FIRM GIANCHAND WALAITI RAM AND ORS. Vs. KISHAN CHAND
HIGH COURT OF PUNJAB AND HARYANA
Firm Gianchand Walaiti Ram And Ors.
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Harnam Singh, J. -
(1.) ON 13 -6 -1948, Lala Kishan Chand son of Lala Nika Mal instituted the suit Out of which these proceedings have arisen for the recovery of Rs. 10,500 from Gian Chand Walaiti Ram and others on the basis of transactions which according to the terms of the contracts are to be considered as wholly made and completely to be fulfilled at Okara, subject to the customs of the Okara market and the rules and bye -laws of the Krishan Murari Exchange Ltd., Okara.
(2.) ON 27 -7 -1918, Walaiti Shah and Gian Chand basing themselves on Clause 12 of the agreement applied under Section 84, Arbitration Act, 1910, hereinafter referred to as the Act, for the stay of the suit. Plaintiffs, however, maintained at the trial that the agreement for reference of the dispute to arbitration had become wholly incapable of performance for the reason that Krishan Murari Exchange Ltd., Okara, has ceased to function at Okara. The trial Court finding that the arbitration Clause has become impossible of performance has dismissed the Defendants application under Section 34 of the Act. Messrs. Gian Chand Walaiti Ram have now come up in appeal under Section 39 of the Act from the order passed by the trial Court on 24 -5 -1949.
(3.) FOR a proper decision of the point involved in these proceedings, I think it desirable to set out conditions Nos. 1, 6, 12 and 14 of the agreement on which reliance has been placed. Conditions Nos. 1, 6, 12 and 14 read as under:
(1) All transactions are to be construed and are to take effect as contracts wholly made and completely to be fulfilled at Okara, subject to the customs of the Okara market, the rules and bye -laws of the Krishan Murari Exchange, Ltd., Okara (or its successors if any) in force from time to time, which shall apply to me/us and bind me/us in the same way and manner as they do you in your capacity of members of the said company.
(6) I/We agree to deposit with you in Okara, a minimum margin of Rs. 200 per each transaction of lowest denomination and to maintain the same with you intact over and above the current market rate until completion of this contract; differences between the contract and market prices due to fluctuations of the market arising against me/us shall be paid by me/us to you in cash in Okara as and when they may arise. You are not bound to demand payment of the said deposit, and/or differences or to give any notice or warning for such payment. Absence or failure on your part to do so will not in any degree or form prejudice the authority expressly vented in you under this agreement. Any indulgence shown by you pertaining to margin money payable by me/us or my/our failure to keep it intact subsequent on fluctuations of the market will not be construed as a waiver or operate us estoppel....
(12) In the event of any disputes arising out of these transactions between you and me/us the matter shall be referred at Okara to the arbitration of two directors of the Krishan Murari Exchange, Limited, Okara (or its successors, if any), one to be appointed by each of the parties. If any party fails to nominate an arbitrator within seven days of the date of request of the other, or his arbitrator neglects or refuses to act within seven days of his appointment, the other party has the right to nominate both. In case of difference of opinion between the arbitrators they will appoint an umpire who shall also be a director of the Krishan Murari Exchange, Limited, Okara (or its successors, if any). The decision of the arbitrators or the umpire as the case may be shall be final and binding on both the parties.
(14) The arbitration proceedings under this Clause shall be governed by the Indian Arbitration Act of 1940 and award shall be filed in Montgomery Court.;
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