# JAGDISH CHANDER GUPTA v. KAJARIA TRADERS (INDIA) LTD

- **Citation:** [1964] 8 S.C.R. 50
- **Court:** Supreme Court of India
- **Decided:** 1964-04-29
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/jagdish-chander-gupta-v-kajaria-traders-india-ltd-3276
- **Pages:** 11

## Headnote

50
SUPREME COURT REPORTS
[rg64J
IfJfU
"such" may . as weU refer to the "income" in the opening
CJ.T.
sentence of sub-s. (3). The said rnb-section says that the
~I h "· WanllJ incomes mentioned thereunder shall not be included in the
• "°-
' total income, but the proviso lifts the ban and says that such
Sublla Rao 1.
incomes shall be included in the to:al income if the conditions laid down are satisfied.
We think that the expression
usuch income" only means the income accruing or arising in
favour of the trust.
1964
April, 29.
The legal position may briefly be stated thus.
Clause
(i) of s. 4,(3) of the Act takes in every property or a fractional part of it held in trust wholly for religious or charitable purposes.
It also takes in :mch property held only in
part for such purposes.
Business is also property within the
meaning of the said clause. Clause (b) of the proviso to
s. 4(3)(i) applies only to a business not held in trust but
carried on on behalf of religious or charitable institutions.
For the foregoing reasons we hold that the High Court
has co~ectly answered the question referred to it.
In the result, the appeals fail and are dismissed with
costs.
One set of hearing fees.
Appeal dismissed.
JAGDISH CHANDER GUPTA
v.
KAJARIA TRADERS (INDIA) LTD.
(K. N.
WANCHOO,
M.
HIDAYATULLAH,
K.
C.
DAS
GUPTA AND N. RAJAGOPALA AYYANGAR JJ.)
hrbitration Act-Partnership agreement-Provision
for
referring
to
arbitration-Partnership not registered-Application
in
the High
Court for appointment of arbitrator-If maintainable-Interpretation
of statute-Ejusdem Generis--No1citur a
sociis-Indiarc
Partnership Act, 1932 (9 of 1932), •· 69-Arbitration Act, 1940
(Act 10 of 1940), " 8(2).
lbo respondent entered into a partnership agreement with tho appellant. But this was not registered. There was an arbitration clauoe sti-
8 S.C.K
SUPREME COURT REPORTS
51
pulatiog that in case of dispute the matter will be referred for arbitration
in accordance \\ith Arbitration Act, 1940. Dispute having l\risen between
the respondent and the appellant the former wrote to tho latter stating
that the dispute be referred for arbitration and
that the
respondent
has appointeil one K as the sole arbitrator. On the failure of the appellant
to agree to this the respondent filed an application under s. 8(2) of the
Indian Arbitration Act for the appointment of arbitrator. The application was hearil by a Division Bench of the High Court before which the
appellant contended that s. 69(3) of the Indian Partnership Act, 1932
afforded a bar to tho petition because the partnership was not registered.
One of the Judges upheld the contention while the other rejectell it and
the matter was referred to another Judge who held that the application
was competent. The present appeal was filed by special leave granted
by this Court.
HELD:-(i) That since the arbitration clause formed a part of the agreement constituting the. partnership it is obvious that the proceeding which
is before the Court is to enforce a right which arises from a contract.
Whether one views the contract between the parties as a whole· or on•
Tiews only the arbitration clause it is impossible to think that the. riaht
to proceed to arbitration is not one of the rights which are founded OD
the agreement of the parties.
The words of s. 69(3)
"a right arisina
from a coiitract" are in either sense sufficient to
cover
tho present
matters.
(ii) Interpretation ejusdt:m ge11eris or nosc:itur a l'Ociis
need
not
always be made when showing particular classes are followed by general
words. Before ·the general wvrds can be so interpreted there- must bo
a genus constituted or a category disclosed with reference" to which tho
1eneral words can and are intende'd to be restricted. The expression
"clairp. of set off" does not disclose a category or a genus.
Set. offs are
of two kinds legal and equitable and both are already comprehended
and it is difficult to think of any right ""arising from a contract• which
is of the same nature as a cl

## Text

50
SUPREME COURT REPORTS
[rg64J
IfJfU
"such" may . as weU refer to the "income" in the opening
CJ.T.
sentence of sub-s. (3). The said rnb-section says that the
~I h "· WanllJ incomes mentioned thereunder shall not be included in the
• "°-
' total income, but the proviso lifts the ban and says that such
Sublla Rao 1.
incomes shall be included in the to:al income if the conditions laid down are satisfied.
We think that the expression
usuch income" only means the income accruing or arising in
favour of the trust.
1964
April, 29.
The legal position may briefly be stated thus.
Clause
(i) of s. 4,(3) of the Act takes in every property or a fractional part of it held in trust wholly for religious or charitable purposes.
It also takes in :mch property held only in
part for such purposes.
Business is also property within the
meaning of the said clause. Clause (b) of the proviso to
s. 4(3)(i) applies only to a business not held in trust but
carried on on behalf of religious or charitable institutions.
For the foregoing reasons we hold that the High Court
has co~ectly answered the question referred to it.
In the result, the appeals fail and are dismissed with
costs.
One set of hearing fees.
Appeal dismissed.
JAGDISH CHANDER GUPTA
v.
KAJARIA TRADERS (INDIA) LTD.
(K. N.
WANCHOO,
M.
HIDAYATULLAH,
K.
C.
DAS
GUPTA AND N. RAJAGOPALA AYYANGAR JJ.)
hrbitration Act-Partnership agreement-Provision
for
referring
to
arbitration-Partnership not registered-Application
in
the High
Court for appointment of arbitrator-If maintainable-Interpretation
of statute-Ejusdem Generis--No1citur a
sociis-Indiarc
Partnership Act, 1932 (9 of 1932), •· 69-Arbitration Act, 1940
(Act 10 of 1940), " 8(2).
lbo respondent entered into a partnership agreement with tho appellant. But this was not registered. There was an arbitration clauoe sti-
8 S.C.K
SUPREME COURT REPORTS
51
pulatiog that in case of dispute the matter will be referred for arbitration
in accordance \\ith Arbitration Act, 1940. Dispute having l\risen between
the respondent and the appellant the former wrote to tho latter stating
that the dispute be referred for arbitration and
that the
respondent
has appointeil one K as the sole arbitrator. On the failure of the appellant
to agree to this the respondent filed an application under s. 8(2) of the
Indian Arbitration Act for the appointment of arbitrator. The application was hearil by a Division Bench of the High Court before which the
appellant contended that s. 69(3) of the Indian Partnership Act, 1932
afforded a bar to tho petition because the partnership was not registered.
One of the Judges upheld the contention while the other rejectell it and
the matter was referred to another Judge who held that the application
was competent. The present appeal was filed by special leave granted
by this Court.
HELD:-(i) That since the arbitration clause formed a part of the agreement constituting the. partnership it is obvious that the proceeding which
is before the Court is to enforce a right which arises from a contract.
Whether one views the contract between the parties as a whole· or on•
Tiews only the arbitration clause it is impossible to think that the. riaht
to proceed to arbitration is not one of the rights which are founded OD
the agreement of the parties.
The words of s. 69(3)
"a right arisina
from a coiitract" are in either sense sufficient to
cover
tho present
matters.
(ii) Interpretation ejusdt:m ge11eris or nosc:itur a l'Ociis
need
not
always be made when showing particular classes are followed by general
words. Before ·the general wvrds can be so interpreted there- must bo
a genus constituted or a category disclosed with reference" to which tho
1eneral words can and are intende'd to be restricted. The expression
"clairp. of set off" does not disclose a category or a genus.
Set. offs are
of two kinds legal and equitable and both are already comprehended
and it is difficult to think of any right ""arising from a contract• which
is of the same nature as a claim of set otl and can be raised bJ a
4efendent in suit.
Allen v. Emerson, (1944) I
K.B. 362. referrell to.
Hafiz Qamar Din v. Nur Din, A.I.R. 1936 Lah. 136, /Tabulal Dhaft
Dhania v. Mis. Gautam & Co. A.I.R. 1950 Cal. 341, Kottama1u Sreemannarayanamurthy v. Chakka Arja11ad11, A.l.R. 1939 Mad. 145, Jarnal
Y. Firm Umar Haji Karfm, l.L.R. 1943 Nag.- 540, and R,tm Lal Harnam
Das v. Bal Kishan. A.l.R. 1957 Punj. 159, distinguished.
(iii) The . words "other proceeding" in sub-section (3) must rec:eift
lheir full meaning untramelled by the words "a claim of set oil". Tho
latter words neither intend nor can be construed to cut down the senerality of the words "other proceeding". The sub-section provides for the
application of tho provisions of sub-sections (!) and (2) to claims ol.
aet otl an'd also to other proceedings of any kind which can proper)J
be said to be for eQ{orcemeD;t of any right arising front contract except
lh- expressly mentioned aa exceptions in sub-sections (3 T llld ( 4).
1964
Jagduh Chantl1r
...
Ka/aria T1'fllhn
52
SUPREME COURT REPORTS
[1964]
1964
Crvn. APPELLATE JURISDICTION: Civil Appeal No. 791
lagdishchander of 1962 .
...
La/aria Tradm
Appeal by special leave from the judgment and order
dated March 22, 1960, of the Bombay High Court in Award
No. 18 of 1959.
S. T. Desai and /. N. Shroff, for the appellant.
B. C. Misra, for the respondent.
April 29, 1964. The Judgment of the Court was delivered by
Hldt1)•atullah J.
HIDAYATULLAH J.-This appeal by special leave is directed against an order of the High Court of Bombay dated
Marc;1 22, 1960 in its ordinary original civil jurisdiction.
The facts are simple.
By a letter dated July 30, 1955,
Messrs. Kajaria Traders (India) Ltd., who is the respondent
here and Messrs.
Foreign Import and Export Association
(sole proprietory firm owned by the appellant Jagdish ('.
Gupta) entered into
a partnership
to
export
between
January and June 1956, 10.000 tons of manganese ore to
Phillips Brothers (India) Ltd., New York.
Each partner
was to supply a certain quantity of manganese ore. We are
not concerned with the terms of the agreement but with one
of its clauses which provided:
"That in case of dispute the matter will be referred
for arbitration in accordance with the Indian
Arbitration Act."
The company alleged that Jagdish Chander Gupta failed
to carry out his part of the partnership agreement.
After
some correspondence,
the company wrote to
J agdish
Chander Gupta on February 28, 1959 that they had appointed Mr. R. J. Kolah (Advocate O.S.) as their arbitrator and
asked Jagdish Chander Gupta either to agree to Mr. Kolah's
appointment as sole arbitrator or to appoint his own arbitrator.
J agdish Chander Gupta put off consideration and
on March 17, 1959 the company informed Jagdish Chander
Gupta that as he had failed to appoint an arbitrator within
15 clear days they were appointing Mr. Ko lab as sole arbitrator.
Jagdish Chander Gupta disputed this and the com-
8 S.C.R.
SUPREME COURT REPORTS
53
pany filed on March 28, 1959 an applicMion under s. 8(2)
of the Indian Arbitration Act, 1940 for the appointment of
Mr. Kolah or any other per~on as arbitrator.
1964
Jagdish Chander
Jagdish Chander Gupta appeared and objected inter alia
to the institution of the petition. Two grounds were urged
(i) thats. 8(2) of the Indian Arbitration Act was not applicable as it was not expressly provided in the arbitration
clause quoted above that the arbitrators were to be by
consent of the parties and (ii) that s. 69(3) of the Indian
Partnership Act, 1932 afforded a bar to the petition because
the partnership was not registered.
The petition was referred by the Chief Justice to a Divisional Bench consisting of
Mr. Justice Mudholkar (as he then was) and Mr. Juscice
Naik. The two learned Judges agreed that in the circumstances of the case an application under s. 8 of the Indian
Arbitration Act was competent and that the court had power
to appoint an arbitrator.
They disagreed on the second
eoint: Mr. Justice Mudhollcar was of the opinion thats. 69(3)
of the Indian Partnership Act barred the application while
Mr. Justice Naik held othe<wise. The case was then referred to Mr. Justice K. T. Desai (as he then was) and he agreed
with Mr. Ju~tice Naik with the result that the ap?lic:ition
was held to be competent.
In this appeal it was not contended that the conclusions
of the learned Judges in regard to s. 8(2) were erroneous.
The decision was challenged only on the ground that
s. 69 (3) was wrongly interpreted and the bar afforded by
it was wrongly disallowed.
Section 69 of the Indian
Partnership Act may be reproduced here :
"69. ( 1) No suit to enforce a right arising from a
contract or conferred by
this Act shall be
instituted in any Court by or on behalf of any
person suing as a partner in a firm against the
firm or any person alleged to be or to have
been a partner in the firm unless the firm is
registered and the person suing is or has been
shown in the Register of Firms as a partner in
the firm.
...
Kajaria Traden
Hidayatul/JJ~ I.
1964
Jagdi.rh Chander
••
Kajar/a Tradm
Hldayatullah J.
54
SUPREME COURT REPORTS
L1964j
(2) No suit to enforce a fight arising from a
contract shall be instituted in any Court by or
on behalf of a firm against any third party
unless the firm is registered and the persons
suing are or have been shown in the Register of ·
Firms as partners in the firm.
( 3) The provisions of. sub-sections (1 )
and ( 2)
shall apply also to a claim of set-off or other
proceeding to enforce a right arising from a
contract, but shall not affect-
( a) the enforcement of any right to sue for the
dissolution of a firm or for accounts of a
dissolved firm, or any right or power to
realise the property of a dissolved firm, or
(b) the powers of an official assignee, receiver or
Court under the Presidency-towns Insolvency Act, 1909, or the Provincial Insolvency Act, 1920, to realise the property of
an insolvent partner.
( 4) This section shall not apply-
( a) to firms or to partn.ers in firms which have
no place of business in the territories to
which this Act extends, or whose places of
business in the said territories are situated in
areas to which, by· notification under section
56, this Chapter does not apply, or
(b) to any suit or claim of set-off not exceeding
one hundred rupees in value which, in the
Presidency towns, is not of a kind specified
in section 19 of the Presidency Small Cause
Courts Act, 1882, or outside the Presidency-towns, is not of a kind specified in the
Second Schedule
to the Provincial
Small
Cause Courts Act, 1887, or to any proceeding in execution or other proceeding inciden·
ta! to or afising from any such suit or claim.
The section, speaking generally, bars certMn· suits and proceedings as a consequence of non-registration of firms. Sub-
8 S.C.R.
SUPREME COURT REPORTS
55
s. ( 1) prohibits the institution of a suit between partners
inter se or between partners and the Jinn for the purpose ot
enforcing a right arising from a contract or conferred by
the Partnership Act unless the firm is registered and the
person suing is or has been shown in the Register of Firms
as a partner in the firm.
Sub-s. ( 2) similarly prohibits a
suit by or on behalf of the firm against a third party for the
purpose of enforcing rights arising from a contract unless
the fum is registered and the person suing is or has been
shown in the Register of Firms as a partner in the firm. In
the third sub-section a claim of set-off which is in the nature
of a counter claim is also similarly barr~d. Then that subsection bars "other proceedings". The only doubt that has
arisen in this case is regarding the meaning. to be given to
the expression "other proceeding". One way to look at the
matter is to give these words their full and natural meaning
and the other way is to cut down that meaning in the light
of the words that precede them. The next question
is
whether the application under s. 8(2) of the Arbitration Act
can be regarded as a proceeding "to enforce a right arising
from a contract'', and therefore, within the bar of section 69
of the Indian Partnership Act.'
Mr. Justice Mudholkar in reaching his conclusion did
not interpret the expression "other proceeding" ejusdem
generis with the words "a claim of set-off". He held further
that the application was to enforce a right arising from the
contract of the parties. Mr. Justice Naik pointed out that
the words used were not "any proceeding" nor "any other
proceedings" but "other proceeding" and that as these words
were juxtaposed with 'a claim of set off' they indicated a
proceeding of the nature of a claim in defence. On the
second point Mr. Justice Naik held that this was not a
·procf',eding to enforce a right arising from a contract but
was a c!ltim for damages and such a claim could be entertained because it was based on something which was independent of the contract to supply ore.
He held that the
right which was being enforced was a right ansing from" the
Arbitration Act and not from the contract of the parties.
Mr. Justice K. T. Desai agreed with most of these conclusions and sugQested that the words preceding "other proceed1964
Jagdish Chand•
v.
Ka/aria Trtukr
Hidayatullah I
1944
Jagdish Chttnder
v.
Kaiaria
Trf!.4.11~
Bidayatu/lah J.
SUPREME COURT REPORTS
ing", namely, "a claim of set-off" had 'demonstrative and
limiting effect'. He seems to have a5certained the meaning
of the expression "other proceeding" by n;ference to the
meaning of the words "a claim of
s~.t off", which he
considered were associated with it.
The first question to decide is whether the present proceeding is one to enforce a right arising from the contract
of the parties. The proceeding under the eighth section of
the Arbitration Act has its genesis in the arbitration clause,
because without an agreement to refer the matter to arbitration that section cannot possibly be invoked. Since the
arbitration clause is a part of the agreement constituting the
partnership it is obvious that the proceeding ~hich is before
the court is to enforce a right which arises from a contract.
Whether we view the contract between the parties as a
whole or view only the clause about arbitration, it
i<i
impossible to think that the right to proceed to arbitration
is not one of the rights which are founded on the agreement of the parties. The words of s. 69 ( 3) "a right arising
from a contract" are in either sense sufficient to cover the
present matter.
It remains, however, to consider whether by reason of
the fact that the words "other proceeding" stand opposed
(
to the words "a claim of set-off" any limitation in their
meaning was contemplated. It is on this aspect of the case
that the learned Judges have seriously differed. "ihen in a
statute particular classes are mentioned by name and then
are followed by general words, the general words are sometimes construed ejusdem generis, i.e. limited to the same
category or genus comprehended by the particular words.
But it is not necessary that this rule must always apply.
The nature of the special words and the general words must
be considered before the rule is applied.
In Allen v.
Emerson ('), Asquith J. gave interesting examples of
particular words followed by general words where the
principle ot efusdem generis might or might not apply. We
think that the following illustration will clear any difficulty.
In the expression "books, pamphlets, newsp~pers and other
(I) [1944) I K.B. 36z,
... 1
._,.'
IS.CR.
SUPREME COURT REPOKfS
57
documents" private letters may not be held included if
1964
other documents' be intepreted ejusdem generis with what lagdishChalllh
goes before.
But in a provision which reads "newspapers
. v.
or other document likely to convey secrets to the enemy'", KaJarra Trader:
the words 'other document' would include document of Hidayatullah I
any kind and would not take their colour from 'newspapers'.
It follows, therefore, that interpretation ejusdem generis or
noscitur a sociis need not always be made when words
showjpg particular classes are followed by general words.
Befor~ the genezal words can be so interpreted there mu:st
be a genus constituted or a category disclosed with referenc~
to which. the general words can and are intended to
be
restricted. Here the expression "claim of set-off" does not
disclose a category or a genus. Set-offs are of two kinds--
legal and equitable-and both are already comprehended
and it is difficult to think of any right "arising from
a
contract" which is of the same natuce as a claim of set-off
and can be raised by a defendant in a suit.
Mr. B. C'.
Misra, whom we invited to give us
examples,
admitted
frankly that it was impossible for him to think of any proceeding of the nature of a claim of set off other than a claim
of set-off which could be raised in a suit such as is described
in the second sub-section. In respect of the first snb-sect!on
he could give only two examples. They are (i) a claim by
a pledger of goods with an unregistered firm whose goodc.
are attached and who has to make an objection under O. 21
r. 58 of the Code of Civil Procedure and (ii) proving a
debt before a liquidator. The latte; is not raised
as
a
defence and cannot belong to the same genus as a "claim
of set-off". The former can be made to fit but by a stretch·
of some considerable imagination. It is difficult for us to
accept that the Legislatu~; was thi11king of such far-fetc~ed
things when it spoke of "other proceeding" ejusdem generi.•
with a claim of set-off.
Mr. Justice Naik asked the question .that if all proce_edings were to be excluded why was it not considerecl suffi
cient to speak of proceedings along with suits in sub-ss.
(1) and (2) instead of framing a separate snb-sec!ion
about proceedings and coupling 'other proceeding' witli 'a
claim of set-off'? The question is a proper one to ask but
1964
"1a,.U.h Chander
v.
Kafin'la Trader1
Hidayalullah I.
58
SUPREME COURT REPORTS
[1964l
!Jie search for the answer in the scheme of the section
itself gives the clue. T!J.e section thinks in terms of (a)
suits and (b) claims of set-off which are in a sense of the
nature of suits and ( c) of other prnr;ec<lings. The section
first provides for exclusion of suits :n '.;Jb-ss. ( 1) and (2).
Then it says that_ the same ban applies to a c:aim of set-off
and other proceeding to _enforce a .right arising from a
contract. Next it excludes the ban in respect of the right
to sue (a) for the dissolution of a firm, (b) for accounts
-
.,
of a dissolved firm and ( c) for the realisation of the
property of a dissolved firm. The emphasis in each case is
on dissolution of the firm. Then follows a general exclusion
of the section. The fourth sub-section says that the section
as a whole, is not to apply to firms or to partners and
firms which have no place of business in the territories of
India or whose places of business are situated in the territories of India but in areas -to which Chapter VIl is not
to apply and to suits or claims of set off not exceeding
Rs. 100 in value.
Here there is no insistence on the dissolution of the firm. It is significant ,.that in the latter part
of clause (b) of that section the words are "or to any proceeding in execution or other proceeding incidental to or
arising from any such sujt or claim" and this clearly shows
that the word
"proceeding" is not limited to a proceeding in the nature of a suit or a claim of set-off. Subsection ( 4) combines suits and a claim of set-off and t!Jen
ipeaks of "any proceeding in execution" and "other proceeding incidental to or arising from any such suit or claim"
as being outside the ban of the main section. It would
hardly have been necessary to be so explicit if the words
·'other proceeding' in the main sec,(ion had a meaning
as
restricted as is suggested by the respondent. It i~ possible
that the draftsman wishing to make exceptions of different
kinds in respect of suits, claims of set-off and other proceedings grouped suits in sub-ss. (1) and (2), set-off and ot!ler
proceedings in sub-s. (3) made some special exceptions in
respect of them in sub-s. (3) in respect of dissolved firms
and then viewed them all together in sub-s. ( 4) providing
for a complete exclusion. of the section 'in respect of 1mits
-0f particular classes. For convenience • of drafting this
8 S.C.R.
SUPREME COURT REPORTS
59
scheme was probably followed and nothing can be spelled
out from the manner in y.'hich the section is sub-divided.
Some cases noticed by the High Co.art were cited to us
but none of them appear§ to be really in point. In Hafiz
Qamar Din v. Nur Din( 1)
and Babu/al Dhandhania v.
Messrs. Gauttam and Co. (2) proceedings were started on
an award, in one to mi\ke it a rule of the Court and in the
other to get it set aside. These cases are distinguishable
because they deal with awards and it is not necessary to
decide ·whether after an award the proceeding is one to
enforce a right arising from a contract.
We do not refer
to
them.
In Kottamasu
Sreemannarayanamuthy
and
another v. Chakka Arjanadu( 3 ) a petition for adjudication
of a partner as insolvent was held to be a right arising not
from a contract but from statute. Here the right that is
being enforced through the medium of the Arbitration Act
arises from the contract between the parties and is a part
of it. In Jamal v. Firm Umar Haji Karim(') the bar of
s. 69 ( 3) was claimed during the execution of a consent
decree and was disallowed. Grille C. J. observed that the
1xpression 'other proceeding' indicated
something which
was 'sui generis of a claim of set-off', If the partners cf an
unregistered firm go to court without either asking for
a
dissolution of the firm or dissolving it themselves and enter
into an agreement and compose their differences it is possible to say that the enforcement of the consent decree is no
more than the enforcement of a right arising from a contract
and is . within the ban. It is, however, not necessary to
decide. this point here. ln Ram Lal Hw,ram Das v. Bal
Krishan and others(") it was expressly f!Ointed out that
the expression 'other proceeding' in the third sub-section
applied to proceedings of the nature of a claim of set-off
and nothing else. This case cannot be said to interpret the
sub-section correctly.
Similarly, Mahendra v. Gurdeyal("),
which lays down that s. 69 does not bar a partner of an
unregistered partnership firm from
applying to the court
under ~- 8 of the Arbitration Act for referring the dispute
(t) A.I.R 1936 Lah. 136.
(3) A.I.R. t939 Mad. 14,.
(,) A.l.R. I9j7 Punjab r,,.
(2) A.T.R. 1950 Cal. 391.
(4) I.L.R. 1943 Nag. s40.
(6) I.L.R- 30 Pat. 109. ·
J964
Jagdi>h Chandu
v.
Ka/aria Trad""
Hldaya1ulla& J.
60
SUPREME COURT REPORTS
1964
between partners to arbitrator as provided in the condition
Ja11dtsh Chander of t4eir agreement, cannot be accepted
as souud.
The
v
.
. Y.T d
,reason given by the Divisional Bench that as s. 69 al~ows
.n.a]Orio
ra er' - .
.
. -
d1Ssc:Jl.utJ.on and accounts of
unregistered
partnership
it
Hidayarul/ah J. cannot bar such an application appe<:rs · •, "'; to be not quite
m point.
1964
April, 30.
1n ·our judgment, the words '0th.er proceeding' in subs. (3) must receive their full meaning untramelled by the
words ·a claim of set-off'.
The latter words neither intend
nor can be construed to cut down the generality of the
words 'other proceeding'. The sub-section provides for the
application of the provisions of sub-ss. (1) and (2)
to
claims of set-off and also to other proceedings of any kind
which can properly be said to be for enforcement of any
right arising from contract except those expressly mentioned
as exceptions in sub-s. ( 3) and sub-s. ( 4).
The appeal is, therefore, allowed.
The decision of the
High Court will be set aside and the application under s.
8(2) of the Arbitration Act shall stand dismissed
with
costs throughout on the applicant in the High Court.
Appeal allowed
STATE OF MADRAS
v.
C. J. COELHO
(K. SUBBA RAo, J. C. SHAH AND S. M. SIKRI J.J.)
Incon1e Tax-Interest
paid
on monies borrowed for purchase of
plantation-I/ deductible from the assessable income-Expsnditur•
if laid out or expended wholly and exclusively for the purpose of
plantation-Madras Plantations Agricultural Income .. fax Act
(Mad.
V of 1955), s. S(e) and (k).
·
The respondent, assessee purchased an estate, consi!lling of tea. coffee
and rubber plantation•. Out of the sale price of Rs. 3,10,000/· ho
borrowed Rs. 2,90.000/· at interest. For the assessment year 1955·56.