no difference to the respondents. Assuming that Counsel had as a matter of fact consented, if we were to set aside the order on the ground that there had been no free consent, the suit would stand restored. If, on the other hand, the suit were dismissed because Counsel did not agree to adopt the course indicated by the Court, the reversal of the order of dismissal by the Court of Appeal would also result in the revival of the suit. But we need not elaborate this aspect of the matter further, because, as the Minute Book shows that Counsel on behalf of the plaintiff did not consent to the course adopted by the learned Judge, his decree mast be set aside, provided it is established that the plaintiff was entitled to have the action tried, not merely upon affidavits but also upon oral evidence. This question must consequently be now investigated.

5. The plaintiff buyer seeks to set aside the award of the arbitrators on the ground that there was no valid contract between the parties and also imputes fraud to the defendants, inasmuch as they have claimed damages for refusal to accept goods which they never offered and were indeed not in a position to deliver. The case for the defendants sellers is that there was a valid contract made on the 2nd August 1918 for the sale of 16 bales of grey Dhotis, that they delivered the goods according to the contract on the 24th September, that the plaintiff buyer wrongfully refused to accept the goods and then cancelled the contract on the 17th October. They thereupon gave notice on the 22nd February of their intention to re sell and actually re-sold the goods three days later. They next applied to the Chamber of Commerce on the 7th March for arbitration and notice was served upon the buyer on the 11th March. The buyer, on the 23rd May, repudiated the authority of the Arbitration Tribunal to deal with the matter, but, under protest, submitted to them his own version of the affair. The buyer also applied to the Tribunal for leave to appear by Counsel and to tender oral evidence in support of his case. This request, however, was refused, and an award was made against him on the 5th June. The award was forthwith filed in Court and the buyer instituted the present suit on the 16th June. As regards the alleged contract, the buyer and the sellers are disagreed upon a fundamental point. The case for the buyer is that the sale was with reference to the shipment sample and was intended to include the assortment of borders therein carefully shown. The case for the sellers is that the sample was provided only to show the material, and the buyer could not expect to get exactly that assortment of borders. In these circumstances, the plaintiff urges that the parties were not ad idem, and there was no valid contract between them in fact and in law. The plaintiff farther urges that the defendant was not ready to deliver goods according to sample and that the claim for assessment of damages on the basis of a pretended re-sale was fraudulent. It cannot be seriously maintained for a moment that a suit is not maintainable for the determination of this controversy between the parties. Section 9 of the Code of civil Procedure provides that the Courts shall have jurisdiction to try all suits of a civil nature, excepting suits of which their cognizance is either expressly or impliedly barred. This is unquestionably a suit of a civil nature, and we have not been able to discover how its cognizance is barred expressly or impliedly. There is no provision in the Indian Arbitration Act which bars this suit. Section 14 empowers the Court to set aside an award where an arbitrator or umpire has misconducted himself or an arbitration award has been improperly procured. Assume for a moment that this authority of the Court may be invoked by way of an application; still the question may arise, whether such remedy is exclusive, or, whether the party affected may not, at his choice, have recourse to a suit as the more preferable course. We need not decide that question, because, in the case before us, the grievance alleged is deeper and broader than what is contemplated by Section 14. But it may be observed parenthetically that if the view is taken that where the grounds of attack are completely covered by Section 14, an application is the exclusive and not merely an alternative remedy, the adjudication by a Court other than a Chartered High Court will be final and not liable to be challenged by way of appeal, as the Indian Arbitration Act contains no provision for an appeal: Ripley v. Nahapiet 17 Ind. Cas. 902 : 6 L.B.R. 88 : 5 Bur.L.T. 155. But we need not examine that aspect of the matter further, for here the buyer disputes the very existence of the contract and adds that the claim of the sellers to recover damages is tainted by fraud. This is plainly a matter for investigation in a suit. The learned Judge has taken the contrary view for reasons set out in the following passage of his judgment:

This award was filed in Court on the 13th June 191P. If it was desired to have it set aside either as a nullity by reason of its not being within the scope of a valid submission or under Section 14 of the Indian Arbitration Act, the proper course under the rules was to apply by petition to have it taken off the file or to have it set aside. Instead, the buyer commenced a suit on 16th June and brought on a motion for an interlocutory injunction. I will not here repeat what in previous cases I have said about this particular abuse. It is defended sometimes when the submission is attacked, on the ground that the application is not within Section 14 or any other section of the Act; This is no valid reason. The award here was filed under the Act before action brought and became enforceable in execution under the Act as though it were a decree. If it is to be taken off the file as a nullity, the application should be made under the Act which has been abused. In England, awards, save by leave obtained on summons, are not enforceable except by an action. It is not usual or necessary, therefore, to apply to set aside an award on the ground of want of jurisdiction in the arbitrators. The old English cases, however, show that this was done where a step could be taken to enforce the award and the interference of the Court was necessary; Russell, 9th Edition, page 369; Doe d Turnbull v. Brown (1826) 5 B. & C. 384 : 29 R.R. 275 : 108 E. 143 : 8 Dowl. & Ry. 100, Worral v. Deane (1833) 2 Dowl. 261. This, under the Indian Arbitration Act, is always the position and all applications to set aside an award which has been filed should be made by petition, whatever be the ground.

6. We are not prepared to adopt this as a correct exposition of the law and to hold that an award which has been filed can be set aside only by application, whatever the ground on which it is impeached, Indeed, the learned Counsel for the respondents has made no attempt to support the proposition. There is no trace in the Indian Arbitration Act of any provision indicating that the Legislature intended to prescribe such a restrictive rule and to take away the right of suit. The learned Judge refers to his observations in previous cases; our attention has been drawn to* only one such, namely, Sardarmull Jessraj v. Agarchand Mahata & Co. 52 Ind Cas. 588 : 28 C.W.N. 811. There, the question primarily under consideration related to the grant of interlocutory injunctions to restrain arbitration proceedings commenced on the basis of a contract which was either denied or impeached on equitable grounds. The earlier decisions reviewed in that judgment do not justify the inference that when an award has been made and filed and has consequently become enforceable as a decree of Court, a party affected thereby cannot maintain a suit to impeach it on grounds not included within the scope of Section 14 of the Indian Arbitration Act, for example, such grounds as that the contract, was never made or is not enforceable by reason of fraud, mistake or surprise. Nor do the cases of Doe d Turnbull v. Broun (1826) 5 B. & C. 384 : 29 R.R. 275 : 108 E. 143 : 8 Dowl. & Ry. 100 and Worrall v. Deane (1833) 2 Dowl. 261 lead to that conclusion. Besides, we should not interpret our statutory law, when it provides for a specific procedure, by reference to decisions pronounced under a different system of procedure. We need not decide whether a suit does or does not lie to set aside an award on grounds covered by Section 14, which contemplates two classes of cases, namely, first, where there has been legal misconduct on the part of the arbitrator or umpire, and, secondly, where there has been impropriety on the part of the litigant in the procuring of the award, both relating plainly to events between the commencement and termination of the arbitrator proceedings. But where the ground of attack goes to the root of the matter and arises as it were before the constitution of the domestic forum, a suit is maintainable for the investigation and determination of the controversy according to the procedure prescribed by law. The case before us clearly falls within this category.

7. The result is that this appeal is allowed and the suit remanded for trial. The appellant will have the costs in this Court; all the costs in the Court below mentioned in the decree and order of the 19th August 1919 will be costs in the suit.

Fletcher, J.

8. I agree.


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