Lachhuman v. Makar

Das, J.:— Lachhuman Singh, defendant no. 1, is the appellant before us. The appeal arises out of a suit for partition. According to the plaintiffs-respondents, village Badgunda, which is the subject of partition, was given in khorposh to one Dayal Singh by Khem Narain Singh. Dayal Singh had six sons. Subsequently, Dayal Singh made a mukarrari khorposh grant on the 14th November, 1895, in favour of one Mod Narain Singh in respect of 428 and odd acres of land of village Badgunda. Mod Narain had four sons, namely, Lachhuman Singh, Meghlal Singh, Guru Prasad Singh and Makar Singh. A tenure-holder's khewat, no. 5, was prepared in respect of 428 and odd acres of land in the names of Lachhuman Singh, Meghlal Singh and Guru Prasad Singh, Makar Singh, plaintiff no. 1, being a minor at the time. It was alleged that the parties had been messing separately for more than fifteen years before the suit and were also cultivating the bakasht lands separately according to convenience of cultivation, but there was no partition by metes and bounds. Makar Singh and the son of Guru Prasad Singh were the plaintiffs who brought the suit, each claiming 4 annas share.

Lachuman Singh, the eldest son of Mod Narain, was the principal defendant who contested the suit. The heirs of Meghlal Singh, who were also ranged as defendants, supported the case of the plaintiffs. The substantial defence of Lachhuman Singh was that there was a previous partition of the property by metes and bounds as a result of an award made by certain arbitrators on the 3rd of June, 1925. It was alleged that Lachhuman Singh was entitled to 6 annas share on the strength of a custom in the family under which the eldest son got a larger share. It was alleged that as there had already been a partition of the property which was binding on the parties, the suit for a second partition was not maintainable.

The learned Subordinate Judge framed several issues, some of which are of no importance at this stage. On the question as to whether there was a previous partition, the learned Subordinate Judge found that the award on which the appellant relied was an invalid award which was never acted upon. He further found that there was no previous partition in fact, though the lands were being cultivated separately for convenience of cultivation. He also found that the appellant had failed to prove a family custom under which the eldest son was entitled to a larger share. On these findings he decreed the suit for partition, holding that plaintiffs 1 and 2 were entitled to 4 annas share each.

The award on which the appellant relied was not marked as an exhibit in the court below, because the appellant failed to pay the necessary stamp duty and penalty. Learned Counsel for the appellant has stated that the necessary stamp duty and penalty have now been paid and he has based one of his main arguments on the award, an English translation whereof has been placed before us. We have heard learned Counsel for the parties on the basis of the award and the appeal will be disposed of on that basis.

The first and foremost argument of learned Counsel for the appellant is that the award is binding on the parties and sections 3.1 and 32 of the Arbitration Act, 1940, are a bar to the suit. Section 31(2), on which reliance has been placed by learned Counsel for the appellant, is in these terms:—

“31(2) Notwithstanding anything contained in any other law for the time being in force and save of otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court.”

Section 32, which is more important, states:—

“32. Bar to suit contesting arbitration agreement or award.—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.”

It seems to me that section 31(2) merely states which court shall decide questions regarding the validity, effect or existence of an award; in terms it does not bar a suit. Section 32, however, bars a suit on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award. The case of the plaintiffs-respondents is that they have brought the suit not for a decision upon the existence, effect or validity of the award; they have brought the suit for partition on their original title. The second part of section 32, however, is in very wide terms.” It states,

“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 decreeing the partition suit will be to set aside the award, and if section 32 applies to this case, it will be a bar to the suit, provided the appellant can plead the award by way of defence.

The question, therefore, has arisen whether section 32 applies to an award made long before the coming into force of the Arbitration Act, 1940. That Act came into force on the 1st day of July, 1940. Exhibit A was the arbitration agreement in the present case and was dated the 13th of July, 1921. The award was stated to have been made four years after, on the 3rd of June, 1925. Therefore, both the arbitration agreement and the award relate to a period long before the coming into force of the Arbitration Act, 1940. The question is—do the provisions of the Arbitration Act, 1940, apply? No direct decision bearing on the question has been brought to our notice, though in Sukhdeo Singh v. Radhika Sihgh Manohar Lal, J., said:—“Moreover, it is doubtful if the provisions of the new Arbitration Act can be invoked in aid of or against the validity of an award which was pronounced before this Act came into force.” The difference in the scheme of the Arbitration Act, 1940, and Schedule II of the Code of Civil Procedure has been the subject of many decisions of this Court, the latest of which is Sia Kishore Kuer v. Bhairvi Nandan Sinha. The difference was thus explained by Reuben, C.J, in the aforesaid decision:—

“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 (his Lordships then quoted section 32).”

His Lordship then considered various decisions of different High Courts and approved of the view expressed by Leach, C.J, in Moolchand Jothajee v. Rashid Jamshed Sons & Co.. Leach, C.J, said:—

“The scheme of the Act (the Arbitration Act, 1940) is to prevent the parties to an arbitration agitating question relating to the arbitration in any manner other than that provided by the Act.”

Reuben, C.J, then said that the Arbitration Act, 1940, 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. If the scheme of the Arbitration Act, 1940, is to prevent the parties to an arbitration agitating a question relating to the arbitration in any manner other than that provided by the Act, then the appellant cannot be in a better position than the plaintiffs-respondents. If the plaintiffs-respondents' could not bring a suit to set aside an award, the appellant could not also plead the existence of an award by way of defence in a suit, when he had taken no steps under the Arbitration Act to file the award. Mr. A.C Mitra, appearing for the appellant, has relied on two Madras decisions. In Pamudurthi Suryanarayana Reddy v. Pamudurthi Venkata Reddi it was held that section 32 of the Arbitration Act, 1940, did not preclude a defendant from putting forward an award which has been fully performed by him but which was not filed under section 14 and according to which a judgment was not pronounced or a decree given under section 17 of the Act, in answer to the plaintiff's claim which was the subject-matter of the reference and the award. It is to be noted that in the Madras case the award was made on the 9th March, 1943, that is, after the coming into force of the Arbitration Act, 1940; therefore, the question whether the Arbitration Act applied to awards made before the coming into force of that Act did not arise for decision before their Lord—ships. Their Lordships did, however, take somewhat narrower view of section 32 of the Arbitration Act, 1940—narrower than the view taken by Leach, C.J, in Moolchand Jothajee's case. Their Lordships took the view that the inhibition in section 32 was confined merely to a plaint by which a decision upon the existence, effect or validity of an award was sought. Speaking for myself, I find it somewhat difficult to confine the words of section 32 of the Arbitration Act, 1940, to a plaint only. The latter part of section 32, which I have already quoted, is comprehensive enough to preclude, to use the words of Leach, C.J, any of the parties to an arbitration from agitating a question relating to the arbitration in any manner other than that provided by the Act. The decision in Pamudurthi Suryanarayana Reddy's case was followed by a Single Judge in the Madras High Court in Sayyaparaju Surayya v. Nekkanti Anandayya. That was also a case where the award was made after the coming into force of the Arbitration Act, 1940. Mr. A.C Mitra also drew our attention to an Oudh decision, B. Sher Bahadur Singh v. Ram Narain Singh. That was a case in which section 48 of the Arbitration Act, which saved pending references, was considered and it was held that an appeal lay under the Act of 1940 in respect of an award made on the 21st March, 1939, but on which judgment was pronounced on the 12th August, 1940. I do not think that decision is of any help in determining the question before us I need make only one more observation about section 48, Arbitration Act, 1940. That section shows that the Arbitration Act does not apply to references pending at the commencement of the Act. It is a little difficult to understand how then the Arbitration Act, 1940, will apply to arbitration agreements and awards made long before the coming into force of that Act. Mr. Mitra said that the Arbitration Act was a consolidating Act; its provisions would, therefore, apply to arbitrations made before the coming into force of the Act. I am unable to accept that argument. A consolidating Act does not necessarily apply to transactions past and closed, unless in express terms or by necessary intendment it has retrospective effect.

My own view is that the Arbitration Act, 1940, has no retrospective effect and does not apply to awards made long before the coming into force of that Act. If the Arbitration Act, 1940, applies, then the appellant will be precluded from putting forward an award which was never filed in court by way of defence to the suit for partition. Speaking with great respect, I doubt the correctness of the Madras decision which has put a narrower view on section 32 of the Arbitration Act, 1940. For these reasons, I do not think that section 32 is a bar to the present suit.

Let us, however, examine this case on the footing that it was open to the appellant to plead the award as a bar to the suit. It is obvious that if the appellant can plead the award, it should be open to the court to consider whether the award is valid or invalid. It seems to me obvious that the court cannot allow a party to plead an award and at the same time preclude the other party from showing that the award was not valid. The learned Subordinate Judge has carefully considered the evidence bearing on the question. He has pointed out that out of the arbitrators mentioned in exhibit A, three, had died before the award was made. It further appears that some eleven persons had joined in making the award, though they were not appointed arbitrators at all. An arbitration agreement sets up a private tribunal of the parties. That tribunal, must consist of persons appointed as arbitrators. Outsiders who had never been appointed as arbitrators cannot give a decision which will be binding on the parties. This, in my opinion, is elementary. In the case before us it has been found, and the finding has not been challenged, that a number of outsiders joined in making the award. Obviously, such an award was not valid and could not bind the parties. The learned Subordinate Judge correctly found that there was no valid award and the parties did not act upon it.

Learned Counsel for the appellant took us through the evidence in the case and argued that the evidence establishes a previous partition, irrespective of the award. We have carefully examined the evidence and find that there was no previous partition. It is true that some of the witnesses of the plaintiffs-respondents said that there was separate cultivation: that, however, was the case of the plaintiffs-respondents who said that the separate cultivation was by way of convenience and not as a result of a partition by metes and bounds. My finding is that the appellant had failed to prove a previous partition.

On the question of a family custom of jethans, the learned Subordinate Judge has dealt with the evidence in great detail and has pointed out several instances where the custom does not appear to have been followed. Moreover, the evidence as to what the alleged custom was is highly discrepant. One witness said that the eldest son got the double share; another witness gave a different version. The entries in the, record-of-rights also went against the existence of such a custom. Having regard to all the evidence in the record, I see no reasons to differ from the finding of the learned Subordinate Judge.

My conclusion, therefore, is that the findings of the learned Subordinate Judge are correct and there are no reasons for interference. The appeal fails and is dismissed with costs.

Sinha, J.:— I agree.

K.D

Appeal dismissed.