JUDGMENT Das, J. - This is an application on the part of the Defendant Company for an order that the plaint filed herein be rejected and be taken off the file. The grounds on which the order prayed for is based and which are summarised in paragraph 12 of the petition are (1) that the plaint discloses no cause of action and (2) that the suit appears from the statement in the plaint to be barred by law. Evidently this application purports to be one under Or. 7, r. 11, cls. (a) and (d) of the Code of Civil Procedure. The Defendant Company maintains that on the 10th May, 1946, a contract in writing and numbered J. 9 was entered into by and between the Plaintiff and the Defendant Company through brokers Joychand Bejoy Chand. By that contract the Plaintiff agreed to sell to the Defendant Company 1000 maunds of Tossa Jute at Rs. 17 per maund delivery September to December, 1946. Clause 8 of that contract contains an elaborate arbitration agreement. The Defendant Company has annexed to the petition a copy of the bought note received by it from the brokers. The Plaintiff denies having ever entered into any such contract or having authorised anybody to do so on his behalf. The Plaintiff charges that the alleged contract has been falsely set up. 2. The Defendant Company states that on the 15th May, 1946, it wrote a letter to the Plaintiff confirming the contract but no reply was received by it from the Plaintiff. The Plaintiff denies having received any such letter. 3. On the 19th December, 1946, the Defendant Company wrote a letter to the Plaintiff requesting the latter to deliver the jute without delay. The Plaintiff not having supplied any jute, the Defendant Company on the 2nd January, 1947, sent a letter to the Plaintiff by registered post declaring its option under cl. (7) (b) of the contract and giving notices of its claim. The letter came back through the Post Office with the remark "unclaimed." The Plaintiff admits that he received the letter of the 19th December, 1946, and states that on the 3rd January, 1947, he sent a reply through his attorneys, Messrs. K.K. Dutt & Co., repudiating that he ever entered into any contract with the Defendant Company.
The letter came back through the Post Office with the remark "unclaimed." The Plaintiff admits that he received the letter of the 19th December, 1946, and states that on the 3rd January, 1947, he sent a reply through his attorneys, Messrs. K.K. Dutt & Co., repudiating that he ever entered into any contract with the Defendant Company. The Plaintiff denies that any letter dated the 2nd January, 1947, came to him by post or that he returned it as "unclaimed." 4. On the 14th January, 1947, the Defendant Company sent its difference bill along with a letter to the Plaintiff by registered port, but the same came back with the remark "left." The Plaintiff denies that he ever left the premises No. 35, Cross Street, or that he received any bill. 5. On the 17th January, 1947, the Defendant Company referred the matter to the arbitration of the Bengal Chamber of Commerce. The correspondence between the Bengal Chamber of Commerce and the Plaintiff and the Defendant Company are set out in the annexure to the petition. In such correspondence the Plaintiff maintained that there was no contract between the parties and that the tribunal of arbitration of the Bengal Chamber of Commerce had no jurisdiction and should not proceed with the arbitration. The Registrar having on the 2sth February, 1947, intimated that the arbitration would be proceeded with, the Plaintiff on the 27th February, 1947, filed the present suit. 6. The allegations in the plaint shortly are: that the Defendant Company is seeking to make the Plaintiff liable in respect of the alleged contract; that the Plaintiff did not enter into the alleged contract or; authorise anybody to do so on his behalf; that the alleged contract has been falsely set up; that the Defendant Company has referred an alleged dispute to the arbitration of the Bengal Chamber of Commerce on the allegation of failure and neglect on the part of the Plaintiff to deliver goods under the alleged contract and the Registrar of the Tribunal of Arbitration of the Bengal Chamber of Commerce has issued a notice. The Plaintiff states that the written instrument, being the said alleged contract, is void, inoperative and not binding on the Plaintiff and the same, if left outstanding, will cause serious injury to the Plaintiff.
The Plaintiff states that the written instrument, being the said alleged contract, is void, inoperative and not binding on the Plaintiff and the same, if left outstanding, will cause serious injury to the Plaintiff. The Plaintiff submits that the said written instrument should be ad- judged void and should be delivered up and/or cancelled. The main prayers formulated in the plaint are: (a) Declaration that the aforesaid alleged contract is void; (b) Delivery up of the said contract by the Defendant to the Plaintiff; (c) Cancellation of the said alleged contract; (d) Injunction on the Defendant from proceeding with the arbitration or taking any other steps. 7. Mr. Mukharji for the Defendant Company contends that the plaint discloses no cause of action and that on the allegations in the plaint the suit is not maintainable in law. He relies on my judgment in Snow White Food Products Co., Ltd. v. Punjab Vanaspati Supply Co. 49 C.W.N. 472 at P. 177 (1943) and contends that the suit in so far as it prays for a declaration that the contract is Void is not maintainable under sec. 42 of the Specific Relief Act. For reasons stated by me in that case I am inclined to agree with learned Counsel's contention on this point. That, however, does not mean that the whole suit is bad. I agree with Mr. Roy that the prayer for a declaration in this case is only an introductory prayer. Indeed it is an unnecessary prayer and need not have been asked for at all. At best it appears to be merely ancillary to the prayer for delivery up and cancellation of the contract. 8. Mr. Mukharji next relies on the decision of the Appeal Court in Ram Kissen Joydoyai v. Pooran Mull ILR 47 Cal 733 (1920) which is certainly binding on me, Mr. Mukharji maintains that the suit in so far as it prays for a declaration that the contract is void and for an injunction restraining the Defendant Company from going on with the arbitration is not maintainable for reasons stated in that decision. The prayer for a declaration in that case was treated as an ancillary prayer and the whole, decision turned on the question whether a perpetual injunction could be granted under secs. 54, 55 and 56 of the Specific Relief Act. As Mr.
The prayer for a declaration in that case was treated as an ancillary prayer and the whole, decision turned on the question whether a perpetual injunction could be granted under secs. 54, 55 and 56 of the Specific Relief Act. As Mr. Roy points out there was in that case no prayer for delivery up and cancellation of the disputed contract, such as there is in the case now before me, I find myself in agreement with Mr. Roy that that decision does not make the present suit bad in its entirety. The prayers in the present suit are similar to those in the suit of Bahadurmull Chaudhury v. Nagarmull Madan Gopal ILR (1941) 1 Cal. 451. In that suit learned Counsel for the Defendant took two preliminary objections to the maintainability of the suit. As appears from the reported argument, one of the points taken was that a declaratory suit of this nature was not, on the authority of Deokali Koer v. Kedar Nath ILR 39 Cal. 704 (1912) maintainable and that the prayer for injunction could not be granted in view of cl. (i) of sec. 56 of the Specific Relief Act as held in Ram Kissen Joydayal's case ILR 47 Cal 733 (1920). Lort Williams, J., agreed that such a declaratory suit was not sanctioned by the terms of sec. 42 of the Specific Relief Act but pointed out that besides the prayer for declaration and injunction there were prayers for delivery up and cancellation of the contract under the provisions of sec. 39 of that Act and rejected this preliminary point. That reasoning is equally applicable to the case now before me where the Plaintiff asks for delivery up and cancellation of the alleged contract. 9. Mr. Mukharji then falls back on sec. 39 of the Specific Relief Act and contends that this suit, in so far as it prays for delivery up and cancellation of the alleged contract, does not come within the purview of sec. 39 at all. That section authorises a person against whom a written instrument is void or voidable, who has reasonable apprehension, that such instrument, if left outstanding, may cause him serious injury to sue to have it adjudged void or voidable and authorises the Court to so adjudge it and order it to be delivered up and cancelled.
39 at all. That section authorises a person against whom a written instrument is void or voidable, who has reasonable apprehension, that such instrument, if left outstanding, may cause him serious injury to sue to have it adjudged void or voidable and authorises the Court to so adjudge it and order it to be delivered up and cancelled. The first step in the argument is that as the Plaintiff in this case prays that the contract be delivered up and cancelled he must first show that as against him this contract is void or voidable. The next step in the argument is that a contract may be void or voidable only in circumstances and for reasons set forth in secs. 19 to 30 of the Indian Contract Act, and where the case, as pleaded in the present plaint, does not come under any of those sections, the contract cannot be said to be void or voidable and therefore the case does not come within sec. 39 of the Specific Relief Act. The fallacy of this argument appears to be that it overlooks the very important words "written instrument" in sec. 39. That section is not limited to a suit for cancellation of a written contract only; It covers a case where a person, against whom a written instrument, be it a contract or a deed of sale, or a deed of trust or any other kind of written instrument, is void or voidable seeks to have it adjudged void or voidable and cancelled. Where the party seeking cancellation of the instrument is a party thereto he may have to show that the instrument is void or voidable against him under one or Other of the sections of the Contract Act. But the party seeking to have an instrument cancelled need not be a party to it and if he is not a party to it the provisions of the Contract Act do not come into play at all. The illustrations to sec. 39 clearly show that a person may sue to have an instrument adjudged void and cancelled although he is not a party to it provided he can show that it is void or voidable against him and if left outstanding is likely to cause him serious injuries. See also the cases of Kaluram v. Babulal ILR (1932) 54 All. 812 at p. 820 and Suraj Ket Prasad Vs.
See also the cases of Kaluram v. Babulal ILR (1932) 54 All. 812 at p. 820 and Suraj Ket Prasad Vs. Chandra Mul and Others, AIR 1934 All 1071 where a stranger to an instrument seeks to have it adjudged void and cancelled the principles of the Contract Act referred to by Mr. Mukharji cannot apply. In such a case the word "void" must be read in the larger sense of not binding on him. In the case before me the Plaintiff's case is that there was no contract at all and he was not a party to the written instrument which is being sought to be set up against him as a contract. There being no contract and the Plaintiff being no party to it there can be no question of its being void or voidable against him under one or other of secs. 19 to 30 of the Contract Act. Those provisions of the Contract Act are applicable after the question of validity of the contract arises between the parties to the contract. They can have no application to a case where a stranger seeks to have an instrument adjudged void. The stranger is, therefore, not limited to the grounds laid down in those sections for avoiding the instrument. All that he need show is that the written instrument is not binding on him and that that worthless piece of paper which is being set up against him will, it left outstanding, cause him serious injury. Mr. Mukharji's argument proceeds on the assumption that only a party to an instrument can seek to have it cancelled and that he can do so only if he can show that it is void or voidable against him under the Contract Act. There is no justification or reason for this assumption. Sec. 39 has been worded very wide and to accede to Mr. Mukharji's argument will be to cut down sec. 39 very drastically. This I am not prepared to do unless I am forced to do so by some authority binding on me. No such authority has been brought to my notice. I, therefore, uphold Mr. Ray's contention and hold that the plaint certainly discloses a cause of action for cancellation of the written instrument being the alleged contract. Under Or. 7, r, 11 the Court has no authority to reject parts of the plaint.
No such authority has been brought to my notice. I, therefore, uphold Mr. Ray's contention and hold that the plaint certainly discloses a cause of action for cancellation of the written instrument being the alleged contract. Under Or. 7, r, 11 the Court has no authority to reject parts of the plaint. Therefore even if the prayers for declaration and for injunction may not be maintainable, the plaint cannot be rejected or taken off the file, for it discloses a cause of action for cancellation under sec. 39 of the Specific Relief Act. 10. Mr. Mukharji's last point is that this suit is barred by the provisions of sec. 32 of the Indian Arbitration Act, 1940. Mr. Ray at the outset takes the preliminary objection that it is not open to the Defendant Company to raise the question of the non-maintainability of this suit by reason of sec. 32 of the Arbitration Act. His argument is that cl. (d) of Or. 7, r. 11 requires that the suit must appear from the statements in the plaint to be barred by law and he points out that there is nothing in the plaint in this suit to show that this suit is barred by sec. 32. I think that this argument is based on a very strict and narrow leading of the plaint. In the plaint there is a clear reference to Contract No. J. 9 dated the 10th May, 1946, and a denial thereof. There is a statement that the Defendant Company has referred the alleged disputes to arbitration on the allegation of failure on his part to deliver goods under that alleged contract. He has annexed a copy of the notice from the Registrar of the Tribunal of Arbitration to the plaint. He has expressed his apprehension that the alleged contract, if left outstanding, will cause him serious injury. He has prayed, amongst other things, for an injunction restraining the Defendant Company from proceeding with the arbitration. On these allegations it seems to be fairly clear that while the Plaintiff seeks to have the alleged contract adjudged void and can called he is also attacking the arbitration proceedings. This obviously he is doing only on the ground that as there is no contract between the parties there is no arbitration agreement.
On these allegations it seems to be fairly clear that while the Plaintiff seeks to have the alleged contract adjudged void and can called he is also attacking the arbitration proceedings. This obviously he is doing only on the ground that as there is no contract between the parties there is no arbitration agreement. That is the substance of the plaint as I read it and in my opinion it is open to the Defendant Company to attack the suit on the ground of sec. 32 if that section is applicable at all. I have, therefore, to consider the question raised by Mr. Mukharji. The determination of this question depends upon a true construction of the relevant provisions of the Indian Arbitration Act, 1940. 11. The cardinal rule of construction of a statute is that it is to be expounded "according to the intent of them that made it." This intention is, however, to be gathered from the language used in the statute. The elementary rule is that it is to be assumed that the words and phrases are used in their ordinary and grammatical meaning unless they have acquired any special or technical meaning. This method of literal construction has, in general, but prima facie preference. To arrive at the real meaning it is always necessary to get an exact conception of the aid, scope and object of the whole Act. It was held as far back as Lord Coke's time that in interpreting a statute it was permissible, to consider (1) what was the law before the statute was passed, (2) what was the mischief or defect for which the law had not provided, (3) what remedy the legislature had appointed and (4) the reason of the remedy [see Heydon's case 3 Co. Rep. 7a (1584)]. Almost three centuries later Lindley, L.J., in In re Mayfair Property Co. L.R. (1898) 2 Cl. 28 at p. 35 observed;-- ......in order properly to interpret any statute it is necessary now as it was when Lord Coke reported Heydon's case 3 Co. Rep. 7a (1584) to consider how the law stood when the statute to be construed was passed, what the mischief was for which the old law did not provide and the remedy provided by the statute to cure that mischief. 12.
Rep. 7a (1584) to consider how the law stood when the statute to be construed was passed, what the mischief was for which the old law did not provide and the remedy provided by the statute to cure that mischief. 12. It must, however, be borne in mind as pointed out by Lord Herschell in Kent County Council v. Gerard L.R. (1897) A.C. 633 at p. 639, that the language of a statute must not be strained to make it apply to a case to which it does not legitimately on its terms apply by invoking the consideration of the supposed intention of the Legislature. 13. The Indian Arbitration Act, 1940, as its preamble states, purports to consolidate and amend the law relating to arbitration in British India. It is well-known that before the passing of that Act the law of arbitration in India was in a very unsatisfactory state. There were indeed two parallel systems, one in the CPC applicable to Mofussil India and the other in the Arbitration Act, 1899, applicable to the Presidency towns. The defects of the then law of arbitration and the abuse thereof were adverted to by the Civil Justice Committee in Chapter XIII of their Report. In paragraph 5 of that Chapter the Committee pointed out that a party objecting to arbitration had the following courses open to him, namely, (1) to try and get an injunction restraining an arbitration proceeding, (2) to wait until the award is made and filed and then to apply to Court to set it aside, (3) to file a suit about the matter in dispute so as to make the arbitrators functus officio and (4) to wait until the award is put in execution and then to launch a suit, maybe in a far away place where the award had been transferred for execution, asking for an injunction restraining the execution proceeding and for a declaration to the effect that the submission was obtained by fraud, that the arbitrator mis-conducted himself and that the award is not binding on the Plaintiff.
The first part of paragraph 6 of that Chapter was as follows;-- The scheme of the Indian Arbitration Act of 1899 is, in many cases, utterly ineffective in the sense that a person who has no defence to a just claim, who has agreed to refer all such matters to arbitration, and against whom an award has been made in terms of his agreement, may, nevertheless, defy the other party, not for months only but for years, by means of one or other of the methods above referred to. In all the Courts which have to administer the Act of 1899 the advantages of arbitration can for practical purposes be abolished by bringing a suit to set aside the award as distinct from an application under the Act. 14. In paragraph 13 the Committee recommended that in the case of every arbitration one Court and one Court only should be the forum in which all questions relating to the validity of the award should be finally determined. In paragraph 18 the Committee recommended that a summary method by way of an application for disposing of objections to awards should be provided. These recommendations were sought to be given effect to by secs. 31, 32 and 33 of the Arbitration Act, 1940. There were no such provisions in the old Act of 1899. Sec. 31 deals with the jurisdiction of the Court and is not material for this application, for this Court is the Court having jurisdiction under that section. Secs. 32 and 33 of the new Act are in the following terms:--- 22. Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or an award, nor shall any arbitration agreement ox award be set aside, amended, modified or in any way effected otherwise than as provided in this Act 33.
Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or an award, nor shall any arbitration agreement ox award be set aside, amended, modified or in any way effected otherwise than as provided in this Act 33. Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the court and the court shall decide the question on affidavits; Provided that where the court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. 15. Mr. Mukharji contends that sec. 32 bars suits contesting the existence, validity or effect of an arbitration agreement on any ground whatsoever and an arbitration agreement cannot be set aside, amended or modified or in any way affected otherwise than as provided in the Act. According to Mr. Mukharji it does not matter on what ground the existence of the arbitration agreement is challenged or whether its existence is challenged ab initio or at the date of the suit. He points out that this section bars all suits of that description. There is no reference in this section to "any party to an arbitration agreement" such as there is in sec. 33. Therefore a person who alleges that he never entered into any arbitration agreement and was, therefore, not a party to it and challenges its existence on that ground is equally hit by this section as a person who admits having entered into an arbitration agreement but who alleges that by reason of certain things it is not operative. Mr. Ray, on the other hand, maintains that sec. 32 must be read with sec. 33 and the two sections read together mean that where a person admits having entered into an arbitration agreement but contends that it is not Operative, sec. 32 applies and bars any suit by such a person to challenge the existence, validity or effect of the arbitration agreement and his only remedy is to apply under sec. 33. According to Mr.
32 applies and bars any suit by such a person to challenge the existence, validity or effect of the arbitration agreement and his only remedy is to apply under sec. 33. According to Mr. Ray the word "existence" in both the sections means legal existence as opposed to a merely factual or apparent existence. Where, however, the arbitration agreement is denied in the sense that the person never entered into it there is in fact and in law no arbitration agreement in existence at any time and a suit by such a person is not hit by sec. 32. Mr. Ray strongly relies on the opening words "Any party to an arbitration agreement" in sec. 33. 16. The matter appears to be one of first impression, for I have not been referred to any reported decision of any Court on the point. The case of Bhaguandas Atma Sing v. Atmasing Jessasing 47 Bom. L.R. 716 (1945) does not touch this point. The question considered there arose on an application for stay under sec. 34 of the Act. It must be borne in mind that an applicant under that section must necessarily assert the existence of an arbitration agreement and must first establish its existence. The question then was whether the Court must decide the question of the existence of the arbitration agreement in that application of relegate the party challenging the arbitration agreement to a substantive application under sec. 33. There the Plaintiff contended that it was not necessary for him to apply under sec. 33 and that it was for the applicant to establish the arbitration agreement in order to be entitled to maintain his application under sec. 34. The Court accepted this contention of the Plaintiff in that case. The point whether his application under sec. 33, if made, would be maintainable was not actually raised or decided. That decision, therefore, does not throw any light on the point now raised before me in a concrete form. After considering the interesting and cogent arguments on both sides I have come to the conclusion that the contention of Mr. Ray is correct. If I accede to Mr. Mukharji's contention and hold that sec.
That decision, therefore, does not throw any light on the point now raised before me in a concrete form. After considering the interesting and cogent arguments on both sides I have come to the conclusion that the contention of Mr. Ray is correct. If I accede to Mr. Mukharji's contention and hold that sec. 32 bars all suits on any ground whatsoever for a decision upon the existence, validity or effect of an arbitration agreement then a person who alleges that he never entered into the arbitration agreement and was, therefore, not a party to any arbitration agreement will be without any remedy. Sec. 32 provides that an arbitration agreement shall not be set aside, amended, modified or in any way affected otherwise than as provided in the Act. The only way provided in the Act is what is laid down in sec. 33. That section enjoins that a party to an arbitration agreement desiring to challenge the existence or validity of an arbitration agreement or to have the effect thereof determined must apply to the Court. This section proceeds on the basis of the factual or an apparent existence of an arbitration agreement and contemplates the case of a party to such arbitration agreement coming to Court and seeking to challenge its legal existence on the ground of mistake, fraud, misrepresentation, coercion, illegality or like grounds to be found in secs. 19 to 30 of the Contract Act. The case of Deokinandan Dalmia v. Basantlal Ghanshyamdas 45 C.W.N 381 (1941) decided by Lort-Williams, J., dealt with such a situation. But a person who alleges that he never entered into an arbitration agreement cannot possibly be said to be a party to an arbitration agreement so as to come within the purview of sec, 33. To bring him within the section words will have to be added to that section and to the expression "Any party to an arbitration agreement" will have to be added the expression "or any person alleged to be a party to an arbitration agreement." I do not think it is permissible to do so. Of course the Defendant Company maintains that there was a contract and therefore according to the Defendant Company the Plaintiff is a party to the arbitration agreement but that consideration does not appear to me to be relevant.
Of course the Defendant Company maintains that there was a contract and therefore according to the Defendant Company the Plaintiff is a party to the arbitration agreement but that consideration does not appear to me to be relevant. What I have to consider is the position of the person who wants to come to Court to challenge the existence, factual and legal, of the arbitration agreement. Can he say that he is a party to any arbitration agreement? Obviously not If not, he is not within sec. 33. This literal construction of sec. 33 is consonant with the mischief sought to be remedied by these sections. As I have said, the Civil Justice Committee roundly condemned the practice of dishonest people who were parties to arbitration agreements and who had no defence on merits filing suits on the ground that they were induced to enter into the arbitration agreement by misrepresentation, fraud or the like. Mr. Mukharji submits that a dishonest person may also falsely deny having entered into any arbitration agreement and the mischief will be still there. From a practical point of view the cases where a contract is denied in toto are less numerous than cases where contracts are challenged on the ground of fraud, etc. The risk of consequences in denying a contract is greater than that in impugning the contract on grounds of fraud, etc. In any event the legislature has thought fit to prevent one mischief perhaps because it was more prevalent, but has not said anything about the other, perhaps because it was considered to be rarer. I cannot speculate on the reason. It is not for the Court to unduly stretch the language of the section so as to make it cover a case which it does not, by its terms, do. Every person has a right to file any suit of a civil nature unless this right is taken away expressly or by necessary implication (see sec. 9, C.P.C). Secs. 32 and 33 as they stand do not appear to me to take away, expressly or by implication the right of suit of a person who alleges he never entered into any arbitration agreement and was consequently no party to any such agreement.
9, C.P.C). Secs. 32 and 33 as they stand do not appear to me to take away, expressly or by implication the right of suit of a person who alleges he never entered into any arbitration agreement and was consequently no party to any such agreement. Sec. 32 does take away the right of suit of persons who admit being apparently a party to an arbitration agreement but challenge its real or legal existence, validity or effect. I agree with Mr. Ray that sec. 32 must be read with sec. 33 and the opening words of sec. 33 clearly indicate the persons whose suits are barred by sec. 32. This construction does not involve any tampering with the language of the sections by addition of words but may easily be supported by giving a restricted meaning to the word "existence," namely, as implying the legal existence as opposed to apparent or merely factual existence, i.e., as opposed to a mere semblance of existence. 17. To further reinforce his argument Mr. Ray pointed out that the scope of sec. 33 was indeed limited to challenging the existence, validity or effect of an arbitration agreement. Under that section a person could not claim the larger declaration that the whole contract is void. Therefore a person who challenges the whole contract will be without any remedy as regards the rest of the contract. I do not think there is much force in this argument for a decision as to the existence and validity of an arbitration agreement will ordinarily involve a decision as to the existence or validity of the whole contract. I do not, therefore, base my decision on this consideration. The result, therefore, is that this application must be dismissed with costs and I order accordingly.