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Ramnibas Jhunjhunwalla v. Benarashi L. Jhunjhunwalla .
Structured Summary of the Opinion
Factual and Procedural Background
The opinion concerns an application brought by Probhu Dayal Jhunjhunwalla, who is one of the heirs and legal representatives of the original petitioner Ramnibas Jhunjhunwalla (deceased). The application sought, among other reliefs, recording the deaths of Ramnibas Jhunjhunwalla and the original respondent Benarasilal (Benarashilal) Jhunjhunwalla, setting aside any abatement of the judgment-upon-award matter, and recording the names of the heirs and legal representatives of the deceased parties for necessary orders.
Procedural timeline and facts as stated in the opinion:
- March 1961: The arbitrators entered into the reference.
- 10 April 1961: The award was made and signed by the arbitrators.
- 28 May 1963: The award was filed in Court.
- 6 July 1962: Ramnibas Jhunjhunwalla applied for taking the award off the file and alternatively setting it aside.
- 16 July 1962: The judgment-upon-award matter appeared in the list.
- 18 April 1965: Benarashilal Jhunjhunwaila died.
- 12 July 1965: Ramnibas Jhunjhunwalla died.
- The petition names the heirs and legal representatives of both original parties (referenced as paragraph 8 of the petition in the opinion).
The applicant alleged that negotiations between the parties after the deaths prevented steps being taken to have the judgment-upon-award pronounced; the respondent denied those negotiations. The court found the particulars of alleged negotiations insufficient to establish that negotiations indeed precluded procedural steps.
Legal Issues Presented
- Whether Order 22 of the Code of Civil Procedure (CPC) is applicable to arbitration proceedings under the Arbitration Act, 1940 (i.e., whether the doctrine of abatement under O.22 applies to arbitration proceedings).
- If Order 22 is applicable, whether Rule 6 of Order 22 (and related rules such as R.6 of O.21) can cause abatement in circumstances where an award has already been made and filed in Court (specifically, whether abatement can occur after hearing is closed or after an award has been made and filed).
- Whether the Court can, in the circumstances, bring heirs and legal representatives on the record (for example, by exercising inherent jurisdiction), having regard to provisions of the Arbitration Act (including section 6 and the procedural Rule 7 of the First Schedule referred to in the opinion).
Arguments of the Parties
Applicant's Arguments (as presented by Mr. Shroff)
- It was unnecessary in an arbitration proceeding to make an application for setting aside any abatement because Order 22 of the Code of Civil Procedure does not apply to arbitration proceedings.
- Even if Order 22 applied to arbitration proceedings, Rule 6 of Order 22 was applicable to the facts of this case and thus abatement need not be set aside (i.e., the respondent's death would not have caused abatement that required being set aside under R.6).
- The petition alleged negotiations between the parties after the death(s) that explained the failure to take procedural steps (the petition attempted to show sufficient cause for not taking steps to have the judgment-upon-award pronounced).
Respondent's Position
- The respondent denied that there were negotiations that would excuse the failure to take procedural steps.
- On the point of bringing heirs on record, Mr. Tibrewal (for the respondent) stated before the Court that he was prepared to meet the point without further opportunity being given to him.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Rikhabdass v. Ballabhdas, AIR 1962 SC 551 | That the arbitrator becomes functus officio after making the award and is then required to file the award in Court. | The court relied on this authority to support the proposition that after an award is made the arbitrator's role largely ceases (subject to filing), and the Court then assumes the active role of issuing notices and proceeding to judgment-upon-award. |
| Juggilal Kamlapat… v. General Fibre Dealers Ltd., AIR 1962 SC 1123 | Sets out qualifications to the general rule that an arbitrator becomes functus officio after the award. | The court noted that qualifications to the functus-officio rule exist as described in this case, using it to refine the understanding of the arbitrator's position after making an award. |
| Abdul Karim Khan v. State of Madhya Pradesh, AIR 1964 Madh Pra 171 | Interpreting a statute (Land Acquisition Act) that adopts CPC provisions, the court held that Order 22 CPC could not be applied to proceedings under that Act; specifically, Section 53 could not be read so as to treat those proceedings as ordinary suits for purposes of O.22. | The court invoked this case by analogy to conclude that the observation in that case about Section 53 of the Land Acquisition Act equally applied to the Arbitration Act context—i.e., the mere incorporation of CPC provisions does not mean O.22 applies to arbitration proceedings. |
| Maharajadhiraja of Dharbhanga v. Commissioner of Income Tax, AIR 1930 Pat 81 | Held, in an Income Tax context, that the provisions of Order 22 do not apply (a somewhat similar point). | The court cited this authority as an additional judicial observation supporting the position that O.22 does not apply in comparable statutory contexts. |
Court's Reasoning and Analysis
The court proceeded in a sequence of legal findings built strictly on the statutory framework and the procedural posture of arbitration proceedings as described in the Arbitration Act and the Rules:
- Statutory context: Section 41 of the Arbitration Act makes the provisions of the Code of Civil Procedure applicable to proceedings before the Court under the Arbitration Act, "subject to the provisions of this Act and of rules made thereunder." The court framed the preliminary question whether, having regard to the Arbitration Act and its rules, Order 22 could be applied to arbitration proceedings.
- Nature of Order 22: The court observed that Order 22 is framed expressly with suits and appeals in mind. It operates within the suit-decree-appeal legal architecture (survival or extinction of causes of action on death of parties) and is premised upon the way suits proceed and are finally decreed by courts.
- Nature of arbitration proceedings: By contrast the court emphasized that arbitration arises from an agreement (reference to section 6) and proceeds before a tribunal chosen by the parties. The arbitral award is final and binding on the parties and those claiming under them (Rule 7 of Schedule I). Once the award is made the arbitrator generally becomes functus officio (Rikhabdass), his remaining task being to file the award in Court (an administrative/ministerial act under sec. 14).
- Stage when Court becomes active: After filing the award, the Court issues notices under section 14 and may proceed to pronounce judgment-upon-award and pass a decree; at that stage the award is effectively clothed with the efficacy of a judgment and decree.
- Applicability of Order 22 to arbitration generally: Given these essential differences between suits and arbitration—particularly that arbitration rights crystallize in the award and that the award binds parties even before judgment-upon-award is pronounced—the court concluded that Order 22 cannot be applied to arbitration proceedings without doing violence to both Order 22 and the Arbitration Act.
- Analogical support and absence of direct precedent: The court noted there was no direct decision on the precise point, but relied by analogy on a decision under the Land Acquisition Act (Abdul Karim Khan) and an Income Tax decision (Maharajadhiraja) in which similar conclusions were reached about the inapplicability of O.22 in those statutory contexts where CPC provisions were made applicable "subject to" the special Act; the court found the observations in those cases persuasive and applicable to the Arbitration Act situation.
- Narrower question addressed next: Whether O.22 applies to an award already filed in Court and where notices have been issued. The court held that an award already filed in Court is not subject to O.22: an award partakes of the character of a judgment/decree, and because rights and obligations have crystallised in the award, O.22 is inapplicable to such an award.
- Even if O.22 were applicable: The court further held, as an alternative legal point, that even assuming O.22 applied to arbitration proceedings, Rule 6 of Order 22 could not produce abatement after the hearing was closed and especially not after an award had been made and filed. The court therefore discarded the applicability of R.6 of O.22 (and R.6 of O.21) in the present facts.
- Power to bring heirs on record: The court concluded that it could bring the heirs on record by exercising its inherent jurisdiction, particularly having regard to section 6 of the Arbitration Act and Rule 7 of the First Schedule (which makes the award binding on parties and persons claiming under them). The court observed that the legal point it upheld was not taken earlier in pleadings and that the respondent stated willingness to meet the point in court.
- Practical and procedural directions: The court ordered that parties (heirs/legal representatives) be brought on record and would be competent to pursue the matter on the grounds already stated in petition/opposition/reply. The court granted orders in terms of the petition's prayers (a), (c), and (d); it refused to make an order in terms of prayer (e) and observed that a fresh application would be necessary for that relief. Costs of this application were awarded to the respondent because the point of law on which the applicant succeeded had not been taken in the petition or reply.
Holding and Implications
Holding:
The Court held that Order 22 of the Code of Civil Procedure is not applicable to an arbitration award which has already been made and filed in Court, and that, even if Order 22 were applicable to arbitration proceedings generally, Rule 6 of Order 22 could not cause abatement after the hearing was closed or after the award had been made and filed.
Direct effects and practical consequences as stated in the opinion:
- The Court will bring the heirs and legal representatives of the deceased parties on the record in its inherent jurisdiction (having regard to section 6 of the Arbitration Act and Rule 7 of the First Schedule).
- The parties when on record will be competent to pursue the matter on the grounds already set out in the petition, opposition and reply.
- The Court ordered relief in terms of prayers (a), (c) and (d) of the petition; it declined to make the order sought in prayer (e) at this stage and directed that a fresh application is necessary for that relief.
- The respondent was awarded the costs of this application because the key points of law relied upon by the applicant were not taken earlier in the pleadings; the Court certified the matter for counsel.
The opinion does not elaborate broader precedential policy beyond these direct effects; the Court relied on analogies to prior decisions but did not purport to overrule or create an expansive new doctrine beyond the facts and legal reasoning set out above.
Order accordingly. (Certified for Counsel)
1. This is an application by one Probhu Dayal Jhunjhunwalla, one of the heirs and legal representatives of the original petitioner Ramnibas Jhunjhunwalla, since deceased, for inter alia recording the death of Ramnibas Jhunjhunwalla and Benarasilal Jhunjhunwalla, the original respondent setting aside the abatement, if any, of the judgment upon award matter and recording the names of the heirs and legal representatives of the deceased Benarasilal Jhunjhunwalla and Ramnibas Agarwalla for necessary and incidental orders. In or about March 1961, the arbitrators entered into the reference. On April 10, 1961 the award was made and signed by the arbitrators. On the 28th May 1963, the award was filed in Court. On or about July 6, 1962 an application was made by Ramnibas Jhunjhunwalla for inter alia taking the award off the file and alternatively setting it aside. On the 16th July, 1962 the judgment upon award matter appeared in the list.
2. On the 18th day of April 1965, Benarashilal Jhunjhunwaila died. On 12th day of July 1965 Ramnibas Jhunjhunwalla died.
3. The heirs and legal representatives of both the original petitioner and respondent are mentioned in paragraph 8 of the petition.
4. In the petition sufficient cause was sought to be shown for not taking steps to have the judgment upon award not pronounced by alleging that there were negotiations between the applicant and his brother after the death of Ramnibas Jhunjhunwalla on or about 12th day of July, 1965 and the respondent so long as he was alive and after his death on 18th April, 1965 between the applicant and his mother on the one hand and the eldest son of the respondent on the other. There were no particulars indicating when the negotiation for settlement started and when it ended. There are again no particulars as to whether any proposal was made by either party and so what was the result thereof. This case of negotiation was denied by the respondent in this application. In my opinion, on the materials before me it is difficult to hold that there were negotiations for settlement though there are circumstances which indicate the parties were minded to carry on negotiations for settlement. The circumstances are that the respondents in this application after the death of their father have not taken any steps to bring themselves on the record. The further circumstance is that the parties are near relations and that the parties have no taken steps for years to bring the application and the judgment upon award matter to a hearing.
5. Hence, the application as an application for setting aside the abatement fails. Mr. Shroff, learned counsel appearing for the applicant, however, sought to support the application on purely points of law on a different basis entirely. He firstly submitted that it was unnecessary in an arbitration proceeding to make an application for setting aside the abatement, for O. 22 of the Code of Civil Procedure does not apply to arbitration proceedings. He secondly submitted that even if it does apply, R. 6 of O. 22 is applicable to the facts of this case and here the abatement need not be set aside.
6. The Arbitration Act is a consolidating Act in certain respects. Be that as it may Section 41 of the Arbitration Act, however, makes the provisions of the Code of Civil Procedure, 1908 applicable to arbitration proceedings. The relevant portion of S. 41 is as follows:—
“Subject to the provisions of this Act and of rules made thereunder:
(a) the provisions of the Code of Civil Procedure 1908 shall apply to all proceedings before the Court and to all appeals under this Act.”
7. Therefore, the first question for consideration is whether having regard to the provisions of the Arbitration Act and Rules made thereunder, O. 22 can at all be applied to arbitration proceedings.
8. O. 22 is expressly applicable to suits and appeals. It proceeds on the basis that on the death of one or more of the parties, in some cases the cause of action survives and in some cases the cause of action is extinguished. A suit is commenced by the presentation of a plaint in a Court of law where the plaintiff rightly or wrongly feels that he has a cause of action. The duly constituted Courts of the land subject to the provisions of law applicable to it hear and try the suit. The hearing results in a judgment which embodies decisions of the Court and the judgment is followed by decrees preliminary and final or only one decree. If the suit is dismissed, the aggrieved party cannot again successfully file a suit on the same cause of action in the same Court or any other Court. There is often an appeal from the decree. If the unsuccessful party files an appeal and fails there is an end of his claim on cause of action. If the plaintiff succeeds before the trial court and fails in the appeal court he cannot file another suit or application on the same cause of action.
9. The fountain of an arbitration proceeding is an agreement between the parties. An arbitration agreement under sec. 6 of the Arbitration Act is not discharged by the death of a party thereto. This is followed by a reference when a claim or cause of action arises, and it is further followed by the appointment of an arbitrator or arbitrators or umpire as the case may be.
10. The proceedings from the beginning until the award is passed take place not before a Court of law but before a Tribunal chosen by the parties subject to the control which has been vested in the Court under the Arbitration Act in certain circumstances. The arbitrator or arbitrators or even the umpire, as the case may be ultimately embodies its decisions in a document which is described as the award. Rule 7 of Schedule I of the Arbitration Act provides that the award shall be final and binding on the parties and the parties claiming under them respectively. At this stage the arbitrator becomes functus officio except that he is required to file it in Court: Rikhabdass v. Ballabhdas, AIR 1962 SC 551. The qualifications to this rule that the arbitrator becomes functus officio are stated in Juggilal Kamlapat… v. General Fibre Dealers Ltd.…., AIR 1962 SC 1123. Then a new chapter in the proceedings takes place upon the filing of the award in the proper Court. The Court is then cast with the duty to issue notices to the parties or persons claiming through them under sec. 14 of the Arbitration Act. In an ordinary case a judgment upon award and a decree in final thereof follows after a month of the service of the notice by the Court which is again followed by a decree. At this stage, the award blossoms into a full-fledged judgment and decree which can be executed in a Court of law. There may be no appeal against an award but there are provisions which enables the aggrieved opposite party to make an application to set it aside on certain limited grounds. If the application for setting aside succeeds then the award is set aside. This may again lead to an appeal under sec. 39 of the Arbitration Act. This may again fail. This, however does not necessarily mean that there is an end of the agreement which was the foundation of the reference and the appointment of the arbitrator or even the end of the reference, though, in my opinion, it means ordinarily the end of the arbitrator whose award had been set aside. Therefore, in such a case where the award is set aside a party can again agitate the same claims or question in another arbitration proceeding.
11. Hence, in my opinion, the nature of an arbitration proceeding is so different in some essential features from a suit that O. 22 cannot be applied without violence to the provisions of O. 22 itself and the provisions of the Arbitration Act.
12. There is no decision on the point. In any event, none was cited before me. A somewhat similar question arose in a case under the Land Acquisition Act of Abdul Karim Khan…Applicant; v. State Of Madhya Pradesh…Opponent., AIR 1964 Madh Pra 171.
13. Section 53 of the Land Acquisition Act provided as follows:—
“Save in so far as they may be inconsistent with anything contained in this Act, the provisions of the Code of Civil Procedure shall apply to all proceedings before the Court under this Act.”
14. Hence, on the death of one of the parties a question arose whether O. 22 was applicable in view of the provisions of the Land Acquisition Act. Their Lordships after considering Sections 18, 20, 21. 22, 23, 26 and 53 and O. 12 of the CPC came to the conclusion that the provisions of O. 22 cannot be applied to a proceeding under the Land Acquisition Act. In course of the judgment their Lordships observed inter alia as follows:—
“Section 53 cannot be read as creating a friction for deeming the proceedings before the Court under the Act as proceedings in any suit.”
15. In my view the observation is equally applicable to a proceeding under the Arbitration Act. In an Income Tax case, Maharajadhiraja of Dharbhanga v. Commissioner of Income Tax, AIR 1930 Pat 81, which is a little more remote than the other case a somewhat similar point arose. There their Lordships observed that the provisions of O. 22 do not apply.
16. The next question for consideration is a more limited one, that is to say whether O. 22 of the Code of Civil Procedure is applicable to an award which has already been filed in Court and where notices have already been issued to the parties.
17. It is now well established that O. 22 does not apply to a preliminary decree or to a final decree or if there is only decree, to the said decree on the ground that the rights and obligations of the parties are crystallised in the decrees. Award partakes the character of a judgment and decree though it is not a judgment and decree for it is not a nullity and is binding on the parties even though no judgment upon award is pronounced which is taken by a decree. Hence. O. 22 is not applicable to an Award.
18. The arbitration proceeding results in an award. The arbitrator or umpire becomes functus officio as soon as the award is made. Once the award is made, the duty of the arbitrator is to file the award which is in the nature of an administrative or ministerial act, as will be evident from sec. 14 of the Act.
19. Once the award is duly filed, the arbitrator disappears from the scene and this Court becomes active. It is the Court which has to give the notice to the party or parties claiming under them and not the arbitrator or arbitrators or umpire nor the parties.
20. Hence, there is no question of survival of a cause of action or otherwise for it has reached a stage beyond that where the rights and obligations have merged in the award. The mere fact that a judgment upon award has not been pronounced or a decree has not been passed does not make the award no less binding on the parties though upon the pronouncement of a judgment upon award and a decree the award is clothed with greater efficacy and is placed in the same position as a judgment and decree of the Court. See R. 7 of the Second Schedule and the case of AIR 1962 SC 551. In this connection, again, some of the observations made in the case of AIR 1964 Madh Pra 171 subject to certain modifications are applicable to the present situation. Hence, again in my opinion, O. 22 is inapplicable to an award which has already been filed.
21. Therefore, I uphold the contention advanced on behalf of the petitioner. In my opinion, even if O. 22 was applicable to an arbitration proceeding, R. 6 would have been applicable in this case. There cannot be abatement under R. 6 after the hearing is closed far less after an award has been made and filed in Court. In my opinion neither R. 6 of O. 22 or R. 6 of O. 21 are applicable in terms. Hence, in my opinion, the Court can bring the heirs on record in its inherent jurisdiction, more particularly, having regard to sec. 6 of the Arbitration Act and R. 7 of the 1st Schedule. If may be noticed that this point was not taken in the petition. Mr. Tibrewal, learned Counsel who was appearing for the respondent, when asked by Court stated that he was prepared to meet the point without any further opportunity being given to him. The parties when brought on the record will be competent to pursue the matter on the grounds stated in the petition or opposition and reply as the case may be. In the result there will be orders in terms of prayers (a), (c) and (d). In my opinion at this stage no order should be passed in terms of prayer (e), for in my opinion a fresh application is necessary. In view of the fact that the points of law on which Mr. Shroff has succeeded were not taken in the petition or in the reply in my opinion the respondent should get costs of this application, for if the objection was pressed that no such point can be taken on this application it may have been that I would have dismissed this application and directed the filing of another application. Certified for Counsel.
MVJ/D.V.C
22. Order accordingly.
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