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The argument is therefore attempted to be put on a legal foundation and it is that section 18 (2) used mandatory language and attached penal consequences and the slightest deviation in a material respect and particularly the lack of signature of one of the contracting parties renders the agreement null and void. Ratio |
What the law requires is that the cane growers and the factories should, in view of the scheme, conform to certain terms and conditions which have been predetermined so that the scheme of rationalisation does not fail. Ratio |
For this purpose a form is prescribed and the form shows the place where the parties have to sign in token of their acceptance. Ratio |
Of course, the terms could be accepted orally but the section requires that the contract should be in a particular form and hence in writing. Ratio |
As to signatures it was held by Duke L. J. as he then was in Ruf (T. A.) & Co. vs Pauwels (1) as follows (1) , 670.779 "As to the suggestion which was made that the words 'contract in writing ' imports a contract made by means of a writing or writings signed by both parties, I do not think the words necessarily have th... |
A document purporting to be an agreement may be an agreement in writing sufficient to satisfy the requirements of an Act of Parliament though it is only verified by the signature of one of the parties. PRE |
Re Jones The learned Attorney General, however, contends that the prescriptions of section 18(2) being manda tory they had to be followed to the letter. Ratio |
He urges that in as much as the Act and the rules prescribe a penalty for breach the section cannot but be regarded as mandatory in all its parts. Ratio |
He assumes that the appellant may be guilty and punished but, says he, the mandatory provision not having been followed according to the letter there can be no resulting valid contract. Ratio |
A large number of rulings on how to distinguish between mandatory and directory provisions of law were cited before us, in support of the contention. Ratio |
More cases were cited ' to show that where a form is prescribed, the form and must be used otherwise there is no contract. Ratio |
We shall only briefly refer to them. Ratio |
The general rule as to which provision of law, can be regarded as mandatory and which directory is stated in Maxwell on the Interpretation of Statutes at page 364 "It has been said that no rule can be laid) down for determining whether the command (of the statute) is to be considered as a mere direction or instruction ... |
It may, perhaps, be found generally correct to say that nullification is the natural and usual consequence of disobedience, but the question is in the main governed by considerations of convenience and justice (R. vs Ingall (2) , per Lush, J.), and, when that result would involve general inconvenience or injustice to i... |
The whole scope and purpose of the statute under consideration must be regarded. Ratio |
The general rule is, that an absolute enactment must be obeyed or fulfilled exactly, but it is sufficient if a directory enactment be obeyed or fulfilled substantially. Ratio |
" This rule has been applied in many cases both in India and in England. Ratio |
In State of U. P. vs Manbodhan Lal Srivastava (1) this Court observed that no general rule can be laid down but the object of the statute must be looked at and even if the provision be worded in a mandatory form, if its neglect would work serious general inconvenience or injustice to persons who have no control over th... |
If the statute (1) ; (2) A.I.R. (1962) 113,119.781 is found to be directory a penalty may be incurred for noncompliance but the act or thing done is regarded as good. PRE |
It is unnecessary to multiply these cases which are based upon the statement in Maxwell which is quoted over and over again. PRE |
Now the prescription of the law in the present case was that the cane growers and the factory must enter into an agreement in a prescribed form. PRE |
That form has in fact been used, only there are certain blanks and the appellant has not signed where he was expected to do so. PRE |
Reliance is placed by the appellant upon a decision of the House of Lords reported in Thomas vs Kelly (1) particularly the observations of Lord Macnaghten where a distinction was made between the words "in accordance with the form" and "in the form". PRE |
It is argued that the Act and the rules in the present case require the agreement to be in the form prescribed and not in accordance with the form. Ratio |
It is submitted that a substantial compliance may be permissible when the words of the statute are " 'in accordance with the form" but that strict compliance is necessary when the words are "in the form": The form in Thomas vs Kelly (1) was in a different category from their form which we have. Ratio |
Under the statute, which prescribed the form (a bill of sale), it was provided that a bill of sale given by way of security was void unless made in accordance with the form. Ratio |
, The form used there being not in accordance with the form prescribed was held to be void though there are observations to show that if this consequence had not been attached a departure from the statutory form in any thing which was not a characteristic of that form would not have been fatal. Ratio |
In the body of the bill of sale executed in that case there was no description of the things intended to be assigned and this portion was regarded as characteristic of the form prescribed. Ratio |
There are some cases of this Court in which the prescribed forms have been considered, In two (1) 782 cases under the Representation of the People Act,1950, the form for making a security deposit which was prescribed, was not strictly followed but it was held that it was merely a matter of form and as there was substan... |
See Jagan Nath vs Jaswant Singh (1) and Kamaraja Nadar vs Kunju Thevar (2), In Hari Vishnu Kama the vs Syed Ahmed Ishaque (3) votes not given in the form prescribed were held to be invalid because the form prescribed was considered to be essential and an intention of the voter expressed otherwise than in the form presc... |
In Radhakisson Gopikisson vs Balmukund Ramchandra (4) a by law provided that contract between agents and their constituents shall be in the form prescribed. PRE |
It was held by the Privy Council that a literal compliance with the forms was not essential if the contract contained all the terms and conditions set out in the form but it was otherwise if it did not. PRE |
In the present case the form prescribed set out a number of conditions and these have all been incorporated in the agreement which has been executed by the society. PRE |
In other words the form has been used. Ratio |
There is no deviation from the prescribed form except in respect of the three defects which we have mentioned earlier. Ratio |
We have pointed out that the failure to execute the agreement in the form is made an offence but no other consequence is indicated if the form is not followed. Ratio |
The utmost that can be said is that if the form which was used included conditions which were at variance with the conditions in the prescribed form a contract might not have resulted. Ratio |
But we need not express any opinion on this, because in this case the terms as stated in the prescribed form are the terms in the form used. Ratio |
We have pointed out that no consequence attaches to the failure to observe the form except punishment by fine and section 18 (2) is capable (1) ; (2) (3) ; (4) [1932] L.R. 60 1.A. 63.783 of being read as directory. Ratio |
Even if it be read as mandatory we have shown already that the failure of the appellant to sign the form is not a matter of which he can take advantage regard being had to his own conduct. Ratio |
The blanks also do not matter in view of the existence of form No. 10 which suppli ed the information accidentally omitted from the agreement. Ratio |
The form is also sufficiently identified by the signature on behalf of the Society and it has been acted upon not only by the Society but also by the appellant who is complaining of the want of signature. Ratio |
In our opinion, the agreement was binding. Ratio |
It may be pointed out that the arbitration clause in the agreement was enforceable, if agreed to, even without the signature of the appellant as it is settled law that to constitute an arbitration agreement in writing it is not necessary that it should be signed by the parties and it is sufficient if the terms are redu... |
See Jugal Kishore Rameshwardas vs Mrs. Goolbai Hormusji (1). PRE |
In our opinion even if the section be held to be mandatory to the extent that the terms as prescribed should appear in writing, that is complied with in this case. Ratio |
There was thug a binding contract between the parties and the dispute was to be ,resolved as required by Rule 23. Ratio |
The appellant has an alternative argument by which he challenges the validity of Rule 23 itself. Ratio |
He says that Rule 23 permits the Cane Commissioner to follow two different methods for the adjudication of the disputes. Ratio |
One method is that the Cane Commissioner can himself hear and decide the dispute and the other is that he can direct the parties to have their dispute decided by arbitration. Ratio |
It is said that Rule 23 thus confers on the Cane Commissioner an arbitrary power to proceed with some cases in one way and in some cases in another because there is no (1) ; 784 guiding principle. Ratio |
It is also contended that one of the procedures, (namely the decision by the arbitrators) gives a right of appeal from the award to the Commissioner of the Division while there is no right of appeal in the other (namely, decision by the Cane Commissioner) and there is thus discrimination between those persons whose cas... |
It is contended that the Commissioner is given an arbitrary power to discriminate between one case and another in as much as he can decide one case himself and refer another to arbitration and the rule thus offends against the equal protection clause contained in article 14 of the Constitution. ARG |
Reference is made to those cases in which this Court has ruled that in such circumstances the law is void. Ratio |
It is also contended that Rule 23 contains a provision for appeal but sub r.(6) providing for an appeal goes beyond the power conferred by section 30 which confers the rule making power on the Provincial Government. ARG |
It is also said that sub r.(6) is not severable from the rest of the Rule because the Provincial Government would not have made a rule for arbitration in that form if it was not able to enact a rule giving a right of appeal to an aggrieved party when there was arbitration. Ratio |
It is thus contended that sub r.(6) allowing the right of appeal should be struck down as ultra vires the Provincial Government and the whole rule because sub r.(6) is not severable from the rest of the rule. ARG |
The arguments are somewhat conflicting. Ratio |
If sub r.(6) was ultra vires the Provincial Government and must be struck down then one of the reasons on which the complaint of discrimination is based must disappear provided the sub r.is severable, because the decision in either case then would be final. Ratio |
It is only if it is unseverable that other considerations would arise. Ratio |
It is therefore necessary to see if section 30 of the Act confers power to provide for appeal from 785 the award of the arbitrators. Ratio |
An appeal is no doubt a creature of statute and does not lie in the nature of things. Ratio |
Under the general law relating to arbitration there is no appeal against an award. Ratio |
The power to provide for an appeal by a rule must, therefore, flow from section 30 of the Act. Ratio |
Section 30 first confers a general power to make rules and then enumerates, as illustrative of the general power, certain topics on which rules in particular may be made ' The general power is conferred by the first sub section which reads: "The Provincial Government may make rules to carry out the provisions of this A... |
" It is argued by the appellant that this sub section does not use the common formula "carry out the purposes of this Act" and the Provincial Government could only provide for an appeal if a provision enabling it to ' do so existed in the Act, and no such provision regarding appeals is to be found. ARG |
The other side relies upon sub section(2) which says that rules may provide for : "(u) the reference to the Cane Commissioner of disputes relating to the supply of Cane for decision or if he so directs to arbitration, the mode of appointing an arbitrator or arbitrators, the procedure to be followed in proceedings befor... |
" It is contended that this clause confers on the rule making authority the power to make rules regarding disputes relating to the supply of cane for decision by arbitration and being itself a provision of the Act '. ARG |
rules can be made to carry out this provision. Ratio |
The appellant however contends that 186 clause (u) mentions only four matters and the provision of an appeal is not one of them. ARG |
In our opinion, clause (u) conferred a general power to make rules for the resolving of disputes either by the Cane Commissioner or if he so directs by arbitration and to give effect to the latter part of this provision arbitration with an appeal from the arbitrator 's decision would be giving effect to the provisions ... |
In this sense sub r.(6) providing for an appeal against the decision of the arbitrators must be considered as a rule giving effect to the provision of section 30 (2) (u) providing for the resolving of disputes by arbitration. Ratio |
Sub Rule (6) was thus within the rule making power of the Provincial Government and it is unnecessary to discuss whether it is severable or not from the rest of the rule. Ratio |
We shall now pass on to the main contention in this case, that Rule 23 provides for two different types of procedures to be followed at the option of the Cane Commissioner. Ratio |
If it could be said that the rule, as framed, allows the Cane Commissioner to discriminate between one party and another, then the rule must offend Article 14. Ratio |
We shall, therefore, see whether there is any room for discrimination at the hands of the Cane Commissioner. Ratio |
It is necessary in this connection to see first whether the Cane Commissioner can compel a party to go to arbitration against his will. Ratio |
The rule says that any dispute touching an agreement shall be referred to the Cane Commissioner for decision or if he so directs to arbitration. Ratio |
It also provides that no suit shall lie in a civil or revenue court in respect of any such dis pute. Ratio |
At first sight, it does look as if the Cane Commissioner can pick and choose between two disputes of like nature., keeping one two himself ' and sending another for decision by a sale arbitrator or Board of arbitrators. Ratio |
But the purport of the first sub Rule is that an arbitration can be with the permission of the Cane Commissioner 787 and parties cannot go to arbitration without the permission of the Cane Commissioner. Ratio |
The rest of the rule shows that there can be no arbitration without the consent of the parties. Ratio |
If the reference to arbitration is purely on a voluntary basis then there can be no complaint that two different procedures are provided for the solution of the same kind of disputes. Ratio |
If parties cannot be compelled to go to arbitration and refuse to go to arbitration then the Cane Commissioner must decide the dispute himself. Ratio |
If this view was correct then there is but one mode of deciding disputes, namely, by the Cane Commissioner and an alternative mode, no doubt, under the direction of the Cane Commissioner but only if the parties agree, by arbitration. Ratio |
Therefore the provisions regarding arbitration cannot be compared with the procedure before the Cane Commissioner, and the provision for an appeal in the former but prima facie not in the latter loses all significance. Ratio |
The procedure of arbitration with the appeal included really applies only if both sides accept that procedure willingly. Ratio |
To determine whether the procedure involving arbitration is voluntary or not we shall have to examine Rule 23 in some detail but before we do so we shall advert to section 46 and three other sections of he Arbitration Act. Ratio |
That section provides : "The provisions of this Act, except sub section (1) of section 6 and sections 7, 12, 36 and 37, shall apply to every arbitration under any other enactment for the time being in force, as if the arbitrations were pursuant to an arbitration agreement and as if that other enactment were an arbitrat... |
" It was admitted before us by the learned counsel for the appellant that section 46 in its first part does not apply but it was argued that section 8, 9 and 10 of the 788 arbitration Act must be considered in deciding whether the arbitration is purely on a voluntary basis or not. Ratio |
We have thus to compare the provisions of Rule 23 with those of these sections to find out if the rule prevails over the sections. Ratio |
Rule 23(2) provides that when the Cane Commissioner directs the reference of the dispute to arbitration "it shall be referred to a sole arbitrator acceptable to the parties concerned". STA |
It is thus clear that arbitration by a sole arbitrator can only be by consent of parties. Ratio |
New if the matter were governed by section 8 of the Arbitration Act it would be open to any party to serve the other party with a written notice to concur in the appointment and after a lapse of a fortnight the Court could be moved to make the appointment. Ratio |
This provision is clearly inconsistent with what happens in the same circumstances under the Rule. Ratio |
The Rule provides : in case no sole arbitrator is acceptable to both parties the dispute in question shall be referred to a Board of Arbitration., consisting of one representative of each party and an umpire acceptable to both representatives. STA |
The Board is a three member board and this eliminates from consideration section 8. Ratio |
It also excludes section 9, of the Arbitration Act which deals with situations in which the reference is to two arbitrators and if one party fails to appoint his arbitrator the other party after appointing his own arbitrator can give a notice and the appointed arbitrator becomes the sole arbitrator. Ratio |
Under Rule 23 this cannot happen. Ratio |
Section 9 is thus inconsistent with a three member board which is the sine qua non of the Rule. Ratio |
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