LexTHE PRINTERS (MYSORE) PRIVATE LTD. versus POTHAN JOSEPH
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
3 S.C.R.
SUPREME COURT REPORTS
713
All these cases turned on different facts, and it is
not necessary to decide which of them in the special
1960
Pingle Industries
nrcumstances were correctly decided.
This enquiry Ltd., Secunderabad
will hardly help in the solution of the case in hand.
We are, however, satisfied that in this case the
asse~
see acquired by his
long-term lease a right to
win
~tones, and the leases conveyed to him a part of land.
v.
rommissioner of
Income-tax,
Hyderabad
The stones in situ were not his stock-in-trade 111
a
Hidayatullah J.
business sense . but a capital asset from which
after
extraction he converted the stones into his
stock-in-
trade.
The payment, though periodic
in fact, wa~
neither rent nor royalty but a lump payment in instal-
ments for acquiring a capital asset of enduring benefit
to his trade.
In this view of the matter, the High 1
Court was right in treating the outgoings as on capital
account.
In the result, the appeal fails, and will be dismissed
with costs.
BY CQUR'I':
judgment of the
costs.
In accordance
with the majority
Court, the appeal is dismissed with
Appeal dismissed.
THE PRINTERS (MYSORE) PRIVATE LTD.
/
v.
POTHAN JOSEPH.
(P. B. GAJENDRAGADKAR, K. N. vVANCHOO and
K. c. DAS GUPTA, JJ.)
· ' Arbitration Agreement:-Power of court to st~y legal proceedings
-Order by trial court refusing stay of proceedings affirmed in appeal
-Supreme Court, if and when can interfere with concurrent exercise
of discretion by the courts below-Arbitration Act, 1940 (x of 1940),
s. 34-Constitution of India, Art. 136.
The respondent was the Editor of the Deccan Herald, owned
and published by the appellant, and the two contracts executed
by the parties contained an arbitration clause that if in the inter-
pretation or applicatio.n of
the contract
any difference
arose
between the parties the same shall _ be referred to arbitration :ind
the award shall be binding between the parties and also provided
for, apart from his monthly salary, the payment of 10% of the
profits to the respondent.
Upon the termination of his services
by the appellant, the respondent brought a suit for ·accounts and
payment of the profits ·found. due to him. The appellant by an
1960
April 27.
1960
Printers ( ft{J•sort')
Privatt' Ltd.
v.
Pothan Jostjih
714
SUPREJVlE COURT REPORTS
l l 9GOJ
application pleaded that the suit ought to be stayed under s. 34
of the Arbitration Act, 1940, and the dispute referred to arbitra-
tion in accordance with the agreement between the parties.
The
trial Judge refused to exercise his discretion in
favour of the
appellant and refused to stay the suit.
On appeal the High Court
confirmed the decision of the trial court. The appellant came up
to this Court special leave under Art. 136 of the Constitution:
Held, that the power conferred on the court by s. 34 of the
Arbitration Act, 1940.., is discretionary and even though the con-
ditions specified therein were fulfilled no party could claim there-
under a stay of legal proceedings instituted in a court as a matter
of" right.
But the
discretion vested in
the court is a judicial
discretion and must be exercised as such in the facts and circum-
stances of each case.
No inflexible rules can, therefore, be laid
down for its exercise and the court has to act according to common
sense and iusticc.
Gard11'1· v. Jay, (1885) 29 Ch. D. SO, referred to.
Where the discretion under
the section has been properly
and judiciously
exercised by the trial court the appeallate court
would not be justified in interferin? with sU:ch exercise_ of dis-
cretion n1crely on the ground that it would have taken a contrary
decision if it had considered the matter at the trial stage.-
But if
it appears to the appellate court that the trial court has exercised
its discretion unreasonably or capriciously or has ignored relevant
facts or has approached the matter unjudiciou.sly, it would be its
duty to intetfere.
Charles Osenton & Co. v. Jhanaton, (1942) A.C. 130, referred
to.
The words "interpretation and application of the contract'',
frequently used in arbitration clauses_, as they have been in the
contracts in question
cover not
only disputes
relating to the
construction of the relevant terms of the contract but also their
effect. and unless the context compels a contrary construction, a
dispute relating to the working of the contract falls within such
a clause.
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