TMI Blog1961 (9) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... oprietor Jawahar Lal Burman under ss. 33 and 28 of the Act. The respondent alleged that a concluded contract had been entered into between the parties on August 31, 1949 for supply of 170-1/2 Cwt. of cocoanut oil by the appellant to the respondent. The respondent had advertised in the Indian Trade Journal for the said supply and the appellant had submitted its tender No. SM-I/1104524. This tender was accepted by the respondent which concluded a contract between the parties. The respondent's case 'was that the said contract was governed by general conditions of contract Form W.'S.B. 133., These conditions included an arbitration 'agreement, 'Disputes arose between the parties regarding the said contract, and so in pursuance of the arbitration agreement they were referred to the two arbitrators appointed by the parties. After ,the arbitration propeedings had gone. on for, a considerable time before the arbitrators the appellant objected to their jurisdiction to , deal. with the disputes on the- ground: that there was no. concluded contract between the parties. This plea made it necessary for the respondent to move the Court for a decision of the question about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract and so there was no substance in the point of 'jurisdiction raised by the appellant. In the result the appellant's revision application was dismissed. It is against this decision that the appellant has come to this Court by special leave ; and on his behalf Mr. Din Dayal has raised the same two points for our decision. He contends that the High Court was in error in holding that the trial court bad jurisdiction to entertain the respondent's petition, and he argues that even if the point of jurisdiction raised by him fails it should be held that there was no concluded contract between the parties and so. there was no scop or room for making any reference to arbitration. The first of these two contentions has been seriously pressed before us. Before dealing with, the question of jurisdiction it is necessary to recall the material facts which have led to the present dispute. The appellant and the respondent nominated their arbitrators. The arbitrators heard the matter at length and the proceedings bad reached a stage when an award might have been pronounced. It was then that the appellant chose to obstruct the further progress of the proceedings by raising the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court. Indeed, s.2(c) defines a Court as meaning a Civil Court having jurisdiction to decide the questions forming the subject- matter of the reference if the same had been the subject- matter of a suit, but does not, except for the purpose of arbitration proceedings under s. 21, include a Small Cause Court. Therefore, stated broadly, it would be correct to assume that the main object of introducing the new provisions of ss. 31, 32 and 33 was to entrust the decision of the relevant disputes to the specified Court and to require the parties to bring the ,said disputes for the decision of the said Court in the form of petitions. Remedy by a regular suit is intended to be excluded. Section 32 creates a bar against the institution of suits, and it provides that if the existence effect or validity of an arbitration agreement or award is in dispute on any ground whatsoever no suit shall lie for the adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first part of s. 33 refers to the existence or validity in terms and ss. 31 and 32 also refer separately to the existence effect or validity. Therefore, the effect of an arbitration agreement is treated as distinct from the existence of the agreement, and where it was intended to refer to the existence as well as the effect of such an agreement both the words existence and effect have been specifically used. Thus, under the latter part of s. 33 an application can be made to have the effect or purport of the agreement determined but not its existence. That means that an application to have the effect of the agreement can be made provided the existence of the agreement is not in dispute. Besides, if a person affirming the existence of an agreement is held entitled to apply to the Court under the latter part of s.33 for getting a declaration about the said existing agreement then the first part of s. 33 would be wholly superfluous. Therefore, it seems to us that a party affirming the existence of an arbitration agreement cannot apply under s. 33 for obtaining a decision that the agreement in question exists. In fairness we ought to add that the learned Solicitor-General, who appeare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of a. 33 may end in the finding that the arbitration agreement exists. Similarly, in applications made under s.20 of the Act, if a dispute arose as to the existence of the arbitration agreement the Court may find in favour of the existence and make an order of reference as contemplated by a. 24. Thus, it is clear that in the applications expressly provided for by these two sections a party affirming the existence of the agreement would be entitled to prove the said existence, and if he succeeds he would obtain a decision to that effect. Therefore, in holding that s. 32 impliedly recognises the inherent jurisdiction of the Court to entertain applications made by the parties affirming the existence of arbitration agreements we are bringing the provisions of s.32 in line with the provisions of ss. 33 and 20. Indeed, s. 33 is a corollary of s. 32 and in a sense deals by way of illustration with the most usual type of cases arising in arbitration proceedings. Section 28 of the Act has no material bearing on the decision of this point. The power to enlarge time for making the award which is the subject- matter of the provisions of s. 28 cannot be hold to include a power to entertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lord Macmillan in Hayman v. Darwins, Ltd.(1), the arbitration clause is quite distinct from the other clauses. The other clauses set out the obligations which the parties undertake towards each other hinc inde; but the arbitration clause does not impose on one of the parties an obligation in favour of the other. It embodies the agreement on both the parties that, if any dispute arises with regard to (1) [1942] A.C. 356. S. C. [1942] 1 All. E. R. 337 at p. 347. the obligations which the one party has undertaken to the other, such dispute shall be settled by a tribunal of their own constitution. Moreover, there is this very material difference that whereas in any ordinary. contract the obligations of the parties to each other cannot in general be specifically enforced and breach of them results only in damages, the arbitration clause can be specifically enforced by the machinery of the Arbitration Acts . It is, therefore, theoretically possible that a contract may come to an end and the arbitration agreement may not. It is also theoretically possible that the arbitration agreement may be void and yet the contract may be valid; and in that sense there is a distinction between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit had been filed on the Original Side of the Calcutta High Court claiming a declaration that a certain contract was not made between the parties and was not binding on the plaintiff. A further claim was also made that it should be declared that the defendant was not entitled to make any claim in respect of the said contract and that the contract be adjudged void and delivered up as cancelled. The learned trial judge construed the plaint as one for declaration that the arbitration agreement contained in the contract was invalid and on that view he held that under ss. 32 and 33 of the Act the suit was not maintainable. On appeal it was held that the suit was not one for challenging the validity of the arbitration agreement merely; it (1) 1. L. R. [1950] Bom. 333. (2) A. I. R. 1950 Cal. 2.67. (3) 1. L. R. [1952] 2 Cal. 49. covered other reliefs and so bar of ss. 32 and 33 could not be pleaded. We are inclined to think that the decision of the Bombay High Court is substantially correct. That takes us to the next question as to whether there was a concluded contract between the parties or not. We have already noticed that in response to the advertisement published by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r depositing 10% as security. The security money which comes to ₹ 15,230/- (Rupees fifteen thousand two hundred and thirty only) should please be deposited immediately into a Government Treasury in favour of the Deputy Accountant General, I and S., Akbar Road, New Delhi and the Treasury Receipt forwarded to this office. This security money will be refunded to you after the completion of the contract. The contract is concluded by this acceptance and formal acceptance of Tender will follow immediately on receipt of Treasury Receipt. Kindly acknowledge receipt. Yours etc. etc. The whole argument is founded on the use of the clause 'Subject to your depositing. 10% as security. Prima facie this clause may justify the argument that it is intended to make the security deposit a condition precedent; but in construing the true effect of this clause we must look at the whole of the letter bearing in mind the fact that it has been written not by a lawyer or in consultation with a lawyer but by a Government officer in the ordinary course of the discharge of his duties. The first sentence in the first paragraph clearly shows that the offer was accepted for the quantity th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
