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Gajanand Maskara and anr. Vs. Shaik Taleb Jalaluddin - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in46Ind.Cas.173
AppellantGajanand Maskara and anr.
RespondentShaik Taleb Jalaluddin
Cases ReferredKitts v. Moore
Excerpt:
contract providing arbitration in case of dispute between parties - buyer impeaching contract--arbitration proceedings, stay of, pending decision of suit impeaching contract. - .....by the defendants in the action who traded under the name of kaluram nund lall.2. the suit was brought by the plaintiffs asking for a declaration to the effect that the plaintiff firm was not bound by the contract of the 8th of november 1916. the contract was made between the defendants and the plaintiffs through a firm called ghaneshyam dass and co., the brokers, as i understand, purporting to act on behalf of both parties: and the contract was for the sale of a certain quantity of hessian. apparently, the market went down and the buyers, who are the plaintiffs in the case, refused to take delivery, and, a dispute arose. thereupon, the defendants relied upon the arbitration clause in the contract, which was in the usual terms and provided that 'any dispute whatsoever arising on or.....
Judgment:

Lancelot Sanderson, C.J.

1. This is an appeal from the judgment of my learned brother Mr. Justice Greaves by the defendants in the action who traded under the name of Kaluram Nund Lall.

2. The suit was brought by the plaintiffs asking for a declaration to the effect that the plaintiff firm was not bound by the contract of the 8th of November 1916. The contract was made between the defendants and the plaintiffs through a firm called Ghaneshyam Dass and Co., the brokers, as I understand, purporting to act on behalf of both parties: and the contract was for the sale of a certain quantity of Hessian. Apparently, the market went down and the buyers, who are the plaintiffs in the case, refused to take delivery, and, a dispute arose. Thereupon, the defendants relied upon the arbitration clause in the contract, which was in the usual terms and provided that 'any dispute whatsoever arising on or out of this contract should be referred to arbitration under the rules of the Bengal Chamber of Commerce', and so on.

3. The plaintiffs have brought this action in effect for the purpose of setting aside the contract, relying upon an allegation that whereas the brokers Ghaneshyam Dass and Co. purported to act as brokers, they were in fact identical with the defendants who were the sellers and that consequently the plaintiffs were not bound by the contract.

4. The learned Judge has found that this contention goes to the very root of the whole contract and is not a dispute arising out of the contract or in connection therewith. I should prefer to put it in a rather different way. I think that the plaintiffs in this case are impeaching the contract within the meaning of the judgment of Lord Justice Lindley in Kitts v. Moore (1895) 1 Q.B. 253 at p. 260 : 64 L.J. Ch. 152 : 12 R. 43 : 71 L.T. 676 : 43 W.R. 84. The learned Lord Justice pointed out in that case that the plaintiff brought an action for an ordinary partnership account and asked for an injunction to restrain the arbitration proceedings: and that he did so upon the footing that the agreement which contained the arbitration clause was for some reason not binding; whether for fraud or mistake, or surprise, or for some other reason, which could not be said, because the statement of claim had not been launched but his equity was to impeach that agreement. Therefore, it appears that if the plaintiffs in this case had been alleging that they were not bound by the contract because they had been induced to enter into it by reason of some fraud on behalf of the defendants, that would have been a claim which impeached the contract which contained the arbitration clause. I do not see any difference in principle between that case and the present one, where, I understand, the contention put forward by the plaintiffs is that the gentlemen who were put forward as brokers and purported to act as brokers were not in fact brokers, but were in fact sellers. As to whether that contention is a right one or not, I, of course, do not express any opinion whatsoever, that is not a matter before us. In my judgment this is a case in which the plaintiffs are impeaching the contract, and consequently the Court was right in staying the arbitration proceedings until the question whether the contract could be successfully impeached or not, was decided.

5. With regard to the case to which the learned Counsel for the appellant referred, M'Harg v. Universal Stock Exchange (1895) T.L.R. 409, the report of the judgment is exceedingly scanty and it does not to my mind make it clear whether this particular point, namely, that the plaintiff was impeaching the whole of the contract in that case, was relied on: at all events, I think that the principle which is laid down in Kitts v. Moore (1895) 1 Q.B. 253 at p. 260 : 64 L.J. Ch. 152 : 12 R. 43 : 71 L.T. 676 : 43 W.R. 84 is clear and applies to this case.

6. Consequently this appeal must be dismissed with costs.

7. This judgment, it is conceded, will govern the other Appeal No. 47, which is accordingly dismissed with costs.

Woodroffe, J.

7. I agree.


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