- (1.) This is an application on behalf of two partners of a partnership firm known as Greer Pictures, the Respondent No. 2, for setting aside or recalling an order of reference made under Section 21 of the Arbitration Act in Suit No. 2127 of 1966, Greer Pictures v. Free India Pictures Private Ltd.
(2.) Mr. N. K. Roy Choudhury, on behalf of the petitioners, has submitted that in the said suit the Respondent No.3. H.P. Goenka, a partner of the said firm agreed to refer the disputes and differences without the knowledge or consent of the petitioners. Relying upon (1) Rajendra Prosad v. Pannalal Champalal, AIR 1932 Cal 343 he has contended that the said order of reference under Section 21 of the Act is without jurisdiction and should be set aside inasmuch as the petitioners who are admittedly the partners of the plaintiff firm did not give their consent inasmuch as the said H. P. Goenka, the Respondent No. 3, has no implied authority within the meaning of Section 19 of the Partnership Act to refer the disputes in the suit to arbitration without the consent of the petitioner. Mr. Bachawat, on behalf of the Respondent No. 1, has submitted that the present application should be dismissed both on facts and on law.
(3.) By an agreement entered into between the said firm and the Respondent No. 1, hereinafter described as 'the company', the company was appointed as the sole distributor of a firm known at Chandi-ki-Diwar for the area known as C.P. - Bearer Circuit in the film trade for a period of 10 years from the date of the first release of the said picture in the said circuit. The terms and conditions of the said agreement would appear from the documents dated August 4, 1962, November 13, 1964 and January 14, 1965. The said agreement contained, inter alia, an arbitration clause. It appears that the said documents dated August 4, 1962, November 13, 1964 and January 14, 1965 were signed by Madhab Prosad Jatia, the Petitioner No.2. Disputes and differences arose betweenthe parties on April, 22, 1966, and the said Goenka wrote to the company for referring the said disputes to the arbitration of one Mr. M. D. Chatterjee. On the next day, the company informed the firm that disputes were being referred to the arbitration of the Central Circuit Cine Association, Bhusawal. It may be stated here that a copy of this letter was sent to Jatia and Goenka. On April 27, 1966, the Company wrote again to the firm that the disputes were being referred to the said Association at Bhusawal and that they were not agreeable to have the Arbitration held at Calcutta. A copy of this letter was also sent to Jatia and Goenka. In reply to the said letter the firm intimated the company that as the company failed to appoint its arbitrator the firm's nominee Mr. Chatterjee had become the sole arbitrator in the matter. This letter was also addressed to Jatia and Goenka. On May 17, 1966, the company informed in writing the partnership firm, Jatia and Goenka, that they were not agreeable to the appointment of Mr. Chatterjee as arbitrator. On May 19, 1966 the company referred to disputes to the arbitration of the Association at Bhusawal claiming Rs.25,000. On June 14, 1966, the firm wrote again that the matter should be referred to the arbitration of Mr. Chatterjee. This letter was signed by one S. R. Khaitan on behalf of the firm. On August 8, 1966, the firm addressed a letter to the said Association at Bhusawal challenging its jurisdiction. The said letter was also signed by Khaitan. On October 5, 1966, the firm instituted the pending Suit No. 2127 of 1966 claiming a sum of Rs.2,00,000. The plaint was verified by Goenka and S. K. Ganguly & Co., the Solicitors, acted for the firm. Paragraph 26 of the plaint in the said suit reiterated the fact that the disputes between the parties were referred to arbitration of the said M. D. Chatterjee. It may be stated here that the said S. K. Ganguly & Co. has appeared in this proceeding as the Solicitors on behalf of the firm and, strangely enough, the Counsel on behalf of the firm, instructed by the said Goenka, is now supporting the petitioners on the plea that, under a bona fide mistake of law, they referred the disputes to the arbitration which is pending now. On February 17, 1967, the company made an application for stay of the said suit. S. K. Ganguly & Co. acted for the firm in the said application. On June 21, 1967, the hearing of the application, by consent of the parties Mr. Mullick was appointed the sole arbitrator for adjudicating the disputes between the parties. The firm preferred an appeal against the said order dated June 21, 1967, and also made an application for stay. On July 10, 1967, the Counsel for the company contended that the appeal was not maintainable as the order against which the appeal was preferred was made by consent. The matter writ application sent back to the Court below when on July 24, 1967, Sen, J. after hearing the parties delivered a judgment and held that the order of June 21, 1967, was made by consent. On August 16, 1967, the firm instituted another suit against the company being Suit No. 1840 of 1967 for a declaration that the order dated July 24, 1967, was without jurisdiction and made beyond the scope of authority of the learned Counsel. The plaint in the said suit was also verified by Goenka and S. K. Ganguly & Co. was recorded as Solicitors for the firm. Thereafter, on January 24, 1968, on application for referring the disputes between the parties in the earlier suit, i.e. Suit No. 2127 of 1966 was filed. The petition was prepared by Mukherjee and Biswas Solicitors, and approved by S. K. Ganguly & Co., Solicitors. Order was passed on the said application whereby the disputes were referred to the arbitration of Mr. M. N. Banerjee who happened to be the Counsel for the firm. Mr. M. N. Banerjee thereafter entered upon the reference. Arbitration sittings took place in February 12, 1968. April 8, 1968, July 10, 1968, March 10, 1969, May 16, 1969, May 17, 1969, May 20, 1969, June 12, 1969 and June 26, 1969. It may be added here that the firm made applications on May 20, 1969, for amendment of its statement of claim before the arbitrator and on the next three days the firm took adjournment on the plea of such amendment. The petitioners, thereafter, made the present application on July 8, 1969, and prayed for interim stay of the arbitration proceedings before the said Mr. M. N. Banerjee which was granted by me.;