SUBHALAXMI FABRICS PVT LTD Vs. CHAND MAL BARADIA

JUDGEMENT

(1.) This appeal by special leave has been preferred against the judgment and order dated 21.5.2002 of Calcutta High court by which the application moved by the first respondent under Order 39 Rule 1 and 2 and Section 151 CPC was allowed and hindustan Chambers of Commerce, Mumbai (second respondent) was restrained from proceeding in Arbitration Case Nos. A/186 and a/187 subject to deposit of Rs. 2 lakhs by the first respondent with the Registrar General within two days of receipt of the certified copy of the order.

(2.) The first respondent Chand Mal baradia filed Title Suit No. 993 of 1999 in the city Civil Court at Calcutta for permanent injunction restraining the defendants from proceeding with the arbitration proceedings, which had been initiated by the appellant Shree subhlaxmi Fabrics Pvt. Ltd. The case of the plaintiff (first respondent) in brief is that he was carrying on business under the name and style of M/s. Chand Mal Prakash Chand and Co. at calcutta; that Shree Subhalaxmi Fabrics Pvt. Ltd. , Mumbai (defendant No. 1) , which is a company registered under the Companies Act and sells cloth through its agent M/s. Naresh enterprises, which has its office at Calcutta, under the terms and conditions as dictated by defendant No. 1; that the plaintiff was getting supplies against the orders placed by him at calcutta through the agent of defendant No. 1; that all such supplies were made by the agent to the plaintiff at Calcutta at his premises No. 160, Jamunalal Bajaj Street and all payments made by the plaintiff were collected by this agent on behalf of defendant No. 1 at Calcutta; that the plaintiff was taking delivery of goods at Calcutta on the basis of Railway Receipts/lorry receipts and consignment notes from the said agent M/s. Naresh Enterprises. The case of the plaintiff further is that there was no arbitration agreement between the plaintiff and defendant No. 1 at any point of time for referring their disputes to any arbitrator; that he was not a member of defendant no. 2 M/s. Hindustan Chambers of Commerce, having its office in Mumbai. As the plaintiff became seriously ill some time in early part of 1997, he could not look after his business and consequently there was some delay in making payments to defendant No. 1; that the plaintiff paid more than Rs. 4 lakhs to defendant No. 1 and the last payment was made on 27.2.1999; that in April, 1999 the plaintiff received two notices from defendant No. 2 intimating that the defendant No. 1 had initiated arbitration proceedings and the plaintiff was asked to nominate an arbitrator and send a sum of Rs. 200/- as arbitration fee; that the defendant No. 2 had no jurisdiction or authority to act as an arbitrator and accordingly the plaintiff requested it not to proceed with the arbitration case. The case of the plaintiff further is that the defendant No. 1 initiated another arbitrati on proceeding bearing No. A/186 before defendant No. 2 claiming that M/s. Chand Mal Prakash Chand and Co. was also the proprietor of Arihant Textiles; that the plaintiff informed by sending a letter to defendant no. 2 on 18.5.1999 that he had never placed any order in the name of Arihant Textiles at any point of time and, therefore, the case be dropped. The plaintiff filed an application under Order 39 Rule 1 and 2 and Section 151 cpc for restraining the defendants from proceeding with the arbitration cases.

(3.) The appellant Shree Subhlaxmi Fabrics Pvt. Ltd. (defendant No. 1) opposed the prayer for grant of injunction and also filed an application under Section 20 read with Section 151 CPC on the ground inter alia that the defendant No. 1 is a cloth merchant, which is carrying on business all over India; that M/s. Naresh Enterprises having its office at Calcutta had been engaged as a middleman by the appellant, who procured a buyer namely Chand mal Prakash Chand and Co. represented by chand Mal Baradia and others at Calcutta; that m/s. Naresh Enterprises contacted defendant no. 1 at Mumbai for supply of cloth upon which the defendant No. 1 sent their indents through the said middleman to the said M/s. Chand mal Prakash Chand and Co. (plaintiff) , which was duly accepted by them; that the defendant No. 1 supplied cloth valued at approximately Rs. 20 lakhs in 1996-97 to the plaintiff; that in the indents (contracts) terms and conditions were mentioned and condition Nos. 6 and 7 read as under :