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TMI Blog1964 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... id to be for enforcement of any right arising from contract except those expressly mentioned as exceptions in sub-s. (3) and sub-s. (4). Appeal allowed. - Civil Appeal No. 791 of 1962 - - - Dated:- 29-4-1964 - HIDAYATULLAH, M., WANCHOO, K.N., GUPTA, K.C. DAS AND AYYANGAR, N. RAJAGOPALA, JJ. S. T. Desai and I. N. Shroff, for the appellant B. C. Misra, for the respondent JUDGMENT HIDAYATULLAH J.- This appeal by special leave is directed against an order of the High Court of Bombay dated March 22, 1960 in its ordinary original civil jurisdiction. The facts are simple. By a letter dated July 30, 1955, Messrs. Kajaria rraders (India) Ltd., who is the respondent here and Messrs. Foreign Import and Export Association (sole proprietory 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 persons suing are or have been shown in the Register of Firms as partners in the (3) The provisions of sub-sections(1) and (2) shall apply also to a claim ofset-off or other proceeding to enforce a rightarising 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-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of an insolvent partner. (4) This section shall not apply- (a) to firms or to partners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not any proceeding nor any other proceedings but other proceeding and that as these words were juxtaposed 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 suggeted 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. Ile 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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 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 is described in the second sub-section. In respect of the first sub-secton he could give only two examples. They are (i) a claim by a pledger of goods with an unregistered firm whose goods are attached and who has to make an objection under 0. 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 Lis to accept that the Legislature was thinking of such far-fetched things when it spoke of o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r proceedings in sub-s. (3) made some special exceptions in respect of them in sub-s. (3) in respect of dissolved firms and then viewed them all together in sub-s. (4) providing for a complete exclusion' of the section in respect of suits of particular classes. For convenience of drafting this scheme was probably followed and nothing can be spelled out from the manner in which the section is sub-divided. Some cases noticed by the High Court were cited to us but none of them appears to be really in point. In Hafiz Qamar Din v. Nur Din and Babutal Dhandhania v. Messrs. Gauttam and Co. proceedings were started on an award, in one to make it a rule of the Court and in the other to get it set aside. These cases are distinguishable because they deal with awards and it is not necessary to decide whether after an award the proceeding is one to enforce a right arising from a contract. We do not refer to them. In Kottamasu Sreemannarayanamuthy and another v. Chakka Arjanadu a petition for adjudication of a partner as insolvent was held to be a right arising not from, a contract but from statute. Here the right that is being enforced through the medium of the Arbitration Act arises from t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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