Raj Kishore Prasad, J.:— The sole question for determination, in this Letters Patent Appeal, against the judgment of Mr. Justice Ratikant Choudhary is: Can an application, under Section 33 of the Arbitration Act (Act X of 1940), by a person alleged to be a party to an arbitration agreement, for declaration of its non-existence, on the ground that it was fabricated, and, he was no party to it, after the award on its basis, was merged into the judgment and decree of the Court, passed under S. 17 of the Act, be maintained?
2. In order to answer this question, it is necessary, at first, to decide some preliminary, but basic, questions, on the determination of which alone would depend the correct answer to the principal question posed by me. These questions, which precede the main question, and, which emerge from the discussions at the bar, are:
1. Do the words “or is otherwise invalid” in clause (c), of S. 30 of the Act, embrace an objection, which challenges the existence, or validity, of an arbitration agreement?
2. Is an application, under S. 33 of the Act, if presented on grounds other than those mentioned in S. 30 of the Act, challenging the existence, or validity, of an arbitration ageeement, governed by Article 158 of the First Schedule of the Indian Limitation Act, 1908?
3. If Article 158, Limitation Act, does not apply, which Article of the Limitation Act, then would apply to such an application?
4. Can a person, who is alleged to be a party to the arbitration agreement, but who is not in fact a party to it, maintain an application? and,
5. If the arbitration agreement is found to be non-existent, and the objector to be no party to it, do the ex parte award based on such a reference, and, the judgment and decree, passed on the basis of such an award, under S. 17 of the Act, bind him?
3. The questions, formulated by me, are quite, simple, and can be answered merely by a proper interpretation and construction of Ss. 30 and 33 of the Act; but, it has been greatly complicated by the divergence of judicial opinions, and, conflicting views, of the different High Courts, and, by a mass of decisions, which have consequently clustered round these sections. In the present case, therefore, the simplest way, in my opinion, to decide the questions at issue is to try to construe correctly S. 33 of the Act under which this case has arisen, but before I do so, I would like to mention the circumstances in which the points have arisen.
4. The appellant, Basant Lal, and, respondents 1 and 2, Surendra Prasad and Laliteshwar Prasad Sinha, purported to have executed an arbitration agreement, on 17th February 1945, for referring their differences, with respect to certain lands, to the arbitration of Pandit Girindra Mohan Mishra, respondent No. 3, without intervention of the Court. The arbitrator respondent 3, gave an award on 2nd June 1947, in favour of respondent 1. On the application of respondent 1, under S. 14(2) of the Act, made on 6th December 1947, the arbitrator filed the award in Court on 15th December 1947.
5. Notices, as required by S. 14(2), of the filing of the award, are alleged to have been served on the appellant and respondent 2. None of them, that is, the appellant and respondent 2, having appeared, and, no objection to the award having been made, the Court, on 4th September 1948, pronounced judgment in terms of the award; under S. 17 of the award, on which a decree followed, which was prepared on 20th December 1948.
6. The decree awarded cost to respondent 1 against the appellant. Its execution was, therefore, sought by respondent 1, by the arrest and detention in the civil prison of the judgment-debtor-appellant.
7. The notice under O. 21, R. 37 of the CPC, was served on the appellant on 25th July 1950. Thereafter, the appellant, so runs his case, started making an enquiry into the matter, and, learnt on 10th August 1950, that respondent 1 had committed fraud in procuring an award in his favour against the appellant, although he never executed any arbitration agreement, nor referred any difference to the arbitration of the arbitrator, respondent 3. The appellant, therefore, on 12th September 1950, filed an application, under S. 33 of the Act, for a declaration that the alleged arbitration agreement was invalid, forged and fabricated, and, consequently the decree under execution had been fraudulently obtained against him. Him, therefore, prayed that the decree based on the award be set aside.
8. The appellant further averred that the alleged dispute refers to land covered by the kebala, executed by one Judgeshwar Labh, in favour of the appellant, who is the sole purchaser of this land; and, respondent 1 or 2, or anybody else, has had nothing to do with it, and, as such, there was no occasion, or any reason, for any difference over these lands with respondent 1. Respondent 1, therefore, had fraudulently alleged himself to be a co-purchaser with the appellant and alleged this so-called difference to have arisen between himself and the appellant. He further denied about any service of the notice under S. 14(2) of the Act, of the filing of the award, or of any proceeding before the abritrator, or the Court, before the execution stage.
9. The learned Munsif, who considered the above application in the first instance, held that the application made by the appellant was maintainable, and was not barred by limitation, as Article 158 of the Limitation Act, 1908, had no application to such a case. On merits, he found that the arbitration agreement was never signed by the appellant, and, he never joined it, and as such, the reference of arbitration was invalid and illegal, and consequently the award and the decree passed on the basis of such an award were also void, and without jurisdiction. He further found that no notice of any proceeding had been served personally on the appellant, and, the person, who is alleged to have received such notices on his behalf, had not been shown to have any authority on behalf of the appellant to receive such notices. On these findings, he declared the award, and, the judgment and decree based on it, as being invalid and without jurisdiction, and, consequently allowed the application of the appellant.
10. Respondent 1, therefore, took an appeal to the learned District judge, who held, in disagreement with the learned Munsif, that the application of the appellant under S. 33 of the Act was not maintainable because the appellant alleged that he was no party to the arbitration agreement. He further held that because a decree had already been passed in terms of the award, unless the decree was set aside, no application under S. 33 of the Act could be maintained. In this view of the matter, he did not go into the merits of the case, and, although he did not reverse the finding of the first Court on the merits, he, however, allowed the appeal on this preliminary ground, and, reversed the order of the learned Munsif.
11. The appellant, then, preferred a second appeal to this Court, which was heard and decided by Mr. Justice Ratikant Choudhary. He held that no appeal against an order under S. 33 of the Act lay to the District Judge, and, therefore, the appeal before him was incompetent, but, in such circumstances, a second appeal to the High Court was competent. He, therefore, overruled the preliminary objection with regard to the maintainability of the second appeal before him. He, however, on a review of a large number of authorities of the different High Courts, and, of the Privy Council, came to the conclusion that the application, made by the appellant under S. 33 of the Act, was not maintainable, as the award had merged into the judgment and decree of the Court, and, once judgment had been pronounced, followed by a decree, no objection to the award could be filed, without first having got the judgment and decree set aside by an appropriate proceeding. He further held that an objection, that the objector had never agreed to refer any dispute to arbitration, was an objection, which came within the meaning of the expression “or is otherwise invalid” in cl. (c) of S. 30 of the Act, and, therefore, such an objection must be made within thirty days, as required by Article 158 of the Limitation Act; and, the appellant's objection, having admittedly been filed beyond thirty days, was, as such, barred by limitation. For these reasons, he upheld the order of the learned District Judge, although on different grounds, and, dismissed the appeal of the appellant. He, however, granted him leave to appeal under the Letters Patent.
12. Mr. Lal Narayan Sinha, the learned Government Advocate, appearing for the appellant, contended that his application under S. 33 of the Act was maintainable, because the award, judgment and decree were void ab initio, and, as such, did not require to be set aside, and, therefore, they could be declared as nullities and operative against the appellant under S. 33 of the Act.
13. Mr. N.P Agarwala, appearing for the Respondent 1, however, stoutly resisted the contention of Mr. Sinha, and, maintained that the applicant had no right to make the impugned application under S. 33 of the Act.
14. Re: Question (1):—It is necessary, at first, to give the history of the legislation regarding S. 30(c) of the Act. The words “otherwise invalid” were introduced for the first time by the Code of Civil Procedure, 1908, in cl. (c) of para. 15(1) of Sch. II of the Code, which corresponded to S. 521 of the Code of 1882, and, which corresponds to Section 30(c) of the present Act. In S. 521 of the Code of 1882, the words “otherwise invalid” were not there, but in other respects para. 15(1) of Sch. II of the Code of 1908, and, S. 521 of the Code of 1882 were almost the same. In the Act of 1940 also, the word, “otherwise invalid” were maintained in cl. (c) of S. 30 of the Act.
15. The question, as to what is the true scope, and effect of the words “or is otherwise invalid” occurring in cl. (c) of S. 30 of the Act, has, as stated earlier, given rise to divergence of judicial opinion in the different High Courts. Majority of the High Courts have taken the view that an objection to the validity of an award included an objection impeaching the reference upon which the award is founded and, as such, an objection regarding the existence, or validity, of an arbitration agreement, or the reference, comes within the purview of cl. (c) of S. 30 of the Act. Such cases, to mention a few out of many, are Umadutt Nemani v. Chandrao G. Kadam, AIR 1947 Bom 94 (A); Rala Ram Walaiti Ram v. Bansi Lal Jagan Nath, AIR 1932 Lah 239 (B); Kishinchand Changomal v. Takhitram Tulsidas, AIR 1939 Sind 241 (FB) (C); Mt. Mariam v. Mt. Amina, AIR 1937 All 65 (FB) (D) and Saha & Co. v. Ishar Singh Kripal Singh & Co. (S) AIR 1956 Cal 321 (FB) (E). The contrary view has been taken, for instance, in A.R Savkur v. Amritlal Kalidas, AIR 1954 Bom 293 (F).
16. In my opinion, however, it is not necessary, in order to find out the true scope and meaning of the words “or is otherwise invalid” occurring in cl. (c) of S. 30 of the Act, to travel beyond the plain words actually used in the section, because any attempt, to reconcile the one, and differentiate the other, out of the numerous decisions, which have grown up and gathered around the words “or is otherwise invalid” since 1908 up to the present day is act to lead one to uncertainty, and, indecisiveness.
17. Let us, therefore, now read S. 30 itself. It runs thus:
“30. Grounds for setting aside award. An award shall not be set aside except on one or more of the following grounds namely:—
(a) that an arbitrator or umpire has misconducted himself of the proceedings;
(b) that an award has been made after the issue of an order by the Court superseding the arbitration or after arbitration proceedings have become invalid under S. 35;
(c) that an awad has been improperly procured ‘or is otherwise invalid’ (Underlined (here into 1 ‘ ’) by me).
18. In my judgment, on a true construction of S. 30 of the Act, the powers conferred by S. 30 upon the Court, in relation to an award, presuppose a valid reference to arbitration, and only contemplate cases where the propriety of the award, on the basis of such a reference, is in question. If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceeding. The words, “an award shall not be set aside” which are the opening words of S. 30, clearly indicate that S. 30 presupposes the existence of an award. It deals with voidable awards, and not with void awards, because a void award need not be set aside and, an award made on a non-existent, or invalid, arbitration agreement, is void ab initio, and, in the eye of law it does not exist. Further, S. 30 deals with an award, and not an arbitration agreement: it sets out the grounds on which an award, and not an arbitration agreement, should be set aside. It would, therefore, be right to hold that S. 30 proceeds on the assumption that there is a valid arbitration agreement, or reference which obviously requires the assent of both sides.
19. The consensus of opinion of all the other High Courts is that the expression “or is otherwise invalid”, occurring in S. 30(c), should not be read ejusdem generis with the grounds given in the preceding clause, and that expression is wide enough to embrace all grounds of attack on the validity of an award. That this is the better view would appear also from the following observations of Lord Blanesburgh in Ram Protap Chamria v. Durga Prasad Chamria, A.I.R 1925 P.C 293 : 53 Ind App 1 (G):
“An award made otherwise than in accordance with the authority conferred upon them is, therefore, their Lordships cannot doubt, an award which is otherwise invalid and which may accordingly be set aside by the Court”.
20. In my judgment, therefore, S. 30 speaks only of invalidity in making the award, and the grounds set forth in S. 30 clearly indicate that these grounds have reference only to proceedings before the arbitrator alone, and not to the anterior proceedings of the court. The words “or is otherwise invalid” must, therefore, refer to the invalidity of the award based on any ground unconnected with the proceedings of the Court. The words “or is otherwise invalid” occurring in Cl. (c) of S. 30 of the Act, should not, as such, be taken as including the question whether there existed an arbitration agreement, or whether there was a valid reference to arbitration. These words do not include an objection impeaching the existence, or validity, of an arbitration agreement, or reference, upon which the award is founded. Non-existence, or invalidity, of an arbitration agreement, or reference, are not contemplated by, and, included in the words “or is otherwise invalid” in S. 30(c), and are, as such, not grounds, contemplated by, and, within the meaning of S. 30, on which an award can be set aside, under it even if the award is based on any invalid and non-existent arbitration agreement, or reference, without the intervention of the Court. These words consequently should not be read ejusdem generis, with the other cases mentioned in Cls. (a) and (b), or, in the preceding words in Cl. (c) of S. 30. They should be restricted to cases where an award is on one or more of the grounds mentioned in S. 30, or on grounds other than those specifically mentioned in Cls. (a), (b) and (c) of S. 30, relating to the invalidity of the award.
21. The above view was taken by Sir Iqbal Ahmad also in Mt. Mariam's case (D) supra, in disagreement with the majority view. This minority view, however, was upheld by the Judicial Committee of the Privy Council in Chhaba Lal v. Kallu Lal, (A.I.R 1946 P.C 72 : 73 Ind App 52 (H). Their Lordships of the Judicial Committee were construing the words “or being otherwise invalid” occurring in para 15(1)(c) of Sch. II of the Code of 1908. Sir Jhon Beaumont, who delivered the opinion of the Board, observed as follows:
“The ruling of the court in that case that O. 32 R. 7 applies to an agreement to refer to arbitration has already been noted with approval. A further question referred to the Full Bench was ‘whether an objection to the validity of reference to arbitration comes within the provisions of para 15 of Sch. II, Transfer of Property Act’. The learned Chief Justice and Harries, J., considered that it did, relying on the words ‘being otherwise’ in para. 1.5; Iqbal Ahmad, J., considered that it did not. Upon this question their Lordships agree with the view of Sir Iqbal Ahmad. In their opinion all the powers conferred upon the Court in relation to an award on a reference made in a suit presuppose a valid reference on which an award has been made which may be open to question. If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceedings”.
22. In my view, the construction put by the Privy Council on the words “or being otherwise invalid” occurring in para. 15(1)(c) of Sch. II of the Code of 1908, brings out, if I may say so with respect, the true and proper scope, effect and meaning of the words “or is otherwise invalid” occurring also in Cl. (c) of S. 30 of the Act.
23. An attempt has been made, by Choudhury, J., and, also by some other High Courts to distinguish this Privy Council case, on some ground or other, but, in my opinion, it cannot be distinguished on any ground whatsoever, as it is on all fours with the present case, and, it reveals the true and correct effect and interpretation of the words “or is otherwise invalid” occurring also in S. 30(c) of the Act. The words “otherwise invalid” occur both in the Code of 1903 and in the Act of 1940, and, therefore, on parity of reasoning, these words, a fortiori, must bear the same meaning and interpretation in both, as put by the Privy Council, particularly because, otherwise also, S. 30(1) and para. 15(1) are, almost, in similar terms.
24. An award made, otherwise than in accordance with the authority, by the order conferred upon an arbitration, or an award beyond the scope of the reference, are some of the instances, out of many, of an award which is “otherwise invalid”. So long as the arbitrator acts within the scope of his authority, there can be no doubt that his award must be accepted as valid and binding; but that is no ground for sub-staining his award, and upholding it, where the arbitrator has already misdirected himself, and has exceeded the scope of his authority. If the existence, or validity, of the arbitration agreement, or the reference is not challenged, then an award, made even on such a valid reference, can be impeached, by an application under S. 33, for any of the reasons given in S. 15, 16 or 30 of the Act.
25. The contrary view taken by the Full Bench of the Calcutta High Court, in Saha & Co.'s case (E) supra by three of the Hon'ble Judges, against two, that the non-existence, or, invalidity, of an arbitration agreement must be urged under S. 30 of the Act, as the Act uses the expression “set aside” in a wide sense, and requires that whenever an award is found fit to be removed. It must be set aside, is, in my opinion, not borne out either by the language of S. 30 itself, or, even by the scheme of the Act, and, therefore, with great deference, I am unable to accept, and, assent to, it.
26. I would, therefore, answer the first question in the negative.
27. Re: Question (2):—The next question is, if an award, on the ground of non-existence, or invalidity, of the reference, cannot be set aside under S. 30 of the Act, under what provision, if any, of the Act, then, can such an award be impeached, and, got rid of, on the above grounds?
28. The answer to this question depends on the proper construction of S. 33 of the Act. Section 33 was introduced for the first time in the Act of 1940. There was no such, or similar, provision either in the Code of 1908, or in the Code of 1882.
29. Section 33 is in these terms:
“33. Arbitration agreement or award to be contested by application. — Any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the Court and the Court shall decide the question on affidavits:
Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit.”
30. In considering this section our first duty is to enter into the mind of the framers of the Act, and look at the whole matter, as they must have looked at it. Proceeding in this way, it seems to be absolutely clear that arbitration agreement, or award, both could be contested only by an application under S. 33 of the Act, and not otherwise.
31. Reading S. 33 of the Act, therefore, as a whole, it is manifest that its emphasis, is, first, on the application; secondly, on the ambit of that application by limiting it to questions of existence, validity, or effect, of either an arbitration agreement, or an award; thirdly, on how the application should be tried, prescribing it to be tried by affidavits alone, or on other evidence also, as in a suit; and, fourthly, on the person who should make such an application, by limiting it to a person, who is a party to an arbitration agreement, or claiming under him.
32. In order to appraise correctly the true scope of Ss. 30, 33, it is, in my opinion, necessary to know, at first, the scheme of S. 17 of the Act under which the Court is empowered to pass a judgment and decree in terms on the award. The scheme of S. 17 is that after the award has been filed, an opportunity is given to the party challenging, or disputing the award, to file an application to set aside the award, and the application has to be filed within the period of limitation prescribed by Article 158 of the Limitation Act. If a party to an award wants to challenge the validity of the award on any ground and desires that the award should either be modified, or corrected under S. 15 or remitted for reconsideration under S. 16, or set aside under S. 30, he has to make an application in that behalf under S. 33, within thirty days, of the date of service of the notice of filing of the award, which is the time prescribed by Article 158, Limitation Act, both for cases falling under S. 16 and S. 30 of the Act. If no application is filed, the party, in whose favour the award is made, is entitled to a decree upon the award, or, if the application is filed, and has been dismissed on merits, then also the party in whose favour the award is made is entitled to a decree. It is only when an application to set aside an award has been made in time, and the application has succeeded that the party, in whose favour the award is made, is not entitled to a decree in terms of the award under S. 17. Hence, the only proper interpretation to give Section 17 is that it contemplates all applications to set aside an award, and, ill such applications to set aside an award have to be filed under S. 33, and not under S. 30 of the Act. Section 30 does not deal with applications to set aside an award at all. It deals with what the powers of the Court are when an application is made to set aside an award. But when a Court wants to decide what is the right of a party to set aside an award, and what procedure he should follow, then the Court has got to turn to S. 33. Therefore, whereas S. 30 deals with the ground on which an award can be set aside, S. 33 is the procedural section which lays down the procedure to be followed in making an application either for the purpose of setting aside an award, or for the purpose of contesting an award, or an arbitration agreement. Section 30, in setting out the grounds, for setting aside an award, further provides that an award shall not be set aside, except on one or more of the grounds stated therein. Its main and only purpose, therefore, is to circumscribe the grounds on which an award can be set aside. The two sections, therefore, have a certain resemblance, and may, to a certain extent, overlap, but it cannot be said that both have the same meaning, or that both cover the same ground.
33. Section 33 speaks of challenging awards on the ground of their existence, validity or effect, but S. 30 limits the grounds on which an award can be set aside. The party, to an arbitration agreement, or any person claiming under him, has therefore, been given a summary remedy under S. 33, and, if he desires to challenge the existence, or validity of an arbitration agreement, or an award, and to have the effect of either determined, he can apply to the Court under S. 33 of the Act to decide the question on affidavit, or other evidence. When the existence, or validity of an arbitration agreement is challenged on an application under S. 33 the Court has to decide whether there was an arbitration agreement, and, if so, what is its effect. There is no apprehension in S. 33 for setting aside the award, or for an order directing that a decree be passed in terms of the award. Section 33 only entitles the party to have the effect of either the arbitration agreement, or the award, determined. No doubt, it is true that the line between setting aside an award and declaring an award invalid, is rather thin, but at the same time there is a difference, and, it cannot, therefore, be said that the words “set aside” in S. 30 should be interpreted to include an order declaring an arbitration agreement to be non-existent, or invalid, under S. 33 of the Act. If an application filed under S. 33 is rejected, and, the Court holds that the petitioner has failed to challenge the validity of the award, there is no provision in that section requiring the Court to pronounce judgment according to the award and directing that upon the judgment so pronounced, a decree shall follow.
34. Therefore, S. 30 and S. 33 should be construed in such a way that all their provisions which may appear to conflict may be harmonised, and there may be no conflict whatsoever, and the apparent conflict may be resolved. If, therefore, Ss. 30 and 33 are construed thus, then their proper construction would be that all applications challenging an award, irrespective of the ground of the challenge, must be made under S. 33 of the Act. This view gets support also from the Full Bench decision of the Calcutta High Court in ‘Shah and Co. (E) (supra). If the award only is challenged, because of some infirmity, or invalidity in the award, and not the arbitration agreement, and, the grounds of the challenge are those expressly mentioned, or impliedly included in the “otherwise invalid” clause in cl. (3), of S. 30, the Court is empowered, on an application presented under S. 33, to set aside the award under S. 30 of the Act. If, however, the existence of the arbitration agreement itself is challenged, then the Court under S. 33 is empowered to determine the existence, or invalidity of the arbitration agreement, and to declare, if satisfied, that it is non-existent or invalid. On such a declaration, the purported award becomes a nullity, and void ‘ab initio.’ Such a void award does not require to be set aside, but only to be so declared; and this declaration can be made only under S. 33. This construction would be consistent with the legislative intent and design, and would also indicate the scope and purpose of the legislation itself in enacting S. 33 of the Act.
35. Section 33, therefore, is the only section under which an application can be made challenging the existence, or validity of the arbitration agreement, or the award. Section 30 does not, expressly or impliedly, speak of any application being made under it, but it only lays down the grounds on which an award can be set aside. In my judgment, therefore, S. 33, as stated earlier, contemplates all applications objecting to the arbitration agreement, and the award both.
36. If an application under S. 33 is made contesting the award only, and sets out all, or some of the grounds mentioned in S. 30 of the Act, for setting aside the award, the Court will entertain the application under S. 33, and allow, or disallow, it according as one or more of the grounds mentioned in S. 30 are made out. If, therefore, a party accepts the validity of the reference, but is aggrieved only by the award, with reference to the proceedings before the arbitrator, either on account of irregularities in the procedure of the arbitrator, or on the ground that the award was made by a person who had not been properly appointed to act as arbitrator, he can make an application under S. 33 on one or more of the grounds mentioned in S. 30, or, on any other ground showing the invalidity of the award, which comes within the mischief of the words “or is otherwise invalid” in cl. (c) of S. 30 of the Act, the Court will exercise its power under S. 30 of the Act. If an application on one or more of the grounds mentioned in S. 30, is made under S. 33, then such an application for setting aside the award must be made within 30 days as provided by Article 158 of the Limitation Act. In Article 158 as well as in S. 30 of the Act, the provision therein is for setting aside the award, and, the words used in both are “set aside,” although in Article 158, Limitation Act, the words “or to get an award remitted for reconsideration” also occur after the words “to set aside an award.” A Court has no jurisdiction to condone delay, which a party may make, in filing an application under S. 33, for any of the reliefs envisaged in Ss. 15, 16 and 30 of the Act, as Section 5 of the Limitation Act, has not been made applicable. Therefore, it is manifest that applications made under S. 33, contesting an award, on the grounds mentioned in S. 30, are governed by Article 158, Limitation Act.
37. If, however, a party wants to challenge an arbitration agreement, or the reference, on the ground of its non-existence or invalidity, then also such an application has to be made under S. 33 of the Act, but, as, such an application is not to set aside an award, or to get an award remitted for reconsideration, as postulated by Article 158, Limitation Act, and, as, such a ground is not one of the grounds contemplated by S. 30 of the Act, such an application will not be governed by Article 158, Limitation Act. Such an application, as already stated, is not to set aside the award, but to declare it a nullity, and a void award does not require to be set aside, as it may be treated as void for all purposes ‘ab initio.’ In my judgment, therefore, an application on the ground of non-existence, or invalidity of the arbitration agreement, or the reference, is not governed by Article 153, Limitation Act. My answer to the second question, therefore, would also be in the negative.
38. Re: Question (3):—The next question is, what article of the Limitation Act, then, should govern such an application?
39. The obvious answer would depend on the nature of the objections advanced against the arbitration agreement, or the award, on which the relief is sought in the application under S. 33 of the Act. If the ground for asking the relief in the application under S. 33 is fraud, then obviously Article 95 of the Limitation Act would apply; on the other hand, if the relief is for a declaration that the agreement for reference to arbitration is a forgery, then Articles 92 or 93 of the Limitation Act, as the case may be would apply. If, however, the relief is to cancel or set aside the arbitration agreement on any ground, not cohered by S. 30 of the Act, and, also not provided for by any other Article of the Limitation Act, then Article 91 of the Limitation Act would apply. If, however, the application under Section 33 is for a relief which is not covered by any Article of the Limitation Act, then to such a case the residuary Article 181 would apply. But in any of these cases, where Articles 91, 92, 93, 95 or 181 apply, the objector under S. 33 of the Act would get a period of three years within which an application has to be made. In the present case, admittedly, the application under S. 33 was made, no doubt, after thirty days, but within three years, from the date, when the fraud became known to the appellant, the party wronged, and, therefore, in such circumstances, in the present case no question of limitation arose, as an application, based on the ground of fraud, would be governed by Article 95, Limitation Act. My answer to the third question, therefore, would be that such an application under S. 33 would be governed by Article 91, 92, 93, 95 or 181, Limitation Act, according to the nature of the objection and declaration sought for, and relief claimed, in the application.
40. Re: Question (4):—The words “any party” with which S. 33 of the Act opens contemplate and include persons alleged to be parties, though they may not be actually parties, and, therefore, they mean also persons who are not actually parties, but who claim, and, who are alleged to have entered into the arbitration agreement. Likewise, the word “agreement” includes a sham agreement, and means factual existence of the agreement, although, it may have or it may turn out to have no legal existence at all: See Umadutt Nemani's case (A) (supra): I, therefore agree on this point with Choudhary, J. The appellant has, therefore, been rightly held to be entitled to apply under S. 33 of the Act. My answer to this question would, therefore, be in the affirmative.
41. Re: Question (5):— The fifth, and the last, preliminary question for decision is the most important, and the crucial one, because on its determination will now hinge the answer to the principal question, notwithstanding that the decision on the preceding preliminary points has otherwise cleared the way.
42. The question is, do the judgment and decree, passed under S. 17 of the Act, in the circumstances of the present case, bind the appellant?
43. Mr. Justice Choudhary has taken the view that, as the award has merged into the judgment and decree, and, has no longer independent existence, the appellant has no locus standi to object to the award, on any ground whatsoever, without first getting the judgment and decree set aside. In my opinion, they are no hurdles in the appellants' way, nor, are they any fetter on the power of the Court to grant the declaration claimed under S. 33 of the Act, if otherwise on merits it can be done.
44. It should be remembered that the arbitration agreement is the sole basis of the reference, award, judgment and decree; and as such, if the arbitration agreement is found to be non-existent, on the ground that the appellant did not sign it, and, that he did not join it, the main plank goes, and the basis disappears, and, therefore, all the subsequent proceedings taken and, based on such an arbitration agreement would automatically fall to the ground. It is true the award, judgment and decree based on it must be taken to be subsisting and valid, unless and until they are reversed, or superseded by some ulterior proceeding. But the moment it is found, on an application presented under S. 33 of the Act, that there never existed any arbitration agreement at all, which could give authority to the arbitrator to make an award, and, which could empower the Court to pass a judgment and decree on the basis of such an award, under S. 17 of the Act, then the very foundation of all these proceedings vanishes, and, therefore, they can have no binding effect at all. In my judgment, therefore, an application, under S. 33 of the Act, on the ground of non-existence of the arbitration agreement, can be made, even after judgment and decree are passed ex parte behind the back of the party wronged, under S. 17 of the Act, for the simple reason that such judgment and decree are void from the beginning to the end, and are not binding on him.
45. The law has, for many years, been settled and remained so at this day, that where a cause, or matters in difference, are referred to an arbitrator, he is constituted the sole and final judge of all questions, both of law and of fact. The only exception to that rule are cases where the award is the result of corruption or fraud.
46. To borrow the language of Lord Chief Justice De Grey:
“Fraud is an extrinsic collateral act, which vitiates the most solemn proceedings in Courts of justice.”
47. In the words of Lord Coke: “It avoids all judicial acts, ecclesiastical or temporal.” If fraud, or surprise, is, therefore, the ground of an application, as in the present case, the fundamental ground, in all such applications where there is such a charge is that there has been a miscarriage of justice. The judgment that is thus tainted and affected by fraudulent conduct is tainted throughout, and the whole must fail. Suppression of truth suppresseio veri, by reason of which per quod, fraud is committed on the Court and the party is obviously an act nala in se. According to Story:
“Fraud properly includes all acts, omissions, and concealments, which involve a breach of legal or equitable duty, trust or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken by another. Acts originating in any actual evil design or contrivance to perpetrate a positive fraud or injury upon other persons are acts done malo animo and come within the mischief of actual or positive fraud”
48. In the present case, charge of fraud, or surprise, was brought forward, and, such a case has been established on the finding of the learned Munsif. On the finding of the learned Munsif, respondent 1 set up a forged arbitration agreement, which did net bear the signature of the appellant, in order to obtain an award in his favour, and, therefore, his act was definitely mala fide, and it amounted to positive fraud on the appellant and the court. The application under S. 33 of the Act made, in the present case, was equivalent to a suit for the rescission and destruction of a former decree of a prima facie competent court. The rescission and destruction could be obtained on the ground of fraud, practised on the Court, which made the reference, and, on the arbitrator, who made the award.
49. It is very trite and very familiar that a challenge of the method of the exercise of the jurisdiction of a Court can never in law justify a denial of the existence of such jurisdiction. The former has reference to the merits of the case, but in the present case the basis of the jurisdiction of both the Court and the arbitrator had been challenged on the ground of non-existence of an arbitration agreement, which was the foundation and root of the jurisdiction of both. The fraud of respondent 1 was committed not only on the appellant, but also on the court. The judicial proceedings subsequent to the perpetration of the fraud are, therefore vitiated, and, as such, the award, the judgment and the decree, based on such an arbitration agreement, were absolute nullities and inoperative.
50. In such circumstances, the suggestion that as the award was “merged” in the judgment and decree of the court, passed under S. 17 of the Act, the appellant was not entitled to maintain the present application under S. 33 of the Act for a declaration of non-existence of the arbitration agreement must be rejected. When an arbitration agreement ceases to have any force or effect, as the appellant was not a party to it, and, when once it is established that the proceedings before the court consequent upon such an arbitration agreement are to be regarded a nullity, there can be no question of any such merger. This view finds support also from the decision of the Privy Council in Shree Meenakahi Mills Ltd. v. Patel Bros. A.I.R 1944 P.C 76 : 71 Ind. App. 106 (I).
51. The result, therefore, of declaring the arbitration agreement and the reference as non-existent, and consequently of declaring the proceedings on the basis of this non-existent arbitration agreement and reference before the court and the arbitrator to be a nullity must be to leave the parties in the position which they occupied immediately before those proceedings were begun.
52. On the finding of the learned Munsif that the appellant did not sign the arbitration agreement and that consequently he was not a party to it, the award, or the subsequent proceedings based on it, cannot, therefore bind the appellant. It is well settled that an award could only bind the parties to the arbitration, and, the appellant being a stranger to the submission to the arbitration was under no obligation to abide by the award, and, as such, the appellant not being a party thereto, was not bound by it, and therefore, it could not be enforced against the appellant. The proceedings in execution taken against the appellant on the basis of the decree passed on the footing of the award on the alleged reference, therefore, are also ineffective as against the appellant, the proceedings taken before the court and the arbitrator on the basis of the arbitration agreement being void ab initio. I would, therefore, answer the fifth question in the negative;
53. Principal question: In my judgment, therefore, for the reasons expressed by me in deciding the preliminary questions, the application made by the appellant under S. 33 of the Act is maintainable, notwithstanding that an award, and on the basis of the award, judgment and decree have been passed, and, that it is not necessary that such an application on the ground of non-existence of the arbitration agreement need be made before the passing of the judgment and the decree, because the very fact that fraud has been committed upon the court and the party clearly indicates that the party wronged had no knowledge of the proceedings before the Court, or the arbitrator, and, naturally, therefore, in such circumstances, he could make an application, under S. 33 of the Act, only when the fraud becomes known to him.
54. A mere reading of Ss. 31 and 32 of the Act makes the position absolutely clear that the question about non-existence, or invalidity, of an arbitration agreement also has to be dealt with under the Act itself, and, not by a separate suit. It is for this reason, that S. 33 has been enacted providing the making, or an application for such a purpose. In this view of the matter, the application made by the appellant must be held to be legally maintainable. I would, therefore, answer the main question in the affirmative.
55. The decision of Mr. Justice Choudhary that no appeal lay to the District Judge against the order passed on the present application under S. 33 of the Act by the learned Munsit is correct. The question, whether the appellant had signed the agreement, and, as such, whether he was a party to it, is a question of fact, which has been decided on the evidence adduced by the parties in the first court and, he has found that the appellant did not sign the agreement, and, as such, he was not a party to it. This being a finding of fact, it is not open to this court to reverse that finding of fact.
56. But that apart, this finding of fact has not even been challenged by Mr. N.P Agarwala, who appeared for the respondents; the only point, on which the learned counsel for the parties addresses the Court, being the question of maintainability of the application presented under S. 33 of the Act by the appellant.
57. I would, therefore, allow the appeal, set aside the judgments of the learned District Judge, and, of Mr. Justice Choudhary I would restore the judgment, dated the 12th September 1951, of the learned Munsif allowing the application of the appellant, made under S. 33 of the Act.
58. In the result, the appeal succeeds, and, is accordingly allowed with costs throughout.
59. Ramaswami, C.J:— I agree.
V.B.B
60. Appeal allowed.