PRATAPRAY MANMOHANDAS Vs. BOMBAY BULLION ASSOCIATION LTD

JUDGEMENT

(1.) This is an appeal against the judgment and decree of the High Court of Bombay confirming the decree passed in its original jurisdiction. The appellant, who was the plaintiff in the suit, was trading under the name and style of Messrs. Pratapray Manmohandas as a bullion merchant and trader in Bombay. He was a member of the Bombay Bullion Association Ltd., which was defendant No. 1 in the suit and is respondent No. 1 in the appeal. Respondents 2 to 7 were defendants 2 to 7 and at all material times were members of the Clearing House Committee appointed under the Bye-laws of the 1st respondent. The appellant had also added as parties in the suit defendants 8 to 12 but they are no longer parties as their names were struck off in the trial court.

(2.) The appellant entered into certain forward transaction with defendants 8 to 12 during the period from May 30, 1949 to June 30, 1949. On June 13, 1949, the Hawala rate of these transactions was fixed and on June 14, 1949, the appellant "admitted a clearance sheet under bye-law 131 of the bye-laws of 1st respondent in which outstanding transactions for the Valan day (settlement) were entered. They included the transactions which had been entered into with defendants 8 to 12. All these transactions were Rajued (tallied) on the following day. According to the bye-laws of the respondent association the balance sheet had to be submitted and money kaplis (vouchers) had to be given. In this balance sheet which was submitted the appellant did not include the amounts which were due to defendants Nos. 8 to 12 or the transactions he had entered into on the ground that he disputed the transactions entered into with those defendants as they were fictions and illegal. On June 21, 1949, which was the Valan day (settlement day), the appellant claimed reference to arbitration in regard to those items under bye-laws 38. On that day defendants 8 to 12 complained to the respondent Association that the appellant had not issued the necessary Kaplis (vouchers). At 3 p. m. on the same day the appellant received a notice from the Clearing House Committee, respondents 2 to 7, calling upon him to appear before them. The appellant appeared with his solicitor and counsel and his contention before the Clearing House Committee was that it had no jurisdiction to proceed with the matter because he was claiming arbitration and the dispute between him and defendants 8 to 12 had to be settled by the arbitrators. The Committee heard the explanation and passed a resolution under bye-law 155(4) declaring the plaintiff a defaulter and it is this resolution which is the matter in controversy between the parties.

(3.) On June 20, 1952, the appellant brought a suit for declaration that the resolution in dispute dated June 21, 1949, was bad in law, inoperative, ultra vires and not binding on the appellant and also for damages against the respondents. He also prayed for reinstatement as a member of the respondent Association.