CALCUTTA HIGH COURT
Re Arbn. Munshilal and Sons - Appellant
Versus
Modi Bros. - Respondent
Suit Nos. 7 and 8 of 1945
Decided On : 17-01-1947
Arbitration - Joint Hindu Family Business - Indian Arbitration Act, 1940, Sections 14, 15, 17, 30, 31, 32, 33, 41 - A judgment can be passed against a joint Hindu family business in its trading name upon an award for or against the joint Hindu family business under the Indian Arbitration Act, 1940. The court held that the technical rules of procedure as to parties in a suit have no application at the stage when the award made out of court comes before the court for judgment being passed upon it. The court also held that the decree following such judgment may easily be executed either under Order 21, Rule 11 or Rule 50 of the Code of Civil Procedure.
Fact of the Case:
A joint Hindu family business, Modi Brothers, entered into a contract with Munshi Lal & Sons for the sale of paper. Disputes arose and were referred to arbitration. The arbitration agreement was signed by Modi Brothers by the pen of Bhuramull Modi, the manager and karta of the joint family business. The Tribunal of Arbitration made an award directing Modi Brothers to pay Munshi Lal & Sons Rs. 3,360. The award was filed in court, and Bhuramull Modi applied to set aside the award on various grounds, including that the award was bad because it purported to be one against a joint Hindu family business. The application was dismissed, but the court gave liberty to the applicant to raise the objection at the time of judgment. A fresh notice was issued and served on Bhuramull Modi, who contended that the award against Modi Brothers, a joint family business, was a nullity and illegal.
Finding of the Court:
The court held that an award against a joint Hindu family business in its trading name is a valid award and can be enforced by a suit. The court further held that the Indian Arbitration Act, 1940, provides for a uniform procedure for enforcing awards, and the court has to pronounce judgment on every award filed in court. The court found that there is no express provision in the Code of Civil Procedure or the Arbitration Act that prohibits passing a judgment against a joint Hindu family business. The court concluded that the Arbitration Act gives the court express power to pronounce judgment upon an award irrespective of the question as to whether a suit would be maintainable by or against a party for or against whom the award has been made. The court also held that the decree following such judgment may easily be executed either under Order 21, Rule 11 or Rule 50 of the Code of Civil Procedure.
Issues: The issues raised in the case were:(i) Whether an award for or against a joint Hindu family business in its trading name is at all valid;(ii) Whether judgment can be passed under the Indian Arbitration Act, 1940, for or against a joint Hindu family business in its trading name upon an award in favour of or against it;(iii) Whether judgment can be passed upon such an award for or against the members of the joint Hindu family individually or their karta as such.
Ratio Decidendi: The court held that the technical rules of procedure as to parties in a suit have no application at the stage when the award made out of court comes before the court for judgment being passed upon it. The court also held that the decree following such judgment may easily be executed either under Order 21, Rule 11 or Rule 50 of the Code of Civil Procedure. The court reasoned that the Arbitration Act gives the court express power to pronounce judgment upon an award irrespective of the question as to whether a suit would be maintainable by or against a party for or against whom the award has been made.
Final Decision: The court pronounced judgment in accordance with the award against Bhuramull Modi as the karta of the joint family carrying on business in the name of Modi Brothers referred to in the award. Bhuramull Modi as such karta will also pay the costs of these proceedings before the court.
JUDGMENT
Das, J. - The material facts leading up to the present proceedings for judgment upon award may shortly be stated as follows:
A business is carried on in this city under the name and style of "Modi Brothers." There is no dispute that this business belongs to a Mitakshara joint Hindu family and that Bhuramull Modi as the karta of that family manages this business.
In the usual course of business Modi Brothers entered into a contract with Munshi Lal & Sons for the sale of certain quantity of paper. Disputes and differences having arisen between the parties to that contract the same were referred to the Tribunal of Arbitration of the Bengal Chamber of Commerce. The arbitration agreement, so far as Modi Brothers was concerned, was subscribed as follows:-"Modi Brothers by the pen of Bhuramull Modi, the Manager and karta of the joint family Business Modi Brothers."
2. On 20th December, 1944, the Tribunal of Arbitration made an award declaring that the contract was valid and binding upon the parties and directing Modi Brothers to pay to Munshi Lal & Sons the sum of Rs. 3,360. This award was forwarded by the Tribunal of Arbitration to the Registrar of this Court with a request that the award be filed. The award was filed on or about 27th June, 1945. Under sec. 14 of the Indian Arbitration Act a notice addressed to Messrs. Munshi Lal & Sons and Messrs. Modi Brothers was issued by the Registrar at the instance of Munshi Lal & Sons and served by registered post at the place of business of Modi Brothers.
3. On 4th November, 1945, Bhuramull Modi as such karta as aforesaid made an application to this Court for setting aside the award on a variety of grounds. One of the grounds was that the award was bad because it purported to be one against a joint Hindu family business. This objection, I am told, was not regarded as quite appropriate on that application and consequently was not pressed at that stage. I gather that the Court gave liberty to the applicant to raise the objection at the time when the Court would proceed to pronounce judgment upon the award. The application for setting aside the award was, therefore, fought out on other grounds and was eventually dismissed on the 4th June, 1946.
4. On the same day after the dismissal of that application the Court took up the matter of judgment upon the award. Learned Counsel appearing for Munshi Lal & Sons apprehending that the notice directed to Messrs. Modi Brothers and served at its place of business might be held to be misconceived and invalid, applied for an adjournment to enable his client to get fresh notice to be issued and served on proper parties. The prayer for adjournment was granted and a direction for issue of a fresh notice was given upon certain terms as to payment of costs.
5. On 11th June, 1946, a fresh notice addressed to Messrs Munshi Lal & Sons and to Bhuramull Modi of Modi Brothers was issued and has since been duly served on him. Bhuramull Modi has filed an affidavit admitting that he is the karta but contending that as Modi Brothers is a joint family business the award against it is a nullity and is illegal and the award or the decree which is sought to be obtained thereon will not be capable of execution at all. An affidavit in opposition has been filed controverting the several contentions mentioned above Bhuramull Modi has filed a reply re-iterating his contentions. The matter has now come before me for hearing. It is not disputed that Modi Brothers is a joint Hindu family business.
6. Three several points have been raised in the argument, namely,
(i) whether an award for or against a joint Hindu family business in its trading name is at all valid;
(ii) whether judgment can be passed under the Indian Arbitration Act, 1940, for or against a joint Hindu family business in its trading name upon an award in favour of or against it;
(iii) whether judgment can be passed upon such an award for or against the members of the joint Hindu family individually or their karta as such
gpt-4
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