PRATAPSINGH Vs. KISHANPRASHAD AND CO LTD

JUDGEMENT

(1.) [His Lordship, after narrating the facts, proceeded :] The grounds on which the petition is based are set out in paragraph 11 of the petition. The principal grounds as stated by the petitioner's own counsel are: (1) that the petitioner was not given proper and sufficient notice and/or reasonable opportunity of appearing before the arbitrators and urging his contentions, his main contention being that he was not personally liable to the respondents, (2) that the arbitrators had no jurisdiction to decide who were the partners in the firm of S.B. Kartar singh & Sons, and that the award was improperly procured against the petitioner on misrepresentations made by the respondents that he was a partner in the said firm, and (3) that the arbitrators had no jurisdiction to decide the claims and/or disputes in regard to the consignment business. Before I deal with these grounds there is just one minor point to which I should like to refer in passing. It has not been pressed by the respondents counsel, but it is still referred to in the respondents affidavit in reply. They contend that the petitioner had waived his right to object to the jurisdiction of the arbitrators or of the appeal board by filing an appeal and appearing before the board which heard all his arguments and contentions. The petitioner, however, appeared under protest, and it has been laid down in several English cases, and recently also in Rambaksh V/s. Bombay Cotton Company , that once a party has made his protest, he is entitled to defend himself and to go through the arbitration, and the petitioner could, therefore, exercise his right of appeal which is given to him by the by-laws of the East India Cotton Association Limited.

(2.) I will now deal with the principal grounds mentioned in the petition. The first ground is that the petitioner has not been given a proper and sufficient notice and/or reasonable opportunity of appearing before the arbitrators and urging his contentions, It is a well-known principle of the law of arbitration that an enquiry before the arbitrator should be assimilated as near as possible to proceedings in a trial in a Court of law, and that therefore a party to the arbitration must not only have notice of the time and place of the meeting, but he should be allowed reasonable opportunity of proving his case either by evidence or by arguments or both, and of being fully heard. The notice must be sufficiently long in order to give the party that reasonable opportunity if he wants to be heard. If there is no sufficient notice there cannot be a proper hearing nor a valid award, it being a well-recognised rule of natural justice that a man's legal rights cannot be determined without giving him an opportunity of being heard. In a case in Amir Begam V/s. Badr-uddin Husain (1914) I.L.R. 36 All. 336, s. c. 16 Bom. L.R.413, p.c. their Lordships of the Privy Council observe as follows (p. 343) :- If irregularities in procedure can be proved, which would amount to no proper hearing of the matters in dispute there would be misconduct sufficient to vitiate the award without any imputation on the honesty or impartiality of the arbitrator.

(3.) In the matter before me the arbitrators sent a notice to the petitioner by registered post on January 3, 1930, and counsel for the respondents stated that in due course it should have reached Sargodha on or about January 6, 1930. The envelope containing notice addressed to Tejsingh, one of the guardians of the minor brothers of the petitioner, bears the postal mark of January 6, 1930. The name of the post office is very faint, but the respondents counsel says that it is the mark of the post office of Sargodha. Presumably, therefore, the letter containing the notice addressed to the petitioner must also have reached Sargodha on January 6, 1930, though the envelope containing that notice is not now forthcoming. The petitioner, however, says that he was absent from Sargodha from January 4 to 14, 1930, and the postal acknowledgment says that the letter was received by one Jivandas on January 11, 1930, presumably on behalf of the petitioner. The letter came into the hands of the petitioner on January 14, 1930, and the acknowledgment dated January 11, 1930, came into the hands of the arbitrators on the same day, an hour or two before they held their meeting. On reading the letter the petitioner wrote on January 15, 1930, the letter to the arbitrators to which I have referred above. But the arbitrators proceeded with the arbitration and made their award on January 14, 1930, as I have stated before. Under by-law 8 of the by-laws of the East India Cotton Association a notice to a member or a non-member of the association which is required to be given under the by-laws may be served either by hand or by a registered letter sent to the address registered with the Association or to his last known address, and a notice if served by post "shall be deemed to have been served at the time the letter containing the same would in the ordinary course of post have been delivered. The production of the post office receipt for the registered letter shall in all cases be conclusive proof of the posting of the notice." Under the instructions to arbitrators at the end of by-law 8 it is stated that the arbitrators have to satisfy themselves that the notice has been duly served before proceeding with the arbitration, Now it is admitted that the notice was sent by registered post on January 3, 1930, to the petitioner, and a postal receipt obtained for the same. The notice would, therefore, under by-law 8 be deemed to have been served upon the petitioner at the time when the same would be delivered at his destination by post. In other words it would have been deemed to have been served on or about January 6, 1930, But the acknowledgment which the arbitrators had before them on January 14, 1930, showed that it was received by Jivandas on January 11, 1930, and there is nothing before me to show that until then the petitioner or anyone on his behalf had refused to take delivery when the letter containing the notice was tendered, so that the presumption that the notice would be deemed to have been served on or about January 6, 1930, is rebutted by proof of its having been actually received on January 11, 1930. The arbitrators do not seem to have taken that fact into consideration. They proceeded with the arbitration and recorded in their award that the notices were duly served on the petitioner and his brothers, but that none of them appeared at the hearing. On the assumption that the letter of January 3, 1930, would reach Sargodha on January 6, 1930, the arbitrators thought that a week's time should be given to the petitioner to come down to Bombay and appear before them on January 14, 1930. It is, therefore, difficult to understand how, when they knew that the notice was actually received by the petitioner on January 11, 1930, they could still have thought that three days time was sufficient for the petitioner to appear before them on January 14, 1930, remembering that even on January 11, 1930, the letter had not gone into the hands of the petitioner but of one Jivandas on his behalf, as it appears from the acknowledgment. The respondents in their affidavit in reply say that the petitioner said nothing in his letter of January 15, 1930, to the arbitrators about his absence from Sargodha from January 4 till January 14, 1930, and that the allegation was merely an afterthought on his part. I do not agree with the contention of the respondents. The letter of January 15, 1930, refers to the arbitrators notice of January 3, 1930. If by his letter of January 16, 1930, the petitioner thought it necessary to draw the arbitrators attention to his contention that he was not a partner in the firm and that the question of partnership was not before them, I see no reason why he should not have done so earlier if as a matter of fact the notice of the arbitrators had reached him earlier than January 14, 1930. Moreover, as I have already stated, that notice wag acknowledged by Jivandas on January 11, 1930, and even if it was forwarded by Jivandas to the petitioner it would have been difficult for him to come down and be ready to proceed with the hearing on January 14, 1930, in Bombay. I should just like to add that even when an arbitrator considers that the time and place fixed by him for the meeting are reasonable, and if after service of notice one of the parties to the arbitration fails to attend before him, he is entitled no doubt to proceed with the arbitration ex prate. But it is still advisable for him, though it is not compulsory, that he should give that party notice of his intention to do so: see Halsbury's Laws of England, Vol. I, Para 970. The arbitrators did not, however, think it advisable to send such a notice. It was further argued by counsel for the respondents that the question of sufficiency of notice does not arise, because the award of the arbitrators has been disposed of, and the Court is only now concerned with the decision of the appeal board, and that decision was given after the board had heard the parties fully. In my opinion both the award of the arbitrators and the decision of the appeal board must be considered together, as they really constitute one entire proceeding, and as far as the petitioner is concerned, the decision of the board confirms the award of the arbitrators. Moreover, on looking at the minutes of the proceedings before the board it appears that counsel who appeared under protest only pointed out to the board that the questions of partnership and of the consignment business were outside the scope of the reference, and the question of sufficient notice was not considered at all, Taking all the contentions of the parties into consideration, I come to the conclusion that the petitioner had not been given a reasonable opportunity to urge his contentions, his main contention being, as I have stated before, that he was not in any way personally liable in respect of the claim of the respondents.