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Babul S.K Kuer v. B.N Sinha
Structured Summary of the Opinion (Reuben, C.J.) — Appeal against Preliminary Decree for Partition
Factual and Procedural Background
The dispute arises from a large joint Hindu family governed by Mitakshara law. Genealogical facts, as pleaded in the opinion, are:
- Lachminandan Sinha and his brother Kalikanandan were sons of Baidyanathnandan; Lachminandan's widow is Siakishori Kuer (appellant no. 1).
- Lachminandan's sons included Ratneshwarinandan (defendant no. 1) and the deceased Vindeshwarinandan, whose sons are defendants nos. 2–4; other defendants are plaintiffs' agnates as stated in the opinion.
- The family was formerly a joint Hindu family; an unregistered ekrarnama dated 28 October 1939 effected a partition of most immovable property between branches.
After 1939 the plaintiffs allege that they and their father formed a separate joint family and that the defendants (nos. 1–6) formed another joint family, with certain undivided property continuing in common (Schedules B and C).
On 9 July 1940 the families referred outstanding disputes and unresolved common property to a sole arbitrator who made an award dated 23 May 1941. The award directed that, regarding Schedule B (land and a house at Sitamarhi), if the plaintiffs paid Rs. 2,000 to the defendants within six months as compensation for defendants' excess expenditure, plaintiffs would be entitled to a half-share with joint ownership and possession; failing payment the property would vest exclusively in the defendants. As to Schedule C (a tamjan and a houdah), the arbitrator directed they be kept between the parties with custody arrangements specified.
The plaintiffs pleaded they sent Rs. 2,000 by money order within the stipulated time but the money was refused by the defendants; they also pleaded defendants did not deliver custody of the houdah. The plaintiffs sought a decree for partition of their half-share in Schedules B and C and asked for permission to deposit Rs. 2,000 in Court in accordance with the award.
The defendants raised defences including a contention that Schedule B belonged to Siakishori Kuer via inheritance; that Schedule C had been divided in 1939 (houdah to plaintiffs, tamjan to defendants); they admitted the arbitration reference but disputed its validity on the ground that some defendants then alleged to have been minors or misrepresented (the opinion records that some defendants "then majors" were treated as minors and thus not properly represented) and further alleged fraud in obtaining the arbitrator's signature.
The deed of reference and the award were not put in evidence. The Subordinate Judge, while noting the plaint was mainly based on the award, observed plaintiffs were not seeking relief on the basis of the award and therefore refrained from investigating the award's validity. The Subordinate Judge rejected the defence as to the Sitamarhi house and the alleged division of Schedule C property and decreed partition in favour of the plaintiffs.
There was an administrative omission: property in Schedule D (added by an amendment order dated 24 July 1946) was omitted from the drawn decree owing to office error; the omission will be corrected. The appeal before the High Court relates only to Schedules B and C (the appellants' counsel clarified the appeal does not relate to Schedule D).
Legal Issues Presented
- Whether the suit in respect of the properties in Schedules B and C is barred by reason of the award made by the arbitrator.
- Whether the suit, being based on an award which was not filed under section 14(2) of the Arbitration Act, 1940, is maintainable.
- Whether the findings of fact by the Subordinate Judge in relation to the properties in Schedules B and C are incorrect.
Arguments of the Parties
Appellants' Arguments (as recorded)
- The suit is barred by the 1941 arbitral award (relying on authorities such as Krishna Panda v. Balaram Panda and Bhaijahari Saha Banikya v. Behary Lal Basak).
- The suit is not maintainable because it is based on an award that was not filed under section 14(2) of the Arbitration Act, 1940.
- The Subordinate Judge's findings of fact regarding the properties in Schedules B and C are incorrect.
Plaintiffs' / Respondents' Position (as recorded)
- Plaintiffs asserted continuous joint possession of the Schedule B property for more than forty years and claimed a half-share by original title (the award was relied on in parts of the pleadings as background rather than as the sole basis for relief).
- Plaintiffs pleaded they had attempted to comply with the award (sent Rs. 2,000 by money order), which was refused by defendants; they sought partition on the ground defendants refused to partition and because joint possession caused inconvenience.
- During trial plaintiffs' counsel stated the claim was not based on the award; the plaint's averments refer to the award as part of the history but plead rights arising from joint possession and original title.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Krishna Panda v. Balaram Panda | Held that an award duly passed in accordance with the submission is equivalent to a final judgment; after an award for partition neither party can sue for partition any more than after a decree for partition. | The Court noted this authority was relied on by the appellants but distinguished it on the basis that the Arbitration Act, 1940 (specifically section 32) changed the position; the Court held that, under the 1940 Act, an award does not operate as res judicata unless it has been made a rule of the Court. |
| Bhajahari Saha Banikya v. Behary Lal Basak | Held that where rights merged in an award, a suit based on the award itself was maintainable even if the award had not been made a rule of Court; an award, if valid, is a final adjudication by the parties' chosen tribunal and is conclusive until impeached. | The Court discussed this decision (and the explanatory judgment by Mookerjee, J.) as illustrative of pre-1940 law in which a valid private award could be operative without being made a rule of Court; the Court used it to describe historical law but then explained the effect of the 1940 Act superseded that position for the present question. |
| Muhammad Niwaz Khan v. Alam Khan | An award (on private reference) remained legally valid and could be relied upon even though an application under section 525 CPC to set it aside had been unsuccessful; the award retained ordinary legal validity. | Cited in explanation of how, before the 1940 Act, an award could be relied upon in subsequent litigation; the Court recorded this as part of the background to the change effected by the 1940 Act. |
| Cumminas v. Heard; Sweat v. Morrison; Harris v. Social M. Co. | Authorities cited for the proposition that a private award is final and conclusive unless the parties intended otherwise. | These cases were cited by way of authority for the general proposition in pre-1940 law that a valid award is conclusive between parties; the Court referenced them in explaining the historical legal position. |
| Curley v. Dean; Walsh v. Gilmor; Clegg v. Dearden | Cited to support that a valid award operates to merge and extinguish claims embraced in the submission. | Used to illustrate the pre-1940 principle that a valid award becomes the sole basis to determine the parties' rights and bars actions on the original demand; the Court placed these decisions in the background context. |
| Moolchand Jothajee v. Rashid Jamshed Sons and Co. | Observed that the Arbitration Act, 1940, prevents parties from agitating arbitration matters other than as provided by the Act; held that a suit will not lie to enforce an award because such a suit raises questions about the existence and validity of the award contrary to section 32. | The Court relied on the reasoning in this case (quoting Leach, C.J.) to support the view that under the 1940 Act the appropriate course is to proceed only under the procedures provided by the Act; this case was used to explain why an award is not automatically operative except under the Act. |
| Ramchander v. Munshi | Considered the effect of section 32 of the 1940 Act; Ramaswami, J. relied on Moolchand Jothajee and other authorities for proposition that a suit will not lie to enforce an award. | The Court treated Ramchander v. Munshi as authority for the proposition that under the 1940 Act a suit to enforce an award does not lie and used it in framing the question of whether the present suit was based on the award or on original title. |
| Deokinandan v. Basantlal; Ratanji Virpal v. Dhirajlal Manilal | Cited alongside other authorities in discussion of the effect of the Arbitration Act, 1940, on proceedings concerning awards. | Referenced as part of a group of cases relied upon in earlier decisions about the effect of awards; the Court noted differing views and emphasized the specific effect of section 32 in the present context. |
| Dewaram v. Harinarain; Jagdish v. Sunder | In Dewaram (and Jagdish) the courts considered whether a private award is exempt from registration and discussed whether a private award is operative without being made a rule of Court; these cases were relied on in earlier decisions. | The Court observed these decisions concerned registration and held they do not definitively resolve whether an award has operative force without being made a rule of Court; the Court indicated those cases are not authorities on the point being decided here. |
| Lachmi Prasad v. Gobardhan Das (and related citation grouping) | Cited in the opinion in connection with debates about filing an award and the procedure under the 1940 Act and previous law. | Included among earlier cases discussed; the Court considered the group of authorities and concluded that section 32 of the 1940 Act changes the pre-1940 position. |
Court's Reasoning and Analysis
The Court proceeded in stages, addressing the three points raised on appeal.
1. Findings of Fact (Schedule B and Schedule C)
The Court readily disposed of the appellant's third ground (incorrect findings of fact) in respect of Schedule B and Schedule C:
- For Schedule B (Sitamarhi house and land) the Court found the subordinate judge's factual conclusions overwhelmingly supported by documentary evidence: khatian entries dating back to 1898, superior landlord papers, family account books (Exhibits series), correspondence (Exhibit 6 and note thereon), and the deed of surrender (Exhibit 8) excluding Schedule B. The Court accepted the Subordinate Judge's rejection of scant oral evidence offered by the defence and accepted the Subordinate Judge's conclusion that Schedule B was family property, not the separate property of Siakishori Kuer.
- For Schedule C (tamjan and houdah) the Court observed the defence's evidentiary case was inconsistent with its pleadings and documentary exhibits (e.g., Exhibit D dated 1951) and therefore accepted the Subordinate Judge's finding.
2. Effect of the Award and the Arbitration Act, 1940 (Sections 14(2), 32, and related provisions)
The Court analysed whether the 1941 award operated as a bar to the suit. To do so it reviewed pre-1940 authorities (including Krishna Panda and Bhajahari Saha Banikya) which had held that a valid private award might operate as a final adjudication and bar subsequent suits on the same subject. The Court acknowledged that prior to the Arbitration Act, 1940, an award could be treated as operative by itself and enforced either by making it a rule of Court or by treating it as an independent source of title and suing on it.
The Court then focused on section 32 of the Arbitration Act, 1940, which provides that "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."
Applying this provision and the reasoning of cases such as Moolchand Jothajee v. Rashid Jamshed Sons and Co. and Ramchander v. Munshi, the Court concluded:
- Section 32 changes the pre-1940 position by requiring that questions about the existence, effect or validity of an award be addressed only by the procedures provided under the Arbitration Act, 1940 (for example by making the award a rule of the Court under the Act).
- Consequently, an award only becomes operative in the sense of acting as res judicata and barring litigation when it has been filed and made a rule of Court under the Act; otherwise the award's validity cannot properly be treated as conclusively barring a suit because deciding that validity in the suit would contravene section 32.
- The Court rejected the contention that Krishna Panda and Bhajahari Saha remain directly applicable without qualification: those cases reflect the pre-1940 position and their operation is modified by the 1940 Act's specific procedural limitations.
3. Whether the Present Suit was "Based on" the Award
The Court carefully examined the plaint and conduct at trial to determine whether the plaintiffs' suit was founded on the award or on their original title and rights arising from joint possession:
- The award was not produced in evidence notwithstanding the plaint's statement that each party received a copy.
- The Subordinate Judge records that plaintiffs' counsel stated the claim was not based on the award.
- A close reading of the plaint showed the award was pleaded as part of the historical background ("even by the aforesaid partition award..." and similar phrasing), and the plaintiffs' substantive claim rested on original rights—joint possession and a right to partition arising when defendants refused to partition—rather than on enforcement of the award itself.
- The plaintiffs' prayer seeking permission to deposit Rs. 2,000 "according to the terms of the award" was interpreted as demonstrative of bona fides and willingness to comply, not as an attempt to enforce the award via the suit.
- The Court concluded that the suit was maintainable as a suit founded on the plaintiffs' original title and right to partition; the existence/effect/validity of the award could not be adjudicated in the suit under section 32, and the defendants could, if they wished, apply to have the award filed in Court and seek a stay pending that application.
4. Disposition
On these bases the Court held that the award did not bar the plaintiffs' suit in the circumstances, and that the suit was maintainable on the plaintiffs' original title and rights. The Court therefore dismissed the appeal.
Holding and Implications
Holding:
APPEAL DISMISSED.
Implications and direct consequences (as stated in the opinion):
- The Subordinate Judge's decree for partition (as to the properties in Schedules B and C) is upheld in respect of the matters contested on this appeal; the factual findings in favour of the plaintiffs as to Schedule B and Schedule C are accepted by the High Court.
- The plaint and decree will be amended to insert the property in Schedule D in accordance with the Subordinate Judge's earlier order of 24 July 1946 (this administrative correction was directed by the Court).
- The Court held that under the Arbitration Act, 1940 (section 32) an arbitral award does not operate as a bar to a suit by a party on his original title unless and until the award has been filed and made a rule of the Court under the Act; questions as to the existence, effect or validity of an award must be pursued by the procedures provided in the Act.
- Direct effect on the parties: plaintiffs are entitled to the relief sought (partition of their half-share) and the defendants' reliance on the award as an absolute bar failed in the present circumstances because the award had not been filed and the suit was pleaded as founded on original title. The appeal having failed was dismissed with costs.
The opinion contains an extended discussion of the interaction between pre-1940 authorities and the Arbitration Act, 1940, and concludes the 1940 Act limits the circumstances in which a private award can operate as an automatic bar to litigation. The Court did not purport to create a broad new principle beyond its application of section 32 to the facts of this case.
Judgment: Reuben, C.J. delivered the principal judgment; Sarjoo Prosad, J. concurred. Appeal dismissed.
Reuben, C.J:— This appeal by the defendants is directed against a preliminary decree for partition. The appellant no. 1 Siakishori Kuer is the widow of Lachminandan Sinha, one of whose sons is Ratneshwarinandan, defendant, no. 1, whose sons Parmeshwarinandan and Awadheshwarinandan are defendants nos. 5 and 6. Lachminandan had another son Vindeshwarinandan, deceased, whose sons are Biseswarinandan, defendant no. 2, Iswarinandan, defendant no. 3 and Kameshwarinandan, defendant no. 4. Bairvinandan plaintiff no. 1 and Kamleshwarinandan plaintiff no. 2, are the sons of Kalikanandan, deceased, the brother of Lachminandan. Baidyanathnandan, father of Lachminandan and Kalikanandan, had a brother Girjanandan, who died leaving no heirs.
The family was formerly a joint Hindu family governed by the Mitakshara law. There was a severance of the joint status in 1939 when, by an unregistered ekrarnama dated the 28th October, 1939, the bulk of the immovable property was partitioned between the different branches. According to the plaintiffs, from this time they and their father formed a joint Hindu family and the defendants 1 to 6 formed another joint Hindu family, and the undivided property specified in Schedules B and C to the plaint remained in the common possession of the two families. On the 9th July, 1940, the two families appointed Rai Saheb Satruhan Prasad Sahi as sole arbitrator to decide certain disputes pending between them and to divide such of the movable and immovable properties that still remained common to them. The arbitrator made an award on the 23rd of May, 1941.—By this award he directed as regards the property in Schedule B, which is land and the house standing thereon at Sitamarhi, that if the plaintiffs paid to the defendants the sum of Rs. 2,000 within six months as compensation for expenditure incurred by the defendants in excess of 9, their proper share for construction of the building after the earthquake of 1934 out of their own funds, the plaintiffs would be entitled to a half-share in the property with the right of joint ownership and possession, failing which if would vest exclusively in the defendants. As regards the property in Schedule C which consists of a gold and silver tamjan and a gold and silver houdah, he directed that they be kept between the parties, but the tamjan would remain in the custody of the defendants and the houdah in the custody of the plaintiffs each item of property to be made available to the other party when required by it.
The plaintiffs pleaded that within the time specified by the arbitrator they sent Rs. 2,000 by money order to the defendants, but the money was refused by them; also, that the defendants have not delivered the custody of the houdah to the plaintiffs. On these facts the plaintiffs prayed that “a decree for partition to the extent of the plaintiffs' half share in the properties as mentioned in Schedules B and C be passed in plaintiffs', favour against the defendants and the plaintiffs may be allowed to deposit Rs. 2,000 in Court according to the terms of the award to the credit of the defendants.”
Originally Siakishori Kuer, defendant no. 7 was not impleaded. She was brought on the record in consequence of the defence taken that the property in Schedule B is really her property, having come to her—from her father. Namdhari Singh as part of the Athari estate. They also pleaded that the movable property described in Schedule C had already been divided in 1939, the houdah being allotted to the plaintiffs and the tamjan to the defendants. They admitted the reference to arbitration, but disputed its validity on the ground that some of the defendants, then majors, were treated as minors and were, therefore, not properly represented. They further contested the validity of the award asserting that the signature of the arbitrator had been obtained on it by fraud. They also pleaded that certain property, which should have been brought into the partition had been omitted, a defect which was removed by the plaintiffs by, a petition for amendment filed on the 24th July, 1946, and allowed by the Subordinate Judge by an order of the same date by which this property was added at the foot of the plaint in Schdule D.
The deed of reference to arbitration and the award made by the arbitrator have not been put in evidence and the Subordinate Judge, observing that although the plaint was mainly based on the award the plaintiffs were not seeking relief on the basis of the award, refrained from investigating the validity of the reference and the award. He rejected the defence story as regards the house at Sitamarhi and the alleged division of the property in Schedule C and decreed the suit for partition accordingly.
The decision of the Subordinate Judge covers the property in Schedule D. Owing to an omission of the office of the Subordinate Judge to amend the plaint in accordance with the order dated the 24th July 1946, the decree has been wrongly drawn up and the property in Schedule D is omitted therefrom. The necessary correction will now have to be made in both the plaint and the decree. Mr. Lalnarayan Sinha, who represented the appellants, made it clear that, the appeal does not relate to the property in Schedule D. So far as that property is concerned, therefore, the decree is not challenged.
Three grounds have been urged before us (1) that the suit as regards the properties in Schedules B and C is barred by reason of the award made by the arbitrator; (2) that the suit being based on an award, which was not filed under the provisions of section 14 sub-section (2) of the Arbitration Act, 1940, is not maintainable; and (3) the findings of fact in relation to the properties in Schedules B and C are incorrect.
The third point is readily disposed of as regards the property in Schedule B. the evidence is overwhelmingly in support of the finding of the Subordinate Judge. It is not necessary to set out the evidence at length because this has been done very fully by the Subordinate Judge. As long ago as 1898 the house was recorded in the name of Lachminandan Singh (Exhibit 13, khatian) and since then it has stood recorded in the papers of the superior landlord in the names of one or other male member, of the family. Among the persons, in whose name the property has stood is Girianandan Sinha who is not in the line of Lachminandan Sinha at all but is his uncle. It is extremely unlikely, if the property was really the property of Siakishori Kuer, that it would be allowed to stand in the name of Girjanandan. The account, books of the family, Exhibit 2 series and Exhibit 7 series, show that the property has been treated as the property of the family. Expenses incurred on it have come out of the family fund and income derived from it have gone into the family fund. There is only one entry in these accounts. Exhibit E (5) to support the contrary inference, and it was made at a time when the karta was Ratneswarinandan defendant, no. 1. A few municipal receipts. Exhibit A series, were produced by the defence in the name of Siakishori Kuer but they relate to a period after disputes between the parties had commenced. Certain jamabandis, Exhibit C series, of the superior landlord have been produced, and it is contended that they show that in 1295 and 1297 Fasli the property stood in the name of Nemdhari Singh, father of Siakishori Kuer. The identity of the property to which those entries relate is not clear. But even if it be accepted that the entries relate to the property in Schedule B, the fact that the property then stood in the name of Nemdhari Singh would not establish that the property how belongs to his daugrhter and would not explain away the numerous papers which support the case of the plaintiffs that this was the family property of the plaintiffs and their agnates. “A letter Exhibit 6 written by Brai Bihari Sinha the manager of the Sheohar estate, which is the estate belonging to the family of the plaintiffs, relates to the property in Schedule B and mentions that Ratneshwarinandan had directed that the bricks of the house which had collansed during the earthquake be given to one Ramdeo Babu. A note on this letter made by Kamleshwarinandan plaintiff no. 2, states that he is writing to Ramdeo Babu about it and
“as I myself am erecting my hourse at Sitamarhi on the same site, it is no more possible for me to return the bricks at this stage”
The letter and the note thereon are dated some time in November 1937. They are not consistent with the property being the property of Siakishori Kuer. Finally, there is the deed of surrender. Exhibit 8 by which Musammat Ramsakhi widow of Nemdhari Singh, surrendered the properties of the Athari estate in favour of Siakishori Kuer. The property in Schedule B is excluded from this deed. Oral evidence is hardly sufficient to outweigh the documentary evidence, and in this case the oral evidence, which is very scanty, has on its own merits been rejected by the Subordinate Judge. For these reasons I would accept the finding of the Subordinate Judge as regards this property.
As regards the property in Schedule C, the finding of the Subordinate Judge is not seriously challenged. This is not surprising because the case attempted to be made out in evidence is not consistent with that pleaded in the written-statement and the list of divided property, Exhibit D, on which the defence rely, is of the year 1951, though the division is said to have taken-place in 1941. I would, therefore, accept the finding of the Subordinate Judge on this point also.
For his contention that the suit is barred by the, award Mr. Lalnarayan Sinha relies on the decisions reported in Krishna Panda v. Balaram Panda and Bhaiahari Saha Banikua v. Behary Lal Basak. The Madras case arose out of suit for partition. The parties were formerly members of a joint Hindu family. There was a severance of joint Status in 1875 and in 1882 a reference was made to arbitration to effect a division of the family Property. The arbitrators made an award to which neither party agreed and which was never enforced. Their Lordships held that the suit was barred, observing:
An award duly passed in accordance with the submission of the parties is equivalent to a final judgment. To give effect to it the subsequent consent or approval of neither party is required. After an award made for partition of joint property neither party can sue for partition any more than he could if a decree in a suit for partition had been passed.” (The italics are mine).
In Bhajahari Saha's case an award was made in 1893 on a private reference to arbitration regarding the title to and possession over certain immovable property, but was not made a rule of the Court. Subsequently one of the parties sued to recover possession of the property on title by purchase and alternatively on the title created and recognised by the award. Their Lordships held that, while the suit was not maintainable on title by purchase, the rights of the parties having merged in the award, it was maintainable on the award itself: Mookerjee, J., who delivered the leading judgment, explained the true effect of an award of arbitrators:
This decision [Muhammad Niwaz Khan v. Alam Khan] clearly shows that, if an award is valid, it is operative even though neither party has sought to enforce it by a regular suit or by the summary procedure. This conclusion is based upon the elementary principle that as between the parties and their privies, an award is entitled to that respect, which is due to the judgment of a Court of last resort. The award is in fact a final adjudication by a court of the parties' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, an award, which is on the face of it regular is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive. See Cumminas v. Heard, Sweat v. Morrison and Harris v. Social M. Co.. To put the matter in another way as the ordinary rule, a valid award operates to merge and extinguish all claims embraced in the submission and after it has been made, the submission and award furnish the only basis by which the rights of the parties can be determined, and constitute a bar to any action on the original demand. See Curley v. Dean; Walsh v. Gilmor and Clegg v. Dearden. It is a, mistake, therefore, to contend that, if an award has been validly made, as it has been found to have been made in this case, it does not become operative until it has been enforced by suit or application; in reality, it possesses all the element of vitality even though it has not been formally enforced, and it may be relied upon in a litigation between the parties relating to the same subject-matter: obviously, if such reliance is placed upon the award, it is open to the party, against whom it is sought to be used, to question its validity; but if it is established to be a valid award, it is binding upon the parties as embodying an adjudication of their rights.” (The italics are mine).—
The case of Muhammad Niwaz Khan, to which Mookerjee, J., referred is interesting as the award, also on a private reference to arbitration, was made the subject of an unsuccessful application under section 525 of the Code of Civil Procedure, 1882. Nevertheless, it was held that it could be relied on as a defence in a suit relating to the subject-matter dealt with by it, their Lordships of the Judicial Committee pointing out that in the proceedings under section 525 the validity of the award as an award was not directly and substantially in issue, and so the failure of the application under section 525 left the award to have its ordinary legal validity. Their Lordships proceeded thereafter to consider and reject the contention that the award was invalidated by the misconduct of the arbitrators.
The decisions to which I have referred illustrate the state of the law previous to the coming into force of the Arbitration Act, 1940. A valid award was an operative award by itself and there were two ways in which it could be enforced. It might be made a rule of the Court by an application under the Civil Procedure Code or under the Arbitration Act, 1899, as the case might be, or the party might treat it as an independent source of title and enforce it by suit. In either case it was open to the opposite party to challenge the validity of the award. The remedy by suit was taken away by section 32 of the Arbitration Act, 1940, which provides:
“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.”
The effect of this section was considered in Ramchander v. Munshi in which Ramaswami, J. relied on Moolchand Jothajee v. Rashid Jamshed Sons and Co., Deokinandan v. Basantlal and Ratanji Virpal v. Dhirajlal Manilal for the proposition that a suit will not lie to enforce an award. Mr. Lalnarayan Sinha's contention is that a distinction must be drawn between a right and the remedies open for enforcing it; section 32 has taken away one the two remedies available in respect of an award of arbitrators, but the legal effect of the award as a decree finally determining the rights of the parties remains and, therefore, Krishna Panda v. Balaram Panda and Bhajahari Saha Banikya v. Behary Lal Basak are still good law. This contention is supported by the process of reasoning in Dewaram v. Harinarain and Jagdish v. Sunder in which, on the principle that a private award is operative even if it is not made a rule of the Court, it was held that it is not exempt from the provisions of section 17 sub-section (1) clause (b) of the Registration Act. Manohar Lall, J., in the former case rejected Mr. Lalnarayan Sinha's argument that by the amendment of the law in 1940 an award is operative only when it is made a rule of the Court. In reply Manohar Lall, J., pointed out that under section 33 of the Act an award can be questioned in Court without being filed under section 14 of the Act, a view which is contrary to that taken in Deokinandan v. Basantlal Ratanji Virpal v. Dhirajlal Manilal and Lachmi Prasad v. Gobardhan Das, Manohar Lall, J., also relied on the necessity for registration to pass title in the event of the parties accepting the award and acting on it without making it a rule of the Court. With respect, this reasoning appears to me to have no bearing on whether the award has an operative forces-without being made a rule of the Court. In Jagdish v. Sunder in which the leading judgment was delivered by me, the learned Counsel relied on the amendment; as between the 1940 Act and the second schedule of the Civil Procedure Code of 1908, in the procedure by which the award is made a rule of the Court. I rejected the contention as I considered that there was no substantial difference in the two sets of provisions. But my attention was not drawn in this connection to the effect of section 32 of the 1940 Act. In Moolchand Jothajee v. Rashid Jamshed Sons and Co., Leach, C.J, observed: “The scheme of the Act (the Arbitration Act, 1940) is to prevent the parties to an arbitration agitating questions relating to the arbitration in any manner other than that, provided by the Act”, and as a reason for holding that a suit will not lie to enforce an award he said that such suit raises questions with regard to the existence and validity of the award, which is contrary to section 32 of the 1940 Act. The question of the existence and validity of an award arises also if the award is pleaded by way of a defence. This explains the observation of Chagla, C.J, in Moolchand Jothajee v. Rashid Jamshed Sons and Co., which was cited with approval by Ramaswami, J., in Ramchander v. Munshi:
“Further, under the present Act no proceedings can be taken on the award till after it has been filed, and I fail to see how 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 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 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 executed.”
In other words, the award only becomes operative when it is made a rule of the Court. In Dewaram v. Harinarain and Jagdis v. Sunder the question at issue was whether a private award is exempt from the necessity for registration. If that question arises again it may be necessary to reconsider those decisions, but I do not regard them as authorities on the point now under consideration.
Apart from what I have said above, the contention that the award operates as res judicata breaks down for the reason given by Leach, C.J, in Moolchand Jothajee v. Rashid Jamshed Sons and Co.. As is clear from the words which I have placed in italics in the citations from Krishna Panda v. Balaram Panda and Bhajahari Saha Banikya v. Behary Lal Basak the award can operate as res judicata only if it is a valid award. Thus, the question of its validity necessarily arises and it is contrary to the provisions of section 32 of the 1940 Act to consider this point in a suit. It has been contended that the effect of such an interpretation would, be to defeat the purpose of the Arbitration Act, 1940. In my opinion, the effect would be just the contrary. Under the law as it stood before the 1940 Act, what would otherwise have been a perfectly good claim might be made by a plea of an arbitration award dating so far back that the claimant might be unable, owing to lapse of time, to establish circumstances rendering the award an invalid one. This is a situation which may easily arise in a case like Krishna Panda v. Balaram Panda where neither party attempts at the time when the award is made to act on the award. The present Act by insisting that within the time limited by Article 178 of the first schedule to the Limitation Act, 1908, an application must be made in Court for the filing of the award, makes for certainty and minimises the danger of an injustice occurring. As a test of the correctness of the view which I am inclined to take the question was suggested whether a suit on his original title filed by a party to an award within the period limited by Article 178 is maintainable. I do not see why such a suit may not be entertained. This will not defeat the Act of 1940 because it would be open to the defendant to make an application to get the award filed in Court, and pending the disposal of that application, he could ask for a stay of the suit. Then, as soon as the award is made a rule of the Court, it is available to the defendant as a bar to the suit.
This disposes of Mr. Lalnarayan Sinha's first point, and I turn to his second point, namely, that the suit, being based on an award which was not filed under section 14 sub-section (2) of the Arbitration Act, 1940, is not maintainable. I have already noticed that Ramchander v. Munshi is an authority for the proposition that such a suit does not lie, and it is merely a matter of interpretation to determine whether in the present case the suit is based on the plaintiffs' original title or on their rights as determined by the award. At first sight it would appear that the suit is based on the award and this was the interpretation which the Subordinate Judge appears to have been inclined to place upon it. It is noticeable, however, that the plaintiffs have not placed on the record, or produced at any time during this suit, the award itself although according to paragraph 6 of the plaint the arbitrator sent one copy of the award to each of the parties. The Subordinate Judge mentions in his judgment that at the trial Counsel for the plaintiffs stated that the claim was not based on the award. Apart from anything which may have been said at the trial and the conduct of the plaintiffs during the suit, a careful perusal of the plaint shows that the claim is not based on the award. Paragraphs 5 to 7 of the plaint recite the facts leading up to the making of the award and the registration thereof and speak of the award as “final” between the parties. This recital is by way of relating the history of the case. In paragraph 11 the plaintiffs plead that the properties at Sitamarhi have been
“the joint family properties of the plaintiffs and defendants over which they have been coming on in joint possession for more than forty years”.
and paragraph 12 continues
“that even by the aforesaid partition award it was decided that the land and the houses standing thereon was the joint property of the plaintiffs and the defendants and that if the plaintiffs paid to the defendants sum of Rs. 2,000 within six months as compensation for the amount spent by the defendants in excess of their own share for construction of the building after the earthquake of 1934 from his (sic) own funds, the plaintiffs will be entitled to one-half share in the said lands and house and outhouses with right of joint ownership and possession, failing which they will Teat exclusively in the defendants.”
I stress the words “even by” as they suggest that the award is being referred to as something additional; After this, having stated that Rs. 2,000 was sent by money order to the defendants and was refused by them, the plaintiffs go on and plead.
“That the plaintiffs have all along been in joint possession of the land and buildings detailed in schedule ‘B’ below. That as the plaintiffs felt inconvenience in allowing the said land and house to remain joint they asked the defendants several times to partition the buildings but they did not pay any teed to it. That the plaintiffs under the circumstances mentioned above have been forced to bring this suit.”,
That is to say, the plaintiffs thought that after their unsuccessful attempt to comply with the condition imposed by the arbitrator they continued in joint possession of the property in Schedule B and their right to partition arose on the failure of the defendants to accede to their request to partition the property. After this come paragraphs 14 and 15 of the plaint which are as follows:
“14. That under the terms of the award besides other articles one gold and silver tanzam and one gold and silver haudah the details of which have been given in schedule ‘C’ of the plaint were kept joint between the parties with a direction that the tanzam will remain in the custody of the defendants and the haudah in the custody of the plaintiffs to be available to each party when retired.
15. That the defendants have not delivered the custody of the howdah to the plaintiffs. The articles still continue to be the joint properties of the parties, and the plaintiffs are very much inconvenienced by allowing them to continue joint. That the plaintiffs requested the defendants to partition the said properties but the defendants did not pay any heed to this also”.
According to this there was no direction in the award regarding division of these properties and the plaintiffs right to ask the Court to partition the property arose on the refusal of the defendants to do so. My interpretation is supported by paragraph 16 of the plaint which says that “the cause of action arose to the plaintiffs, on 30th April 1944 when the last demand for partition was made”. (I should mention that the award is said to have been made on the 23rd May, 1941). It is true that in the prayer for relief which I have cited the plaintiffs ask for permission to deposit Rs. 2,000 “according to the terms of the award”. This, however, is not by way of asking the Court to enforce the award. The plaintiffs are merely showing their bona fides by expressing their willingness to comply with the condition imposed by the arbitrator. On the admitted genealogy the plaintiffs were entitled to claim, a half share in the property without subjecting themselves to this condition. In view of the award of the arbitrator they have thought fit to cut down their right. This is no reason why the Court should hold that the plaintiffs are not entitled to any relief at all. In my opinion, they are entitled to the relief as sought by them.
For the reasons which I have given this appeal fails and will be dismissed with costs. As directed at the commencement of my judgment, the plaint and the decree will be amended by inserting the property in Schedule D in accordance with the order of the Subordinate Judge dated the 24th July, 1946.
Sarjoo Prosad, J.:— I concur.
Appeal dismissed.
K.D
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