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TMI Blog1969 (4) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... 21-7-1962, Shri 0m Prakash Mehra wrote a letter to M/s Rawalpindi Theatres (P) Ltd., Chandni Chowk, Delhi (Ex. P. 5) which it is necessary to reproduce in extenso :- Iwrite to confirm that I am the rightly appointed legal representative of M/s Shanti Niketan Films, Bombay, Producers of the film 'WARRANT' and Financiers of M/s Padam Films, Delhi, the Distributor of the Picture 'WARRANT' for Delhi, U.P. Circuits, I am enclosing herewith a letter of Authority issued by the above party in my favor. Ifurther confirm that I am entering into this arrangement with you after consulting Mr. Patanjal, the Prop. of the said firm M/s Shanti Niketan Films, Bombay, the Producers and this decision is within his knowledge, Ifurther confirm that you have agreed to write your letter dated 21-7-62 to the Motion Picture Association, Delhi informing them that you are withdrawing your claim against the picture 'Warrant' and enabling the release of this picture on my assuring you as under.- (1)That I shall pay to Shri W. N. Chawdhary, 781, Nicholson Road, Kashmere Gate, Delhi, a sum of ₹ 9,500.00 from the Distributors share becoming due from 'Warrant' o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppointed Shri W. N. Chowdhary as a Special Attorney to take steps for recovery of the amount due to the applicant-company from respondent No. 1. Needless to point out that Shri Patanjal was respondent No. 1 in those proceedings, The power of attorney granted by Shri J. N. Chowdhary authorised Shri W.N. Chowdhary to take such legal steps for enforcement of the claim of M/s Rawalpindi Theatres (P) Ltd. as may be considered right and proper. That application was, according to the express averments contained therein, signed and verified by Shri W.N. Chowdhary who was stated to be fully conversant with the facts of the case and able to depose to matters relating to the dispute from his personal knowledge. In paragraph 22 of the application, assurance No. 1 in the agreement dated 21-7-1962 was repeated and in paragraph 25, it was complained that the respondents mentioned in the application had failed to perform their part of the agreement and had nto paid the amount due to the applicants M/s Rawalpindi Theatres (P) Ltd. under the agreement dated 21-7-1962. It was prayed that the agreement dated 21-7-1962 be ordered to be filed in the Court and steps for an award being made by the arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the petitioner-company regarding the amount due on the agreement. After noticing the ratio of the Supreme Court decision (Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak etc.(1)) cited both in the appeal before the learned Additional District Judge and on revision in the High Court, and other decisions cited before H. R. Khanna, J. the learned Judge observed as follows :- IT is stated that the dispute between the parties now is that the respondents had undertaken to pay ₹ 9,500.00 in accordance with the agreement reproduced above and as the respondents have nto paid that amount there is a dispute which needs adjudication. The dispute now between the parties, according to the learned counsel, is only with respect to the payment of ₹ 9,500.00. Reference in this connection has been made to the statement of W. N. Chowdhary, Director and Special Attorney of the petitioner, who has come into the witness-box as Public Witness 3 and who has deposed that the dispute between the parties was that the respondent were nto paying the money to the witness. It would appear from the above that the dispute, which needs adjudication and which is sought to be referred to the arbi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India calling upon the respondents to appear before the arbitrator on 14-2-67. The arbitrator says that the respondents put in appearance on 14-2-67 through Shri Sham Sunder Gautam, Advocate. In these circumstances, there is good reason for extension of the time. So, time is extended for making the award till 7-5-67. (10) In April, 1967, an application was presented in the Court of the Commercial Subordinate Judge by Shri R. L. Duggal, Arbitrator under sections 14 and 17 of the Arbitration Act stating that he had signed and published his award dated March 29, 1967 and that he was therewith filing the award and the arbitra- tion proceedings in Court. It was prayed that notices be issued to the parties of the filing of the award and the matter be proceeded with according to law. Objections under sections 30 and 33 of the Arbitration Act were raised to the award and the pleadings of the parties gave rise to four issues on the merits including, whether the arbitrator had no jurisdiction to determine the claim of Shri Chowdhary, whether the arbitrator was guilty of misconducting himself or the proceedings, and whether M/s Rawalpindi Theatres (P) Ltd. were entitled to a decree in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r a party to the reference nor to the arbitration proceedings, and, therefore, nto entitled to enforce the award, it was beyond the competence of the Court below to direct the arbitrator to implead Shri Chowdhary to the arbitration proceedings before him. The submission seems to me to be A well-founded. (12) The Arbitration Act of 1940 being a consolidating and amending Act on the law relating to arbitration, we have to look to the provisions of the Act for discerning the legal position. Arbitration agreement in this Act means a written agreement to submit present or future difference to arbitration, whether an arbitrator is named therein or nto and reference as defined there in, means a reference to arbitration. Capacity to make-an arbitration agreement seems to me to be co-extensive with the capacity to contract under the law. In order to constitute a valid arbitration agreement, among other things, there should be a valid agreement, the terms of which are reduced to writing and the parties thereto should be ad idem in other words, the agreement of the parties should be established so that they can be held to be bound by .it, though the written instrument or instruments, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C's death. The plaintiffs who were neither party to the suit nor the reference, were given a share in the property under the award. A decree on the basis of the award was passed. On C's death the plaintiffs, basing their claim on the award and the decree passed thereon, brought a suit for a share in the rents and profits of the house which was in exclusive possession of G. HELD(i) that the plaintiffs had no locus standi to file the suit. As they were nto parties to the earlier suit or to the reference, they were nto bound by the award or the decree and, therefore, they could nto claim any right under the award or the decree ; 2nd 6 All 322 (PC) and Air 1955 Nag 126, Rel. on. (14) The Nagpur decision in Chouthmal v. Ramchandra has also been cited by Shri Bagai. It has been observed in this decision that arbitrators have no power to go outside the reference and create trust or give directions regarding thereto and even if they do so, the Court should exclude that portion of the award from the decree. Shri Sahney has placed his reliance on the language of section 34 of the Arbitration Act and on an English decision reported as Shayler v. Woolf, In the English decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is was a contract assignable by Mrs. Peacock and, as it was assigned by her in her conveyance to the present plaintiff, the benefit of the contract is now vested in him and he is entitled to sue upon it. (15) This decision was concerned with section 4 of the Arbitration Act 1889 (52 53 Vict.c.49), an English statute, which empowered the Court to stay proceedings where there was a submission. According to that section, if any party to a submission or any person claiming through or under him commenced any legal proceeding in any Court against any other party to the submission or any person claiming through or under him in respect of any matter agreed to be referred, then any party to such legal proceeding should apply to that Court to stay the proceedings. In an assignable contract, when assignment was held to have been made, the assignee was, in the reported decision, held entitled to the benefit of the contract and entitled to sue upon it. It is difficult to understand how the ratio of this case helps Shri Sawhney. (16) Section 34 of the Indian Arbitration Act, like section 4 of the English Act, merely confers on the judicial authority before which legal proceedings have b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alpindi Theatres (P) Ltd. (17) As a last resort, Shri Sawhney has submitted that this revision should be thrown out because there is no jurisdiction infirmity and the impugned order cannto be held to suffer from any illegality or material irregularity in the exercise of the lower Court's jurisdiction. I am unable to accept this contention. If Shri W. N. Chowdhary is nto a party to the arbitration agreement and if for this reason, he is nto entitled to claim adjudication of his personal right, then obviously, the direction given by the Court below is without jurisdiction, and is certainly tainted with a serious illegality and a material irregularity in the exercise of the jurisdiction vested in the Court below by law. (18) The petitioner's objection that after setting aside the award, the Court below could nto remit the case back to the arbitrator, is clearly misconceived and seems to me to be contrary to the settled view, and indeed Shri Bagai, after half-heartedly pursuing it, gave up the attempt. (19) For all the foregoing reasons, we allow this revision and delete the direction from the lower Court's order that the arbitrator should implead Shri W. N. Chowdh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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