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Lilju Mandal And Others v. Smt. Chandra Devi .
Structured Summary of the Opinion (Misra, J.)
Factual and Procedural Background
The matter arises from a partition suit filed by the plaintiff-respondent seeking carving out of her share in joint family properties. Two appeals were heard together. One is a miscellaneous appeal (Miscellaneous Appeal No. 53 of 1960) directed against an award filed by arbitrators in respect of a reference made by the learned Subordinate Judge; the other is a first appeal (referred to variously in the opinion; at one point as "the first Appeal No. 53 of 1960" and later as "First Appeal No. 56 of 1960") directed against a decree passed on the basis of that award. The Court states it is not necessary to set out all facts in detail because both appeals could be disposed of on a single ground pressed by the appellants' counsel.
Legal Issues Presented
- Whether a reference to arbitration made without compliance with Order 32, Rule 7, Code of Civil Procedure (specifically taking into account the position of minors and recording leave of the court to the guardian-ad-litem) vitiates the reference, and consequently the award and any decree based upon it.
- Whether failure to comply with Order 32, Rule 7 renders an award a nullity or makes it merely voidable as against the minors concerned.
- Whether Article 158 of the Limitation Act (providing a period of thirty days to apply to set aside or remit an award) bars the minors from challenging the award where Order 32, Rule 7 was not complied with.
Arguments of the Parties
Appellants' Arguments (as set out in the opinion)
- The reference to arbitration was made at the instance of the plaintiff and of the defendants other than appellants 6 and 7; appellants 6 and 7 were minors under the guardianship of Kadamlal Mandal (appellant No. 4).
- Although Kadamlal signed the petition for reference both for himself and as guardian of the minors, the learned Subordinate Judge did not comply with Order 32, Rule 7, Code of Civil Procedure — he did not apply his mind to whether the reference was for the benefit of the minors nor record leave of the court as required.
- Order 32, Rule 7 is mandatory; non-compliance vitiates the reference itself and therefore vitiates the award and the decree founded on that award.
- Counsel relying on (and drawing attention to) authorities (for example, Chhabha Lal v. Kallu Lal) in support of the contention that strict compliance with O.32 R.7 is required.
- It was also pointed out that the minors themselves have preferred appeals; thus arguments that only the minors could attack the award is not a barrier here.
Respondent's Arguments (as set out in the opinion)
- Mr. B.C. De (for the respondent) accepted that the Privy Council's observations could be read to suggest that an award given without full compliance of O.32 R.7 might not be a nullity but only an irregularity; he relied upon authorities (including decisions of the Supreme Court) which indicate non-compliance makes the award voidable rather than a nullity.
- Mr. De further urged that any attempt to avoid the award by the minors should have been made in the court of the Subordinate Judge within the period provided by Article 158 of the Limitation Act (thirty days from the date of service of notice of filing of the award) and that Article 158 should therefore apply.
- He also drew attention to a Division Bench decision (Kedar Nath v. Basant Lal) emphasizing the necessity of leave of the court being recorded when a guardian agrees to a reference affecting a minor.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Chhabha Lal v. Kallu Lal, AIR 1946 PC 72 | Order 32, Rule 7 of the Code of Civil Procedure is imperative; judge must record leave and satisfy himself that reference is for benefit of minors; guardian signing without qualification is taken to have signed in requisite capacities. | The Court relied on this decision to underline that compliance with O.32 R.7 is mandatory and that failure to have the court apply its mind and record leave can vitiate the reference as regards minors. |
| Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280 | Failure to comply with O.32 R.7 does not render the award a nullity but makes it voidable as against the minors concerned. | The Court noted this authority to explain an alternative view (that non-compliance creates a voidable award), but observed that the appellants (minors) had themselves appealed, a fact relevant to the outcome. |
| Kaushalya Devi v. Baijnath Sayal, AIR 1961 SC 790 | Similar to Bishundeo Narain: non-compliance with O.32 R.7 renders an award voidable (not necessarily a nullity) as against minors. | The decision was cited to show the Supreme Court's approach that non-compliance produces voidability; the Court considered this in weighing whether Article 158 limitation principles applied. |
| Kedar Nath v. Basant Lal, AIR 1939 Pat 278 | When a minor is a party, no effective reference to arbitration unless guardian-ad-litem obtains leave of the Court to agree to such reference; general permission is insufficient; Court must specifically record reasons for granting or refusing permission; minor can avoid award/decree if requirements not met. | The opinion relied on this Patna Division Bench authority to reaffirm that a recorded leave is required and that non-compliance allows avoidance by the minor. |
| Gopal Choudhary v. Mt. Sundari, AIR 1955 Pat 277 | Appellate court, once apprised of illegality in the trial court's order of reference (for example, via an appeal filed by a minor), cannot ignore that illegality; appellate court can address it. | The Court invoked this decision to support the proposition that the appellate court's power to deal with objections to an award is coextensive with the original court's power and that an appeal filed by a minor brings the illegality to the superior court's attention. |
| Deo Narayan Singh v. Siabar Singh, AIR 1952 Pat 461 | Referenced in the context of whether an appellate court may ignore an illegality identified on appeal. | The opinion cites this case (through discussion in Gopal Choudhary) to indicate prior treatment of similar issues and as context for the rule that appellate courts should not "shut their eyes" to illegalities in making an order of reference. |
Court's Reasoning and Analysis
The Court's analysis proceeded on the single central ground pressed by the appellants: the learned Subordinate Judge made a reference to arbitration without complying with the mandatory requirements of Order 32, Rule 7, Code of Civil Procedure as they relate to minors.
- The Court observed that Kadamlal Mandal (appellant No. 4), the guardian of minors defendants 6 and 7, had applied for reference and signed the petition for himself and as guardian. However, the Subordinate Judge "did not pass any order for reference in compliance with the terms of O.32 R.7", meaning the Judge failed to apply his mind to whether the reference was for the benefit of the minors and failed to record leave of the court as mandated.
- The Court treated authorities differently on the question whether non-compliance renders an award a nullity or merely voidable: Chhabha Lal was cited for the imperative nature of O.32 R.7 and the need for an express recorded leave; Bishundeo Narain and Kaushalya Devi were cited for the proposition that non-compliance may make an award voidable rather than a nullity. The opinion recognizes both lines of authority but emphasizes the practical consequence for the minors before the Court.
- The respondent's contention that Article 158 of the Limitation Act (thirty days) required challenge at the Subordinate Judge's court was considered and rejected. The Court reasoned that Article 158 applies where an award is otherwise within jurisdiction and is sought to be avoided on grounds such as misconduct of the arbitrator, breach of natural justice, or exceeding the reference. Article 158 presupposes an award that is otherwise a valid, binding award unless set aside under the Article.
- By contrast, Order 32, Rule 7 itself provides that if a reference is made without complying with its requirements (as regards a minor), the minor is not bound and can avoid it. The Court concluded that where the rule is not complied with, "there is no award whatsoever so far as the minor is concerned" — the award cannot be treated as an award within jurisdiction for purposes of Article 158.
- The Court further held that the appellate court's powers in dealing with objections to an award are coextensive with those of the original court and can be exercised by the appellate court in the same manner; moreover, since the suit had not finally ended and continued as an appeal, the minor's right to challenge the reference continued free from the time limitation imposed by Article 158. The Court relied upon Gopal Choudhary to support this view — that an appellate court, when apprised of illegality (for example, by an appeal filed by a minor), cannot ignore that illegality.
- On these bases the Court concluded the decree founded on the award had to be set aside and the award itself could not be sustained to the extent it purported to affect the interest of minors who were not properly made parties to the reference.
Holding and Implications
Holding:
- First Appeal No. 56 of 1960 succeeds — the decree passed by the Court below is set aside and the suit is to proceed in the ordinary course. (The opinion states this outcome expressly: "First Appeal No. 56 of 1960 succeeds, the decree passed by the Court below is set aside and the suit must now proceed in the ordinary course.")
- Miscellaneous Appeal No. 53 of 1960 is allowed — the award is set aside because it purports to affect the interest of minors who were not parties to the reference in compliance with Order 32, Rule 7.
- Costs: The Court directed that, in the circumstances, the parties shall bear their own costs.
Implications:
The direct consequences of the decision are that the decree based upon the contested award is overturned, the award itself (to the extent it affects the minors) is set aside, and the partition suit will continue for further adjudication in the ordinary course. The opinion emphasizes the mandatory nature of Order 32, Rule 7 when minors are affected and clarifies that Article 158 of the Limitation Act does not bar a minor from invoking the protection of Order 32, Rule 7 where the reference was made without the required court-recorded leave; where the rule's conditions are not met, the award is treated as not binding on the minor rather than as an award within jurisdiction subject to Article 158 time limits.
Note: The summary is limited to and faithfully reflects only the information contained in the provided opinion. Where the opinion itself contains variations in citation of the appeal number, those variations have been preserved rather than reconciled by the summarizer.
Misra, J.:— These two appeals have been heard together. They arise out of a partition suit filed by the plaintiff-respondent for carving out of her share in the joint family properties. The appeal is by the defendants including Nos. 6 and 7 Ram Chandra Prasad and Bindeshwari Prasad. Miscellaneous Appeal No. 53 of 1960 is directed against the award filed by the arbitrators in the suit in which reference was made by the learned Subordinate Judge and the first Appeal No. 53 of 1960 is directed against a decree on the basis of the award. It is not necessary to set out the facts of these appeals in detail because the appeals can be disposed of on one simple ground, which alone has been pressed before us by learned counsel for the appellants.
2. It has been contended that the reference to the arbitrators was made by the Court at the Instance of the plaintiff and the defendants other than appellants 6 and 7 who were under the guardianship of Kadamlal Mandal appellant No. 4 their father. It is true that Kadamlal Mandal made the application for reference of the dispute between the parties to arbitration joining with other defendants and signed the petition for himself as also as guardian of his minor sons, defendants 6 and 7. But the learned Subordinate Judge did not pass any order for reference in compliance with the terms of O. 32 R. 7 of the Code of Civil Procedure, that is to say, he did not apply his mind to the facts as to whether the 1 reference to arbitration was for the benefit of the minors concerned. The point urged in support of the appeals and against the validity of the award as also of the decree is that the provisions of O. 32 R. 7 are mandatory, and non-compliance with those provisions by the court-making the reference whose duty it is to look to the interest of the minors, vitiated the reference itself. If the reference, therefore, was bad in law, the award on the basis of the reference was also vitiated and in consequence non-existent. Further if the award was thus vitiated the decree passed upon the award would also automatically fall to the ground. In support of his contention learned Counsel for the appellants has drawn our attention to a number of decisions first of which is in the case of Chhabha Lal v. Kallu Lal, AIR 1946 PC 72. In that case their Lordships of the Judicial Committee laid down that R. 7 of O. 32 of the Code of Civil Procedure is imperative and its terms must be strictly complied with. It is true that the decision makes it clear that where the guardian signs the agreement without qualification, that is, without specifying whether he is acting in his own capacity or as, guardian-ad-litem of that minors he must have taken to have signed in all capacities in which his signature is required. In the present case, it is conceded by learned counsel that Kadamlal had not only signed for himself but also stated that he was doing so as guardian of the minors. It has, however, been laid down further in that decision that where there was no formal application by the guardian-ad-litem for the leave of the Court for entering into the agreement for reference to arbitration, nor was any such leave formally given, or expressly recorded in the proceedings, the reference itself would be hit as bad in law. It was held that the policy of the law in regard to O. 32 R. 7, Code of Civil Procedure, was that the Judge making the reference must realise that he is dealing with the guardian-ad-litem of the minors and that leave of the Court must be expressly recorded in the proceedings, so that it may become clear that the Judge has satisfied himself that the reference is for the benefit of the minors concerned.
3. It may be stated that Mr. De appearing for the respondent has not challenged the position, except to this extent that the observation of Privy Council that where the award has been given by the arbitrators without the reference having been made in full compliance with 0., 32 R. 7 of the Code of Civil Procedure, the award is not a nullity, as was laid down in that case, but that it is merely an irregularity. In fairness to Mr. Jha for the appellants it must be stated that he has not pressed that part of the observation of their Lordships of the Judicial Committee, which appears to have been slightly modified in the judgment of their Lordships of the Supreme Court in Bishundeo Narain v. Seogeni Rai, AIR 1951 SC 280 and Kaushalya Devi v. Baijnath Sayal, AIR 1961 SC 790. According to these two decisions, failure to comply with the formalities of O. 32 R. 7 of the Code of Civil Procedure does not render the award itself a nullity but only makes it voidable as against the minors concerned so that the minors should be at liberty to challenge the award in an appropriate proceeding.
4. The next point raised by Mr. Jha in support of the appeal is that the question whether failure to comply with the formalities of O. 32 R. 7 of the Code of Civil Procedure has rendered the award a nullity or made it merely voidable is irrelevant in the context of the present appeals inasmuch as these appeals have been preferred by the minors as well.
5. Mr. B.C De has drawn our attention to a ??? of the Division Bench of this Court in Kedar Nath v. Basant Lal, AIR 1939 Pat 278. That case also lays down that where a minor is a party to the litigation, no effective reference to arbitration can be made by the parties, unless the next friend or the guardian-ad-litem first obtains leave of the Court to agree to any such reference, permission in general terms by the Court that the matter may be referred to arbitration is not sufficient. The Court must first be asked by the guardian of the minor for leave to permit him to agree to the reference to the arbitration and the Court must specifically record its reasons for giving or refusing such permission. It is only after obtaining the leave of the Court that the guardian can agree to a reference to the arbitration. That is clearly laid down under O. 32 R. 7 of the Code of Civil Procedure, which also provides that the minor concerned can avoid the award or decree if there is no compliance with the requirements of this Rule. Mr. De, however, has laid stress upon the fact that the Judgment also proceeds to lay down that the minor alone can avoid the award or decree but the other parties to the reference cannot do so. This decision also, however, is of no assistance to learned counsel inasmuch as, as I have said above, this appeal has been preferred on behalf of defendants 6 and 7, who are minors and, therefore, the principle of this decision does not stand in their way.
6. To get over this difficulty, Mr. De has urged that in any case attempt to avoid the award by the minors should have been made in the court of the Subordinate Judge, inasmuch as Article 158 of the Indian Limitation Act provides a period of thirty days for application by a party to an arbitration proceeding from the date of service of the notice of filing of the award for setting it aside or getting it remitted for reconsideration, and in no other circumstances can the award be set aside. In my opinion, however, the point raised cannot be accepted as valid. The power of the court of appeal in the matter of dealing with the objections to an award is coextensive with the power of the original court and it can exercise that power in the same manner as the court which makes the reference to arbitration. Mr. De has further urged that this must be subject to the period of limitation laid down under Article 158 of the Limitation Act.
7. In my opinion, howler, Article 158 applies to a case where an award is to be avoided on grounds other than those contemplated under O. 32 R. 7, Code of Civil Procedure, for example, if the award is to be avoided for misconduct of the arbitrator, or failure to observe the rule of natural justice in recording the award without bearing the parties to the proceedings or exceeding the terms of reference etc. In that case Article 158 would be invoked. Where, however, Order 32 R. 7 of the Code of Civil Procedure itself lays down that when a reference is made without fulfilling the requirements of this rule of law it does not bind the minor and he can avoid it, the position is entirely different. It is in the very foundation of that rule that there is no award whatsoever so far as the minor is concerned if this rule is not strictly complied with. Article 158 contemplates an award which is within jurisdiction and which would be binding upon the parties to the arbitration proceeding unless it is avoided in accordance with the provisions of the said Article. The same cannot be said of an award in so far as it affects the interest of the minor where it is given on a reference of which the minor is not a party. In that view of the matter, Article 158 does not stand in the way of the appellants.
8. Apart from that, since the suit has not come to an end but it is continuing in the form of an appeal to a higher Tribunal, as in the present case, minor's right to challenge it in terms of O. 32 R. 7 of the Code of Civil Procedure continues in the same manner as it would do before the original court itself free from the limitation of time imposed upon a party under Article 158 of the Limitation Act. This view was adopted by this Court in Gopal Choudhary v. Mt. Sundari, AIR 1955 Pat 277. The following observation covers the point completely:
“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 base of Deo Narayan Singh v. Siabar Singh, AIR 1952 Pat 461”.
9. The contention of Mr. De, therefore, must be overruled so far his objection on the ground of limitation is concerned.
10. In the result, First Appeal No. 56 of 1960 succeeds, the decree passed by the Court below is set aside and the suit must now proceed in the ordinary course. Attention of the learned Subordinate Judge is drawn to the fact that the suit has remained pending for a long time and as such it must be disposed of as expeditiously as possible.
11. So far as Miscellaneous Appeal No. 53 of 1960 is concerned, as I have already stated, it is directed against the award filed by the arbitrators leading to the passing of the decree, the subject matter of the First Appeal to this Court. Since the decree itself, upon which it is based, falls to the ground, this appeal also will have to be allowed. Even as it is, however, the award cannot be sustained because it purports to affect the interest of the minors, who were not parties to this. On this ground also this appeal must be allowed. The award is set aside. So far as cost is concerned, in the circumstances of the case the parties will bear their own costs.
A.B.N Sinha, J.:— I agree.
DH/CWM/D.V.C
12. Order accordingly.
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