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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

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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

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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

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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

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