M/S. Grasim Industries Ltd. And Anr vs M/S. Agarwal Steel

REPORTABLE IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 5994 OF 2004

Grasim Industries Ltd. & Anr. .... Appellants

Versus

Agarwal Steel .... Respondent

WITH

CIVIL APPEAL NOS. 7477/2004 AND 1733/2005

O R D E R

Heard learned counsel for the parties.

This appeal by special leave has been filed against

the judgment and order dated 14th May, of the High Court of

Judicature at Madhya Pradesh at Jabalpur.

The facts in detail have been set out in the

impugned judgment and hence we are not repeating the same

here. Briefly stated the facts are that the appellant

herein entered into an agreement with the respondent and

appointed the appellant as a principal dealer for sale of

its cement 'Vikram Premium Brand'. On 21.3.1997, the

respondent became the consignment agent of the appellant

company and in this behalf an agreement dated 1.5.1997 was 2

signed between the parties. Disputes and differences arose

between the parties under the said agreement dated 1.5.1997

and the same were referred to an arbitrator. A copy of the

arbitration award dated 6.8.2000 is annexed as Annexure-P/10

to this appeal. In the award the arbitrator has rejected the

plea of the claimant-respondent that the signature on Ex.D-8

dated 21.10.1997 were only in lieu of a receipt. The case

of the appellant was that the document Ex.D-8 was a joint

statement of account. The arbitrator held that the

signatures on Ex. D-8, joint statement of account, were made

by the parties. However, he held that the signature on

behalf of the claimant-respondent was made under a mistake

and hence the same was not binding. Accordingly, the

arbitrator re-examined each head of account and ultimately

held the appellant liable to pay to the respondent a sum of

Rs. 49.90 lakhs alongwith interest. Objections under

Section 34 of the Arbitration and Conciliation Act, 1996

(hereinafter for short 'the Act') were filed by the

respondent before the IXth Addl. District Judge, Jabalpur.

By his order dated 25.6.2001, the learned Addl. District

Judge held that the appellant was entitled to receive a sum

of Rs. 62,000/- alongwith interest @ 18%. The said order of

the learned Addl. District Judge was put in challenge before 3

the High Court under Section 37 of the Act.

We are not going into the details of the

impugned judgment except to note that in para 24 of the said

judgment it has been stated that the arbitrator did not

accept the claimant-respondent's plea that the signatures on

Ex.D-8 were only in lieu of receipt. However, the

arbitrator addressed himself to the facet whether the

admission was erroneous or mistaken or it was conclusive

proof of the matter.

In our opinion, when a person signs a document,

there is a presumption, unless there is proof of force or

fraud, that he has read the document properly and understood

it and only then he has affixed his signatures thereon,

otherwise no signature on a document can ever be accepted.

In particular, businessmen, being careful people (since

their money is involved) would have ordinarily read and

understood a document before signing it. Hence the

presumption would be even stronger in their case. There is

no allegation of force or fraud in this case. Hence it is

difficult to accept the contention of the respondent while

admitting that the document Ex.D-8 bears his signatures that

it was signed under some mistake. We cannot agree with the

view of the High Court on this question. On this ground 4

alone, we allow this appeal, set aside the impugned judgment

of the High Court and remand the matter to the High Court

for expeditious disposal in accordance with law.

All questions of law and fact, except the one

decided by us hereinabove shall remain open for the parties

to be urged before the High Court. We make it clear that we

are making our observation that there was no mistake in the

document Ex. D-8, which the parties have signed.

Interim order of this Court dated 23.9.2004, as

modified on 9.1.2006, shall continue to remain in operation

till final disposal of the matter by the High Court.

Appeal allowed. No order as to the costs.

CIVIL APPEAL NOS. 7477/2004 AND 1733/2005

In terms of our order in Civil Appeal No. 5994/2004,

these appeals also stand disposed of.

.....................J. (MARKANDEY KATJU)

.....................J. (ASOK KUMAR GANGULY) NEW DELHI;

OCTOBER 20, 2009 5