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G.M. Birla and Co. Vs. Johurmull Premsukh - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in55Ind.Cas.817
AppellantG.M. Birla and Co.
RespondentJohurmull Premsukh
Cases ReferredGajanand Mashara v. Shaik Taleb Jalaluddin
Excerpt:
arbitration proceedings, stay of - interlocutory injunction, when can be granted. - .....defendants alleged that in the trade in question there is a well-known and universal custom. the custom alleged is set out in the learned judge's judgment at page 29 of the paper book-i do not propose to read it all, but part of it runs as follows: 'they (i.e., the persons signing as brokers) may sign such contracts as aforesaid when negotiations between them and some mill or mills or other party are in progress, and, on the closing of such negotiations within a reasonable time, declare the name of their principals accordingly, and when such negotiations are not so closed, the persons signing as aforesaid are entitled to enforce such contracts and remain solely personally liable on such contracts.'5. the defendants argued that the alleged custom is tacitly incorporated into the.....
Judgment:

Lancelot Sanderson, C.J.

1. The learned Judge has granted an interlocutory injunction restraining the arbitration proceedings in this case.

2. The learned Judge relied upon several grounds in his judgment, hut the learned Counsel appearing in this Court for the plaintiff-respondent has said that he can support one of these grounds only, which was as follows (page 30, line 25): 'It was held in Gajanand Mashara v. Shaik Taleb Jalaluddin 46 Ind. Cas. 173 : 22 C.W.N. 535 that in a case where the plaintiff was impeaching the contract on the ground of fraud, it was quite right to stay the arbitration proceedings.' That is the only ground on which the learned Counsel has endeavoured to support the learned Judge's judgment-he has not argued the points which were urged in the other case and to which I drew attention in my previous judgment.

3. The question 13 whether the plaintiffs in this suit can be said to be impeaching the contract upon an equitable ground, such as that the plaintiffs were induced to enter into the contract by fraudulent misrepresentation. A statement of the alleged misrepresentation is found in the letter of Messrs. Fox and Mandal at page 19 where it is said: The contract was on the face of it with a mill whose name was not disclosed and if your clients chose to pass a so-called contract without having secured a mill as their principal, they were guilty of misrepresentation; as soon as this became obvious to our clients, viz, when your clients asked for delivery to themselves, cur clients were perfectly justified in repudiation of the so called contract.' When I turn to the plaint which was filed in this case, I find that it is in paragraph 4 that the ground, upon which reliance is now placed, is dealt with. There I find this: 'inasmuch as the defendant firm had failed to disclose the name of their principals and inasmuch as the defendant firm had in fact no principal, the plaintiff firm treated the said contract as void and inoperative.' To my mind, if the plaintiffs desired to impeach this contract on the ground that the defendants had made a fraudulent misrepresentation which induced them to enter into the contract, then they ought to have so pleaded. There is no such allegation in the plaint: It is clear that the misrepresentation must have in fact materially induced the contract in order to give the right of avoidance. There is no allegation in this plaint that the plaintiffs were deceived or that the alleged misrepresentation induced the plaintiffs to enter into the contract. I think this is one answer to the argument which was put forward by the learned Counsel for the plaintiffs.

4. I think there is a further answer: The defendants alleged that in the trade in question there is a well-known and universal custom. The custom alleged is set out in the learned Judge's judgment at page 29 of the paper book-I do not propose to read it all, but part of it runs as follows: 'They (i.e., the persons signing as brokers) may sign such contracts as aforesaid when negotiations between them and some mill or mills or other party are in progress, and, on the closing of such negotiations within a reasonable time, declare the name of their principals accordingly, and when such negotiations are not so closed, the persons signing as aforesaid are entitled to enforce such contracts and remain solely personally liable on such contracts.'

5. The defendants argued that the alleged custom is tacitly incorporated into the contract and must be taken as a part, though an unexpressed part, of the agreement between the parties: and, that if the alleged custom is taken as part of the contract between the parties, that custom in itself destroys the allegation of fraudulent misrepresentation which the plaintiffs have urged in their argument in this Court, bat which, as I have said before, was not properly pleaded in their pleading. For these reasons, having regard to the form of the pleading in this case, and having regard to the alleged custom which is relied upon by the defendants which they say must be incorporated into the written contract, I am of opinion that this is not a suit in which the plaintiffs can be said to be impeaching the contract upon equitable grounds. For these reasons the appeal should be allowed and the questions at issue between the parties should be referred to the tribunal which the parties themselves have chosen. Consequently, the interlocutory injunction which has been granted by Mr. Justice Chaudhuri should be set aside and the respondents must pay the costs in this Court and in the Court below.

Mookerjee, J.

6. I agree.

Fletcher, J.

7. I agree.


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