RAM CHANDRA RAM NAG RAM RICE AND OIL MILLS LTD Vs. HOWRAH OIL MILLS LTD

JUDGEMENT

(1.) THE plaintiff which is a limited Company has obtained this Rule against an order of the District Judge of Howrah affirming on appeal an order made by the First Subordinate Judge of Howrah under Section 34 of the Indian Arbitration Act of 1940. THE plaintiff sued for the recovery of a sum of Rs. 4233-11-6 alleged to be due to it as the balance of price of goods sold and supplied to defendant No. 1 on the basis of various contracts entered into on diverse dates in the year 1942. According to the plaintiff, the defendent No. 1 is the buyer of goods and defendant No. 2 acted as the agent of defendant No. 1. THE suit was originally filed on 21-7-1945, in the court of the 1st Subordinate Judge of Gaya and registered as Money suit No. 90 of 1945. After passing through various stages the suit was ultimately taken up for hearing on a preliminary issue as to whether the 1st Subordinate Judge of Gaya had territorial jurisdiction to entertain the suit. By an order dated the 22nd July, 1954, the Subordinate Judge of Gaya came to the conclusion that he had no territorial jurisdiction to entertain the suit and he accordingly returned the plaint for presentation to die proper court. THEreafter on 2-8-1954, the plaintiff refiled the plaint in the Court of the Subordinate Judge of Howrah. THE defendant No. 1 filed an application for stay of the suit u/s 34 of the Indian Arbitration Act alleging that the contracts under which goods were sold contained an arbitration clause. Both the courts below have granted that prayer and against that order the plaintiff has obtained the present Rule.

(2.) MR. Mukherjee appearing in support of the Rule has raised various points before us. The first point raised by MR. Mukherjee is that it cannot be said that there was any arbitration agreement between the plaintiff and the defendant No. 1 and consequently the courts below acted without jurisdiction in making an order of stay under Section 34 of the Indian Arbitration Act. The contract in this case was entered into by the delivery and acceptance of bought and sold notes to the buyer and seller respectively. The bought notes delivered by the broker to me defendant No. 1 have been produced by them but the sold notes, though produced by the plaintiff in the Gaya Court, have not been produced in the Howrah Court, and both the Courts have drawn an adverse inference against the plaintiff for the non-production and have held that the sold notes, if produced would have shown that they are the counter parts of the bought notes which have been produced by the defendant No. 1. The bought notes which have been produced by the defendant No. 1 contain an arbitration clause which runs as follows:

(3.) MR. Mukherjee also made a faint attempt to bring the case within the principles of a decision of this Court in the case of Johurmull Parasram v. Louis Dreyfus and Co. Ltd., 52 Cal WN 137 : (AIR 1949 Cal 179) (G). That was a case where the plaintiff instituted a suit not on the basis of any contract containing any arbitration clause, but for the reasonable price of goods sold and delivered de hors the contract. In that case Harries, C.J. and Mukherjea, J., held that such a suit could not be stayed under Section 34 of the Indian Arbitration Act of 1940. Looking at the allegations made by the plaintiff in the present case, however, it is quite clear to me that in this case the plaintiff bases his claim entirely upon the contract. The statements in paragraphs 2, 3, 4, 5, 6 and 7 of the plaint make it quite clear that the plaintiff is suing for the recovery of the balance of the price due to it upon contracts entered into on diverse dates in the year 1942. I, therefor, cannot see how it can be said that this case is to be governed by the principles laid down by Harries, C.J. in the cause of Johurmull Parasaram.