CHIRANJILAL FULCHAND PARASRAMPURIA Vs. DWARKADAS & CO. LTD.

JUDGEMENT

(1.) This is a petition to set aside an award. The petitioner according to him carries on business in his own name as Chiranjilal Fulchand Parasrampuria and also in the firm name of Messrs. Chiranjilal Parasrampuria. The respondents, who have obtained an award against the firm of "Chiranjilal Parasrampuria" for the aggregate sum of Rs. 1,21,685.00 are members of the East India Cotton Association, and were employed by that firm to act as commission agents to effect transactions in cotton in accordance with the by-laws of that Association. The award is in respect of transactions put through by the respondents during the months April, May and June, 1954, in pursuance of such employment. In respect of the clearing dated June 18, 1954, the respondents claimed from "Chiranjilal Parasrampuria" a sum of Rs. 55,820.00 and in respect of the next clearing a further sum of Rs. 65,865.00 These amounts were not paid to the respondents on the due dates of the respective settlements. Correspondence ensued to which it will become necessary to refer in some detail, but for the purpose of the present narrative it is sufficient to observe that in that correspondence the respondents claimed from the petitioner and his brother Ramrikhdas Parasrampuria the two sums on the allegation that instructions for the transactions had been given by both of them and it was at their instance that the business had been effected in the name of "Chiranjilal Parasrampuria". The suggestion was that they were partners in that firm. The contention raised on the other side in that cor respondence was that Ramrikhdas Parasrampuria had nothing to do with those transactions and he had not given any instructions to the respondents in respect of any of them. The petitioner for himself denied all liability to the respondents and his contention was that the transactions in respect of which the two amounts were claimed were all illegal as being in contravention of the Forward Contracts Control Act and the by-laws of the Association. He also contended in that correspondence that there was "no arbitration agreement of reference". The respondents in that correspondence persisted in their allegation that the petitioner and his brother Ramrikhdas were liable as partners in respect of the business effected in the name of "Chiranjilal Parasrampuria". They denied the correctness of all the contentions raised by the petitioner. In accordance with the rules of the Association they appointed an arbitrator and called upon the petitioner and his brother to appoint an arbitrator "on behalf of Chiranjilal Parasrampuria". The petitioner declined to appoint any arbitrator. The contention was that the transactions were illegal and there was no arbitration agreement of reference and the respondents were not entitled to appoint an arbitrator or to can upon him to appoint an arbitrator. Thereafter, the Chairman of the Association acting under the relevant bye-law of the Association appointed two arbitrators to decide the disputes between the parties. The petitioner by his attorneys' letter dated Nov. 9, 1954, pointed out to the arbitrators that there was no valid reference in writing for referring the disputes to arbitration. He denied in that letter the factum of the arbitration agreement and the legality of the transactions and contented that the arbitrators had no jurisdiction to adjudicate upon the matter. The arbitrators proceeded to hear the matter exparte and made their award on Dec. 15, 1954, for Rs. 1,21,685.00 in favour of the respondents against "Chiranjilal Parasrampuria". That award is challenged by the petitioner on a number of grounds.

(2.) The first contention pressed before me by Mr. K. T. Desai, learned counsel for the petitioner was that the petitioner was under no obligation to appoint any arbitrator to decide the disputes that had arisen between the parties. Reference was made to by-law 38-B of the by-laws of the Association which empowers the Chairman of the Association to appoint two arbitrators to decide the disputes between the parties inter alia :

(3.) It will be convenient before I reproduce the argument of Mr. K. T. Desai to refer as succinctly as possible to correspondence on which this contention rests. What the respondents did in the correspondence relied on by Mr. K. T. Desai was that in the letter dated July 2, 1954, that they addressed through their attorneys, they called upon the petitioner and Ramrikhdas as partners in the firm of Chiranjilal Parasrampuria to pay up the amount claimed by them. Ramrikhdas denied that he was a partner. The petitioner contended that the transactions were illegal and no liability attached in respect of the same. In their attorneys' letter of Aug. 16, 1954, the respondents repeated that both the petitioner and his brother Ramrikhdas had given instructions for the business done in the name of Chiranjilal Parasrampuria and called upon them to appoint an arbitrator. The respondents' attorneys' letter of Sept. 9, was headed : Arbitration : Dwarkadas & Co. Ltd. V. Chiranjilal Parasrampuria.