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JAGDISH CHANDRA GUPTA V. KAJARIA TRADERS (INDIA) LTD .AIR 1964 SC 1882

 JAGDISH CHANDRA GUPTA V. KAJARIA TRADERS (INDIA) LTD.AIR 1964 SC 1882 

FACTS

  • M/s. Kajaria Traders (India) Ltd. and M/s. Foreign Import and Export Association (owned by Jagdish C. Gupta) entered into a partnership agreement to export manganese ore.
  • The agreement contained an arbitration clause stating that in case of dispute, arbitration would be conducted according to the Indian Arbitration Act.
  • Disputes arose regarding the partnership agreement, leading the company to appoint an arbitrator, Mr. R.J. Kolah.
  • Jagdish C. Gupta disputed the appointment of Mr. Kolah as sole arbitrator.
  • The company filed an application under Section 8(2) of the Indian Arbitration Act for the appointment of an arbitrator.

ISSUE

  • The primary issue was whether the application under Section 8(2) of the Indian Arbitration Act was barred by Section 69(3) of the Indian Partnership Act due to the partnership not being registered

JUDGEMENT

  • The Court held that the application under Section 8(2) of the Indian Arbitration Act was not barred by Section 69(3) of the Indian Partnership Act.

LEGAL ANALYSIS

  • Court concluded that the proceeding to appoint an arbitrator under Section 8(2) was not a proceeding to enforce a right arising from a contract within the meaning of Section 69(3), as the proceeding to appoint an arbitrator was based on the arbitration clause in the contract.
  • The Court rejected the argument that "other proceeding" should be limited by the preceding words "a claim of set-off," as it found no clear category or genus to which such limitation could apply.
  • Court examined the structure and scheme of Section 69(3) and concluded that the term "other proceeding" should be understood in its full and natural meaning, not restricted by the context of claims of set-off.
  • Therefore, the Court held that the application under Section 8(2) of the Indian Arbitration Act was not barred by Section 69(3) of the Indian Partnership Act.