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TMI Blog1960 (10) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership is alleged to have continued until May 1942. The plaintiffs case was that in order to settle the accounts of this partnership business, an arbitrator named S. P. Singh, who is admittedly a brother of the plaintiff, was appointed by the parties on the 29th July, 1942. The arbitrator allegedly gave his award some time in the first week of February, 1943. This award turns out to be an oral one though the plaintiff under a mistaken notion stated in his replication that it was in writing. It is further alleged that, in accordance with the award of the arbitrator, the defendant Chandmal who was one of the proprietors of Messrs. Chand Bros., gave the plaintiff a post-dated cheque No. D 70180 dated 24-2-1943 for Rs. 17500/- on the Palai Central Bank Ltd.. Delhi, in full settlement of the account of this partnership business. This cheque was presented by the plaintiff to the said bank on the 1st March, 1943, but it was dishonoured by the bank as they had no funds to the credit of the defendant Chandmal in their bank. The plaintiff's case further was that thereafter he sent a notice to the defendants to pay the aforesaid amount as the cheque had been dishonoured by the ban ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the defendants had their immovable property in the State of Kotah and were also living and carrying on business there and consequently that court had the jurisdiction to entertain the suit. The plaintiff also claimed interest on the amount of the decree at the rate of eight annas per cent per mensem. 3. The defendants filed their written statement on the 7th December, 1944, wherein they pleaded ignorance of the decree obtained by the plaintiff from the court at Delhi. It was, however, admitted that a sum of Rs. 20/- had been got attached and recovered by the plaintiff from the defendants. Furthermore, the defendants stoutly resisted the suit on the plea that the court at Delhi which was a foreign court qua the defendants, who were resident, If the Kotah State, had no jurisdiction to pass a decree against them, nor had they ever submitted to the jurisdiction of that court. It was further contended that the judgment of the aforesaid foreign Court was not given on the merits of the case, and, therefore, it was not binding on the defendants. 4. The plaintiff, apparently in order to steer clear of the difficulties with which he might be confronted on the ground of the judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chandmal had any right to admit any claim outstanding against the firm or to issue a cheque in settlement of the accounts of the firm and thereby fasten any liability on defendant Gehrilal, and it was maintained that Gehrilal himself had never given any cheque to the plaintiff in connection with the settlement of this partnership business. The case of the defendants was that the accounts of the partnership had never been settled, and, therefore, there was no occasion for their giving a cheque for Rs. 17500/- to the plaintiff, nor was any such amount due from the defendants to the plaintiff. 6. This brings us to the most important part of the defendants' case as to how the cheque in question came to be given to the plaintiff. Paragraph five of the written statement contains the defendants' version on this aspect of the case. This version is that the defendants firm Messrs. Chand Bros. had received a crossed cheque for a big amount from the Alwar State. This cheque could not be encashed but could only be credited into an account of Messrs. Chand Bros. Defendant Chandmal, therefore, went to Delhi with this cheque. He already knew the plaintiff who had an account with the P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spirited away his cheque-book which was lying in his (defendant's) trunk and the said defendant came to know of this on the 27th July 1943, when the plaintiff who had Stated in the Delhi Court that he had given a receipt for the cheque on the counter-foil thereof openly boasted having come out of the court that the defendant's attempt to produce the counter-foil would be altogether vain as it was in the plaintiff's possession. In short, therefore, the defendants' case was that Chandmal had given a blank cheque to the plaintiff in the circumstances mentioned above, and with a view to have their account in the bank closed, that the plaintiff had fabricated this cheque and further that the counter-foil of this cheque was not available with him as the plaintiff had stolen it away some time in June, 1942, when the defendant stayed at his house in Delhi. In paragraph nine of the written statement, the defendants stated that they had in their possession a paper Ex. D-6 (this is not signed by any body) containing an abstract of the partnership account, which was prepared by the plaintiff himself and which he had passed on to Khema Singh, a director of Messrs. Green Bus C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the alleged discrepancy was due to a trifling clerical error; inasmuch as the Hindi word ^^dks^^ was mentioned for ^^dk^^ after the date 24-2-43 in para two of the plaint. We think that nothing serious turns on this point. Another point made by the defendants in their written statement was that the plaintiff had failed to mention in his plaint who was the arbitrator appointed by the parties and whether his appointment was oral or written and that it had also not been mentioned on what date he gave the award and whether the award was oral or written and, therefore, the defendants were unable to give any reply on this point. Yet another point which is of some importance is that the defendants now denied that a sum of Rs. 20/- had been attached and recovered from them in execution of the judgment of the Delhi Court, although they had clearly admitted this in their earlier written statement dated the 7th December, 1944. Lastly, the question of the binding nature of the judgment of the court at Delhi was again raised as in the previous written statement. We need not repeat this objection as we have already indicated it above. 7. The plaintiff filed a replication on the 10th Apr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... April, 1945, defendant Gehrilal filed a further written statement in which he admitted that the letter Ex. P-3 had been written by him. His contention, however, was that although this letter had been written, S. P. Singh was never made an arbitrator and he could not be made one as he was the plaintiff's own brother. Explaining the circumstances under which this letter came to be written, the defendant went on to state that they (defendants) had some trouble with the Green Bus Co. as regards the dues that they had to receive from them. S. P. Singh, however, told them that he had a relative of his who was a big contractor and that he had plenty of influence with Messrs. Green Bus Co. and that he would get their money paid to them. In these circumstances, S. P. Singh further asked them to execute a document appointing him as an arbitrator and assured them that if they executed the same, he would get their monies paid to them. This defendant's case further was that he thus wrote the document but he had kept it with himself and that he (Gehrilal) and S. P. Singh then went to that relative of S. P. Singh but they were not able to meet him. They also went to Messrs. Green Bus C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Delhi was not given on the merits, and, therefore, it could not be accepted as binding on the defendants. As to issue No. 3, the court held that S. P. Singh was appointed as an arbitrator between the parties and that he gave an oral award to the effect that the defendants do pay a sum of Rs. 17500/- to the plaintiff. On the fifth issue, the trial court found that the defendants had miserably failed to prove that they had passed a blank cheque to the plaintiff or that the latter had filled it for Rs. 17500/- and thus this issue was decided against the defendants. As to the fourth issue, the court found that the execution of the document by Chandmal would be presumed under the circumstances, but it was further held that his action did not bind Gehrilal, and, therefore, it was concluded that Gehrilal was not bound by the act of his son. Having decided issue No. 4, as stated above, the learned Judge also decided issue No. 6 against the plaintiff and held that Chandmal had no authority to pass a cheque for Rs. 17500/- and bind down the firm. 11. Having answered the issues that had been framed in this case as mentioned above, the learned Judge then posed a further question as to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tack this judgment on two grounds within the meaning of Section 13. The first ground is that it was not pronounced by a court of competent jurisdiction. The second is that it was not given on the merits of the case. Now we consider it unnecessary to go into the question whether the Sub-Judge Delhi had jurisdiction to take cognizance of this case on the footing of his having jurisdiction in the international sense over the defendants or not, because we have no doubt that the defendants when they appeared through counsel in the court of the learned Judge and sought leave to defend the suit had undoubtedly submitted to the jurisdiction of the court. The principle is well established that one of the bases on which foreign courts are recognized to be internationally of competent jurisdiction is voluntary submission of the party to the jurisdiction of the foreign court. This principle is grounded on the foundation that a party having taken a chance of a judgment in his favour by submitting to the jurisdiction of the court should not be allowed to turn round when the judgment goes against him to say that the court had no jurisdiction. We, therefore, hold that the Delhi Court was competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its of the case within the meaning of Section 13(b). 17. We should like to point out in passing that the present case is somewhat different inasmuch as the judgment of the Delhi Court in this case was not given as a matter of penalty as in the case before the Privy Council. 18. The same principle seems to us to have been approved in Oppenhemi and Co. v. Mahomed Haneef, AIR 1922 PC 120 where the judgment of Mr. Justice Coutts Trotter holding that the decision of the English Court had been entered in default of appearance, and, therefore, could not be taken to be a decision on the merits, was allowed to go unchallenged before the Privy Council. 19. The next decision to which we wish to refer is a bench decision of the Madras High Court in Janno Hassan v. Mahammad Ohuthu, AIR 1925 Mad 155. The facts in this case were that a suit was brought upon a foreign judgment of the Colombo Court against the defendant. A procedure was in force in the Colombo Court that the court was entitled to give a decree for the plaintiff without any trial if the defendants on having been served did not appear, though the court under the procedure had also power to take evidence if it thought lit, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n appears to us to have been really given because the defendant had failed to appear in the court and this was presumed to amount to an admission of the plaintiff's case by the defendant. 22. In Abdul Rahman v. Md. Ali Rowther, AIR 1928 Ran 319 it was held that a decision on the merits involved the application of the mind of the court to the truth or falsity of the plaintiff's case, and, therefore, an ex pane decision which was given after a judicial consideration of the evidence of the plaintiff, though the defendant did not appear, would be a decision on the merits even if ex parte, but a decision passed without evidence of any kind could not be held to be a decision on the merits. 23. The next decision to which reference may be made is Isidore Fernando v. Antoni Michael Fernando, AIR 1933 Mad 544. This case appears to us to be somewhat parallel to the case in hand. The defendant in this case was sued by the plaintiff, the latter being an assignee of a foreign judgment passed by the District Court of Colombo on a promissory note. The suit was filed under the summary procedure laid down in Chapter 52, Ceylon Ordinance No. 2 of 1889 which was applicable to the trial o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truth or otherwise of the plaintiff's claim. 25. in Abdul Rahim v. Mohamed Din, AIR 1943 Cal 42, it was held that the mere absence of the defendant would not prevent a judgment given in his absence from being one on the merits of the case, and that the court was entitled to presume that the court which originally dealt with the matter must have dealt with it in accordance with law, and that a presumption to that effect arose under Section 114 of the Evidence Act, and that that presumption fully applied to the facts of the case. The facts of this case are peculiar and do not furnish any parallel to the facts of the case before us. 26. In Govindan v. Sankaran, AIR 1958 Kerala 203, it has been laid down that it cannot be said that a decision on the merits can be possible only in cases where the defendant enters appearance and contests the plaintiff's claim, and it should be perfectly possible even where the defendant chooses to remain ex parte and keep out inasmuch as in such a case it would still be possible for the plaintiff to adduce evidence is support of his claim so that the court may give a decision on the merits of the case after a due consideration of such evid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n AIR 1916 PC 121 and AIR 1922 PC 120. According to the broad principles approved by their Lordships in these cases, a decision which is given without investigating or considering any of the matters raised in controversy cannot be held to be given on the merits of the case, and to hold that although the court had not so acted, its decision is nevertheless on merits seems to us to be self-contradictory. It may be that the judgment given is in full accord with the law in force in the foreign country, as indeed most of the cases to which we have referred were, and so it would be binding on the courts of that country passing it; but that is a very different thing from saying that simply because that is so, it must, therefore, be held to be binding on the courts in the foreign country. Section 13 of the Code contains a clear mandate on the point that if the decision is not on the merits, it would not be binding on the foreign courts where the judgment is sought to be enforced, and this mandate is and would be a clear warrant for the latter courts to satisfy themselves, whether the judgment was given on the merits as explained above, and if the answer to this question be in the negative, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which it is open to a plaintiff to resort to if he so chooses, and it is provided that he should present the plaint in the usual form, but a special form of summons is laid down which is form No. 4 in Appendix B. By this special kind of summons, the defendant is asked to obtain leave from the court within ten days from the service thereof to appear and defend the suit and a copy of the negotiable instrument is also annexed to the summons. The defendant is further told that if he fails to appear within the time specified, the plaintiff will be entitled at any time after the expiration of such ten days to obtain a decree. It may also be pointed out that such a suit can be brought within one year from the date of the debt becoming due under Article 5 of the Limitation Act. The effect of the rule, therefore, is that where leave is not applied for within the time specified or is applied for and refused, the plaintiff gets a decree without adducing any evidence whatsoever but on mere proof of service of summons. Rule 3 then provides that leave to appear and defend the suit may be granted upon affidavits which should disclose such facts as would make it incumbent upon the holder to prove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 15th July, 1943. The court thereupon adjourned the case to the 27th July, 1943 calling upon the plaintiff to file a counter-affidavit and the defendants to produce the counter-foil of the cheque alleged to have been forged. On the 27th the defendants did not appear and had sent a telegraphic request for the adjournment of the case. The court took no notice of the request for adjournment and decreed the suit. It is perfectly clear therefore that the court did not apply its mind to the truth or falsity of the plaintiff's case, nor did it decide any of the matters raised by the defendants in their affidavit. On the other hand, the court dismissed the application for leave to defend, and we shall assume that it did so for sound reasons, and so no defence was allowed to be raised. Applying the principles of law which we have enunciated above to the facts and circumstances of this case, we are afraid we are not prepared to hold that the decision of the Delhi court was a decision on the merits of the case. We would therefore hold that the present suit cannot be maintained on the basis of that decision and the plaintiff in order to succeed must establish the alternative of the origin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving that exceptional circumstance must rest upon him. In any case, we are of opinion that the question of burden of proof in the present case is hardly of any materiality inasmuch as both parties led their full evidence, and the only question for the court to determine is which of the two versions, namely, that put forward by the plaintiff, or the other one by the defendants, is correct. The trial court's finding on issue No. 5 is that the defendants have miserably failed to prove that they passed a blank cheque and the plaintiff filled in an amount of Rs. 17500/-. It cannot be expected of a shrewd business-man of the type of Shri Chandmal that he would pass a blank cheque to the plaintiff when already a dispute had arisen between his father and the plaintiff regarding the settlement of the accounts. The issue is decided against him . Having been carefully taken through the entire evidence on this point, and having regard to the surrounding circumstances of the case, we are in entire agreement with the opinion of the trial court in this respect. We would now briefly indicate our reasons for the conclusion to which we have come. 33-42. (After stating the reasons and disposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut a verbal award, but for the statutory requirement that it should be made in writing, and we have not only Indian but English and American cases cited in the books where an oral or a parole award has been held to be good particularly where it has been acted upon. Thus in Savlappa v. Devchand, ILR 26 Born 132 Jenkins C. J. observed that an oral award, though undesirable, was perfectly valid. It was again held in Ram Bilas v. Birich Singh, AIR 1932 Pat 60 that where a reference to arbitration is made without the intervention of a court and where writing was not required by the terms of the submission, a parole or oral award is good and will bind the parties. This last-mentioned case, it may be pointed out, arose under para 10 of the Second Schedule of the Code of Civil Procedure. The same view appears to have been adopted in Tara Prasad v. Raja Singh, AIR 1935 All 90 and Unni Muhammad v. Marakkarutti, AIR 1936 Mad 713. Again, the same view appears to have been taken in some English cases among which may be mentioned Judith Hanson v. Liversedge, (1690) 2 Ven 242 and Rawling v. Wood, (1735) Bar 54. As to an instance of an American case illustrating the same view, the case of Phelps v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to the Bikaner business. It is also admitted that this partnership was dissolved some time in May, 1942. It is further clear that a dispute arose between the parties as to the settlement of the accounts of this partnership business. It also admits of no dispute that the defendants joined the plaintiff in referring this dispute to the arbitration of a single arbitrator. It further appears to us to be beyond the range of any reasonable controversy that so far as this particular partnership business was concerned, the defendants did owe money to the plaintiff, though the exact amount may be in dispute. 46. Then there is a serious controversy between the parties as to the subsequent happenings. The plaintiff's case is that the reference having been made, the arbitrator gave an award in favour of the plaintiff that the defendants should pay him a sum of Rs. 17500/- in complete settlement of the partnership account in question and that the defendants accepted this award and defendant Chandmal gave a cheque for the aforesaid amount to the plaintiff. The defendants dispute the reference and the award and the giving of the cheque, and on all these matters, our finding in concurr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cience will support a transaction even though it may be clothed imperfectly after the bargain has been acted upon. The principle of this case, in our opinion, squarely applies to the case before us and we respectfully adopt it. Learned Counsel invited our attention to some cases relating to minors wherein it was held that an agreement with a minor was void and that it could not possibly be revived and constitute a valid consideration for a subsequent contract even after the minor had come of age. See for example, Firm Bhola Ram v. Bhagat Ram, AIR 1927 Lah 24. We are clearly of opinion that these cases have no relevance to decide the point which falls for consideration before us. In this state of the law, we are definitely inclined to think that the present suit was and is maintainable on the foundation on which it has been brought and that the mere circumstance that the award in the present case was an oral one, even though it had culminated in the passing of the promissory note in suit, is not an adequate circumstance to non-suit the plaintiff. We hold accordingly. 47. Learned counsel for the defendants in the last resort raised a further contention for the first time in this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the defendant was released from all debts claimable against his estate. In other words, the plaintiff had elected to take the judgment of the foreign court whoso jurisdiction he had invoked in discharge of his whole cause of action and, therefore, it was held that he could not afterwards sue for the residue of the debt in England and that he could not be allowed to treat the judgment which the foreign court had given for the whole cause of action as a part payment and sue for the residue in the courts in England. In the case before us, it is true that the plaintiff did obtain a decree against the defendants in the foreign court for Rs. 17500/-with costs and future interest; but he had only been able to recover a sum of Rs. 20/- from the defendants, and it is nobody's case that the rest of the amount was recovered from them. In these circumstances, we are unable to see any valid reason why the plaintiff should be debarred from recovering it by a fresh suit either based on the foreign judgment or on the original cause to action as the case may be, and of such a case it can hardly be postulated with any justification that the plaintiff was approbating as well as reprobating a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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