DEOKI NANDAN GARG Vs. JAGDISH PRASAD

JUDGEMENT

(1.) The circumstances in which this first appeal from order has arisen are these. Sri Jagdish Prasad, respondent No. 1 claimed to be the manager of a joint Hindu family carrying on commission agency business in the name and style of M/s Ravendra Lal Ram Naresh. The appellant and the other respondents nos. 2 to 7 were alleged to be members of another joint Hindu family carrying on business in the name and style of "the Hindustan Cotton Waste Traders Cotton Waste Merchants" and Deokinandan the appellant was alleged to be the manager of that family. On the 4th of Sept. 1954 an agreement was arrived at, according to respondent No. 1 between the parties which provided that the family of that respondent would provide finance for some business which the appellant and the other respondents were to carry on. The case of the respondent is that that agreement contained an arbitration clause also. The agreement was followed by dealings between the parties and a large amount became due to the respondent No. 1 from the, appellant and the other respondents, The respondent No. 1 further alleged that on the 6th of July 1955 the appellant and the other respondents through the appellant acknowledged their liability in respect of a sum of Rs. 29,900. Thereafter the respondent No. 1 demanded the amount by notice but no heed was paid to that demand. He then served a notice requiring the appellant and the other respondents to agree to the appointment of one Sri Ram Bilas Agarwal as sole Arbitrator for deciding the dispute which had arisen under the contract. No response, was, however, made to the notice. The respondent No. 1 then filed the application under Sec. 20 of the Indian Arbitration Act out of which the present appeal has arisen praying that the agreement of arbitration between the parties be filed and a reference made to Sri Ram Bilas Agarwal the agreed Arbitrator for the decision of the dispute that had arisen. The respondent No. 1 contended that the appellant and the other respondents could be deemed to have consented to the appointment of Sri Ram Bilas Agarwal as Arbitrator.

(2.) Two sets of written statements were filed one by the respondents 2 to 7 and the other was by the appellant. The respondents nos. 2 and 4 to 7 denied all the allegations made by the respondent no. 1. They said that they never had any dealings with respondents or their firm and that they had never agreed to any arbitration at any time. They also denied that the appellant represented them or had entered into any agreement on their behalf.

(3.) The appellant filed another written statement in which he admitted that he had approached the firm of respondent No. 1 for some financial facility and that an agreement dated the 4th of Sept., 1954 had been executed. He too, however, said that the other respondents had no concern with that agreement. According to him no dispute had arisen under that contract and the application was not maintainable on that account. He also said that the arbitration clause in the agreement contemplated the appointment of an agreed arbitrator only and no agreement having been arrived at about the person who had to be appointed as arbitrator, no arbitrator could be appointed. He said that if it was held that a dispute had arisen the only way in which the respondent No. 1 could proceed was to have the case decided by a regular suit.