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High Court Of Rajasthan
Judgename : I.N.Modi,L.N.Chhangani
O.P.VERMA - Appellant
Versus
LALA GEHRILAL - Respondent
First Appeal 31 Of 1954
Decided On : 10/12/1960
FOREIGN JUDGMENT - ENFORCEABILITY - ORAL AWARD - VALIDITY - CONSIDERATION FOR CHEQUE - MAINTAINABILITY OF SUIT - ELECTION OF REMEDIES.
Fact of the Case:
The plaintiff and the defendants were partners in a business. The partnership was dissolved in May 1942. A dispute arose between the parties as to the settlement of the accounts of the partnership business. The parties referred the dispute to arbitration. The arbitrator gave an oral award in favor of the plaintiff that the defendants should pay him a sum of Rs. 17500/- in complete settlement of the partnership account in question. The defendants accepted the award and defendant Chandmal gave a cheque for the aforesaid amount to the plaintiff. The cheque was dishonored by the bank. The plaintiff filed a suit in the Delhi court for the recovery of Rs. 17500/- from the defendants. The defendants applied for leave to defend the suit on the ground that the cheque was a forged one. The court dismissed the application for leave to defend and granted an ex parte decree for Rs. 17500/- in favor of the plaintiff. The plaintiff was able to realize a sum of Rs. 20/- only from the defendants by execution in the Delhi court. Thereafter, the plaintiff filed the present suit in the court of the District Judge of the former State of Kotah where the defendants were living. The plaintiff averred that the defendants had their immovable property in the State of Kotah and were also living and carrying on business there and consequently that court had the jurisdiction to entertain the suit.
Finding of the Court:
1. The Delhi Court was competent to decide the suit within the meaning of Section 13 irrespective altogether of the consideration that the defendants were subjects of the former Kotah State which was an independent princely State and which now, forms part of the State of Rajasthan. 2. The judgment of the Delhi Court was not given on the merits of the case, and, therefore, also it is not conclusive within the meaning of Section 13 of the Civil Procedure Code. 3. The defendants miserably failed to prove that they passed a blank cheque and the plaintiff filled in an amount of Rs. 17500/-. It cannot be expected of a shrewd business-man of the type of Shri Chandmal that he would pass a blank cheque to the plaintiff when already a dispute had arisen between his father and the plaintiff regarding the settlement of the accounts. 4. An oral award is not capable of being enforced according to the scheme and provisions of the Arbitration Act, for the said Act contemplates only a written award. 5. There is nothing inherently illegal about an oral award though standing by itself it may not be enforceable according to the statute law. 6. The present suit was not brought merely to enforce an oral award as such. The correct position in point of fact seems to us to be that this suit was instituted on the basis of a promissory note which had been given by the defendants to the plaintiff and which was dishonoured by the bank on which it had been made. 7. The plaintiff did obtain a decree against the defendants in the foreign court for Rs. 17500/-with costs and future interest; but he had only been able to recover a sum of Rs. 20/-from the defendants, and it is nobodys case that the rest of the amount was recovered from them.
Issues: 1. Whether the court of Sub-Judge Delhi had no jurisdiction to hear this suit? 2. Whether the foreign judgment dated 27th July, 1943, is final and binding? 3. Whether the parties appointed an arbitrator on 29th July, 1942, for the decision of the partnership accounts and the arbitrator found Rs. 17500/- due to the plaintiff from the defendants? 4. Whether the defendants gave a cheque to the plaintiff on the 24th february, 1943, for the said amount after accepting the award? 5. Whether the defendant Chandmal passed a blank cheque to the plaintiff in payment of the price of Niwar purchased from the plaintiffs factory and for clearing the Bank account but the plaintiff forged it for rs. 17500/-? 6. Whether Chandmal is not a proprietor of Chand Brothers and he had no authority to pass a cheque and accept the liability on behalf of the firm?
Ratio Decidendi: 1. The decision of the Delhi court was not a decision on the merits of the case within the meaning of Section 13 (b), C. P. C. because it was given without investigating or considering any of the matters raised in controversy. 2. A decree passed in a suit brought under Order 37 C. P. C. without going into the merits of the case and because the defendant failed to appear or because he was not given leave to defend cannot be held to be a judgment on the merits of the case. 3. The initial burden of proving the execution of a document when it is denied must rest upon the person alleging its execution. But where a document is admitted to bear a certain signature and it comes from proper custody, that would, in our opinion, be enough to raise an inference that it was signed with the intention of execution. 4. An oral award is not inherently illegal, but for the statutory requirement that it should be made in writing. 5. A suit can be maintained on the basis of a promissory note which had been given by the defendants to the plaintiff and which was dishonoured by the bank on which it had been made, even though the award on which the promissory note was based was an oral one.
Final Decision: The appeal was partly allowed, the judgment and decree of the trial court were set aside and the plaintiff's suit for Rs. 17480/- was decreed. Interest on this amount from the date of the promissory note, that is the 24th February, 1943, up to the date of realization at six per cent per annum simple was also allowed. The rest of the plaintiff's claim was dismissed. The plaintiff was allowed three-fourths of the costs incurred by him in the High Court as well as the court below and the defendants were ordered to bear their own costs throughout.
MODI, J.
( 1 ) THIS is a regular civil first appeal by the plaintiff O. P. Verma against the judgment of the learned District Judge Kotah dated the 9th February, 1954, dismissing the plaintiffs suit with costs.
( 2 ) THE material facts leading up to this appeal may be shortly stated as follows. There was a partnership business between the plaintiffs wife and the defendants (who are father and son) at Bikaner in December, 1941. The plaintiff was looking after this business, on behalf of his wife, which was carried on in the name of chand Bros. under which firm name the defendants were already carrying on business. Although the nature of this business is not disclosed in the plaint, there is evidence to show that the parties had taken a sub-contract from Messrs. Green bus Co. Delhi, in connection with the supply of lorries for training drivers for the second World War. This partnership is alleged to have continued until May 1942. The plaintiffs case was that in order to settle the accounts of this partnership business, an arbitrator named S. P. Singh, who is admittedly a brother of the plaintiff, was appointed by the parties on the 29th July, 1942. The arbitrator allegedly gave his award some time in the first week of February, 1943. This award turns out to be an oral one though the plaintiff under a mistaken notion stated in his replication that it was in writing. It is further alleged that, in accordance with the award of the arbitrator, the defendant Chandmal who was one of the proprietors of Messrs. Chand Bros. , gave the plaintiff a post-dated cheque no. D 70180 dated 24-2-1943 for Rs. 17500/- on the Palai Central Bank Ltd. . Delhi, in full settlement of the account of this partnership business. This cheque was presented by the plaintiff to the said bank on the 1st March, 1943, but it was dishonoured by the bank as they had no funds to the credit of the defendant chandmal in their bank. The plaintiffs case further was that thereafter he sent a notice to the defendants to pay the aforesaid amount as the cheque had been dishonoured by the bank. To this, a reply came from the defendants that the cheque in question had never in fact been passed in favour of the plaintiff and that the Bikaner account still remained unsettled, and, therefore, the defendants were under no liability to pay the amount asked for. Thereupon on the 26th April, 1943, the plaintiff O. P. Verma filed a suit for the recovery of Rs. 17500/-from the defendants in the court of the commercial Sub-Judge Delhi on the basis of the dishonoured cheque. This suit was brought under Order 37 of the Code of Civil Procedure. The defendants through their counsel Mr. Ranjit Singh put in an application for leave to defend the suit on the ground that the cheque was a forged one. It seems that it was the case of the plaintiff before the Sub-Judge that the plaintiff had given a receipt on the back of the counter-foil of the cheque in question in the defendants cheque book. The case was, therefore, adjourned by the Sub-Judge to the 27th July, 1943, in order to enable the defendants to file the counter-foil of the dishonoured cheque. On the 27th July, 1943, the defendants did not put in appearance in the court of the Sub-Judge, and they appear to have sent a telegram to say that they were ill. The court naturally took no notice of the telegram. The defendants counsel does not seem to have appeared at this hearing, or if he appeared, he probably said that he had no instructions. Thereupon the learned Judge dismissed the application for leave to defend and granted an ex parte decree for Rs. 17500/-in favour of the plaintiff with costs and future interest at 6 per cent. per annum from the date of the institution till the date of realisation. The case of the plaintiff further was that, after obtaining this decree, he was able to realise a sum of Rs. 20/- only from the defendants by execution in the Delhi court, and the balance of Rs. 17480/-together with costs and interes
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