KISHANLAL CHUG Vs. KARAM CHAND THAPAR AND BROS (COAL SALES) LTD
LAWS(CAL)-1970-6-29
HIGH COURT OF CALCUTTA
Decided on June 19,1970

KISHANLAL CHUG Appellant
VERSUS
KARAM CHAND THAPAR AND BROS (COAL SALES) LTD Respondents

JUDGEMENT

- (1.) This is an application for stay of a suit under Section 34 of the Indian Arbitration Act, 1940. The Petitioner was appointed by the Respondent as its Branch Manager at the Jaipur Branch of the Respondent company. The terms of the said appointment were incorporated in a letter dated April 3, 1951 (Ex. A to the affidavit of Kashi Prosad Srivastava). The said terms contain an arbitration clause which reads as follows: 21. That if you and the company ever fail to come to a mutual settlement on any points or disputes arising out of or anywise relating to this letter of appointment, all such points or disputes shall be referred to the sole arbitration of the Managing Director for the time being of the Managing Agents of the company and his decision shall be final and binding on the company and yourself. The Petitioner acted as Manager of the Jaipur Branch on the terms and conditions as set out in the said letter dated April 3, 1951. On July 24, 1958, a fresh agreement was entered into between the parties whereby the Petitioner continued to act as the Branch Manager of the said Jaipur Branch on terms and conditions which are incorporated in the letter dated July 24,1958. Save and except some modifications the terms and conditions as set out in the letter dated April 3, 1951, and the letter dated July 24,1958, are substantially the same. In the subsequent agreement the arbitration clause was, expressed in the following manner: 18. That if you and the company ever fail to come to a mutual agreement on any points or disputes arising out of or anywise relating to the letter of appointment, all such points or disputes shall be referred to the sole arbitration of Lala Karamchand Thapar of 12 India Exchange Place, Calcutta, and his decision shall be final and binding both on the company and yourself. Sometime in 1964 Karam Chand Thapar died. The Respondent on the basis of some allegation against the Petitioner suspended him by a letter dated November 20, 1967. On January 18, 1968, the Petitioner denied the allegations made in the said letter. On February 7, 1968, the Respondent, inter alia, called upon the Petitioner to pay amounts which were alleged to have been overdrawn by the Petitioner in breach of the agreement, on February 17, 1968. The Petitioner denied the charges made in the said letter dated February 7, 1968, and also made a claim against the Respondent demanding an enquiry into the accounts. On May 23, 1968, the Respondent informed the Petitioner that enquiry would be held by Sri Talwar. On June 5, 1968, the Petitioner demanded in writing arbitration in terms of the agreement dated April 3, 1951. On June 10, 1968, the Respondent informed the Petitioner that the earlier agreement dated April 3,1951, was terminated in 1958 and a new agreement dated July 24, 1958, was entered into and that as Sri Karam Chand Thapar who was the sole arbitrator agreed upon by the parties in the new agreement died, the arbitration clause became infructuous. On July 12, 1968, the Respondent intimated the Petitioner that, on enquiry, a sum of Rs. 38,003-72 P. had been found due to the company by the Petitioner. On September 23, 1968, the Petitioner suggested appointment of an arbitrator in place of Sri Karam Chand Thapar, deceased. On November 12, 1968, the Respondent reiterated that the arbitration clause had no application in the present case. On February 20, 1969, a suit filed in this Court (Suit No. 557 of, 1969, Karam Chand Thapar & Bros. (Coal Sales) Ltd. v. Kishanlal Chug) claiming a decree for Rs. 40,681=94 P. and also alternatively for accounts, interest etc. On April 1, 1969, the Petitioner was served with the Writ of Summons in the suit. On April 15, 1969, the Petitioner made an application in the Court of District Judge, Jaipur, for appointment of an arbitrator under Section 8 of the Indian Arbitration Act. The said application is still pending in the Jaipur Court and the present application has been made on April 21, 1969.
(2.) The substantial points raised by Mr. Bhabhra, counsel for the Respondent, is that under the agreement dated July 24,1958, the parties agreed to refer their disputes and differences, if any, to the sole arbitration of Karam Chand Thapar. According to him, by using the word 'sole' the parties intended to have the arbitration of the said K. C. Thapar and Thapar alone. Relying upon the dictionary meaning of the word 'sole' in A New English Dictionary (vol. 1, pt. I), he has argued that the word 'sole' in the present context means 'exclusive'. According to him, the parties by using the word 'sole' -clearly intended that the vacancy caused by the death of Sri Thapar is not to be supplied by any other person inasmuch as reference to arbitration to any other person was not contemplated. He has, therefore, asked me to hold that the arbitration clause has become ineffective and non est. Reference has been made by him on Chief Engineer, Buildings and Roads, Jaipur and Anr. v. Harbans Singh,1955 AIR(Raj) 30
(3.) Mr. Amiya Kumar Bose, counsel on behalf of the Petitioner, has however contended that on the death of Karam Chand Thapar the arbitration agreement has not become infructuous. According to him, the words 'sole arbitration' mean 'a single arbitration' as distinguished from the joint arbitration. The mere use of the word 'sole' does not express the intention of the parties in clear terms to the effect that vacancy caused by death of Sri Thapar is not to be sup plied by the Court. Relying upon Governor-General in Council v. Associated Live Stock Farm (India) Ltd.,1947 52 CalWN 288, Yar Muhammad and Anr. v. Ghulam Sarwar and Ors.,1950 AIR(Lah) 145147 and Surendranalh Paul v. Union of India, 1965 AIR(Cal) 183187 he has argued that this is a proper case 'where a Court should appoint an arbitrator under Section 8(l)(b) of the India Arbitration Act, 1940.;


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