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1951 DIGILAW 21 (MAD)

Ramdayal Rameswarilal v. Vissamsetti Chandra Narasimham

1951-01-09

BASHEER AHMED SAYEED

body1951
Judgment.- The petitioner in this petition is the defendant in O.S.No.702 of 1948 on the file of the District Munsiff’s Court at Vijayawada. The plaintiff in that suit claimed damages against the defendant for non-performance of the contracts entered into between the parties. The defendant took out an application under section 34 of the Arbitration Act to have the suit stayed on the ground that the terms of the contract contemplated a settlement of disputes between the parties by reference to arbitration. The learned District Munsiff did not agree with the contention of the defendant, and even so, the learned Subordinate Judge upheld the decision of the learned District Munsiff. This petition is therefore preferred against the order of the learned Subordinate Judge. It is useful in this connection to refer to the actual terms of the contracts entered into between the parties (Exhibits A-1 and A-2). After setting out the name of the seller, the name of the buyer, the quality, quantity, rate, place of delivery, time of delivery, terms of payment, etc., the written contract which is. signed by both the parties sets out in the clause marked N.B. that the. terms and conditions should be as per Nellimarla or Chittavalsah Jute Mill Company’s contract. Below this, further particulars are set out which are to this effect, viz,, “Settlement against contract No.72, dated 21st March, 1947, at the rate of Rs.92-0-6 per hundred baps only”. These contracts are for the supply and purchase of empty gunny bags manufactured by H.D. Nellimarla or Chittavalsah Jute Mills. This is specifically mentioned in the contracts against column 3. In view of the contents of these contracts wherein specific reference is made to the supply of goods manufactured by a particular mill and wherein there is a stipulation that terms and conditions should be as per the contract of the said Nellimarla or Chittavalsah Jute Mil Company, it cannot be contended for a moment that the plaintiff was not awar of the terms and conditions under which the goods were supplied by the Nellimarla or Chittavalsah Jute Mills. Besides, it is in evidence that the plaintiff has been dealing with such goods manufactured by the said mills, though he has been purchasing the same, as per his own evidence through brokers. It cannot be said that he was a stranger to transactions of the type in question. Besides, it is in evidence that the plaintiff has been dealing with such goods manufactured by the said mills, though he has been purchasing the same, as per his own evidence through brokers. It cannot be said that he was a stranger to transactions of the type in question. Both the parties must be stated to be in the full know of the terms and conditions under which supplies and purchases of the products manufactured by either Nellimarla or Chittavalsah Jute Mill Company are made by those who have dealings in gunny bags manufactured by the said mills. When such is the background, and when there is a specific stipulation, which invites the particular attention of the signatories to the contract to the fact that the terms and conditions should be as per Nellimarla or Chittavalsah Jute Mill Company’s contract, surely there can be no substance in the contention of the plaintiff that he was not aware of what exactly were the terms and conditions under which the products manufactured by the said two Mills were being supplied or sold in the market. Ignorance on the part of the plaintiff, of the terms and conditions under which such sales are made by the said manufacturing companies appears to be one of the reasons why the learned District Munsiff refused to exercise his discretion in staying the suit as required by the defendant. The other reason which has been relied upon by the learned District Munsiff in refusing to stay the suit as prayed for by the defendant appears to be that the plaintiff gave notice before filing the suit, and that the defendant did not choose to send any reply to the threat of the plaintiff held against the defendant that he would file a suit if damages were not paid. These two reasons referred to above can hardly be said to be sufficient for the District Munsiff to refuse to exercise the jurisdiction which is vested in him under section 34 of the Arbitration Act. In my opinion, the learned District Munsiff was not correct in having taken the attitude which he did on these two very flimsy grounds. Even so, the learned Subordinate Judge while upholding the decision of the learned District Munsiff has not approached the question from the background that was available to him and as evidenced by the terms of the contract. Even so, the learned Subordinate Judge while upholding the decision of the learned District Munsiff has not approached the question from the background that was available to him and as evidenced by the terms of the contract. As the contract after setting out the relevant particulars that have usually to be incorporated in any contracts between the. parties who deal in the purchase of goods manufactured by the Mills referred to above, has definitely stipulated that the further terms and conditions of the contract should be those that have been laid down in the contract of the Nellimarla or Chittavalsah Jute Mill Company, there is no sufficient ground for the learned Subordinate Judge to come to the conclusion that the terms of the contract of the Nellimarla or Chittavalsah Jute Mill Company did not get incorporated in the terms of the suit contracts. If it was not the intention of the parties that the terms of the Nellimarla or Chittavalsah Jute Mill Company’s contract were to be incorporated there was absolutely no reason why such a stipulation should have been entered into in the suit contracts, especially, after all the relevant particulars which would ordinarily be sufficient for a contract, had been entered up. As already observed, the ground that the plaintiff was not aware of what exactly were the terms and conditions of the contracts of the said mills is not tenable. In the other hand, it was incumbent upon the plaintiff who was entering into a contract with the defendant to have acquainted himself with the exact terms and conditions under which the goods were being sold or supplied by the said two companies, when there was a stipulation as to the terms and conditions of the contract. The learned Subordinate Judge however has relied on the decision reported in Randal Murlidhar v. Haribux Puranmull1, which follows Chatturbhuj Chandunmull v. Basdeodas Daga2 and Kedarnath Babulal v. Sumpatram Doogur3. I have read through these decisions, and I do not think the facts as disclosed by the present suit contracts are the same as those that are considered in these decisions. In my view, they do not apply to the present case. On the other hand, the learned counsel for the petitioner has relied upon Temperley Steam Shipping Co. v. Smyth & Co.4, Vali Mahomed Ayoob v. Shamdeo5, and Mohanlal v. Bisserlal6. In my view, they do not apply to the present case. On the other hand, the learned counsel for the petitioner has relied upon Temperley Steam Shipping Co. v. Smyth & Co.4, Vali Mahomed Ayoob v. Shamdeo5, and Mohanlal v. Bisserlal6. On a perusal of these authorities relied upon by the learned counsel for the petitioner I am inclined to agree with the rulings laid down in these decisions, as the facts in those cases are on all fours with the facts in the present case. They furnish the proper rule of construction to be followed in such circumstances as those that obtain in the present case. There is of course no direct authority of this Court on the point at issue. My attention has however been drawn to a recent decision of my learned brother, Raghava Rao, J., which has not yet been reported. That decision is in A.A.O.No.146 of 1948. I have read through that judgment, which has turned upon different points which are not relevant to and have no bearing on the facts of the present case. I must however mention in this connection, that two of the important decisions cited by the learned counsel for the respondent, namely, G. Freeman & Sons v. Chester Rural District Council7, and T.W. Thomas & Co., Ltd. v. Portsea Steamship Co., Ltd.8, and which are referred to in Ramlal Murlidhar v. Haribux Puranmull1, Chaturbhuj Chandunmull v. Basdeodas Daga2 and Kedarnath Babulal v. Sumpatram Doogur3, are clearly distinguishable from the facts that obtain in the present case. It may also be stated that T.W. Thomas & Co., Ltd. v. Portsea Steamship Co., Ltd.8 does not refer to an earlier decision in Temperley Steam Skipping Co. v. Smyth & Co.,4 the principle of which decision is acceptable to me as doing justice to the circumstances of the present case, and I hold that the terms of the contract of the Nellimarla or Chittavalsah Jute Mill Company got incorporated into the terms of the suit contracts. Mr. v. Smyth & Co.,4 the principle of which decision is acceptable to me as doing justice to the circumstances of the present case, and I hold that the terms of the contract of the Nellimarla or Chittavalsah Jute Mill Company got incorporated into the terms of the suit contracts. Mr. Parthasarathi, learned counsel for the respondent invited my attention to the observations of in Kedarnath Babulal v. Sumpatram Doogur3, and also to the observations made by the learned author Sircar in his commentaries on the Arbitration Act at pages 292, 293 and 301, wherein it has been stated whenever there is an ambiguity with regard to the actual terms of the contract the jurisdiction of the Courts ought not to be ousted. On the facts of the present case, I do not think that there is any ambiguity at all with regard to the terms of the contract, so as to justify my adopting the ruling in the authorities cited by the learned counsel for the respondent. The circumstances of the present case as set forth above justify the construction that the terms and conditions of the Nellimarla or Chittavalsah Jute Mill Company did become incorporated into the terms of the suit contracts. The next point urged by learned counsel for the respondent is that in so far as the judicial discretion has been rightly exercised by the Courts below, there is no scope for this Court to interfere in revision with the orders passed by the two Courts below. I am afraid I cannot agree with this contention of the learned counsel for the respondent. I do not think, as already observed, that the Courts below have exercised the jurisdiction vested in them in a proper manner, on the facts of the case. I do not think there is any substance in the contention of the respondent that there is no proper agreement for submission to arbitration. The terms and conditions in question do constitute a sufficient agreement to refer to arbitration. I do not think there is any substance in the contention of the respondent that there is no proper agreement for submission to arbitration. The terms and conditions in question do constitute a sufficient agreement to refer to arbitration. Taking the entire circumstances of the case, I am inclined to hold that the defendant is entitled to the benefit of the terms of the contract which have been stipulated between him and the plaintiff, and it is a fit case wherein the matter should be referred to arbitration as per the agreement between the parties,, and there will therefore be a stay of the suit under section 34 of the Arbitration Act. In the result, the revision petition is allowed with costs. V.P.S. ------ Petition allowed.