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1949 Supreme(Cal) 114

HIGH COURT OF CALCUTTA
CHATTERJEE, J.
Babulal Dhandhania
Versus
Gauttam
Arbitration Suit No. 141 of 1949
Decided On : 12-08-1949

Advocates:
K.K. Basu - for Petitioner.R.S. Bachawat - for Respondent.

The non-registration of a firm under S. 69, Partnership Act does not preclude a reference to an arbitrator without the intervention of a Court.

Headnote:

Arbitration - Validity of Award - S. 69, Partnership Act

Fact of the Case:

The petitioner failed to deliver goods as per contract, leading to a dispute referred to arbitration. The petitioner sought to set aside the award on the ground that the respondent was not a registered firm at the time of reference to arbitration.

Finding of the Court:

The court analyzed the provisions of S. 69, Partnership Act and held that the non-registration of a firm does not preclude a reference to an arbitrator without the intervention of a Court.

Issues: Validity of award based on the registration status of the firm and the applicability of S. 69, Partnership Act to arbitration proceedings.

Ratio Decidendi: The court interpreted S. 69, Partnership Act and concluded that the penalty or disqualification for non-registration of a firm only bars the institution of certain suits in any Court, and does not preclude a reference to an arbitrator without the intervention of a Court.

Final Decision: The application to set aside the award was dismissed by the court.

ORDER :- This is an application by the petitioner Babulal Dhandhania for setting aside an award made by the Bengal Chamber of Commerce, dated 6th April 1949.

2. On 9th March 1943, the respondent Gauttam and Co. bought from the petitioner 2,000 maunds of linseed oil at Ss. 33 per maund. The terms of the contract will appear from Bought Note No. 2957, a copy of which is annexed to the petition.

3. There was a clause that any dispute regarding the contract was to be settled by arbitration of the Bengal Chamber of Commerce in Calcutta. The petitioner failed to deliver the goods in time and it is alleged by the respondent that at the request of the petitioner the time for delivery was extended from time to time till 21st July 1948.

4. The petitioner delivered certain quantities but failed to deliver about 1056 maunds. The time for delivery was further extended till 25th August 1948. Yet the petitioner failed and neglected to give delivery. According to the petitioner there was a frustration of the contract. But the respondent alleged that the real reason for non-delivery was that the market had gone against the petitioner and he wanted to avoid delivery.

5. On 19th October 1948, the respondent referred the disputes to the arbitration of the Bengal Chamber of Commerce. An award was made on 8th April 1949 by that Chamber which was filed in Court on 9th July 1949. Under the award the petitioner who carried on business under the name and style of Jhowla Prosad Babulal was directed to pay to the respondent Gauttam and Co., a sum of Rs. 18,480-8-9 together with interest and costs as mentioned therein.

6. The ground on which the petitioner seeks to set aside the award is that the respondent is not a registered firm and in any event was not registered under the Indian Partnership Act at the material time. The letter dated 6th May 1949 from the Registrar of firms addressed to the petitioners attorney shows that Gauttam and Co. was not registered in the office of the Registrar under the Partnership Act.

7. Learned counsel for the petitioner, Mr. K.K. Basu, has contended that the effect of non-registration is fatal to the validity of the reference and the award. His argument is based on S. 63, Partnership Act. The relevant portion of that section is set out below :

"69. (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to hare been a partner in the firm unless the firm is registered and the person suing is of has been shown in the Register of firms as a partner in the firm.

(2) No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the persons suing are or have been shown in the Register of firms as partners in the firm.

(3) The provisions of sub-ss. (1) and (2) shall apply also to a claim of a set-off or other proceedings to enforce a right arising from a contract, bat shall not affect -

(A) the enforcement of any right to some for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or

(B) the powers of an official assignee, receiver or Court under the Presidency-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner."

8. Mr. Basu contends that the reference to arbitration to the Bengal Chamber of Commerce constitutes a "proceeding to enforce a right arising from a contract" under S. 69(3), Partnership Act. According to him the effect of sub-ss. (1), (2) and (3) of S. 69 properly read is that no suit or proceeding to enforce a right arising from a contract shall be instituted in any Court or before any arbitrator by a firm unless that firm is registered under the Partnership Act.

9. No authority has bean cited by Mr. Basu in support of his




















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