BABUBHAI TANSUKHLAL Vs. MADHAVJI GOVINDJI AND CO

JUDGEMENT

(1.) This is an application in revision against the order of the Chief Judge of the Small Cause Court, Bombay, dismissing the plaintiff's suit in pursuance of an award under by-law 38A of the East India Cotton Association.

(2.) The applicant filed a suit in the Court of Small Causes at Bombay to recover a sum of Rs. 1,023-8-0, consisting of Rs. 1,000, the amount paid as deposit, together with Rs. 11 as interest, and Rs. 12 8-0 on account of profits in the transactions of sale and purchase of one hundred bales of cotton done by the defendants as the plaintiff's brokers, on December 10, 1926, a December, 14, 1926. The defendants admitted the amount of the deposit and interest, and also the two contracts sued upon ; but contended that there were other contracts and several payments by them on account of the transactions which resulted in a loss to the plaintiff, and the amount of Rs. 100-10-0 was payable by the plaintiff to the defendants, and that the whole matter had been referred by the defendants to the arbitrators of the East India Cotton Association, and, therefore, the Court had no jurisdiction to try the suit.

(3.) The learned Chief Judge of the Small Cause Court stayed the petitioner's suit pending the arbitration. On an application in revision, No. 148 of 1927, the High Court refused to interfere with the order of stay, and directed that all the objections to the award might be taken before the learned Chief Judge. The learned Chief Judge appreciated the force of the argument on behalf of the plaintiff that the award was null and void, as it embraced matters not recognised by law, and that the contracts on which the plaintiff sued were in sanctioned forms whereas the arbitrators in arriving at their conclusion considered other contracts which were made in contravention of the by-laws, but held that under by-law 38A, all unpaid claims, whether admitted or not, were required to be referred to the arbitration of two disinterested persons, and therefore the reference to arbitration was valid, and that if the arbitrators in investigating the dispute referred to other contracts and took into consideration the liabilities under non- sanctioned contracts, it did not amount to any judicial misconduct, and the award was binding as an adjustment of the suit according to the ruling in Manilal Motilal V/s. Gokaldas Rouji (1920) I.L.R. 45 Bom. 245, s. o. 22 Bom. L.R. 1048, and, therefore, dismissed the plaintiff's suit, as the arbitrators had held that instead of the amount of Rs. 1,023-8-0 being due to the plaintiff, the amount of Rs. 100-10-0 was due by the plaintiff to the defendants.