CALCUTTA HIGH COURT
Lort-Williams, J., Lord Williams, J.
Bahadurmull Chowdhury & Ors. - Appellant
Versus
Nagarmull Madangopal & Ors. - Respondent
Decided On : 24-01-1941
Alteration of Instrument - Contract - The court discussed the legal provision regarding the alteration of an instrument under hand made by, or with the consent of, one party but without the consent of the other party, and its effect on the enforceability of the instrument. The court applied the principle established in Pigot's case and subsequent decisions to determine the validity of the contract and the enforceability of the arbitration agreement.
Fact of the Case:
The plaintiffs alleged that the defendants had applied for arbitration regarding a claim for damages for failure to deliver jute under a contract. They argued that the contract was materially altered without their consent, rendering it void, and therefore there could be no submission to arbitration. The defendants claimed that the alteration was made with the consent and for the plaintiffs' benefit, and that the contract was treated as for delivery in November 1939.
Finding of the Court:
The court rejected the defendants' preliminary points and held that the suit was maintainable. It also decided that the avoidance of the contract by the alteration made the agreement to submit to arbitration unenforceable against the plaintiffs.
Issues: The issues involved the validity of the contract due to material alteration, the enforceability of the arbitration agreement, and the plaintiffs' entitlement to bring the suit.
Ratio Decidendi: The court applied the legal principle that an alteration in a material part of an instrument under hand made by, or with the consent of, one party but without the consent of the other party, makes the instrument void to the extent that the party responsible for the alteration cannot enforce the instrument against the other party. The avoidance operates as from the time of alteration, preventing the enforcement of any promise made in the instrument by the party responsible for the alteration.
Final Decision: The court held that the suit was maintainable and that the agreement to submit to arbitration was unenforceable against the plaintiffs due to the avoidance of the contract by the material alteration.
JUDGMENT
Lort-Williams, J. - In this suit the plaintiffs alleged that on 30th April 1940, the Registrar of the Tribunal of Arbitration of the Bengal Chamber of Commerce informed them that the defendants had applied for arbitration, in accordance with the provisions of an alleged contract, regarding a claim for damages for failure to deliver a thousand maunds of jute under Messrs. Bri. dhichand Mulchand's contract No. 48 dated 9th November 1939. Thereupon, they inspected the contract or bought note which had been passed by the broker and dated 9th November 1939 and found that it had been materially altered without their consent, and this had been done fraudulently, and the contract was rendered void by such material alteration. The contract was for the purchase by the defendants from the plaintiffs of jute for delivery to the Presidency Jute Mills, "shipment or rail despatch November 1939." The defendants had inserted the word "December" after the figures "1939." The contract or bought note contained an arbitration clause. The plaintiffs argued that the alteration vitiated the document altogether, and there being no contract there could be no submission to arbitration.
2. The defendants alleged that the alteration was made not only with the consent but at the request of the plaintiffs and for their benefit, and that a letter of confirmation was sent to them on 10th November 1939. Subsequently, the plaintiffs informed the broker that they did not require any extension of the period of shipment and therefore any alterations in the broker's notes were unnecessary, and about the same date the plaintiffs informed the defendants that they would deliver the goods in November 1939 and did not desire to avail themselves of the benefit of the alteration in the bought note. Thereafter the alteration was treated by the parties as of no effect whatsoever, and the contract was treated as for delivery in November 1939. The sold note which was in the hands of the plaintiffs was never altered. The defendants further alleged that on 18th November 1939 the plaintiffs wrongfully cancelled and repudiated the contract, falsely alleging that they had tendered the goods to the Presidency Jute Mills in November and that acceptance had been refused. The defendants contended that in any event the plaintiffs were estopped by their conduct from claiming that the contract was avoided.
3. Mr. Khaitan, on behalf of the defendants, raised two preliminary points. First, that the suit is not maintainable because the Court's powers to make declaratory decrees are limited to those contained in Section 42, Specific Relief Act, and apply only to cases in which the plaintiff, being entitled to any legal character or to any right to any property, may bring a suit against any person denying his title to such character or right. Such undoubtedly is the position in law under that section- Deokali Koer v. Kedar Nath (12) 39 Cal 704. But in the present suit the plaintiff also asks the Court to adjudge that the contract is void and order it to be delivered up and cancelled, as provided by Section 39. He alleges that if left outstanding the contract may cause him serious injury because the defendants threaten to proceed with the arbitration before the Tribunal of Arbitration of the Bengal Chamber of Commerce.
4. His second point was that, even though the contract might be avoided by the alteration, such avoidance was not ab initio and therefore the agreement to submit all disputes to arbitration was still valid and enforceable. The law may be summarized as follows: An alteration in a material part of an instrument under hand made by, or with the consent of, one party thereto, but without the consent of the other party, makes the instrument void to this extent that the party responsible for the alteration cannot enforce the instrument against a party not responsible. But the latter can enforce it against the former, if he can prove the original form of the instrument, and where t
The main legal point established in the judgment is the binding effect of the settlement between the parties, the waiver of the right to seek re-employment by the workmen, and the entitlement of the ....
A lockout is justified if it is declared in response to an illegal strike or a strike that is in breach of a settlement or award.
The combination of eyewitness testimonies, recovery of the weapon used, and forensic examination results can establish guilt in criminal cases, even based on circumstantial evidence.
The conviction of an accused person under Section 27(3) of the Arms Act is not permissible in law if the accused is also charged with committing murder under Section 302 of the Indian Penal Code.
The court can enhance compensation based on the deceased's income and family dependency, and adjust the multiplier used by the Tribunal if found unjustified.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.