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1949 Supreme(Cal) 119

HIGH COURT OF CALCUTTA
CHATTERJEE, J.
Bajrang Lal Laduram
Versus
Agarwal Brothers
Ordinary Original Suit
Decided On : 19-08-1949

Advocates:
A.C. Ganguly - for Petitioner N. Barwell - for Respondent.

The main legal point established in the judgment is that a person who denies the existence of an arbitration agreement cannot apply under the Arbitration Act, and the Act provides specific remedies for litigants.

Headnote:

arbitration agreement - maintainability of application - Arbitration Act, 1940, Section 32, Section 33 - The court discussed the interpretation of Sections 32 and 33 of the Arbitration Act, 1940, and their implications on the maintainability of an application challenging the existence or validity of an arbitration agreement. The court highlighted conflicting judicial authorities and provided a detailed analysis of the legislative intent behind the provisions. The judgment emphasized that the Act provides specific remedies for litigants and concluded that a person who denies the existence of an arbitration agreement cannot apply under the Arbitration Act.

Fact of the Case:

The petitioner sought an adjudication that an arbitration agreement between the parties is still subsisting. The respondent denied the transaction and repudiated liability. The dispute was referred to the arbitration of the Bengal Chamber of Commerce, but the arbitrators were not prepared to proceed until the question of the existence of the arbitration agreement was decided by the Court.

Finding of the Court:

The court dismissed the application, emphasizing that a person who denies the existence of an arbitration agreement cannot apply under the Arbitration Act. It directed the Tribunal of Arbitration to proceed with the arbitration as indicated.

Issues: The main issue was the maintainability of the application under the Arbitration Act, specifically regarding the interpretation of Sections 32 and 33 and the right to challenge the existence or validity of an arbitration agreement.

Ratio Decidendi: The court's decision was based on the interpretation of Sections 32 and 33 of the Arbitration Act, 1940, and the legislative intent behind the provisions. It concluded that the Act provides specific remedies for litigants and does not confer a general right to apply to Court for a person who denies the existence of an arbitration agreement.

Final Decision: The application was dismissed, and the Tribunal of Arbitration was directed to proceed with the arbitration.

ORDER :- This is an application by Bajranglal Serowgee who carries on business under the name and style of Bajranglal Laduram for having the effect of an arbitration agreement determined by this Court. The application is really for an adjudication that an arbitration agreement between the parties is still subsisting.

2. By contract No. 1633 dated 28th July 1948 the petitioner alleges that he agreed to purchase from the respondent 80,000 heavy cees bags in 200 bales at the rate of Rs. 140/4/- per 100 bags delivery August 1948. The terms of the agreement appear from a copy of the Bought Note included in the annexure to the petition.

3. Clause 13 of the said contract contained an agreement for arbitration in very wide terms.

4. The petitioners case is that on 16th August 1948 he sent shipping instructions to the respondent to bring 50 bales, that is, 20,000 heavy cees bags, and on 18th August 100 bales, that is, 40,000 heavy cees bags alongside the vessel "Kutsang," The respondent failed to bring the aforesaid goods alongside the ship and a letter was sent to the respondent complaining about this failure.

5. It is alleged the petitioner by letter dated 31st August 1948, again requested the respondent to tender the pucca delivery order in respect of the balance of 50 bales of goods, that is, 20,000 heavy cees bags and offered to pay for and take delivery of the said pucca delivery order. The respondent neither sent the 150 bales in terms of the shipping instructions nor did they give any delivery order. The petitioners attorneys demanded payment of the different bills amounting to Rs. 15,992/6/4 but the respondent failed to pay. Thereupon on 13th December 1948 the petitioner filed a statement of case and referred the dispute to the arbitration of the Bengal Chamber of Commerce and claimed the said sum from the respondent.

6. The reply of the respondent was a complete denial of the transaction. Their case is, they never entered into the contract in question and they repudiated liability in toto. Some statements and counter statements were filed before the Tribunal of Arbitration of the Bengal Chamber of Commerce who, it is alleged, heard oral evidence.

7. On or about 8th April 1948, the petitioner was informed by a letter from the Registrar, Bengal Chamber of Commerce that the Arbitrators were not prepared to proceed with the arbitration until the question of the existence of the arbitration agreement was decided by this Court.

8. On receipt of this letter from the Registrar of the Bengal Chamber of Commerce dated 8th April 1948 the present application was presented.

9. The real question I have got to determine is the maintainability of this application.

10. The question argued before me is this can a person who affirms the existence of an arbitration agreement apply to the Court under S. 33 or any other section of the Arbitration Act for an adjudication by the Court that such an agreement exists and is binding on the parties ?

11. In Manik Lal v. Shiva Jute Bailing Ltd., 52 C. W. N. 389, Das, J. held that the "existence" of an arbitration agreement which by S. 32, Arbitration Act, 1940, cannot be challenged by a suit is not the factual but the legal existence of an agreement on grounds like mistake, fraud, illegality, etc under Ss. 19 to 30, Contract Act. His Lordship further held that S. 33 applies only when the applicant admits the factual existence of an agreement but challenges the "legal" existence thereof on such grounds as misrepresentation, fraud, etc. In Baijnath v. Chhotulal, 52 C. W. N. 397, Clough, J. followed the judgment of Das, J.

12. Sinha, J, has differed from the judgments of both these learned Judges in Chaturbhuj v. Bhicamchand Chororia and Sons, 53 C. W. N. 410. According to the learned Judge the intention of the framers of the Arbitration Act was that the right and liabilities of the parties in respect of an arbitration agreement or an award such as are mentioned in Ss. 31 and 32 of the Act should be litigated only
















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