Tara Prasad Baliasey And Others v. Baijnath Prasad Baliasey And Another

Tara Prasad Baliasey And Others v. Baijnath Prasad Baliasey And Another

(High Court Of Judicature At Patna)

| 01-05-1940

Chatterji, J.This is an appeal from an order refusing to make a reference to arbitration on the appellants application under para. 17, Schedule 2, Civil P.C.

2. Appellant 1, who is the lather of the other appellants, is the elder brother of respondent 1 of whom the other respondents are the sons. The parties are members of a joint Mitak-shara family. The application under para. 17 was to the effect that there was an agreement, dated 11th May 1937, between appellant 1 and respondent 1 to refer their disputes regarding the division of their joint family properties to the arbitration of four gentlemen named in the agreement. There was some attempt by the arbitrators to carry on the arbitration, but owing to the laches of the parties they could not proceed in the matter. Afterwards the respondents filed a partition suit (No. 1 of 1938) against the appellants. Thereupon the appellants presented their application under para. 17 praying that the agreement, dated 11th May 1937, be filed in Court. The application was opposed on various grounds, the most important of which is that the arbitrators refused to act and give their award. At the hearing three of the arbitrators gave evidence in support of the respondents version. The learned subordinate Judge, accepting their version, dismissed the application. Dr. D. N. Mitter on behalf of the appellants contends that the grounds on which the Court below has refused to make the order of reference were not sufficient within the meaning of para. 17 of Schedule 2, Civil P.C.

3. The relevant portion of that paragraph is Clause (4), which is as follows:

Where no sufficient cause is shown, the Court shall order the agreement to be filed and shall make an order of reference to the arbitrator appointed in accordance with the provisions of the agreement or, if there is no such, provision and the parties cannot agree, the Court may appoint an arbitrator.

4. Dr. Mitters contention is that "sufficient cause" under this clause does not contemplate the position that has arisen in the present case. According to him, the Court, when it found that there was a valid agreement, was bound to make a reference, and he suggests that, although some of the arbitrators are not willing to proceed with the arbitration, the Court may, in exercise of its powers under para. 5 of the same schedule of the Code of Civil Procedure, appoint new arbitrators in their place. It will be necessary here to refer to para. 5 which provides, among other things, that where an arbitrator refuses or neglects to act or becomes incapable of acting any party may serve the other party or the arbitrators, as the case may be, with a written notice to appoint an arbitrator and then if, within seven clear days after such notice has been served or such further time as the Court may in each case allow, no arbitrator is appointed, the Court may, on application by the party who gave the notice, and after giving the other party an opportunity of being heard, appoint an arbitrator.

5. It is, however, to be observed that paras 1 to 16 of Schedule 2 relate to "arbitration in suits," whereas paras. 17 to 19 relate to "order of reference on agreements to refer." It cannot be seriously disputed that there is some difference between the procedure that is to be followed where the reference to arbitration is made in a pending suit and where there is a mere agreement for reference to arbitration which is sought to be filed in Court.

6. In the latter case, the Court obviously cannot go beyond the terms of the agreement, and if it specifies the persons who are to be appointed arbitrators and makes no provision for the case where the arbitrators refuse to act, the Court cannot substitute in the place of the named arbitrators certain other persons. Clause (4) of para. 17, which I have already quoted, makes it clear that the reference should be made "to the arbitrator appointed in accordance with the provisions of the agreement."

8. In the present case, four persons were specifically named as arbitrators in the agreement. That being so, I do not see how in the face of the clear provision of Clause (4) of para. 17, a Court can substitute anybody else in their place. Dr. Mitter invites our attention to para. 19 of the same schedule of the Code of Civil Procedure, which runs as follows:

The foregoing provisions, so far as they are consistent with any agreement filed under para. 17, shall be applicable to all proceedings under the order of reference made by the Court under that paragraph, and to the award and to the decree following thereon.

9. It is contended that by the operation of this paragraph the provisions of para. 5 will apply to the present case. This contention, to my mind, is quite untenable. What is actually meant by para. 19 is that where there is an order of reference made by the Court under para. 17 "the foregoing provisions" shall be applicable to all proceedings under the order of reference. It by no means follows that the Court, before it is competent to make an order of reference, can exercise the powers conferred under para. 5. Otherwise, it would be stultifying, the very provisions of para. 19.

10. Dr. Mitter in support of his contention relies upon Bhagwan Das v. Gurdayal AIR 1921 All. 188 , Fazal Ilahi v. Prag Narain AIR 1922 All. 133 and Hafiz Zahur Ahmad and Another Vs. Taslim-un-nissa and Another . In Bhagwan Das v. Gurdayal AIR 1921 All. 188 the facts wore that it was not known whether the arbitrators named in the agreement were actually willing to proceed with the arbitration. The trial Court dismissed the application on the ground that the plaintiff had no cause of action. On appeal, it was held that before the application could be dismissed it should be ascertained whether in fact the arbitrators were unwilling to act. The case was therefore remanded to ascertain the real facts.

11. In the course of the judgment, however, Walsh J. observed that if any of the arbitrators was unwilling to act, the Court in exercise of its powers under para. 5 can appoint somebody else in his place and then refer the matter to arbitration. With all respect to the learned Judge, I am unable to agree with his view. As I have already pointed out, para. 5 can come into play only after there has been an order of reference made by the Court. The same view was followed in Fazal Ilahi v. Prag Narain AIR 1922 All. 133 where Walsh J. was one of the Judges who decided it. In this case the learned Judges go further and state:

If it were necessary, we should be prepared to hold that the words in para. 17, Sub-clause (4)(which enables a Court to make an order of reference to a particular arbitrator at the time of filing the reference) if there is no such provision and the parties cannot agree, cover a case where there has been a provision for a particular arbitrator who is either dead or retired. If he has died or refused to act, it is as though there was no provisions.

12. With all respect I must say this is an extreme view which is not justified by the clear provisions of Clause (4) of para. 17. The decision in Hafiz Zahur Ahmad and Another Vs. Taslim-un-nissa and Another does not really support the contention of Dr. Mitter. There the question was whether an order revoking a reference under para. 17 was appealable. In the course of the judgment Sulaiman C.J. referred to the decisions in Bhagwan Das v. Gurdayal AIR 1921 All. 188 and Fazal Ilahi v. Prag Narain AIR 1922 All. 133 , but it does not appear that he approved of those cases.

13. On the other hand, Mr. B.C. De for the respondents has referred to the cases in Narayanappa v. Ramachandrappa AIR 1931 Mad. 28 , Haji Abdul Hamid v. Abdul Aziz AIR 1934 Oudh 67 and Rajani Kanta Karati and Another Vs. Panchanan Karati, . These cases support the view which I have already expressed. I Narayanappa v. Ramachandrappa AIR 1931 Mad. 28 , the parties privately agreed to refer their disputes to certain named arbitrators, but the agreement did not contain any provision as to what should be done in case any of the arbitrators died in the course of the arbitration proceedings, and one of them died in the course of such proceedings. It was held that the agreement became inoperative and came to an end on the death of the arbitrators and that it could note therefore be filed in Court under Para. 17 of Schedule 2, Civil P.C.

In Haji Abdul Hamid v. Abdul Aziz AIR 1934 Oud 67 it was held that an agreement to refer a matter to certain specified arbitrators becomes void and of no effect if one or more of the arbitrators dies or refuses to act and thus makes the agreement incapable of performance, and in such a case the Court has no jurisdiction under Clause (4) of para. 17 of Schedule 2, Civil P.C., to make a reference to the arbitrators who are willing to act. In this case it was pointed out that Para. 5 can come into operation only when an order of reference has already been made under Para. 17. This, to my mind, is the correct view of the law. In Rajani Kanta Karati and Another Vs. Panchanan Karati, , it was held that

an agreement to have a dispute settled by one or more individuals is one thing, and an agreement to go to arbitration rather than to litigation in the Court is another. Where, by an agreement, parties decide to settle disputes by the arbitration of ascertained persons without the intervention of the Court, in a proceeding following the filing of the award under para. 20 of Schedule. 2, Civil P.C., the Court has no power under para. 5 to direct the appointment of a new arbitrator in the place of one declining to act.

15. No doubt it was hold in this case that para. 5 will have no application even after the order of reference is made under Para 17. It is unnecessary for the purposes of this case, to decide whether that view is correct or not. The case however is an authority for the proposition that the Court cannot substitute any arbitrator in the place of the arbitrator named by the parties themselves in their agreement. Dr. Mitter also referred to the case in Pestonjee Nussurwanjee v. Manockjee and Co. 12 M.I.A. 112; but that case merely decided that where certain persons agreed to submit their differences to the arbitration, of one or more specified persons, no party to such an agreement could revoke the submission to arbitration unless for good cause, and that a mere arbitrary revocation of the authority could not be permitted. This case is therefore of no assistance to the appellants. There is another serious objection to the filing of the agreement.

16. The agreement was between the two brothers, and the parties to the partition suit include their minor sons also. In fact, the minor sons also are parties to the present proceeding under Para. 17 of Schedule 2, Civil P.C. From the agreement it appears that the elder brother is to get more than ten annas in the joint family properties. A serious question may arise as to whether this agreement would be binding on the minor sons of the younger brother who agreed to take a little over five annas in the place of eight annas which would be his normal share.

17. For the reasons which I have given above, I am of opinion that the Court below was quite right in refusing to make an order of reference.

18. I would accordingly dismiss the appeal with costs.

Harries C. J.

I agree.

Advocate List
Bench
  • HON'BLE JUSTICE Harries, C.J
  • HON'BLE JUSTICE Harries, J
  • HON'BLE JUSTICE Chatterji, J
Eq Citations
  • AIR 1941 PAT 155
  • LQ/PatHC/1940/101
Head Note

A. Arbitration Act, 1940 — Ss. 8, 7 and 21 — Reference to arbitration — When possible — Where parties had agreed to refer their disputes to certain named arbitrators, but agreement did not contain any provision as to what should be done in case any of the arbitrators died in the course of the arbitration proceedings, and one of them died in the course of such proceedings — Held, agreement became inoperative and came to an end on the death of the arbitrators and could not therefore be filed in Court under S. 8 — Further held, Court cannot substitute in the place of named arbitrators certain other persons — Civil Procedure Code, 1908 — Ss. 17 and 20