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Purusottum Das NaraIn Das Vs. Louis Dreyfus and Co. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in56Ind.Cas.325
AppellantPurusottum Das NaraIn Das
RespondentLouis Dreyfus and Co.
Cases ReferredHurdwary Mull v. Ahmed Musaji Saleji
Excerpt:
arbitration - notice to parties, whether essential--arbitrator, proceeding ex parte, duty of--award against firm, validity of--award, how to be enforced. - .....appear in their individual names; so long as one person appears, the action will go on against the firm in the firm's name, and it will be left to proceedings after the decree to ascertain whether other persons are really partner?, either by means of an issue being directed or otherwise. at the time the court passes a decree against a firm in the firms's name, there is no constant as to how many partners there are of the firm or who these partners are, and, therefore, the major premise, as it seems to me, on which mr. justice fletcher proceeded, 'the court cannot make a decree against a firm when it is ignorant as to what persons constitute the firm,' is i think very much too wide. it is said that in view of the fact that the procedure for suing a firm in the firm's name was only.....
Judgment:

Rankin, J.

1. This is an application by the seller under certain contracts to have an award taken off the file, as being bad and not valid against the firm. There is one question on the contract which I cannot now decide, because it requires investigation by means of oral evidence, and, that is the question whether on the contract which was originally entered into the words which now appear on the top of the exhibit before me (' Calcutta ' will be read instead of Karachi') were really there; whether they have been interpolated afterwards for the purpose of making it appear that the contract was different from what it really was. I have to consider whether this award is invalid apart from the determination one way or another of that question and three points have been taken before me independently of that more troublesome point. The first point) is that the award is bad because it is against a firm. The second point is that the award is had because the arbitrators did not give any notice to the applicants of the fact that they were to determine the matter, and the third point is that this is not a case where a suit over the subject-matter of this award could have been brought in this Court and that, therefore, Act IX of 1899 by Sub-section (2) does not apply.

2. On the first point, that the award is bad because it is against the firm, I am of opinion that that objection will not hold. It is quite true that in Hurdwary Mull v. Ahmed Musaji Saleji 1 Ind. Cas. 371 : 18 C.W.N. 63 there is an opinion of my learned brother Mr. Justice Fletcher to the effect that 'this Court cannot make a decree against a firm when it is ignorant as to what persons constitute the firm. This being so, I am of opinion that not only did the arbitrators act improperly in not taking evidence on this issue, but also that the award is bad on the face of it.' In my opinion there is no substance in reason for this objection. As I have, during the argument, pointed out, when an action is brought against a firm, the persons who appear as partners must appear in their individual names; so long as one person appears, the action will go on against the firm in the firm's name, and it will be left to proceedings after the decree to ascertain whether other persons are really partner?, either by means of an issue being directed or otherwise. At the time the Court passes a decree against a firm in the firms's name, there is no constant as to how many partners there are of the firm or who these partners are, and, therefore, the major premise, as it seems to me, on which Mr. Justice Fletcher proceeded, 'the Court cannot make a decree against a firm when it is ignorant as to what persons constitute the firm,' is I think very much too wide. It is said that in view of the fact that the procedure for suing a firm in the firm's name was only introduced into this country in It 1908, I must not read the Indian Arbitration Act of 1899 together with the new provisions in 190S. For the present purpose 1 do not agree. It is quite true, and I am glad to hear that it is known, that in strictness of law there is no such thing as a firm or partnership. Partnership is a relationship 'between persons and the law in England, and the law that has been incorporated into this country, recognises these persons as joint proprietors of a business, but does not recognise a partnership as being an entity at all; it is a mere guise or cloak or name by which the individual persons, joint owners, are concealed or pointed out. There is no such thing as a partnership; but the law now does allow for persons who own businesses in co-partnership being sued for convenience by a designation which is the designation commercially employed, and the machinery for doing that has been elaborated in England, and is now in force here. It is perfectly well known in India, just as it has been known for many years in England, that a large proportion of awards in commercial cases are made in favour of or against the firm. Business cannot be carried on unless commercial men who have constituted themselves into firms can be allowed to deal with firms, and I shall be doing something that I should be extremely sorry to do, causing much inconvenience and trouble, giving much opportunity for fraud and collusion, if I give my assent to the argument which has been put before me. Under the Indian Arbitration Act the award is not a decree, but it is to be enforced as though it were a decree and a decree of this Court. I certainly held--and I have held in Chambers before today--that the provisions which relate to the execution of a decree against a firm apply in the case of an award which has been filed, the award having been made against the firm. In my opinion, the dictum of Mr. Justice Fletcher proceeded upon a wide principle which is inaccurate. If there is one thing more firmly established than another in law it is the maxim 'Id certum est quod certum reddi potest'--that is certain which is capable of being made certain, capable of being ascertained with a little trouble. In this case the machinery is provided by which you can for all the purposes of execution ascertain who are the partners in the firm, and 1 am not going to deprive the commercial community of the benefit of the system of arbitration and award by reason of a technical objection which, 1 think, is unfounded in principle and has got no commercial substance. So much for the point.

3. The next point that is taken is the question whether this Court has any jurisdiction to entertain an award upon this contract out, and that clearly enough lays down the test. The test is, would the subject-matter as taken to arbitration here be properly made the subject matter of a suit in this Presidency Town? Now, I look to this contract, and it appears to me that although there is to be an advance against railway receipt at Patna, speaking in terms of the contract, and speaking in the ordinary meaning of the English language, in terms of substance, this is a contract for delivery, not at Patna at all, but at a place which is called in the original contract Karachi, and which according to the evidence which is in dispute and which I have already mentioned, would be Calcutta. On that view if Mr. Basu's client be right, upon further investigation of that fact I should be prepared to hold that this Court had jurisdiction. Therefore, at present and without going into the question of what the contract was, whether the words have been interpolated or not, I cannot set aside this award on that ground.

4. Now I have some to the last of the three grounds that have been taken against this award, and that is that the arbitrators did not give notice to the sellers. Now I very much regret indeed that I think this point is fatal. What happened was that the buyers nominated their arbitrator; they nominated Mr. Nicachi of Messrs, Petrocochino Brothers to act for them by a letter of the 19th November 1918, and they asked 'Please let as have the name of your arbitrator within seven days or we shall, without further notice, proceed with the arbitrations ex parte,' Now, under the contract what they were entitled to do was this. They were entitled, if a party failed to nominate an arbitrator within seven days from the date of request, to nominate both arbitrators. That was the measure of their right. They were entitled to nominate both of them, and in fact they did nominate both arbitrators, and so far everything was absolutely correct. But it is a principle which I have already had occasion to, lay down in these oases that when arbitrators assume the burden of their duty, their first duty is to see that the parties have had notice and sufficient notice, to enable them to appear before the tribunal and put their case. That being their duty, I have to examine first of all whether the arbitrators carried their duty out, and secondly, whether there was enough in the conduct of the sellers to entitle the arbitrators to say that the duty no longer existed. What happened was this. The arbitrators gave no notice of their being about to go into this matter at all. The buyers had asked the sellers to nominate their arbitrator. The sellers wrote back to the buyers in their letter of the. 25th November 1918: 'We are surprised to see that you want to refer the matter to the arbitration of one living in Calcutta, You must note that the dealings were effected in Patna and we have no concern with Calcutta and that unless arbitrators living in Patna be chosen, we cannot consent to any such proceeding. We have farther to add that your agent or broker never fully explained the contract to us, nor gave us a copy of the terms thereof. However, as you want on the strength of the said contrast to refer the matter to arbitrators, we would request you to send us a copy of the said contract at any early date. Under the circumstances unless you furnish us with a copy of the contract and we consent to the reference to arbitration your action, if any, taken ex parte will be at your risk and costs and cannot be legally binding on us.'

5. Now, in my opinion, that was not such a letter as made it right or safe for the arbitrators to proceed without giving the sellers any notice that they were going to try the case. This letter states the objection to a Calcutta arbitration, it is true; but it goes on to say: 'We have not got a copy of the contract. No doubt as you have acted under the contract, there may be something in it that is against us. We want to see it; but unless we consent to the reference to arbitration what you do will be at your own risk.' It is not a final irrevocable, conclusive refusal to have any thing to do with this arbitration. It is an objection; What it says is that when we see the contract to know our rights, there is a chance that we may consent to the reference. That is the fair meaning of the letter. To my mind although it may be quite true, where a man refuses utterly and in all events to have any thing to do with an arbitration, that nobody is obliged to give any further notice because it will be useless, I do not think that this letter was sufficient to justify the party or the arbitrators in going on without any further notice whatsoever. As I have said recently, arbitrators, when they begin to take upon themselves the burden of their duty, must remember that ft is laid upon them to see--not upon anybody else, but upon them as tribunal--that the parties have notice to appear before them; if they do not appear before them, to make sure that they have no sort of excuse for not appearing. I very much regret that I have to set aside this award, but I think the arbitrators of the buyers have so con-dusted themselves as to infringe this important principle. That being so, the award must be set aside, and I must set it aside with costs.


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