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Ramchander Singh v. Munshi Mian

Ramchander Singh
v.
Munshi Mian

(High Court Of Judicature At Patna)

Appeal From Appellate Decree No. 470 Of 1947 | 05-05-1949


Ramaswami, J.

(1) In the suit which is the subject of this appeal the plaintiff alleged that he had advanced RS. 230 to the defendants on the basis of an unregistered ijara, that he obtained possession of the land mortgaged but on a subsequent date the defendants looted the paddy crops which he had grown. The parties referred the matter to arbitrators who made an award. The plaintiff claimed that according to the award he was entitled to recover a sum of Rs. 280 with interest from the defendants. The ground of defence was that there was no reference to arbitration and no award was made by the alleged arbitrators. The defendants alleged that the award-even if made was fraudulent and collusive and in any case could not be enforced since there was an agreement to stifle prosecution and the consideration was illegal. The learned Munsif accepted the defence case and dismissed the suit. But in appeal the learned Subordinate Judge held that there was no agreement to stifle prosecution and the plaintiff was entitled to enforce the award. The learned Subordinate Judge accordingly pronounced decree in favour of the plaintiff.

(2) On behalf of the respondent, a preliminary objection was raised that this suit was of the nature cognizable by Small Cause Court and no second appeal was competent under Section 102, Civil P. C, Learned advocate made reference to Mizaji Lal v. Partab Kunwar; 42 ALL 169: (A. I. R.(6) 1919 ALL. 12, in which the plaintiff had sued to recover money due under the terms of a private award. The suit was tried by a Munsif having Small Cause Court jurisdiction and a decree was passed in favour of the plaintiff. The defendants appealed in revision to the High Court under Section 25 upon the ground that the suit was not one cognizable by Small Cause Court. Lindsay J. held that Article 24 of the second schedule was not applicable and a suit to recover money payable by the terms of the private award was not a suit which was excepted from the jurisdiction of Small Cause Court. For the appellants reliance was placed upon Kunja, Behary v. Gosto Behary, 22 C. W. N. 66: (A. I. R. (5) 1918 cal. 899), in which the learned Judges considered that a suit to enforce an award was in essence a suit for specific performance of a contract and was excluded from cognisance of a Small Cause Court under Article

1

5. But the other High Courts have held that a suit to enforce an award, namely, for recovery of money payable under an award was nob a suit for specific performance of a contract and hence was cognizable by a Small Cause Court (Mt. Erachshaw v. Dinbai, 45 Bom 318: (A. I R

. (8) 1921 Bom. 399) [LQ/BomHC/1920/102] , Mg. Ni v. Mg. Aung Ba, 4 Rang. 227 : (A.I.R

. (13) 1926 Rang. 198) and Simson v. McMaster, 13 Mad. 344), In my opinion, the correct rule is stated in this catena of authorities. The Calcutta decision may, however, be explained on the special facts of that case. For, in that case the learned Judges had held in the alternative that the suit must fail upon the ground that the award which the plaintiff sought to enforce could not be enforced as a whole in a Small Cause Court as it involved the partition of immovable properties. In the present case, I am of opinion that the suit instituted by the plaintiff is not excepted by Article 15 or Article 24; that the Small Cause Court had jurisdiction to try it; that in consequence a second appeal to this Court is not competent.

(3) At the request of the appellants we proceeded to treat second appeal as an application in revision under Section 115, Civil P. C.

(4) The main argument addressed on their behalf was that under Section 32, Arbitration Act, the learned Munsif had no jurisdiction to entertain the suit.

(5) Section 14 (1), Arbitration Act, states that when the arbitrators have made their award, they shall sign it and give notice of the fact in writing to the parties. Sub-section (2) requires that the arbitrators shall, at the request of a party cause the award to be filed in Court, and when this is done, the Court shall give notice of its filing to the parties. Sections 15 and 16 empower the Court to modify the award or to remit it to the arbitrators for further consideration. Section 17 enacts that when the Court sees no cause to remit the award for re-consideration, it shall, after the time for making an application to set it aside has expired, or when such an application has been made and refused, proceed to pronounce judgment according the award, and upon the judgment so pronounced a decree shall follow.

(6) Sections 31 and 32 of the Act are also relevant. Section 31 reads:

"(1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates. (2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed and by no other Court. (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be, filed, and to no other Court

. (4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court."

Section 32 enacts:

"Notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in this Act."

(7) Learned advocate for the respondent made reference to Kirkwood v. Maung Sin, 30 C. W. N 529 1 (A. I. R. (12) 1925 P. C. 216), in support of his contention that a suit to set aside an award was maintainable under Section 30, Specific Relief Act. In E. D. Sassoon and Co. v. Ram-dutt Ramkissen, 50 cal. l : (A. I. R. (9) 1922 p. C. 374), the Judicial Committee held that a suit lay to set aside an award on the ground that an arbitrator had acted wholly without jurisdiction. But these decisions were based on the law existing prior to the passing of the Arbitration Act of 1940. Section 30, Specific Relief Act merely states that the provisions of chap. II as to contracts shall mutatis mutandis apply to awards and to directions in a will or codicil to execute a particular settlement. It is manifest that this section cannot override Section 32, Arbitration Act, 1940, which applies "notwithstanding any law for the time being in force." The governing section is Section 32, Arbitration Act. The Act of 1940 was intended to and did alter the law, and one of the main objects of the Act was to provide that claims to set aside arbitration awards or challenge arbitration agreement should be made by application to Court and decided on affidavits or on other evidence if deemed expedient by the Court and not by means of a suit. In the present suit, the question at issue clearly relates to existence and validity of the award made by the arbitrators. In Paras. 8 and 17 of the written statement the defendants specifically asserted that they had never referred the alleged matter in dispute to any arbitrators and that no award was made. The defendants maintained that even if the award was genuine the plaintiff was not entitled to enforce the award since it was illegal, invalid and inoperative. Upon these pleadings, it is manifest that the suit raised the question as to the existence and validity of the award and such a suit is expressly prohibited by Section 32, Arbitration Act. The construction I have adopted is supported by three decisions: Moolchand Jothajee v. Rashid Jamshed Sons and Co., A.I.R. (33) 1946 Mad. 346 [LQ/MadHC/1945/364] : (I. L. R. (1946) Mad. 840); Deokinandan v. Basantlal, 45 C. w. N. 881 : (A. I. R. (28) 1941 Cal. 527) [LQ/CalHC/1941/51] and Ratanji Virpal and Co. v. Dhirajlal Manilal, I.L.R. (1942) Bom. 452 [LQ/BomHC/1941/134] ; ( A. I. R. (29) 1942 Bom. 101) [LQ/BomHC/1941/134] . In the last case it was held that under the Arbitration Act, 1940, till the award had been filed in Court it was not competent to a party to an arbitration to file a petition to set aside the award. Chagla J. states : "Further under the present Act no proceedings can be taken on the award till after it has been filed, and I fail to see bow a party can possibly be prejudiced by the existence of an award -which has not been filed in Court. Under the old Arbitration Act it was competent to a party who obtained an award without filing it to file a suit thereon. Further, the award became enforceable as a decree as soon as it was filed. But under the present Act all proceedings with regard to the arbitration agreement or the award have to be taken as provided by the Act and before the tribunal indicated by the Act. Section 32 specifically provides that no suit shall He on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected otherwise than as provided in the said Act, and under Section 17 of the Act, the Court has to pronounce judgment according to the award and a decree follows. It is only this decree that can be excuted." It is manifest that in view of the bar imposed by Section 32, Arbitration Act the Munsif had no jurisdiction to entertain the suit.

(8) Accordingly, I would allow this application and set aside the decree of the lower appellate Court. The applicants are entitled to their costs. Hearing fee two gold mohurs. Imam, J.

(9) I agree to the order proposed. Speaking for myself, it is immaterial whether a second appeal lies or a civil revision in this case,, having regard to the fact that in any event the suit was barred and could not be heard by a Court whether of Small Causes or a civil Court under the provisions of the Arbitration Act, 1940.

Advocates List

For the Appearing Parties Lakshman Saran Sinha, Lalnarayan Sinha, Kasi Nasrul Hasan, L.M.Ghosh, Advocates.

For Petitioner
  • Shekhar Naphade
  • Mahesh Agrawal
  • Tarun Dua
For Respondent
  • S. Vani
  • B. Sunita Rao
  • Sushil Kumar Pathak

Bench List

HON'BLE MR. JUSTICE N. IMAM

HON'BLE MR. JUSTICE RAMASWAMY

Eq Citation

AIR 1950 PAT 48

LQ/PatHC/1949/51

HeadNote