A.N. Ray, J.@mdashThe appeal is fro-m the order of Sen, J. The order was made u/s 34 of the Arbitration Act. The learned Judge was pleased not to stay the suit.
2. Before the learned Judge it was contended that the allegations made in the plaint were untrue and frivolous. The learned Judge expressed the opinion that the contentions advanced were of no consequence in deciding whether the subject-matter of the suit is covered by the arbitration agreement or not. The learned Judge was pleased to dismiss the application.
3. It is well-settled as will appear for the decision of the Supreme Court in (1) A. M. Mair & Co. v. Gordhandas Sagarmull, reported in (1950) SCR 702 that the court cannot enter into the truth or falsity of the allegations, namely, the merits of the case.
4. Counsel for the appellant did not impeach the conclusion of the learned Judge.
5. What was contended at the hearing of the appeal was that the learned Judge should have gone into the question whether the contract was entered into between the parties and therefore the matter should have been tried on evidence. No such argument was advanced before the learned Judge and no ground was taken in the memorandum of appeal. It is not proper to advance such a contention at the hearing of the appeal when it was not submitted in the trial court. The appeal court is deprived of the views of the trial court. It is also not fair to allow a party to make submissions on points which may turn on questions of fact.
6. Counsel for the appellant relied on the decision of (2)
7. Counsel for the appellant contended that the allegations in the plaint in the present case were similar to the allegations in the case of Anderson Wright Ltd. v. Maron & Co., (supra). I am unable to accept that contention. In the case of Anderson Wright Ltd., (supra), the allegations in the plaint were that the plaintiff acted merely as broker and in that capacity brought about the two contracts of sale and purchase evidenced by the two Bought Notes mentioned in the plaint, that the real seller was a firm known as Gowrchand Danchand, and that the plaintiff not being a party to the contract could not incur any liability under its terms. There were prayers in the plaint for a declaration that the plaintiff was not a party to the contracts and that it had no liability under he same. There was a further prayer for an injunction res-training the respondent from claiming any damages in respect of the said contracts.
8. In the present case the prayers in the plaint are for a declaration that the plaintiff did not enter into the alleged contract or was not a party to the alleged contract with the defendants or any of them or in the alternative that the alleged contract is illegal, void and of no effect and for cancellation of the alleged contract. Further, in the case of Anderson Wright v. Maron & Co. reported in AIR 1955 SC 56, it will appear that in substance the controversy between the parties was whether the plaintiff did incur any liability in terms of the con-tracts evidenced by the two Bought Notes to which the plaintiff there was a signatory. In the present case the al-legations are that there was no contract and that the plaintiff was not a signatory. The plaintiff in the present case was not a party to the contract either as broker or as agent. Counsel for the appellant contended that the signing of the receipt of the contract would amount to evidence that the respondent was a party to the contract. There is no merit and substance in that contention. It would be a strange proposition to hold that any party who receives a contract note on the part of a person becomes a contracting party. The ratio in Anderson Wright Ltd. v. Maron & Co. does not apply.
9. Counsel for the appellant next contended that the arbitration clause in the present case derived its force from the rules which came into existence u/s 9 of the Securities Contracts (Regulation) Act (Act XLII of 1956). Section 9 of the Securities Con-tracts (Regulation) Act provides that any recognised stock exchange may, subject to the previous approval of the Central Government, make bye-laws for the regulation and control of con-tracts. It was therefore contended by counsel for the appellant that the bye-laws had their independent existence and one of the bye-laws provided the arbitration agreement and therefore the arbitration clause drew its vitality from the bye-laws which came into existence u/s 9 of the Securities Contracts (Regulation) Act and did not depend on the alleged contract.
10. Counsel for the respondent contended that section 15 of the Securities Contracts (Regulation) Act provides that no member of recognised stock exchange shall in respect of any securities enter into any contract as a principal with any person other than a member of a recognised stock exchange unless he has secured the consent or authority of such person and discloses in the note that he was acting as a principal. The further provisions in that section are that where the member has secured the consent or authority of such person other wise than in writing he shall secure written confirmation by such person of such consent or authority with-in three days from the date of the contract. Section 23(2) of the Securities Contracts (Regulation) Act provides that any person who enters into any contract in contravention of the provisions contained in section 15 or who fails to comply with the orders of the Central Government u/s 21 or section 22 shall, on conviction, be punishable with fine which may ex-tend to one thousand rupees. In the present case the indisputable facts are first, that the plaintiff was not a member of the Stock Exchange whereas the defendant was, secondly, that no consent was taken. Counsel for the respondent contended that the alleged contract, if any, was ex facie illegal. Reliance was placed by counsel for the respondent on the recent decision of the Supreme Court in (3)
Both the contentions advanced on behalf of the appellant fail.
The appeal is dismissed. Each party will bear its own costs.
S.K. Mukherjea, J.
11. I agree.
