M.HIDAYATULLAH - (1.) THIS appeal by special leave is directed against an order of the High Court of Bombay dated 22/03/1960 in its ordinary original civil jurisdiction. The facts are simple. By a letter dated 30/07/1955, Messrs. Kajaria Traders (India) Ltd., who is the respondent here and Messrs. Foreign Import and Export Association (sole proprietary firm owned by the appellant Jagdish C. Gupta) entered into a partnership to export between January and June 1956, 10,000 tons of manganese ore to Phillips Brothers (India) Ltd., New York, Each partner was to supply a certain quantity of manganese ore. We are not concerned with the terms of the agreement but with one of its clauses which provided: "That, in case of dispute the matter will be referred for arbitration in accordance with the Indian Arbitration Act.'' The company alleged that Jagdish Chander Gupta failed to carry out his part of the partnership agreement. After some correspondence, the company wrote to Jagdish Chander Gupta on 28/02/1959 that they had appointed Mr. R. J. Kolah (Advocate O. S.) as their arbitrator and asked Jagdish Chander Gupta either to agree to Mr. Kolah's appointment as sole arbitrator or to appoint his own arbitrator. Jagdish Chander Gupta put off consideration and on 17/03/1959 the company informed Jagdish Chander Gupta that as he had failed to appoint an arbitrator within 15 clear days they were appointing Mr. Kolah as sole arbitrator. Jagdish Chander Gupta disputed this and the company filed on 28/03/1959 an application under S. 8 (2) of the Indian Arbitration Act, 1940 for the appointment of Mr. Kolah or any other person as arbitrator.
(2.) JAGDISH Chander Gupta appeared and objected inter alia to the institution of the petition. Two grounds were urged (i) that S. 8(2) of the Indian Arbitration Act was not applicable as it was not expressly provided in the arbitration clause quoted above that the arbitrators were to be by consent of the parties and (ii) that S. 69 (3) of the Indian Partnership Act, 1932 afford a bar to the petition because the partnership was not registered. The petition was referred by the Chief Justice to a Divisional Bench consisting of Mr. Justice Mudholkar (as he then was) and Mr. Justice Naik. The two learned Judges agreed that in the circumstances of the case an application under S. 8 of the Indian Arbitration Act was competent and that the court had power to appoint an arbitrator. They disagreed on the second point. Mr. Justice Mudholkar was of the opinion that S. 69(3) of the Indian Partnership Act barred the application while Mr. Justice Naik held otherwise. The case was then referred to Mr. Justice K. T. Desai (as he then was) and the agreed with Mr. Justice Naik with the result that the application was held to be competent. In this appeal it was not contended that the conclusions of the learned Judges in regard to S. 8(2) were erroneous. The decision was challenged only on the ground that S. 69(3) was wrongly interpreted and the bar afforded by it was wrongly disallowed. S. 69 of the Indian Partnership Act may be reproduced here: "69 (1) No suit to enforce a right arising from a contract or conferred by this Act shall be instituted in any Court by or on behalf of any person suing as a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. 2. No suit to enforce a right arising from a contract shall be instituted in any Court by or on behalf of a firm against any third party unless the firm is registered and the person suing are or have been shown in the Register of Firms as partners in the firm. 3. The provisions of the sub-secs. (1) and (2) shall apply also to a claim of set-off or other proceeding to enforce a right arising from a contract, but shall not affect, (a) the enforcement of any right to sue for the dissolution of a firm or for accounts of a dissolved firm, or any right or power to realise the property of a dissolved firm, or (b) the powers of an official assignee receiver or Court under the Presidency Town Insolvency Act, 1909 or the Provincial Town Insolvency Act, 1920, to realise the property of an insolvent partner. The section shall not apply, (a) to firms or to partners in firms which have no place of business in the territories to which this Act extends, or whose places of business in the said territories are situated in areas to which, by notification under S. 56, this Chapter does not apply, or (b) to any suit or claim of set-off not exceeding one hundred rupees in value which, in the Presidency towns is not of a kind specified in S. 19 of the Presidency Small Cause Courts Act, 1882, or, outside the Presidency-towns, is not of a kind specified in the Second Schedule to the Provincial Small Cause Courts Act, 1887, or to any proceeding in execution or other proceeding incidental to or arising from any such suit or claim. The section, speaking generally, bars certain suits and proceedings as a consequence of nonregistration of firms. Sub-section (1) prohibits the institution of a suit between partners inter se or between partners and the firm for the purpose of enforcing a right arising from a contract or conferred by the Partnership Act unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. Sub-section (2) similarly prohibits a suit by or on behalf of the firm against a third party for the purpose of enforcing rights arising from a contract unless the firm is registered and the person suing is or has been shown in the Register of Firms as a partner in the firm. In the third sub-section a claim of set-off which is in the nature of a counter-claim is also similarly barred. Then that sub-section bars "other proceedings''. The only doubt that has arisen in this case is regarding the meaning to be given to the expression "other proceeding''. One way to look at the matter is to give these words their full and natural meaning and the other way is to cut down that meaning in the light of the words that precede them. The next question is whether the application under S. 8(2) of the Arbitration Act can be regarded as a proceeding "to enforce a right arising from a contract'', and therefore, within the bar of S. 69 of the Indian Partnership Act. 4. Mr. Justice Mudholkar in reaching his conclusion did not interpret the expression "other proceeding''ejusdem generis with the words "a claim of set-off''. He held further that the application was to enforce a right arising from the contract of the parties. Mr. Justice Naik pointed out that the words used were not "any proceeding''nor "any other proceedings''but "other proceeding''and that as these words were juxta-posed with a claim of set-off they indicated a proceeding of the nature of a claim in defence. On the second point Mr. Justice Naik held that this was not a proceeding to enforce a right arising from a contract but was a claim for damages and such a claim could be entertained because it was based on something which was independent of the contract to supply ore. He held that the right which was being enforced was a right arising from the Arbitration Act and not from the contract of the parties. Mr. Justice K. T. Desai agreed with most of these conclusions and suggested that the words preceding "other proceeding'', namely, "a claim of set-off had 'demonstrative and limiting effect' He seems to have ascertained the meaning of the expression "other proceeding''by reference to the meaning of the words "a claim of set-off', which he considered were associated with it.
(3.) THE first question to decide is whether the present proceeding is one to enforce a right arising from the contract of the parties. THE proceeding under the eighth section of the Arbitration Act has its genesis in the arbitration clause, because without an agreement to refer the matter to arbitration that section cannot possibly be invoked. Since the arbitration clause is a part of the agreement constituting the partnership it is obvious that the proceeding which is before the court is to enforce a right, which arises from a contract. Whether we view the contract between the parties as a whole or view only the clause about arbitration, it is impossible to think that the right to proceed to arbitration is not one of the rights which are founded on the agreement of the parties. THE words of S. 69(3), "a right arising from a contract''are in either sense sufficient to cover the present matter. It remains, however, to consider whether by reason of the fact that the words "other proceeding''stand opposed to the words "a claim of set-off'any limitation in their meaning was contemplated. It is on this aspect of the case that the learned Judges have seriously differed. When in a statute particular classes are mentioned by name and then are followed by general words, the general words are sometimes construed ejusdem generis, i.e., limited to the same category or genus comprehended by the particular words. But it is not necessary that this rule must always apply. The nature of the special words and the general words must be considered before the rule is applied. In Allen v. Emerson, (1944) 1 KB 362. Asquith, J., gave interesting examples of particular words followed by general words where the principle of ejusdem generis might or might not apply. We think that the following illustration will clear any difficulty. In the expression "books, pamphlets, newspapers and other documents''private letters may not be heldd included if other documents'be interpreted ejusdem generis with what goes before. But in a provision which reads "newspapers or other document likely to convey secrets of the enemy'', the words 'other document'would include document of any kind and would not take their colour from 'news papers'. It follows, therefore, that interpretation ejusdem generis or noscitur a sociis need not always be made when words showing particular classes are followed by general words. Before the general words can be so interpreted there must be a genus constituted or a category disclosed with reference to which the general words can and are intended to be restricted. Here the expression "claim of set-off''does not disclose a category or a genus. Set-offs are of two kinds - legal and equitable - and both are already comprehended and it is difficult to think of any right "arising from a contract''which is of the same nature as a claim of set-off and can be raised by a defendant in a suit. Mr. B. C. Misra, whom we invited to give us examples, admitted frankly that it was impossible for him to think of any proceeding of the nature of a claim of set-off other than a claim of set-off which could be raised in a suit such as it described in the second sub-section. In respect of the first sub-section he could give only two examples. They are (i) a claim by a pledge of goods with an unregistered firm whose goods are attached and who lias to make an objection under O. 21 R. 58 of the Code of Civil Procedure and (ii) proving a debt before a liquidator. The latter is not raised as a defence and cannot belong to the same genus as a "claim of set off''. The former can be made to fit but by a stretch of some considerable imagination. It is difficult for us to accept that the Legislature was thinking of such far- fetched things when it spoke of "other proceeding''ejusdem generis with a claim of set-off.;