8/6/2019 Konda Anthiah vs Madan Rao and Anr. on 8 September, 1967

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Equivalent citations: AIR 1969 AP 211

Bench: S Ahmed

Konda Anthiah vs Madan Rao And Anr. on 8/9/1967

JUDGMENT

1. The short question that fails for determination in this C. R. P. is with regard to the construction to be placed

on the powers of General Power of Attorney stated to have been appointed by Konda Aruna (the second

respondent) in O. P. No. 19 of 1962. The General Power of Attorney, Fateh Mohammad, is the first

respondent and the petitioner in the original petition. Madan Lal is the person in whose favour the agreement

has been drawn. Madan Rao filed the petition under Ss. 9 (1) and 8 (2) of the Arbitration Act, 1940 praying

that the dispute between the parties regarding failure to supply fire wood as agreed to may be referred to a

named arbitrator for settlement. His case was that he had entered into an agreement with first respondent who

holds the power of attorney on behalf of the second respondent whereunder the agent undertook to supply

fire-wood for Rs. 6, 400 within a specified time. The contention is that the respondent failed to supply the fire

wood and refund the amount in spite of the notice on behalf of the petitioner. A condition was imposed of the

terms of the agreement that in case of dispute, the matter would be referred to arbitration and it was thiscondition that was sought to be enforced by the petitioner. The first respondent petitioner did not contest the

petition. The second respondent, however, urged that the petition was not maintainable as the first respondent,

the power of attorney holder was not competent to refer the matter to arbitration. The question, therefore,

before the Court was whether the reference to an arbitration was within the competency of the General Power

of Attorney. The lower Court on a consideration of the terms of the General Power of Attorney held that the

first respondent was competent to entertain an agreement of the nature refereed to above. In other words, it

held that the reference to arbitrator was within the powers delegated to the General Power of Attorney. the

revision petition is filed by the second respondent in the lower Court against the decision of the lower Court.

2. The learned Counsel for the petitioner (second respondent) contends that the original document contains the

word `compromise' and reference to arbitration is not specifically mentioned thereunder. It may be useful toreproduce the relevant portion of the General Power of Attorney.

..........Therefore, we on our behalf appoint Sri Fateh Mohammad son of Shaik Ahmed, caste Muslim, aged 53

years, occupation business, resident of kachiguda, Hyderabad as our General Power of Attorney to the extent

of the above said lease and agree to the effect that the said lease and agree to the effect that the said gentleman

on our behalf is entitled to do pairavi and submit replies in all the Departments of Forests, Revenue, Civil

Court, Criminal Court, etc., in the State of Andhra Pradesh, admit or deny documents, compromise or

withdraw, settle the accounts, file documents, deposit or draw money, file petitions, suits, appeal or revision

in any Court of law obtain possession of above-said lease or obtain par-chittiaht (permit books) and issue

permits, cut the jungle wood and sell it, sell away or transfer the above lease, appoint on his own accord any

Advocate or Barrister or appoint a special power of attorney or cancel their power".

The General Power of Attorney in his turn seemed to have entered into an agreement with the

respondent-petitioner in the lower Court agreeing to supply fire wood within the specified time and received

an amount of Rs. 6,400. In clause 2 of the agreement, he stated as hereunder:

"In default, the said bargain would be deemed as cancelled and the executant shall be bound to pay back the

advance of Rs. 6,400 to the purchaser, and if the executant fails to pay back the said advance to the said

purchaser, the mater would be referred to the Arbitrator, Sri Prabhakar Rao Apsingikar, B.A. LL. B.,

Advocate, Hyderabad as wished by the said purchaser for the settlement of the repayment of the said advance

plus the costs and damages".

Konda Anthiah vs Madan Rao And Anr. on 8 September, 1967

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3. It is this part of the condition which was sought to be enforced by the petitioner herein.

4. The lower Court on a consideration of the argument held that the General Power of Attorney Holder was

competent to refer the matter to arbitration and in that view allowed the petition. The C. R. P. is directed

against this order.

5. The learned counsel for the petitioner contends with reference to the terms that under the powers delegated

Fateh Mohammed was only competent to admit or deny the documents, compromise or withdraw. Referenceto arbitration was not specifically mentioned therein. As such, the agreement entered into by the said person.

viz., Fateh Mohammed to refer the matter to arbitration was beyond his competence. With reference to the

decision in Desappa Nayanim v. Rama Bhaktula Ramaiah, , it has been urged that the Deed of General Power

of Attorney has to be strictly construed and adjustment or compromise did not include arbitration. In Para. 3

of the said judgment it has been observed with reference to Bowstead on Agency that:

"Powers of attorney must be strictly pursued, and are construed as giving only such authority as they confer

expressly or by necessary implication".

6. Some important rules of construction have been reproduced in the above ruling. It is conceded, in the

instant case, that in the deed conferring genera power of attorney on Fateh Mohammed which is in Urdu, thewords `reference to arbitrator' (Supard Salsi) are not found but from the trend of the document it is urged that

this power also would be deemed to be included in the said deed, for the deed authorise Fateh Mohammed `to

compromise or withdraw, settle the

accounts.............file petitions, suits, appeals, or revisions in a Court of etc. The Urdu word `Sulah' in the deed

has a different connotation from the words `Supard Salsi'. No doubt the English equivalent of `Sulah" is

compromise, but even compromise does not normally mean reference to arbitration be said that reference to

arbitration is mode of compromise. it is to be noted that in a compromise it is the discretion of the person to

whom the power has been delegated that has to be exercised one way or the other, but a reference to

arbitration involves delegation of power of that discretion to a third party. It is this delegation which is not

contemplated by the deed under reference.

7. This is the view taken by a Bench of the Madras High Court in Ramanathan v. kumarappa, AIR 1940 Mad

650, wherein it has been held that:

"A power of attorney authorising the agent to adjust a matter does not include a power to refer the matter to

arbitration on the principle underlying the maxim delegata potestas non potest delegari".

8. The learned counsel for the respondent has relied on a decision of Nagpur High Court in Jiwibai v.

Ramkumar, AIR 1947 Nag 17, to substantiate his contention that the word `compromise' is comprehensive

enough to include the word `arbitration'. I am not inclined to accept this interpretation as the said judgment is

based on the interpretation of a particular deed. It appears that in the said case it was held that:

"Compromise included the power to refer the suit to arbitration because the deed set out in separate phases the

two aspects of compromise which the single English word normally connoted".

It is not possible to spell out the same interpretation by reference to the word `Sulah' in the present deed. I am,

therefore, of the opinion that the lower Court was not justified in holding that Fateh Mohammed was

competent to refer the matter to arbitration. The C. R. P. is accordingly allowed with costs.

9. Revision allowed.

Konda Anthiah vs Madan Rao And Anr. on 8 September, 1967

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