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Gopal Choudhary And Others v. Mt. Sundari And Others

Patna High Court
Nov 19, 1954
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Factual and Procedural Background

Plaintiffs Dulhin Sitali and her minor son Ram Ekbal Singh (plaintiff 1 and plaintiff 2) instituted Title Suit No. 50 of 1946 in the Court of the Munsif, 1st Court, Arrah. They sought a declaration that a registered deed of sale and a deed of gift dated 21-01-1946 executed by Mt. Sanichari in favour of Gopal Chaudhari (defendant 1) and Dulhin Bas Kuer (defendant 2), respectively, were illegal, null and void and not binding on the plaintiffs, who claimed to be the next reversioners to the estate of Ramlal Chaudhari. The plaintiffs pleaded a particular family genealogy alleging that Ramlal Chaudhari was the last surviving male member and that the inheritance devolved on his wife Mt. Sanichari; plaintiff 1 claimed to be Mt. Sanichari's daughter and plaintiff 2 her grandson.

The defendants filed several written statements contesting the plaintiffs' genealogy and title. Defendant 4 (Mt. Sundari) presented an alternative genealogy and asserted possession of joint family properties; she asserted that Dulhin Sitali (plaintiff 1) was actually the daughter of Ramratan Chaudhari. Defendant 1 (Gopal Chaudhari) presented yet another genealogy asserting that Ramlal Chaudhari was the last surviving male member and that the sale deed in his favour was for legal necessity and binding. Defendants 2 and 3 supported defendant 1's pleas.

On 17-07-1947 a joint petition sought reference of the dispute to arbitration; the Munsif ordered reference to arbitration and permitted the natural guardian to appear for the minor defendant. The arbitrators (panches) produced an award on 15-08-1947 (and another award was filed on 28-08-1947) dividing joint family properties into three schedules and allocating parcels and life interests to certain persons. The plaintiffs objected to the award.

The learned Munsif held (4-02-1948) that the award dated 28-08-1947 was invalid but that the award dated 15-08-1947 was valid, and he directed that a decree be drawn up on the basis of the valid award; the decree was sealed and signed on 14-02-1948. Defendants 4 and 5 appealed to the District Judge of Shahabad. The District Judge found the order of reference illegal for non-compliance with Order 32, Rule 7 CPC and also held that the arbitrators had gone beyond the scope of the reference; he set aside the award and directed the suit to be heard on merits. Defendants 1 to 3 then appealed in second appeal to this Court.

Legal Issues Presented

  1. Whether the order of reference to arbitration dated 17-07-1947 complied with the mandatory requirements of Order 32, Rule 7 of the Code of Civil Procedure, 1908, especially as regards minors and sanction of the Court.
  2. Whether an appellate decision setting aside a decree founded on an award (on grounds including illegality of the order of reference and excess of the arbitrators' powers) permits a second appeal to the High Court under the Arbitration Act and/or the Code of Civil Procedure.
  3. Whether the arbitrators exceeded the scope of the reference by dividing property and conferring life interests beyond what was the subject matter of the representative declaratory suit.
  4. If non-compliance with Order 32, Rule 7 CPC occurred, whether the award is void or merely voidable and who is entitled to challenge it.

Arguments of the Parties

Plaintiffs' Arguments

  • The opinion records the plaintiffs' pleadings that the sale and gift deeds executed on 21-01-1946 were illegal and not binding and that plaintiffs were the next reversioners; however, the opinion does not set out a granular listing of legal arguments advanced at each stage beyond these core allegations.

Defendant 4 (Mt. Sundari)'s Arguments

  • Challenged the plaintiffs' genealogy, asserting that Ramratan Chaudhari (not Ramlal) was the last surviving male member and that she (Mt. Sundari) had possession of the joint family properties.
  • Stated that she executed a deed of gift on 13-06-1942 in favour of her daughter's son Kesho Prasad Chaudhari (defendant 5) and that the gifted lands were in his possession since the date of the gift.
  • Asserted that Mt. Sundari had no right to execute the sale deed and deed of gift in favour of defendants 1 and 2 (which she considered nominal documents).

Defendant 1 (Gopal Chaudhari)'s Arguments

  • Presented an alternative genealogy asserting plaintiff 1 and plaintiff 2 were descendants of Ramratan Chaudhari and not Ramlal Chaudhari, challenging their standing as reversioners.
  • Asserted that the sale deed executed in his favour by Mt. Sanichari was for legal necessity and binding on the estate.

Appellants' (Counsel Mr. D.N. Varma) Arguments before this Court

  • Contended that because no appeal lay before the District Judge (or even if an appeal under Section 17 of the Arbitration Act lay), his clients were entitled to file a second appeal to this Court under the Arbitration Act and by virtue of Section 41(a) of the Arbitration Act which incorporates the provisions of the CPC for proceedings and appeals under the Act.
  • Submitted that Section 17 of the Arbitration Act deals with finality of decrees based on awards but does not bar a second appeal; relied on Section 41(a) to argue that procedural provisions of the CPC (including appeals) apply.
  • Argued that Order 32, Rule 7 CPC requirements were complied with so far as the minor defendant (defendant 5) was concerned and relied on Satindra Prasad Sukul v. Padumnabh Prasad to contend that omission to mention sanction for the minor would not invalidate the order of reference.
  • Contended non-compliance with Order 32, Rule 7 does not render an award null and void but merely voidable at the instance of the minor concerned; relied on Bishundeo Narain v. Seogeni Rai and Umar v. Mahabir Lal.
  • Argued that because no appeal was filed on behalf of the minor plaintiff 2, the award based on the allegedly defective order of reference could not be set aside at the instance of others.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Satindra Prasad Sukul v. Padumnabh Prasad, 1944 Pat WN 108 Supports the proposition that omission in the order of reference to state that a compromise is for the benefit of a minor does not necessarily invalidate the order of reference as regards that minor. The appellants relied on this decision to argue that the order of reference should not be invalidated for omission; the Court observed the decision was not of assistance in the present facts because the appeal before the lower appellate court was filed by one of the minors, thereby apprising the appellate court of the alleged illegality and obliging it to act.
Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280 Holds that Order 32, Rule 7 CPC read as a whole renders agreements in breach of the rule voidable (not void) and that a decree based on such an agreement is good unless the minor avoids it. The appellants relied on this Supreme Court authority to argue that non-compliance made the award voidable only at the election of the minor. The Court noted the reliance but concluded the decision did not assist appellants because a minor (one of the appellants below) had brought the matter to the appellate court's attention, making it incumbent on that court to consider the illegality.
Umar v. Mahabir Lal, AIR 1940 Pat 59 Invoked by appellants in support of the proposition that non-compliance with Order 32, Rule 7 does not automatically void the agreement; treated as precedent on the effect of non-sanctioned compromises affecting minors. The Court recorded the citation but treated the body of authorities relied upon by the appellants as not decisive in the present factual posture because the appeal below was initiated by a minor, which altered the position.
Deo Narain Singh v. Siabar Singh, AIR 1952 Pat 461 Authority cited to show that a superior court cannot ignore an illegality brought to its notice by a party (here, in respect of a defective order of reference). The Court cited this decision to support the proposition that the appellate court, having been apprised of the illegality in the order of reference (since the appeal was filed by a minor), could not disregard the illegality and was right to set aside the award and decree.

Court's Reasoning and Analysis

The Court examined both procedural and substantive grounds advanced in the appeals and appeals in the appellate courts below:

  1. Jurisdiction to entertain a second appeal under the Arbitration Act and CPC:
    • The Court analysed Section 17 of the Arbitration Act and observed that it deals with the finality of a decree based on an award and provides for an appeal where the decree is in excess of or not in accordance with the award, but it does not contemplate a second appeal to the High Court.
    • Section 41(a) of the Arbitration Act, which incorporates CPC provisions into proceedings under the Act, was interpreted by the Court to mean that the CPC applies subject to the Arbitration Act and rules made thereunder; it did not mean that appeals under Sections 96, 100 or 104 CPC would lie independently of the specific provisions of the Arbitration Act.
    • The Court concluded that while the appeal before the lower appellate court was competent, a second appeal to this Court did not lie under the Arbitration Act in the circumstances. Even assuming a second appeal lay, the Court reasoned that the lower appellate court had jurisdiction under Order 41, Rule 33 CPC to set aside the trial court's decree when it concluded the order of reference itself was vitiated, thereby rendering subsequent proceedings infructuous.
  2. Compliance with Order 32, Rule 7 CPC and the effect of non-compliance:
    • The appellants argued that non-compliance did not invalidate the order of reference as regards the minor and that any defect was merely voidable at the instance of the minor (relying on Bishundeo Narain and related cases).
    • The Court responded that the position changes when the illegality has been expressly brought to the attention of the appellate court by a minor (as occurred here because the appeal below was filed by one of the minors). In that situation, the appellate court could not ignore the illegality and was obliged to act.
  3. Scope of reference to arbitrators and excess of arbitrators' award:
    • The Court analysed the nature of the original suit — a representative declaratory suit relating to an alleged alienation of about eight acres — and concluded that the scope of the suit was limited and declaratory in character.
    • The arbitrators, however, allocated roughly sixteen acres among three persons and imposed life interests in favour of Mt. Sanichari and Mt. Sundari in properties not strictly the subject matter of the reference; such actions went beyond the scope of the reference.
    • Because the award incorporated matters not referred to the arbitrators and dealt with property beyond that in dispute in the suit, those acts were held to be beyond the arbitrators' jurisdiction under the reference.
  4. Conclusion on relief sought:
    • Given the illegality in the order of reference brought to the appellate court by a minor, and given that the arbitrators exceeded the scope of the reference, the Court agreed with the lower appellate court that the decree of the trial court and the award should be set aside.
    • The Court therefore dismissed the present appeal. It also ordered that, in the circumstances, parties should bear their own costs in this Court.

Holding and Implications

Holding: The appeal is DISMISSED.

The Court affirmed the lower appellate court's setting aside of the trial court's decree and the arbitrators' award on the twin grounds that (a) the order of reference was vitiated for non-compliance with Order 32, Rule 7 CPC and such illegality had been brought to the appellate court's notice by a minor appellant, and (b) the arbitrators acted beyond the scope of the reference by dividing properties and conferring life interests not properly before them.

Implications:

  • The immediate effect is that the decree founded on the arbitration award was set aside and the appellate court's order directing the suit to be heard on merits stands.
  • The Court held that a second appeal to the High Court did not lie in the circumstances under the Arbitration Act and that the lower appellate court had jurisdiction under Order 41, Rule 33 CPC to set aside the decree when the order of reference was vitiated.
  • The Court ordered that parties will bear their own costs of this Court. The opinion does not state that any new legal principle or precedent was laid down; the decision applies the cited authorities and procedural provisions to the facts of this case.
Show all summary ...

Rai, J.:— Dulhin Sitali and her son, Ram Ekbal Singh, minor, instituted, in the court of the Munsif, 1st Court, Arrah, title suit No. 50 of 1946 for a declaration that the registered deed of sale and the deed of gift, dated 21-1-1946, executed by Mt. Sanichari in favour of Gopal Chaudhari, defendant 1, and Dulhin Bas Kuer, defendant 2, respectively, were illegal, without jurisdiction, null and void and inoperative and not binding on the plaintiffs who were the next reversioners to the estate of Ramlal Chaudhari. The plaintiffs gave the following genealogy of the family of Ramlal Chaudhari:

2. According to the plaintiffs, Ramlal Chaudhari was the last surviving male member of the joint family, and after his death his entire inheritance had devolved on his wife Mt. Sanichari. Plaintiff 1 claimed to be the daughter of Mt. Sanichari and plaintiff 2, Ram Ekbal Singh, claimed to be her daughter's son. In the suit the plaintiffs impleaded, apart from the transferee, Mt. Sundari, widow of Ram Ratan Chaudhari, and Kesho Chaudhari, daughter's son of Ram Ratan as defendants 4 and 5. The suit was contested by the defendants. Several sets of written statements were filed. Defendant 4, Mt. Sundari, widow of Ramrattan Chaudhari, challenged the correctness of the genealogy filed by the plaintiffs. According to her, the following genealogy gave the correct relationship of the various members of the family of Ramlal Chaudhari and his brothers:

3. According to her, Ramratan Chaudhari was the last surviving male member of the family who died leaving behind him his widow Mt. Sundari, his daughter Mt. Sitia and a daughter's son Kesho Prasad Chaudhari, defendant 5. On 13-6-1942, defendant 4 executed a deed of gift in respect of 8.3 acres of land in favour of her daughter's son Kesho Prasad Chaudhari minor. She alleged that she was all along in possession of the joint family properties and the properties gifted away to Kesho Prasad (sic) were in his possession since the date of the gift. She further alleged that Dulhin Sitali, plaintiff 1, was really the daughter of Ramjatan Chaudhari and not of Ramlal Chaudhari. She asserted that Mt. Sundari had no right to execute the sale deed and the deed of gift in favour of defendant 1 and defendant 2 which, according fo her, were nominal documents.

4. Defendant 1, Gopal Chaudhari, the vendee under the sale deed, dated 21-1-1946, executed by Mt. Sanichari, filed a third written statement in which he gave a different genealogy of the family of Ramlal Chaudhary. The genealogy given by ton runs thus:

5. He asserted that plaintiff 1 and plaintiff 2 were daughter and daughter's son of Ramjatan Chaudhari and had no right to institute the present suit as reversioners of the estate of Ramlal Chaudhari who, according to that defendant, was the Fast surviving member of the family. He asserted that the sale deed in his favour had been executed by Mt. Sanichari for legal necessity and was binding on the estate of Ramlal Chaudhari.

6. Defendants 2 and 3 filed a separate written statement supporting the pleas put forward by defendant 1 in his written statement.

7. On 17-7-1947, an application was filed before the learned Munsif for referring the dispute for the arbitration of a number of panches mentioned in that petition. The learned Munsif passed the following order on this petition:

“Parties file a joint petition for referring the suit for arbitration. Permission petition to join the same on behalf of the minor (sic) defendant also filed. Requisites also filed. Heard Pleaders.

Order: Natural guardian is granted permission to appear on behalf of minor defendant. Let the suit be referred to arbitration as prayed for. To 15-8-1947 for submission of award. Let the records be made over to the arbitrator who is said to be present in court.”

8. The panches gave an award on 15-8-1947, which was placed before the learned Munsif on 21-8-1947. On 28-8-1947, another award was filed before the trial Court. In the first award the panches held:

“Point No. 1—Dulhin Bas Kuer, defendant 2, is the daughter of Mt. Sanichari, defendant 3, and Ramlal Chaudhari.

Point No. 2—Dulhin Sitali, plaintiff 1 is not the daughter of Ramlal Chaudhari, rather she is the daughter of Ramjatan Chaudhari and her name that has been given in the plaint is wrong.

Point No. 3—Ramjatan Chaudhari died during She lifetime of his father. After the death of Sheobalak Chaudhari, Ramlal Chaudhari and Ram Ratan Chaudhari entered into possession and occupation of the whole property left by Sheobalak Chaudhari. Ramratan Chaudhari also died in the state of jointness.

Point No. 4—Under this heading the arbitrators divided the joint family properties into three schedules, the first schedule consisting of about 4.25 acres was given to defendant 1, the second schedule consisting of about 5.965 acres of agricultural lands and a portion of the house plus some mahua trees were given to Dulhin Bas Kuer, and by the third schedule some 5.98 acres of culturable lands and a portion of the house plus some mahua trees were given to Kesho Prasad Chaudhari, defendant 5.”

9. It was further provided that Mt. Sundari and Mt. Sanichari would have life interest in the properties allotted to Kesho Prasad Chaudhari and Bas Kuer, respectively.

10. The plaintiffs filed an objection to this award which was ultimately heard and decided on 4-2-1948. The learned Munsif held that the award dated 28-8-1947, was an invalid one. According to him, the award dated 15-8-1947, was a valid one. He accepted and ordered a decree to be drawn up on its basis. On 14-2-1948, the decree of the trial court was sealed and signed.

11. Defendants 4 and 5 thereafter preferred an appeal before the District Judge of Shahabad. It appears that the lawyer who filed the appeal on their behalf was not sure whether the appeal would lie from the order dated 4-2-1948, or from the decree which was sealed and signed on 14-2-1948. It was probably for this reason that the memorandum of appeal mentioned that the appeal was directed against the order dated 4-2-1948, and against the decree dated 14-2-1948, and a stamp of annas three only was affixed to it. The serishtadar reported that a court-fee of Rs. 37/8/- was payable on the memorandum of appeal. The appellate court accepted the correctness of this report and demanded the deficit court-fee from the appellants which was subsequently paid. Ultimately the appellate court held that the order of reference passed by the learned Munsif was wholly illegal as the requirements of O. 32, R. 7 of the CPC, had not been complied with by him. The learned District Judge was also of the opinion that the arbitrators had gone beyond the scope of the reference, and on that ground also their award was fit to be set aside. On these findings he ordered the award to be set aside and directed the suit to be heard on merits. Defendants 1 to 3 thereafter came up in second appeal before this Court.

12. Mr. D.N Varma, who represented the appellants before this Court, first contended that as no appeal lay before the District Judge, his clients were entitled to file a second appeal to this Court. He next contended that even if the appeal before the District Judge be held to have been filed in accordance with the provisions of Section 17 of the Arbitration Act, his clients had every right to file a second appeal before this Court. In this connection he directed our attention to Section 41(a) of the Arbitration Act which runs thus:

“Subject to the provisions of this Act and of rules made thereunder—

(a) the provisions of the Code of Civil Procedure, 1908 (V of 1908), shall apply to all proceedings before the Court, and to all appeals, under this Act.”

13. He submitted that when a second appeal was not barred under the Arbitration Act, his clients were entitled to file a second appeal as the decree passed by the courts below are not in conformity with the award. In my opinion, S. 17 deals with the finality of the decree based on an award. It no doubt provides for an appeal where the decree is in excess of or not otherwise in accordance with the award, but it does not contemplate a second appeal. Chapter VI of the Arbitration Act which deals with appeals also forbids a second appeal to the High Court. Section 41(a) of the Arbitration Act does not mean that apart from the provisions of that Act appeals will lie under Sections 96, 100 or 104 of the CPC. In my opinion, the appeal before the lower appellate court was quite competent but no second appeal lies to this court. But even if it be held that a second appeal lies to this court, the lower appellate court had, under O. 41, R. 33 of the CPC, every jurisdiction to set aside the entire decree of the trial court when it came to the conclusion that the order of reference itself was vitiated which made all the proceedings subsequent to that order wholly infructuous.

14. Mr. Varma next contended with reference to the order of reference dated 17-7-1947, that the provisions of O. 32, R. 7 of the CPC, were complied with so far as the minor defendant 5 was concerned. He submitted that though the order did not specifically mention that the compromise was for the benefit of the minor defendant 5, yet that omission would not invalidate the order of reference as was held in the case of — ‘Satindra Prasad Sukul v. Padumnabh Prasad’, 1944 Pat WN 108 (A). Mr. Varma had however, to concede that the order of reference does not even mention that any application to refer the matter to arbitrators was filed on behalf of minor plaintiff 2, but he argued that as no appeal before the lower appellate court was filed on behalf of that minor, the award based on that defective order of reference cannot be set aside at the instance of any other plaintiff or defendant. He urged that non-compliance with the provisions of O. 32, R. 7 of the CPC, does not render the award null and void. It is only voidable at the instance of the minor concerned. In this connection he referred to the decision of their Lordships of the Supreme Court in the case of — “Bishundeo Narain v. Seogeni Rai’, AIR 1951 SC 280 (B). The relevant portion of the judgment of their Lordships runs thus:

“In our opinion, O. 32, R. 7 must be read as a whole. Sub-r. (2) contemplates a position where the mandatory provisions of sub-r. (1) have been ignored. In such a case, the resultant agreement or compromise is not to be held a nullity. It is only voidable. Therefore, it is good unless the minor chooses to avoid it. It follows that a decree or order based on the agreement is also good unless the minor chooses to challenge it. That is the position where there is no sanction of the court. Reading the two provisions together, the rule merely means this. No next friend or guardian for the suit can enter into an agreement or compromise which will bind the minor unless the Court sanctions it.”

15. Mr. Varma also cited in this connection the case of — ‘Umar v. Mahabir Lal’, AIR 1940 Pat 59 (C). In my opinion, the decisions cited by Mr. Varma cannot be of any assistance to his clients. The appeal before the lower appellate court was filed by one of the minors, namely, minor defendant 5. The attention of the superior court was thus drawn to the illegality committed by the trial court while making the order of reference, and once the appellate court was apprised of the illegality, it was not possible for that court to have shut its eyes as was held by Sarjoo Prosad J. in the case of — ‘Deo Narain Singh v. Siabar Singh’ AIR 1952 Pat 461 (D).

16. It is also clear that the award in question had incorporated matters which had not been referred for the decision of the arbitrators. The present suit was a representative suit filed by plaintiff 1 who alleged herself to be the nearest heir of Ramlal Chaudhari who, according to her, was the last surviving male member of the family. The, scope of such a suit is merely a declaratory one. The arbitrators were not entitled in this suit to divide the properties between Gopal Chaudhary, Dulhin Bas Kuer and Kesho Chaudhary with life interest to Mt. Sanichari and Mt. Sundari in the properties allotted to Bas Kuer and Kesho Chaudhary respectively. The suit itself related to an alienation in respect of about 8 acres of land but the arbitrators divided about 16 acres of land between, three persons. These acts of the arbitrators were certainly beyond the scope of the reference. In, my opinion, the Court of appeal below had rightly set aside the decree of the trial court and the award which was the basis of that decree. The result is that the appeal fails and is dismissed but, in the circumstances of this case, parties will bear their own costs of this court.

Banerji, J.:— I agree.

V.B.B

17. Appeal dismissed.