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AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • For the Appellant: V. Partha Sarathi, Advocate.
Judges
  • Narasimham, J.
Acts
  • section 2(c) and section 31(1) of the Arbitration Act.11.
  • SECTION 34 ARBITRATION ACT
  • Section 14(2) of the Indian Arbitration Act, 1940
  • section 14(2) of the Arbitration Act, 1940.
  • Section 14(2) of the Arbitration Act
  • question.13. Section 31(1)
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Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
  • For the Appellant: V. Partha Sarathi, Advocate.
Judges
  • Narasimham, J.
Acts
  • section 2(c) and section 31(1) of the Arbitration Act.11.
  • SECTION 34 ARBITRATION ACT
  • Section 14(2) of the Indian Arbitration Act, 1940
  • section 14(2) of the Arbitration Act, 1940.
  • Section 14(2) of the Arbitration Act
  • question.13. Section 31(1)
See more information ...
Smart Summary

Structured Summary of the Legal Opinion

Factual and Procedural Background

The petition seeks revision of an order of the District Munsif, Vijayawada, in O.S. 793 of 1955, which is a proceeding for passing a decree in terms of an award filed under Section 14(2) of the Arbitration Act, 1940. Under rule 5 framed under the Act, applications under Section 14 are to be numbered and registered as suits, explaining the registration as O.S. 793 of 1955.

The core commercial transaction: Chandra Narasimham (the petitioner) contracted by a written contract dated 21-3-1947 at Vijayawada to sell bales of gunnies (the opinion records "75 bales" and also states "the quantity stipulated being 30,000 gunnies") to Ramdayal Rameswarlal of Tadepalligudem, to be delivered in three monthly instalments (April, May and June). The contract provided that disputes were referable to arbitration by the Bengal Chamber of Commerce and that any award could be filed in the High Court of Calcutta and made a decree there.

The buyer defaulted, the dispute was referred to the Bengal Chamber of Commerce, and an award was passed. The award was filed in the High Court of Calcutta but was set aside by that Court on the sole ground that the Registrar of the Bengal Chamber of Commerce had no power to constitute the Court which made the award (order dated 4-5-1954 in suit No. 142 of 1952). Subsequently award No. 1335/54 was passed by the Bengal Chamber on 14-12-1954. The petitioner filed that award in the District Munsif's Court at Vijayawada seeking a decree in terms of the award under Section 14(2) of the Arbitration Act.

The District Munsif rejected the application on the ground that the Court had no jurisdiction to pass a decree in terms of the award. The Munsif therefore did not decide other contested points. The Munsif had earlier framed multiple issues (listed in the record) including whether the arbitration proceedings were valid, whether the High Court's earlier order barred the present proceeding, whether the Court had jurisdiction, limitation, costs, interest, and other reliefs. An additional issue concerned maintainability against a dissolved firm without impleading partners.

There was also an earlier suit by the petitioner, O.S. 702 of 1948 (filed 17-9-1948) claiming damages for breach of contract; in that suit the buyer obtained a stay under section 34 of the Arbitration Act (I.A. 386 of 1949). The respondent in the present proceeding relied on the agreement to file the award in the High Court of Calcutta and also raised limitation as a defence.

Legal Issues Presented

  1. Whether the District Munsif's finding that the Vijayawada Court has no jurisdiction to pass a decree in terms of the award is correct—that is, whether the award must be filed and decreed only in the High Court of Calcutta by agreement of the parties.
  2. Whether the arbitration award and the arbitration proceedings (award case No. 1335 of 1954) are valid.
  3. Whether the High Court's earlier order setting aside a prior award (in suit No. 142 of 1952) operates as a bar to maintainability of the present proceeding.
  4. Whether the application to file the award and obtain a decree is barred by limitation.

Arguments of the Parties

Petitioner's Arguments

  • The petitioner (represented by Sri Parthasarathi) contended that the learned Munsif failed to exercise the jurisdiction vested in the Munsif's Court and that the District Munsif's finding of lack of jurisdiction was incorrect.
  • The petitioner relied on the statutory provisions of the Arbitration Act (in particular sections 2(c) and 31(1)) to show that the award should be filed in the Court in which a suit on the subject-matter would lie (Vijayawada).

Respondent's Arguments

  • The respondent pleaded that the Court had no jurisdiction to entertain the application and that the only Court with jurisdiction, by agreement of the parties, was the High Court at Calcutta (i.e., the contract provided awards could be filed in the High Court of Calcutta and made a decree there).
  • The respondent also raised a plea that the application was barred by limitation.
  • The respondent had relied on the parties' agreement to file the award before the High Court of Calcutta as a basis for asserting exclusivity of jurisdiction in that Court.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
M. Venkatasamiappa v. Srinidhi Ltd., (1950) 1 Mad LJ 709 (Bench decision of the Madras High Court) Interpreting sections 2(c) and 31(1) of the Arbitration Act: the court having jurisdiction for filing an award is the Court which would have jurisdiction if the subject-matter had been the subject of a suit (i.e., determine the Court by asking where a suit on those questions would lie). The present Court relied on this decision to support the conclusion that the Court in which a suit on the subject-matter would lie (the District Munsif's Court at Vijayawada) is the proper Court to file the award under the Act, and that an agreement to the contrary cannot oust the statutory rule.

Court's Reasoning and Analysis

The court's analysis is statute-focused and proceeds in these steps, following only the reasoning evident in the opinion:

  1. The court examined the definitions and jurisdictional provisions of the Arbitration Act, 1940, notably section 2(c) (definition of "Court") and section 31(1) (marginal note: "Jurisdiction"). Section 2(c) defines "Court" as the Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of the suit. Section 31(1) states that "an award may be filed in any Court having jurisdiction in the matter to which the reference relates."
  2. From these provisions the court concluded that, as a statutory requirement, an award must be filed in the Court in which a suit would lie in respect of the subject-matter of the reference. The intendment is explicit: the forum for filing is determined by the subject-matter and where a suit on that subject-matter would properly be brought.
  3. The court held that this statutory rule cannot be circumvented by an agreement between the parties. An agreement providing for filing in some other court (here, the High Court of Calcutta) is ineffective to oust the statutory prescription; parties cannot be estopped against a statute by prior agreement or practice.
  4. It was conceded (and the court accepted) that if the questions forming the subject-matter had been the subject of a suit, that suit would have to be laid before the Court at Vijayawada. Thus, by application of sections 2(c) and 31(1), the District Munsif's Court at Vijayawada is the Court before which the award could be filed under the Act.
  5. To reinforce this statutory construction the court cited and relied on the Madras High Court Bench decision in M. Venkatasamiappa v. Srinidhi Ltd., which applied the same statutory provisions and reached a similar conclusion that the court having jurisdiction under the Act is the Court that would have jurisdiction in a suit on the subject-matter.
  6. On this basis the court held that the learned District Munsif's primary finding that his Court had no jurisdiction was incorrect. Consequently the Munsif's findings on issues 1 and 2 (concerning validity of arbitration proceedings and the effect of the High Court's earlier order) had to be vacated because jurisdiction properly lay in the Vijayawada Court and those matters must be considered there.
  7. The court therefore allowed revision, set aside the District Munsif's jurisdictional finding, and directed the learned District Munsif to take up and decide the other issues that had been framed in the suit.

Holding and Implications

Holding: The revision petition is allowed. The District Munsif's finding that his Court had no jurisdiction to pass a decree in terms of the award is vacated; the Court at Vijayawada is the proper forum under the Arbitration Act to file the award and to proceed under Section 14(2).

Implications:

  • Direct effect on the parties: The District Munsif at Vijayawada must proceed to consider and decide all the other issues between the parties (including issues previously framed by the Munsif such as validity of the arbitration proceedings, the effect of the High Court's earlier order, limitation, costs, interest, and relief), because under the Act the Vijayawada Court is the competent Court to act.
  • The Munsif's earlier findings on the jurisdiction point (and the ancillary findings on issues 1 and 2) are vacated, and the trial Court is ordered to determine the remaining issues afresh.
  • The opinion contains no extended discussion of any broader legal consequence beyond the statutory construction applied; it does not purport to set a new precedent beyond applying established principles. The decision enforces the statutory rule that agreement between parties cannot oust the Court determined by sections 2(c) and 31(1) of the Arbitration Act.
  • The revision was allowed with costs in favour of the petitioner (the opinion records "Petition allowed" and that revision is allowed with costs).

Reference in the opinion: the decision relied upon from the Madras High Court is M. Venkatasamiappa v. Srinidhi Ltd., (1950) 1 Mad LJ 709; statutory provisions principally applied were sections 2(c) and 31(1) of the Arbitration Act, 1940.

Show full summary ...

    Vissamseth Chandra Narasimham v. M/S. Ramdayal Rameswaralal And Others

    1. This is a petition seeking a revision of the order of the District Munsif, Vijayawada, in O.S 793 of 1955 which is a proceeding for passing a decree in terms of the award filed under Section 14(2) of the Arbitration Act, 1940. It is seen that under rule 5 of the rules framed under the Arbitration Act of 1940, applications under Section 14 of the Act shall be numbered and registered as suits and that explains the order under revision having been passed in O.S 793 of 1955.

    2. The learned Munsif rejected the application in the view that Court had no jurisdiction to pass a decree in terms of the award. The other points, which fell for determination in the proceeding, were deemed unnecessary in view of the said finding. The question that arises in this revision petition is whether the view taken by the learned Munsif that the Vijayawada Court has no jurisdiction is correct. Sri Parthasarathi for the petitioner has contended that the learned Munsif failed to exercise the jurisdiction vested in the Munsif.

    3. The facts relevant to this question about which there is no dispute are these; Chandra Narasimham, the petitioner herein, contracted to sell 75 bales of gunnies, the quantity stipulated being 30,000 gunnies, to Ramdayal Rameswarlal of Tadepalligudem for a certain price under a written contract dated 21-3-1947 entered into between the parties at Vijayawada. The quantity stipulated was to be delivered in three monthly instalments of 25 bales each in April, May and June. The seller should inform the buyer of the proposed delivery on or before the 25th of each month. It would appear also that if disputes arose, they were referable to the arbitration of the Bengal Chamber of Commerce which should give its award. It was also agreed that the award could be filed in the High Court of Calcutta and made a decree of that Court.

    4. It is now not in dispute that the buyer defaulted and the dispute was referred to the Bengal Chamber of Commerce for arbitration as agreed to by the parties and that an award was passed by the said Chamber of Commerce. As was agreed to by the parties the award was filed before the High Court of Calcutta and the said High Court set aside that award on the sole ground that the award was void as the Registrar of the Bengal Chamber of Commerce had no power or authority to constitute the Court which made the award, by an order dated 4-5-1954 in suit No. 142 of 1952 on the file of the original side of the High Court of Calcutta. Subsequently award No. 1335/54 was passed by the Bengal Chamber of Commerce on 14-12-1954, Ex. A.I The petitioner has filed that award in the present proceeding before the Court of the District Munsif, Vijayawada, to obtain a decree in terms of that award.

    5. The respondent raised various pleas against the granting of the application, one of the pleas being that the Court had no jurisdiction to entertain the application and that the only Court which, had jurisdiction by the agreement of parties was the High Court at Calcutta. It was also pleaded that the application was barred by limitation.

    6. The learned District Munsif framed issues as under with regard to the points at which the parties were at variance:—

    1. Whether the arbitration proceedings, covered by the award case No. 1335 of 1954 are not valid?

    2. Whether the order of the High Court setting aside award in award case No. 142 of 1953 is a bar to the maintainability of the present proceeding?

    3. Whether this Court has no jurisdiction to entertain this application for passing the decree?

    4. Whether the suit is within time?

    5. Whether the plaintiff is entitled to the costs incurred in O.S 702 of 1948?

    6. Whether the plaintiff is entitled to the costs of Rs. 302 said to have been incurred by him before the arbitrator?

    7. Whether the plaintiff is entitled to any interest on the amounts claimed?

    8. To what relief if any is the plaintiff entitled?

    7. Additional issue framed on 28-8-1958:

    1. Whether the suit as against the dissolved firm without impleading all the partners is maintainable?

    8. On the third issue, the learned District Munsif found that the court had no jurisdiction.

    9. It would appear that the petitioner had instituted the suit O.S 702 of 1948, claiming damages against the buyer alleging that he had broken the contract by not accepting delivery offered by the seller. That suit was filed on 17-9-1948. In that suit the buyer obtained stay under section 34 of the Arbitration Act I.A 386 of 1949 and his proceeding was relied on as giving jurisdiction to the Court at Vijayawada. The said contention was not accepted by the learned District Munsif. The respondent relied on the agreement between the parties that they had agreed to file the award before the High Court of Calcutta and make it a decree of that Court.

    10. Contentions before me proceeded on the above lines and later it was realised that the question of jurisdiction had to be determined with reference to section 2(c) and section 31(1) of the Arbitration Act.

    11. It has to be noticed that this is a self-contained enactment and it specifically provided for the Court before which an award could be filed. Section 2, which states definitions, defines the ‘Court’ thus:—

    “Sec. 2: In this Act, unless there is anything repugnant in the subject or context—

    (c) “Court” means Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of the suit…”

    12. I pause here to notice that the subject-matter of the reference and the subject-matter of the suit shall be the same. The suit has to be laid before the Court at Vijayawada. The learned Counsel have no differences on this question.

    13. Section 31(1) bears the marginal note “Jurisdiction”. It states:—

    “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.”

    14. The intendment of this provision is explicit and is consistent with the definitions heretofore stated. That is to say, an award has to be filed in the Court in which a suit would lie with regard to the subject matter of reference. This is a statutory requirement and cannot possibly be circumvented by any agreement between the parties. In other words, it there was an agreement that would be against the statute and cannot be given effect to. So, the plea that the parties had an agreement stipulated for the award being filed before the High Court of Calcutta would not avail. The circumstance that in fact the agreement had been acted upon would not also avail, as there cannot be an estoppel against statute.

    15. It may be recalled that it is conceded before me that the Court of the District Munsif at Vajayawada is the only Court which has jurisdiction to go into the subject-matter of reference if it were a suit. If so, it has to follow that the District Munsif's Court at Vijayawada is the only Court before which the award could be filed under the Act. This view finds support from the Bench decision of the Madras High Court: M. Venkatasamiappa v. Srinidhi Ltd. (1950) 1 Mad LJ 709. The facts of the case as would appear from the judgment are these: Venkatasamiappa, the appellant before the Court, was a resident of Bangalore City. The respondent was a company with its office at Madras. The respondent Undertook and carried out various works in Bangalore for the Public Works Department of the Government of India. The appellant was a sub-contractor who worked for the respondent for the works that he carried out at Bangalore.

    16. There was a dispute as to the respondent's liability to the appellant in money. The disputes were referred to arbitration of certain persons of Madras. The Arbitrators made their award wherein they directed the appellant to pay the respondent a certain sum. After making the award the Arbitrators filed a petition under Section 14(2) of the Indian Arbitration Act, 1940 before the High Court at Madras. A single Judge of the Court passed a decree in terms of the award, but on appeal, it was set aside. It was held that the High Court of Madras had no jurisdiction to pass a decree in terms of the award.

    17. The learned Judges considered S-s. 2(c) and 31(1) of the Act and held thus:—

    “The combined effect of these two provisions would appear to be this: In order to determine which is the Court having jurisdiction in the matter, you should first of all ascertain what the questions are, which form the subject-matter of the reference to arbitration. You then proceed to ask; supposing these questions had arisen in a suit, which is the Court which would have jurisdiction to entertain the suit. That Court would be the Court having jurisdiction under the Arbitration Act also. It was admitted before us that in the present case the contract between the appellant and the respondent was entered into in Bangalore. The appellant supplied the labour and the materials in Bangalore; the respondent had also a subsidiary office in Bangalore and the payments made were also at Bangalore. The question between the parties arose out of this contract and what the arbitrators had to determine was how much on a settlement of the accounts was due to one side or the other. Obviously, if these questions had arisen in a suit, the Court which would ordinarily have had jurisdiction in the matter is not this Court; but the Court of Bangalore. That result cannot be avoided if the jurisdiction of the Court were made dependent on the subject-matter of the action prima facie, therefore, it would seem that this Court has no jurisdiction in the matter.”

    18. In the result, they set aside the decree made in terms of the award and directed the award to be returned.

    19. For the reasons stated, I find that the District Munsifs Court at Vijayawada is the Court having jurisdiction before which the award could be filed under Section 14(2) of the Arbitration Act that it is the only Court which is competent to act as such under the Act. In the said view this Court has to interfere in revision and direct that the other points at issue between the parties have to be gone into and decided by the learned District Munsif. The learned Munsif purported to give findings on issues 1 and 2 as well. But those findings have to be vacated in view of the fact that the Vijayawada Court alone had jurisdiction under the Act and not the High Court of Calcutta.

    20. The revision petition is therefore, allowed with costs. The learned District Munsif has to take up all the other issues and decide the suit.

    IL/MKS/D.V.C

    21. Petition allowed.

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    Comments

    Vissamseth Chandra Narasimham v. M/S. Ramdayal Rameswaralal And Others
    (Jun 11, 1965)