A note on a credit memo stating that the sale is governed by the Rules and Regulations of an Association and that the decision of the arbitrator shall be final amounts to an arbitration clause, and the Rules and Regulations of the Association are incorporated into the credit memo by reference.

( 1 ) THIS appeal under Section 39 (1) (vi) of thearbitration Act, 1940 is directed against the judgment and order of thesubordinate Judge 1st Class, Delhi dated 30. 1. 1980 setting aside the awarddated 18. 8. 1977 made by Delhi Hindustani Mercantile Association (Regd ). (hereinafter referrred to as the Association ) awarding a total sum of Rs. 15,999. 80 on account of the balance price of goods, costs of proceedings andinterest upto 21. 2,1977 besides future interest at 1. 25 per cent per month tothe appellants against respondents No. 1 to 4.

( 2 ) BRIEFLY the facts are that the appellant firm a registered partnership concern, carrying on cloth business at Delhi, is a member of Delhihindustani Mercantile Association (Regd.), Chandni Chowk, Delhi. Respondents 1 to 4 purchased cloth on credit and a sum of Rs. 12,404. 55 onaccount of balance of price of the goods besides interest and expenses remained due to the appellants. The goods were being sold on the credit memoissued by the appellants containing the following Note :

"the goods have been sold according to the rules and regulationsof Delhi Hindustani Mercantile Association and all disputes will besettled in accordance with the arbitration rules of Delhi Hindustanimercantile Association. The decision of the arbitrator shall be final. "

( 3 ) THE appellants demanded payment from the respondents and ontheir failure to do so, they referred their claim to the Association for settlement in accordance with the Rules and Regulations of the said association. Respondents No. 1 to 4 admittedly are not the members of the Associationclause 36 of the rules of the Association provides the various categories ofthe claims which are adjudicated upon by the Association. Sub-rule (5) ofrule 36 provides for settlement of claims by members of the Associationagainst non-members. The notice of the appellants claim was served up > nrespondents No. 1 to 4. Onkar Nath, respondent Partner of the firm appearedbefore the Arbitrator appointed by the said Association on 13. 7. 1977 andmade a statement that there was difference in the statement of account ofthe appellants, that he be granted time to file the written statement on behalf of the respondents. The arbitrator adjourned the proceedings to 20thjuly, 1977, but the respondents thereafter absented themselves. After sonicadjournments the arbitrator gave his award as stated earlier.

( 4 ) THE appellants on 5. 9. 1977 made an application under Sections14 and 17 of the Arbitration Act for making the said award a rule of thecourt. The arbitrator filed the award in Court. Notice of the filing of theaward was given to the respondents who filed their objections dated 8. 1. 1978alleging that there was neither any arbitration agreement, nor any validreference was made to the arbitrator, that the award was not made withinthe prescribed period, that they were not liable to pay interest, that thereexisted no dispute, that the arbitrator mis-conducted the proceedings, thatthey were not members of the Association and the said Association had noauthority to adjudicate against persons who were not its members, that theywere not served with any notice by the arbitrator and that the claim wasbarred by time. The trial Court framed the issue whether the award wasliable to be set aside in view of the objections to the award made by therespondents. Kanwal Krishan partner of the respondent firm appeared asa witness in support of the objections. He stated that he was not aware ifhis brother Onkar Nath ever appeared before the arbitrator in the saidproceedings. He denied the arbitration agreement. He stated that theynever agreed to arbitration or to refer any dispute to arbitration, that therewas no dispute, that respondent No. 1 was not the member of the Association,that there were no transactions with the appellants. In cross-examination heidentified his signatures on some of the papers but did not identify thesignatures of other partner Onkar Nath who had appea