A partner of a firm has no implied authority to submit a dispute relating to the business of the firm to arbitration, unless there is a usage or custom of trade to the contrary.

Harnam Singh, J.

1. On the 26th of May 1947, Sohan Lal applied under Section 14 of the Indian Arbitration Act, 1940 , hereinafter referred to as the Act, for the filing of the award given by respondents Nos. 6 and 7 and for a decree of the Court in accordance with that award.

2. On the 30th of April 1948, Ram Parshad Chanan Ram, Sri Bam and Bholu Ram respondents Nos. 2 to 5 objected to the filing of the award inter alia on the ground that Banwari Lal partner of firm Madho Ram-Banwari Lal, had no power to submit the dispute to the arbitration of Munshi Ram and Tara Singh, respondents Nos. 6 and 7.

3. On the 22nd of July 1948, Sohan Lal put in his replication and in that replication pleaded that according to the usage of trade governing forward contracts one partner of a firm has implied authority to submit a dispute relating to the business of the firm to arbitration. Upon the pleadings of the parties the trial Court fixed the following issues:

(1) Whether the reference to arbitration made by Banwari Lal partner of firm Madho Ram- Banwari Lal was valid and binding on the said firm?

(2) Whether there was no such dispute between the parties that could be referred to arbitration and what is its effect?

(3) If Issue No. 2, is found against the respondents, were the arbitrators validly appointed in accordance with the terms of the agreement of reference?

(4) Is the award valid when it was not given by the arbitrators within 4 months of the reference?

(5) Whether the award was given by one arbitrator only and what is its effect?

(6) Were the arbitrators guilty of misconduct?

(7) Is the application barred by time?

(8) What is the effect of the award in dispute having been made in Farid Kot State.

4. After fixing the issues set out above, the trial Court expressly recorded that the parties to the dispute did not claim any other issue.

5. Issues Nos. 2, 3, 5, 6, 7 and 8 were decided against the respondents. In deciding Issue No. 4 the trial Court found that it was a fit case for extending the time for making the award.

6. On Issue No. 1, the trial Court found that Banwari Lal, partner of flrm Madho Ram-Banwari Lal, could not refer the dispute of forward contracts to arbitrators so as to bind his co-partners. That being so, the trial Court while decreeing a sum of Rs. 9,568/12/6 against respondent No. 1 in accordance with the award has set aside the award against respondents Nos. 2 to 5.

7. From the order passed by the Court on the 23 of December 1948, setting aside the award so far as the respondents Nos. 2 to 5 are concerned, Sohan Lal applicant has come up in appeal under Section 39 of the Act.

8. Mr. D. N. Aggarwal, learned counsel for the appellant, contends that each partner is praposi-tus negotiis sociatatis and binds the other partners by his acts in all matters which are within the scope and objects of the partnership and has authority to submit a dispute relating to the business of the firm to arbitration.

9. Sections 18 and 19 of the Indian Partnership Act 1932, are relevant to the argument raised. Section 18 and the material portion of Section 19 read : "18. Subject to the provisions of this Act, a partner is the agent of the firm for the purposes of the business of the flrm.

"19 (1) Subject to the provisions of Section 22 the act of a partner which is done to carry on, in the usual way, business of the kind carried on by the firm, binds the firm.

The authority of a partner to bind the firm conferred by this section is called his implied authority.

(2) In the absence of any usage or custom of trade to the contrary, the implied authority of a partner does not empower him to: (a) submit a dispute relating to the business of the firm to arbitration."

10. Clearly the provisions of Section 18 of the Act are subject to the provisions of Section 19 and other provisions of the Act and the authority of a partner to bind the firm conferred by Section 19 (1) of the Act is controlled by the limitations specified in Section 19 (2)