Back
1981 Supreme(AP) 109
Andhra Pradesh High Court
Judges : A.SEETHARAM REDDY, CHENNAKESAVA REDDY
V.ANJANAIAH SETTY - Appellant
Versus
M.G.BROTHERS - Respondent
Decided On : 04-17-81
A suit for enforcement of an arbitration award is maintainable even if there is non-joinder of parties, provided that it does not affect the merits of the case or the jurisdiction of the court. An arbitration award is enforceable even if there is some vagueness in the reference or the award itself, provided that the court can interpret and clarify the ambiguities.
Headnote:
PARTNERSHIP ACT - SECTION 68 - EVIDENCE - REGISTER OF FIRMS - CONCLUSIVE PROOF - PARTNERSHIP - PROOF BY INDEPENDENT EVIDENCE - MAINTAINABILITY OF SUIT - NON-JOINDER OF PARTIES - SECTION 99, CIVIL PROCEDURE CODE - ARBITRATION ACT, 1940 - SECTION 15 - VAGUENESS OF REFERENCE AND AWARD - INTERPRETATION - ENFORCEABILITY OF AWARD.
Fact of the Case:
Plaintiff, a partnership firm, filed a suit for passing of a decree in terms of the award of the arbitrators with necessary modifications. The defendant, a former partner of another firm, had taken over the liability of the said firm and undertook to discharge the same. Disputes arose in respect of these transactions, and the matter was referred to arbitration. The arbitrators made an award, and the plaintiff filed the suit for its enforcement. The defendant contended that the suit was not maintainable due to non-joinder of necessary parties and that the award was not enforceable due to vagueness.
Finding of the Court:
1. Maintainability of Suit: The court held that the suit was maintainable as M. R. Ganganna, a partner of the plaintiff firm, was a partner on the date of the suit, and the non-joinder of V. D. H. Subbayya Setty and Co., the erstwhile firm, was not fatal to the suit. The court relied on Section 99 of the Civil Procedure Code, which provides that no decree shall be reversed or substantially varied due to non-joinder of parties if it does not affect the merits of the case or the jurisdiction of the court. 2. Enforceability of Award: The court rejected the contention that the award was not enforceable due to vagueness. It held that the reference to the arbitrators was not vague as it covered the whole gamut of dealings between the parties without any reference to the period, nature of the transaction, or any specific item of the transaction. The court also clarified ambiguities in the award regarding interest, reconciliation of a sum of Rs. 1,500/-, and the inclusion of an annexure as part of the award.
Issues: 1. Whether the suit is maintainable despite the non-joinder of V. D. H. Subbayya Setty and Co. as a party? 2. Whether the award is enforceable despite the alleged vagueness in the reference and the award?
Ratio Decidendi: 1. Maintainability of Suit: The court held that the suit was maintainable as M. R. Ganganna, a partner of the plaintiff firm, was a partner on the date of the suit, and the non-joinder of V. D. H. Subbayya Setty and Co., the erstwhile firm, was not fatal to the suit. The court relied on Section 99 of the Civil Procedure Code, which provides that no decree shall be reversed or substantially varied due to non-joinder of parties if it does not affect the merits of the case or the jurisdiction of the court. 2. Enforceability of Award: The court rejected the contention that the award was not enforceable due to vagueness. It held that the reference to the arbitrators was not vague as it covered the whole gamut of dealings between the parties without any reference to the period, nature of the transaction, or any specific item of the transaction. The court also clarified ambiguities in the award regarding interest, reconciliation of a sum of Rs. 1,500/-, and the inclusion of an annexure as part of the award.
Final Decision: The court decreed the suit with costs and dismissed the O. P. with costs.
( 1 ) THESE two appeals arise out of a common judgment and decree passed in O. S. No. 17 of 1972 and O. P. No 66 of 1972 by the learned subordinate Judge, Adoni, decreeing the suit with costs and dismissing the O. P. with costs. So they could be disposed of by a common judgment
( 2 ) THE plaintiff in O S No, 17 of 1972 is the respondent in O. P. No. 66 of 1972; and the defendant in O. S. No. 17 of 1972 and M/s Vitta dodda Hanumanthappa Subbaiah Setty and Co. , represented by the then partner Vitta Anjanaiah are the petitioners in O. P. No. 66 of 1972.
( 3 ) THE suit is for passing of a decree in terms of the award of the arbitrators with necessary modifications. Briefly, the plaint averments are: the plaintiff M/s M. G. Brothers is a partnership firm carrying on business inter alia in decorticating and crushing of groundnut seeds under the name and style of M. G. Brothers Oil Mills, at Yemmiganur, and M. R. Ganganna is a partner therein. The defendant was originally a partner of M/s Vitta dodda Hanumanthappa Subbaiah Setty and Co. of Bellary having its plant at Adoni. The said firm, during its dealing with the plaintiff, became indebted in a sum of Rs. 10,377-83 P. to the plaintiff. Vitta Anjanaiah Setty, the defendant, came out of the said firm and started doing business under the name and style of Vitta Dodda Hanumanthappa Anjanaiah Setty. The amount due to the plaintiff-firm by Vitta Dodda Hanumanthappa Subbaiah setty and Co. was taken over by the defendant and the defendant undertook to discharge the said liability. Apart from that, on his own account, the defendant became indebted to the plaintiff in a sum of Rs. 8,167-06 P. in respect of purchase of groundnut oil. The defendant also became indebted to the plaintiff in a sum of Rs. 15,251-71 P being the loss incurred by the plaintiff on account of the despatch of a wagon load of groundnut oil made on the instructions of the defendant. Inspite of repeated demands, the defendant failed to pay the said amounts together with interest thereon. Since disputes arose in respect of these transactions, the matter was referred to arbitration after several unsuccessful efforts to resolve their differences by mediators. Both the parties appointed Sri Mothilal Mavji, Sri Gummandmal lalchand and Sri T. V. Vasantba Guptba as their arbitrators. A muchilika was also executed by the plaintiff and the defendant in favour of the three arbitrators. The arbitrators duly entered on the reference, and after due inquiry, scrutiny of the accounts and also statement of accounts filed by the parties, and after due consideration, made the award by signing it on 23 11-1971. As per the award, payment of all outstanding accounts, interest and other payments ordered, was to be made within 30 days; and in case of default, the erring party should pay interest at 15 per cent per annum from the date of the award. At any rate, the payment should not be delayed beyond 60 days. As per the award, the defendant has to pay a sum of Rs. 27,920-91 P. as detailed below:
( 21 ) THE cases relied on by the learned Counsel for the respondent are more apt and solid on the point. In M J. V. Mudaliar vs. S. V. Finance corporation a single Judge of this Court held,"the provisions of Section 69 (2) only postulate that the name of the persons suing must be shown to have been entered as partners in the register of firms. The mode of proof of that fact is not in any way restricted. It is consequently open to the plaintiff to adduce evidence that the name of a partner suing on behalf of the firm has been entered as such in the register of firms. "la M. A. Hussain v P. V. G. K. andbros a single Judge of the Mysore High Court held:"it is clear from this provision (Sec. 69 (2)) that there are two alternatives available in the second condition. The persons suing may establish either that they are partners on the date of suit or that they arepersons whose names are shown in the register of firms as partners in the fir
