BRIJLAL RAMJIDAS Vs. GOVINDRAM GSEKSARIA

JUDGEMENT

(1.) This is an appeal by the plaintiffs against a decision of Mr. Justice Chagla dismissing the suit on certain preliminary issues. The effect of the learned Judge's decision is that the real substance of the dispute between the parties has been determined by a decision of the High Court of Indore, which is binding between the parties in this suit under Section 13 of the Civil Procedure Code, 1908.

(2.) The facts giving rise to the appeal are these. The plaintiffs and defendants are partners in a firm, the business of which is to act as managing agents of the Indore Malwa United Mills, Limited, a company which owns mills in Indore State, and they carried on business under articles of partnership dated July 17, 1935, which are exhibit A to the plaint. Disputes arose between different groups of partners, and on December 17, 1940, the parties signed a written submission authorizing the Prime Minister of Indore State to arbitrate between them. The terms of the submission are these : We, the undersigned, the seven partners in the Managing Agency Firm of the Malwa United Mills Limited, Indore, by this writing authorize the Prime Minister of the Holkar State to fix the price of the transaction of purchase or sale of any debentures of the said Mills or any share in the agency or capital stock of any nature that may be effected by any one of us. And the price fixed by him shall be acceptable by each one and all of us and we shall act accordingly. Another version of the English translation of the original document, which was in Hindi, makes it rather clearer that the price was to be fixed conditional on the parties wishing to sell, because the terms of that document are : If any of us were to sell or buy any debentures of this Mill or any share of the Managing Agency or any kind of Capital Stock then the Prime Minister is to fix the price of such dealings and the price fixed by him shall be acceptable to each one and all of us and we shall abide by it.

(3.) On February 8, 1941, the Prime Minister made his award in writing, in which he recites that the partners in the Managing Agency had come to see him on December 17, 1940, and requested him to decide as to who should buy or sell their respective shares and at what price. Then he goes on : " They further signed a letter of authority authorizing me to decide this point and agreed to be bound by my decision." Then he mentions that a large number of shareholders of Indore State had waited upon him from time to time and had expressed their dissatisfaction with the present management. Then he decides that Seth Govindram Gowardhandas Seksaria is to buy up the five-anna-shares of Seth Brijlal Ramjidas and Bilasrai Juharmal at par and that the latter should sell their respective shares of annas 2-6 each in the rupee at par, and that they are also to sell the debentures held by them to Seth Govindram Gowardhandas Seksaria at par. Then he provides that the outgoing partners in the managing agency will be entitled to the managing agency and selling agency commission and also interest on their invested capital excluding debentures till the day of payment of the invested capital which must be paid within one month. Then he directs that the outgoing partners shall be liable for all acts or defaults which they may have previously committed as members of the managing agency of the Malwa United Mills, and that they shall sign necessary letters, papers and documents evidencing their retirement from the managing agency to enable Seth Govindram Seksaria and his friends to carry on the business as managing and selling agents in the same name. The partners who were to be bought out are the present plaintiffs, and the partners entitled to buy them out are the defendants.