Full Judgment Text
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CASE NO.:
Appeal (civil) 12645 of 1996
PETITIONER:
MADAN MOHAN RAJGARHIA
RESPONDENT:
MAHENDRA R. SHAH & BROS. AND ANR.
DATE OF JUDGMENT: 31/07/2003
BENCH:
V.N. KHARE CJ & K.G. BALAKRISHNAN & S.B. SINHA
JUDGMENT:
JUDGMENT
2003 Supp(2) SCR 52
The following Order of the Court was delivered:
The appellant herein was engaged in the business of purchase and sale of
shares and for that purpose he had been utilizing the services of the
defendant, who is a broker at the Bombay Stock Exchange. The appellant
herein filed a suit for recovery of Rs. 5,63,334 against M/s. Mahendra R.
Shah & Bros., who are the respondents herein. The respondents herein on
receipt of the summons in the suit, filed an application under Section 34
of the Indian Arbitration Act, 1940 for staying the proceeding on the
ground that there is a provision for arbitration as regards the dispute in
the suit. The learned Single Judge of the High Court accepted the
contention of the respondents herein and directed the stay of proceedings
of the suit. Aggrieved, the appellant filed the First Appeal from the said
order, which was dismissed. It is against the said order of the High Court,
the appellant has filed this appeal by way of special leave petition.
Learned counsel appearing for the appellant urged that the arbitration
clause printed on the bills does not include the persons like plaintiff
and, therefore, the appellant being a non-member is not required to seek
arbitration. We do not find any merit in the contention. One clause of the
Bill, which is printed on the front, reads as under :
"All the claims (whether admitted or not) difference and disputes between a
member and a non-member or a non-member (the terms "non-member" shall
include a remisier, authorized clerk or employee or any other person with
whom the members shares brokerage) arising out of or in relation to dealing
transactions and contracts made subject to the rules and bye-laws and
regulations or the Exchange or with reference to anything incidental
thereto or in pursuance thereof or relating their construction, fulfillment
or validity or relating to the rights, obligation and liabilities of
remisier authorised clerk, employees or any other person with whom the
member shares brokerage in relation to such dealing, transactions and
contracts shall be referred to and decided by arbitration as provided in
the rules, bye-laws and regulations of the Exchange."
Another clause of the Bill, which is printed on the back side, reads as
under;
"In the event of any claim (whether admitted or not) difference or dispute
arising between you and us out of these transactions the matter shall be
referred to arbitration in Bombay as provided in the Rules, Bye-laws and
Regulations of the Stock Exchange, Bombay."
The learned counsel appearing for the appellant urged that a non-member
will only be covered if he falls under the definition of a non-member.
Since the appellant is neither a remisier or authorised clerk or employee
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or shares any brokerage with the member, he cannot be covered by the said
definition and, therefore, the said rules, definition and bye-laws do not
apply to him. In fact, the argument is that the words ’any other person’
should take colour from the preceding words, namely, remisier, authorised
clerk or employee’ and since the appellant is not one of those mentioned,
he does not fall within the expression ’any other person’. The reading of
clause quoted above, as a whole, would clearly show that this clause is
quite wide and comprehensive enough to cover the case of the plaintiff. In
order to make it comprehensive, unauthorised clerk and employee and other
persons like remisier, who are or have been receiving brokerage from the
Members of the Exchange have been included in the definition of ’non-
member’ person. In fact by including these categories, the definition of a
’non-member’ has been widened. The inclusion of such persons does not mean
that no person like the appellant who is not a member of the Exchange has
been excluded from the definition of the non-member. This aspect may be
examined from another angle. The other clause in the same bill puts the
matter beyond doubt. The said clause shows that any claim (whether admitted
or not) difference or dispute arising between you and us’ out of these
transactions, the matter shall be referred to arbitration in Bombay as
provided in the rules, bye-laws and regulations of the Stock Exchange. It
does not show that what does it contemplate as regards arbitration clause
printed on the front of the bill, and tnat it provides for arbitration and
the persons like appellant are included therein.
For the aforesaid reasons, we do not find any merit in the appeal. It,
accordingly, fails and is dismissed. There shall be no order as to costs.