GANGES SUGAR WORKS LTD Vs. NURI MIAH

JUDGEMENT

(1.) The facts connected with the case out of which this appeal arises are shortly as follows. The plaintiff company entered into a contract with the defendant in connection with the working of a certain portion of the company s property or business. One clause of this contract was that in the event of disputes or differences arising they should be referred to the arbitration of a gentleman named Hazari Lal, and that his decision should be binding and conclusive between the parties. This contract was not under seal. Disputes having arisen, the company made an application under Schedule II, Rule 17, of the Code of Civil Procedure to file the contract as a submission to arbitration in order that the matter should be settled in accordance with the provisions of the Code. This application - was refused by the court below on the sole ground that the cont-3 ract which contained the submission to arbitration was not under the seal of the company. At present we have nothing to do with the merits of the dispute between the parties. We have only to decide whether or not the court below was wrong in refusing the application on the ground mentioned above. Section 67 of the Indian Companies Act, VI of 1882, (which was in force at the time), provides for the manner in which contracts can be entered into by companies. It is admitted by both sides that the present contract, (save the particular clause which refers to arbitration,) was a contract which the company was entitled to enter into without its being under seal. It is quite clear that if Section 67 stood alone, the contract to refer to arbitration also did not require to be under seal. It is contended, however, that it necessarily follows from the provisions contained in Section 96 and the subsequent sections down to Section 123 that an agreement to refer disputes to arbitration by a company to be legal must necessarily be under seal. Section 96 is as follows : "Any company under this Act may, from time to time, by writing under its common seal, agree to refer and may refer, to arbitration any matter whatsoever in dispute between itself and any other company or person; and the companies parties to the arbitration may delegate to the person or persons, to whom the reference is made, power to settle any terms or to determine any matter capable of being lawfully settled or determined by the companies themselves, or by the directors or other managing body of such companies."

(2.) This Section (96) is largely taken from the English Companies Act (25 and 26 Victoria, Chapter 89), Section 72 of which is as follows : "Any company under this Act may from time to time by writing under its common seal, agree to refer and may refer to arbitration, in accordance with the Railway Companies Arbitration Act, 1859, any existing or future difference, question or other matter whatsoever in dispute between itself and any other company or person, and the companies parties to the arbitration may delegate to the person or persons to whom the reference is made, power to settle any terms or to determine any matter capable of being lawfully settled or determined by the companies themselves or by the directors or other managing body of such companies."

(3.) Section 73 is as follows : "All the provisions of the Railway Companies Arbitration Act, 1859, shall be deemed to apply to arbitrations between companies and persons in pursuance of this Act; and in the construction of such provisions the companies shall be deemed to include companies authorized by this Act to refer disputes to arbitration."