P L D 1961 Dacca 102 (PLP)

AKBAR, J.‑These three appeals which are between the same parties, and which involve common question of law have been heard together at the request of the parties.

2. Appeal No. 72 of 1953, arises out of Title Suit No. 63 of 1952 of the 4th Court of Subordinate Judge, Dacca. The plaintiff's case was as follows

3. On the 19th December 1950, the defendant, Messrs. Aminpur Union Co‑operative Multipurpose Society, Ltd., (here inafter referred to as the seller), agreed to sell to the plaintiff Messrs. Amin Jute Baling Co., Ltd., (hereinafter referred to as the buyer) 4,000 maunds of jute at Rs. 23‑8‑0 a maund to be delivered within December‑January 1950‑

51. The seller could deliver only 653 maunds of jute within the stipulated time. The buyer then extended the time of delivery at the request of the seller, but even then the seller was not in a position to deliver the balance of the jute. Thereafter, there was a reference to the arbitration of Dacca‑Narayanganj Chamber of Commerce (here inafter referred to as the Chamber of Commerce) on 16th March 1951. On 5th September 1951, an award was made by the said Chamber of Commerce for Rs. 55,870‑5‑0 in favour of the buyer. The buyer was also awarded Rs. 310‑8‑0 as costs.

4. Appeal No. 73 of 1953, arises out of Title Suit No. 64 of 1952 of the aforesaid Court of Subordinate Judge.

5. On 28th December 1950, the seller agreed to sell to the buyer 5,000 maunds of jute at a price of Rs. 28 per maund to be delivered within January‑February 1951. The seller, however, could not deliver the said jute, and hence there was a reference to the arbitration of Dacca‑Narayanganj Chamber of Commerce, and on 5th September 1951, an award was made by the said Chamber of Commerce for Rs. 1,28,000 in favour of the buyer. The seller was also directed to pay Rs. 315 as costs.

6. Appeal No. 74 of 1953 arises out of Title Suit No. 65 of 1952 of the 4th Court of Subordinate Judge, Dacca. On 21st December 1950, the said seller agreed to sell to the buyer 1,000 maunds of jute at the rate of Rs. 26‑12‑0 per maund to be delivered within December‑January 1950‑

51. The seller could deliver only 121 maunds of jute. Hence, there was a reference to the arbitration of the Chamber of Commerce, and on 5th September 1955, the said Chamber of Commerce made an award for Rs. 23,326 in favour of the buyer. They also gave the costs amounting to Rs. 269‑4‑0 to the buyer.

7. All the aforesaid three awards were then filed before the Court under section 14 (2) of the Arbitration Act, 1940. All the above contracts, on the basis of Which the awards were made, were in writing. There was a clause in each of the contracts for reference of this dispute to the arbitration of the Dacca Narayanganj Chamber of Commerce. The said contracts were, however, not stamped.

8. The seller filed three separate written statements. Their contentions were practically the same in all the cases, namely, that the contracts were not duly stamped according to law, and hence the reference to arbitration was bad ; and that in any event the Arbitrators acted arbitrarily and illegally in refusing to take evidence in vital matters. It was further contended that as there were laches on the part of the buyer to take delivery the seller was justifide in cancelling the contracts.

9. The learned Subordinate Judge held that as the agreements containing the submission to arbitration were not duly stamped in accordance with section 35 of the Stamp Act, it was not open to the Arbitrators to act upon them, and, therefore, they had no jurisdiction to make awards in the above cases. He, therefore, dismissed the suits.

10. The buyer has filed all these three appeals against his judgment and decree.

11. Mr. Chowdhury, the learned Advocate for the appellant, has contended that as the contracts were admitted in evidence by the Arbitrators they could not be called in question by the Judge in the suits. In support of his contention, he has relied on section 36 of the Stamp Act.

12. On the other hand, the learned Advocate for the respondent has contended that as these contracts did not bear any stamp the Arbitrators had ‑no jurisdiction to enter upon the arbitration, and, therefore, the learned Judge was right in dismissing the suits.

13. Hence the question is : Will the absence of a stamp on the contracts render the whole of the arbitration proceedings void, and the awards invalid ? Section 36 of the Stamp Act runs thus " Where an instrument has been admitted in evidence, such admission shall not, except as provided in section 61, be called in question at any stage of the same suit or proceeding on the ground that the instrument has not been duly stamped." In some of the old decisions, the High Court of Calcutta held that if no objection to the admissibility on ground of insufficiency of stamp was raised before the instrument was admitted in evidence, such objection could not be subsequently raised. In other words, it was held that if document was admitted after objection, section 36 will not apply : see. Hurdwary Mull v. Ahmed Musaji Saleji and others (13CWN63) and Kali Charan Banik v. Mani Mohan Saha Banik (28CWN871) so far as the recent decisions of the Indian High Courts are concerned, it is now well‑settled that section 36 would be applicable whether the document has been admitted with or without objection. In Nirode Basini v. Sital Chandra (A I R 1930 Cal. 577), Rankin, C. J., observed as follows "On the merits of the appeal, it appears to me that section 36, Stamp Act, makes it reasonably clear that the instru ment having once been admitted in evidence is not to be called in question at any stage of the same suit. The Special Judge has seen this section, but has thought to avoid the consequence of it by taking notice of an affidavit in which it is said that the tenure‑holders did object when the document was tendered, and that there was a discussion as to its admissibility. The learned Judge has entirely failed to see that, under section 36, it matters nothing whether it, was wrongly admitted or rightly admitted or admitted without objection or after hearing or without hearing such objection. These stamp matters are really no concern of the parties, and if the objection wag taken at the time when the record was made up by the trial Court, there it might be rejected, if not, the matter stopped there." This observation was quoted with approval by the Patna High Court in Krishna Kumar v. Mt. Jagpati Kuer (A I R 1937 Pat. 73), and Sm. Khemi Mahatani v. Charan Napit (A I R 1953 Pat. 365). The Allahabad High Court also fol lowed this dictum in Noor Ahmed v. Irshad Ghaus (A I R 1933 All. 821). Recently the Supreme Court of India has taken the similar view in V. E. A. Annamalai Chettiar and another v: S. V. V. S. Veerappa Chettiar and others (AIR1956SC12). In the above case the defendants contended that certain document was inadmissible in evidence for want of stamp. The trial Judge overruled the objection, and admitted the document in evidence. The Supreme Court observed : "There is also a further difficulty in the way of the appel lants, and it is that the document having been admitted in evidence, such admission could not be called in question at any stage of the proceedings on the ground that it had not been duly stamped. The provisions of section 36, Stamp Act, preclude the appellants from raising any objection against the admission of the document at this stage, and the appellants are not entitled now to urge this objection before us."

14. The contracts under consideration, were in writing, and therefore, according to the Arbitration Act there was a good submission for arbitration upon which the Arbitrators were entitled to act.

15. Now, section 35 of the Stamp Act prohibits a Court from admitting in evidence an instrument which in its view is not duly stamped. This section also prohibits the Court from acting on such document. If the Court, however, wrongly admits such document, the appellate Court is prevented by, section 36 of the Stamp Act from calling in question the admission in evidence of such an instrument, though it may have been wrongly admitted. In other words, the appellate Court is bound to hold that admission was proper. Here we may observe that the pro visions of the Stamp Act are for the purpose of protecting the revenue. A failure to comply with the Stamp Act may entail penalty. Hence, it would seem hardly reasonable that the whole proceeding should be vitiated and thrown away for want of stamp, which may in some cases be of a very small amount. The Legislature has, therefore, laid down penalty for non‑compliance with the provisions of the Stamp' Act. They also were alive to the fact that those who have authority to receive might sometimes be ignorant of or in attentive to the requirements of the Stamp Act. To meet such cases section 36 was enacted. Hence, where an instrument is admitted in partial or total neglect of section 35, such admission cannot be called in question except as provided in section 61 of the Stamp Act. In other words, penalty can be exacted under section

61. It is, therefore, wholly immaterial whether the document was admitted with or without objection. In our opinion, the law on this point has been correctly laid down by Chief Justice Rankin in Nirode Basini's case referred to above, and in this view of the matter we hold that the learned Subordinate Judge was not justified in holding that for want of stamp the Arbitrators were not entitled to act upon the contracts, and consequently had no justification to make the awards.

16. The learned Advocate for the respondent has contended that the respondent seller wanted to examine some witnesses, but the Arbitrators did not allow him to do so: The learned Advocate for the appellant has contended that the rules of the Chamber of Commerce do not make it obligatory on the Tribunal to take evidence.

17. No doubt, the Chamber of Commerce are commercial Arbitrators, and they may be in a position to know the condition of the market. It is true that such Commercial Arbitrators are chosen for their knowledge and experience of the trade so that they may be able to determine questions like market rate and damages without taking any evidence, but that does not mean that they will be able to determine the disputed question of facts, namely, whether the defendants' alleged tender was illegally refused by the plaintiff or not without going into evidence. These Arbitrators have got to determine these questions judicially. If they blindly accept one party's statement on the disputed question of facts, it may very well be urged that they failed to apply their minds to the questions before them, and, as such, they were guilty of misconduct and dereliction of duty.

18. In this connection, we may observe that a similar question, namely, whether the Bengal Chamber of Commerce Tribunal of Arbitrators were bound to take evidence arose in the case of Chhoomal Rawatmal v. Sankalchand G. Shah and others (53 C W N 828). It was contended in that case that under the rules of Bengal Chamber of Commerce, the Arbitrators were not bound to take evidence. The Court observed : "It was pointed out by this Bench in a judgment delivered on March 29, 1949, in the case of Mukhram Luchminarain v. Khusiram Benarshilal (Appeal from Original Order No. 2 of 1948), that the Rules of the Bengal Chamber of Commerce should not be construed as granting a charter to the Tribunal of arbitration to decide all questions without taking any evidence." We are in full agreement with the above observations.

19. The Arbitrators must remember that they determine the matter referred to them judicially. They should, therefore, be well‑advised to go into evidence when the nature of dispute requires it. If they decide such disputed questions, namely, whether there was extension of time or whether the seller's alleged story of delivery on the due date was true or not without going into evidence they might be guilty of legal misconduct, because it may be said that they had decided these question blindly without any materials before them. Of course, if the parties fail to adduce evidence, they will be justified to decide the case on the materials before them.

20. These observations do not mean that they must act as a Court. When the propriety of an award is questioned before us. we allow the Arbitrators all possible latitude and ignore technicalities: But deciding disputed question of fact without material or evidence are not questions of technicality or mere irregularity. This will, on the other hand, amount to illegality which may vitiate the award.

21. As arguments were advanced before us that under .the rules of the Chamber of Commerce the Arbitrators were not bound to take evidence, we have made the above observations for the guidance of the Tribunal of arbitration.

22. It seems to us that in the instant case the learned Judge in view of his finding that as the contracts did not bear stamps, the Arbitrators were not entitled to act upon the contracts, did not consider it necessary to discuss fully whether the defendant's prayer to adduce evidence was rejected or not. The defendant examined one witness to show that on the appointed day he went to the Chamber of Commerce with evidence. The learned Judge has rejected his evidence, because he did not say that the evidence was actually tendered and refused. We think the Court should have clarified this point by putting questions to the witness in order to find out if any evidence was actually taken by the Arbitrators or not. We called for the records of the arbitration proceedings. In the said records there are typed notes to the effect that oral evidence was adduced by the plaintiff on 23rd August 1951, but the defendant was absent. The said notes, however, do not bear signatures either of the Arbitrators or of the Registrar of the Tribunal. This point can also be easily clarified by calling one of the Arbitrators or the Registrar. In' these circumstances, we think the best course would be to send back the case to the trial Court for deciding whether the defendant's witnesses were present on the appointed day, and if so, whether the Arbitrators refused to examine them. The parties will be at liberty to adduce evidence on this point.

23. In the result, we allow the appeals, and set aside the judgment and decrees of the trial Court in Title Suits Nos. 63 of 1952, 64 of 1952 and 65 of 1952, and remand the suits to the said Court for disposal in accordance with law, and on the evidence on record, and on such other evidence that the parties may adduce. There will be no order as to the costs of these appeals. These old suits should be disposed of as expeditiously as possible. A copy of this judgment may be sent to the Dacca‑Narayan ganj Chamber of Commerce BAQUER, J.‑I agree. K. B. A. Appeal accepted.