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Prof. Bhagwandas Bhargava v. Durga Prasad Rastogi Non-Petitioner.
Judicial Opinion — Structured Summary
Factual and Procedural Background
Five suits between the same parties were pending in different courts in Jaipur. On 31-7-1959 the parties jointly applied for reference of all disputes in those suits to the arbitration of the same arbitrator; each suit was accordingly referred and a single award was ultimately made covering all five suits.
Prior to the filing of the award the suits were transferred among various courts. The suit of highest valuation (suit No. 16/68) was pending before the District Judge but was transferred to the court of the Additional District Judge No. 2, Jaipur City before the award was filed; the award in the five suits was filed in that court and copies were filed in the other suits.
The present suit was pending in the court of Additional Munsif No. 1, Jaipur City when the award was filed; it was later transferred to the court of the Civil Judge, Jaipur City. The plaintiff applied to the District Judge for transfer of the present suit to the Additional District Judge No. 2 so that objections to the award could be heard by that court. The District Judge transferred the transfer-application to Additional District Judge No. 2.
At the hearing before Additional District Judge No. 2 the defendant (the present applicant in revision) consented to the transfer and the transfer order was passed on that basis. The defendant later filed this revision application contending that he had not in fact consented and also raising objections to the jurisdiction of the Additional District Judge to decide the transfer-application and to hear objections to the award.
Legal Issues Presented
- Whether the transfer of the present suit to the court of Additional District Judge No. 2, Jaipur City was valid where the defendant is alleged to have not consented to the transfer (a factual challenge to consent recorded by the trial court).
- Whether the Additional District Judge was competent to dispose of the transfer application under Section 24 of the Code of Civil Procedure (i.e., whether the Additional District Judge could exercise the District Judge's powers in respect of transfer).
- Whether, in view of Section 31 of the Arbitration Act, the Additional District Judge (in whose court the award was filed in a different suit) had jurisdiction to hear and determine objections to the award arising out of the arbitration reference.
Arguments of the Parties
Defendant's Arguments
- The defendant alleged that he did not consent to the transfer of the present suit to the file of the Additional District Judge No. 2 and that the Additional District Judge's order incorrectly recorded his consent.
- The defendant contended that the Additional District Judge could not properly dispose of the transfer application under Section 24 of the Code of Civil Procedure.
- The defendant further argued that Section 31 of the Arbitration Act gives exclusive jurisdiction to the court in which an award has been filed (or may be filed) and that, on that basis, the Additional District Judge was not competent to dispose of objections to the award in the present matter.
Plaintiff's Arguments
- The plaintiff sought transfer of the suit so that objections to the award could be determined by the Additional District Judge No. 2 (where the principal award had been filed in suit No. 16/68).
- The plaintiff relied on decisions of the Allahabad High Court holding that Section 31 of the Arbitration Act does not prevent the District Judge from transferring a case under Section 24 CPC; those cases support a liberal interpretation that permits valid transfers under Section 24 to vest jurisdiction in the transferee court for handling arbitration-related matters.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Hanuman Mal v. Babu Lal, ILR (1960) 10 Raj 1138 | Observation that the court in which an award was made/filed is primarily the court to decide validity of the award and arbitration proceedings. | The court treated this decision as authority for the proposition that where the initiating court lacked jurisdiction (e.g., pecuniary jurisdiction), subsequent transfer could not confer jurisdiction. The present court distinguished it because in Hanuman Mal the original forum lacked jurisdiction to make the reference; it was not authority for the broader proposition that Section 24 transfers are always barred once a reference/arbitration exists. |
| Nand Kishore v. Moolchandra, AIR 1966 All 613 | Held that Section 31 of the Arbitration Act does not prevent transfer under Section 24 CPC; supports a liberal interpretation that transferred courts may exercise jurisdiction over arbitration proceedings. | Relied upon by the court as supporting authority for the proposition that valid transfers under Section 24 can vest jurisdiction in the transferee court to deal with arbitration matters and objections to awards. |
| Union of India v. Rup Kishore, AIR 1967 All 504 | Same line as Nand Kishore: Section 31 does not preclude District Judge from transferring case under Section 24 CPC so transferee court may deal with arbitration matters. | Adopted by the court as supportive precedent showing practical difficulties of a strict reading of Section 31(4) and endorsing a liberal interpretation that allows Section 24 transfers to operate in arbitration matters. |
| Kumbha Mawji v. Dominion of India, AIR 1953 SC 313 | Principle favouring conferring a single effective court with exclusive jurisdiction over arbitration matters to avoid conflict and "scramble"; cited to explain the object of Section 31. | Quoted and applied (through the reasoning adopted in later Allahabad decisions) to support a liberal interpretation of Section 31(4), i.e., that the expression "that Court" may include a court to which proceedings have been validly transferred under Section 24 CPC. |
Court's Reasoning and Analysis
The court proceeded in a structured manner addressing (a) the factual contention about consent to transfer, (b) the competence of the Additional District Judge to dispose of the transfer-application, and (c) the jurisdiction to hear objections to the award under Section 31 of the Arbitration Act.
Factual finding on consent: The court explicitly found the defendant's allegation that he did not consent to the transfer to be "utterly false" and held that the defendant did, in fact, consent to the transfer at the hearing before Additional District Judge No. 2. The transfer order was therefore valid on the recorded basis of consent.
Competence to dispose transfer-application (Section 24 CPC): The court rejected the contention that the Additional District Judge could not dispose of the transfer-application under Section 24. It relied on Section 10(3) of the Rajasthan Civil Courts Ordinance, 1950 which authorizes an Additional District Judge to discharge any functions of a District Judge assigned to him and to exercise the same powers in the discharge of those functions. Because the District Judge had transferred the application to Additional District Judge No. 2 for disposal, that judge was competent to exercise the District Judge's powers under Section 24 CPC in respect of the transfer-application.
Jurisdiction under Section 31 of the Arbitration Act: The defendant argued that Section 31(2)–(4) vests exclusive jurisdiction in the court where the award was filed, so that no other court could entertain questions regarding validity/effect/existence of the award or applications arising out of the arbitration. The court considered prior authorities. It noted Hanuman Mal where a court that lacked pecuniary jurisdiction had no authority to refer the matter to arbitration and could not confer jurisdiction by transfer — but the court distinguished that decision because its ratio turned on want of original jurisdiction.
The court placed particular reliance on the reasoning in the Allahabad High Court decisions (Nand Kishore and Union of India v. Rup Kishore), which drew on the Supreme Court's observations in Kumbha Mawji. Those authorities recognized the policy objective of Section 31 — to vest effective and exclusive jurisdiction in a single court — but rejected a rigid construction that would render arbitration proceedings unfinishable if the presiding officer ceased to be available or if a court was abolished. Accordingly, a liberal interpretation of Section 31(4) was preferable: "that court" could include a court to which proceedings had been validly transferred under Section 24 CPC.
Applying that reasoning to the facts, and noting the similarity of facts in the cited Allahabad decisions to the present case (i.e., reference made, transfer under Section 24 before/after filing of award, and objections heard by transferee judge), the court concluded that the Additional District Judge No. 2 had jurisdiction to hear and dispose of objections to the award and, if appropriate, to pass decree based on the award.
Holding and Implications
Holding: The revision application is dismissed. The court expressly held that the Additional District Judge No. 2, Jaipur City, had jurisdiction (a) to entertain and dispose of the transfer-application (the defendant had in fact consented), and (b) to hear and determine objections to the arbitration award and, if objections were rejected, to pass a decree on the basis of the award.
Implications:
- Direct effect on the parties: The transfer of the suit to Additional District Judge No. 2 is upheld; the defendant's challenge is rejected; the revision is dismissed and each party is to bear its own costs (as ordered by the court).
- On broader legal effect: The court relied on and followed a line of authority endorsing a liberal interpretation of Section 31(4) of the Arbitration Act so as not to frustrate arbitration proceedings by a strict reading that would block valid transfers under Section 24 CPC. The opinion distinguished Hanuman Mal (which turned on lack of original jurisdiction) and accepted the view that valid transfers under Section 24 can vest jurisdiction in the transferee court to deal with arbitration matters. The court did not state that it was laying down a novel precedent beyond applying the cited authorities to the facts of this case.
Disposition: Revision rejected; parties to bear their own costs.
1. This is a defendant's revision application against, an order of the Additional District Judge No. 2 Jaipur City, dated 1-4-1972, transferring the present suit to his file from the file of Civil Judge Jaipur City, with the consent of the parties.
2. Five suits were pending between the parties in different Courts of Jaipur when they applied to the respective courts on 31-7-1959 for the reference of the disputes in the suits to the arbitration of the same person. All these five suits including the present suit, were referred to arbitration. The present suit was then pending in the Court of Civil Judge. Jaipur City, who made the reference to arbitration. One award was given in all the five suits.
3. Before the award was given by the arbitrator these suits were transferred to other courts. The suit of the highest valuation out of the five suits was suit No. 16/68 which was pending In the court of the District Judge. This suit had been transferred to the court of Additional District Judge No. 2. Jaipur City, before the award was filed and the award was filed in that court. The present suit was pending in the court of Additional Munsif No. 1. Jaipur City when the award was filed. It was later on transferred to the court of Civil Judge. Jaipur City. The plaintiff filed an application to the District Judge for the transfer of this suit to the court of the Additional District Judge No. 2, Jaipur City so that objections against the award may be decided by that court. The original award was filed in suit No. 16 of 1968 which had been transferred to the court of Additional District Judge No. 2, Jaipur City, and copies of it were filed in the other four suits.
4. The transfer application was transferred by the District Judge for disposal to the Additional District Judge No. 2, Jaipur City. When it came up for hearing the defendant consented that the present suit should be transferred to his court and on the basis of that consent the order of transfer was passed.
5. It has been alleged that the defendant did not consent to the transfer and the learned Additional District Judge No. 2, Jaipur City, has made an erroneous statement in his order to that effect. I am satisfied that this allegation is utterly false, and that the defendant did consent to the transfer of the suit to the court of Additional District Judge No. 2. Jaipur City.
6. Another contention which has been raised is that the Additional District Judge could not dispose of the transfer application under Section 24. Civil P. C. This contention too has No. force. Under Section 10(3) of the Rajas-than Civil Courts Ordinance, 1950 any Additional District Judge is competent to discharge any of the functions of a District Judge which the latter may assign to him and in the discharge of those functions he shall exercise the same powers as the District Judge. The District Judge having transferred the transfer application to the Additional District Judge No. 2. the latter was competent to exercise the powers of the District Judge under Section 24, Civil P. C. in respect of it
7. Another contention raised on behalf of the defendant is that the additional District Judge No. 2 Jaipur City is not competent to dispose of the objections against the award in view of Section 31 of the Arbitration Act which runs as follows :--
"31.(1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates.
(2) Notwithstanding anything contained in any other law for the time being in force and save as 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 (3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been made or may be filed, and to no other Court.
(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court."
It is argued that under Sub-section (2) all questions regarding the validity of the award can only be decided by the court in which the award had been filed and by no other court and under Sub-section (4) where in any reference any application under the Arbitration Act has been made in a court competent to entertain it that court alone shall have jurisdiction over the arbitration proceedings.
8. Reliance is placed on the following observations made by a Division Bench of this Court in Hanuman Mal v. Babu Lal, ILR (19601 10 Raj 1138 :--
"Haying regard to these specific provisions, it was mainly and solely for the court of the Civil Judge, Ratangarh, to decide about the validity or otherwise of the award and the arbitration proceedings, including the validity of the reference. No other court had jurisdiction in the matter."
In the above case a suit was filed before the Civil Judge. Ratangarh, who made the reference to arbitration. After the award was filed he held that he had no jurisdiction as the value of the property involved was beyond his pecuniary jurisdiction. He wrote to the District Judge for the transfer of the case and the District Judge thereupon transferred the case to the Civil Judge Churu, who disposed of the suit. It was held that the steps taken by the Civil Judge, Ratangarh, in asking the District Judge to transfer the proceedings to the Civil Judge, Churu and the subsequent order by the District Judge in compliance with that requisition were entirely without jurisdiction and the Civil Judge, Churu had no jurisdiction to deal with, the matter at all.
9. The ratio of decision was that the suit being beyond the pecuniary jurisdiction of the Civil Judge, Ratangarh, he had no jurisdiction to refer the matter to arbitration. Nor could the Districts Judge by passing an order of transfer confer jurisdiction on Civil Judge. Churu where the suit had not been instituted in a court of competent Jurisdiction. The above decision is no authority for the proposition that a suit in which a reference to arbitration has been made cannot be transferred to another court under Section 24. Civil P. C. Learned counsel for the defendant was unable to cite any decision in which it might have been held that in view of the wordings of Section 31 of the Arbitration Act the powers of transfer under Section 24 of the Code of Civil Procedure cannot be exercised in a case in which a reference had been made to arbitration or in which an award had been filed. On the other hand, learned counsel for the plaintiff cited the following two decisions of the Allahabad High Court in which it was held that Section 31 of the Arbitration Act 1940 does not prevent the District Judge from transferring a case under Section 24 of the Civil Procedure Code. Both the decisions are by V. G. Oak, J. (as he then was). One is reported as Nand Kishore v. Moolchandra, AIR 1966 All 613 and the other is Union of India v. Rup Kishore, AIR 1967 All 504. The learned Judge quoted the following observations of the Supreme Court in Kumbha Mawji v. Dominion of India, AIR 1953 SC 313 :--
"the necessity for clothing a single court with effective and exclusive jurisdiction, and to bring about by the combined operation of these three provisions the avoidance, of conflict and scramble is equally essential whether the question arises during the pendency of the arbitration or after the arbitration is completed or before the arbitration is commenced."
and observed.
"That appears to be the idea underlying Section 31 of the Act. Sub-section (4) of Section 31 requires that a single court should deal with arbitration proceedings at different stages. If the strict interpretation suggested by Mr. Sanyal is accepted, serious difficulties would arise in practice. Suppose, an additional court dealing with a case under the Act is abolished; or the Presiding Officer of a certain court becomes personally disqualified on account of bias or some other reason. It would be Impossible to conclude the proceedings under the Act. I do not think that the Legislature intended that Section 31(4) should have such a curious result. Such a result can be avoided by giving a liberal interpretation to Sub-section (4) of Section 31 of the Act. On this liberal interpretation the expression 'that court' would include any court to which proceedings have been validly transferred under the provisions of Section 24, Civil P. C. There is no clear indication either in Section 31 or Section 41 of the Act that Section 24, Civil P. C. should not apply to proceedings under the Act."
10. In the above case the suit was Instituted in the court of Civil Judge who made a reference to arbitration. Before the award was filed the suit was transferred under Section 24. Civil P. C. to the Court of Additional Civil Judge (J. S. C. C.). The award was filed in that court; after the filing of the award it was transferred to another Additional Civil Judge who heard the objections against the award and dismissed it. An objection was taken in the High Court that the court which dismissed the objections against the award had no jurisdiction to do so because of Section 31 of the Act. The facts of the above case are similar to the facts of the present case.
11. I am accordingly of the opinion that the Additional District Judge No. 2, Jaipur City, has jurisdiction to hear and dispose of the objections against the award and if he rejects them, to pass a decree on the basis of the award.
12. The revision application is, therefore, rejected. In the circumstances of the case. I leave the parties to bear their own costs.
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