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Structured Summary of the Opinion (Rule under Section 115, Civil Procedure Code)

Factual and Procedural Background

This Rule challenges the judgment and decree passed by the Munsif of Uluberia on 30th November 1922, which was rendered in accordance with an award filed in the suit. The proceedings arose from a reference to arbitration made in the course of the suit. The Court had fixed 10th November 1922 as the date for filing the award. On that date the award had not been filed and the Court made an order (recorded as passed on 23rd October) indicating that "The arbitrators have not submitted their award. Issue Takid at once fixing the 10th November for hearing." The award was subsequently filed on 4th November 1922.

The petitioner advanced two principal objections to the decree made in conformity with the award:

  • That the award was filed after the time fixed by the Court and therefore the Munsif lacked jurisdiction to pass the decree in accordance with an award filed out of time; and
  • That the agreement to refer the matter to arbitration had been entered into on behalf of a minor plaintiff by his mother without the sanction of the Court (challenging compliance with Order 32, Rule 7), and therefore the award was invalid.

A further objection contested the scope of the arbitrators' determination: the reference issue was said to be limited to whether a particular kobala was genuine, but the arbitrators went further and made findings as to execution and partial failure of consideration concerning a kobala executed by the deceased Khoda Bux.

The High Court considered a preliminary jurisdictional objection as to whether a petition in revision under Section 115 lies against a decree passed in accordance with an award filed under Schedule II to the Civil Procedure Code.

Legal Issues Presented

  1. Whether this Court can entertain a Rule under Section 115, Civil Procedure Code, to challenge a judgment and decree passed in accordance with an award filed in the suit (i.e., limits on revisional interference with decrees made under awards).
  2. Whether the decree is invalid because the award was filed after the time fixed by the Court (i.e., whether the Court's order operated to extend the time for filing the award and whether the award was therefore in time).
  3. Whether the agreement to refer the matter to arbitration (when one party was a minor represented by a guardian) required prior sanction of the Court under Order 32, Rule 7, and, if not sanctioned, whether that defect destroyed the arbitrators' jurisdiction and rendered the award void.
  4. Whether the arbitrators exceeded their jurisdiction by going beyond the specific question referred (i.e., whether they went beyond determining genuineness of the kobala and thereby acted with material irregularity or without jurisdiction).

Arguments of the Parties

Applicant / Petitioner

  • Contended that no petition in revision lies against a judgment and decree passed in accordance with an award filed under Schedule II; reliance was placed on Ghulam Khan v. Mahomed Hassan [1902] 29 Cal. 167 to show that revisional interference is barred or severely limited.
  • Argued that the award was filed after the time fixed by the Court for filing the award, so the Munsif had no jurisdiction to pass a decree under an out-of-time award.
  • Maintained that the agreement to refer to arbitration was entered into on behalf of a minor by his mother without sanction of the Court under Order 32, Rule 7, and therefore the award was invalid; reliance was placed on the Madras decision (Devluru / Davaluru Ramayya v. Venkata Subba Rao (1916) 39 Mad. 853).
  • Asserted that the arbitrators exceeded their reference by making findings beyond the question of genuineness of the kobala (finding execution by Khoda Bux, partial failure of consideration, and circumstances rendering it liable to be set aside), and that the lower Court erred in overruling this objection.

Opposite Party / Respondent

The opinion does not contain a detailed account of the opposite party's legal arguments in response to the petitioner's contentions.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ghulam Khan v. Mahomed Hassan [1902] 29 Cal. 167 Observation that generally no appeal lies from a decree passed in accordance with an award; caution against destroying finality of arbitration by revision. The Court regarded the observations of the Judicial Committee as covering the present case and treated the submission based on that case as having great force; used to justify restraint in entertaining revision under Section 115 except where jurisdiction was exceeded or there was material irregularity.
Digambari Bewa v. Joy Narain Das (1912) 16 C.L.J. 573 Authority on whether an adjournment or order of the Court operates as an extension of time for filing an award (argument that mere adjournment is not necessarily an extension). On close examination the case was treated as supporting the proposition that an order like the present may be taken as an order extending the time for filing the award; used to conclude the award was filed in time.
Devluru (Davaluru) Vijaya Ramayya v. Venkat (Venkata) Subba Rao (1916) 39 Mad. 853 Madras High Court view that an agreement to refer to arbitration requires the sanction of the Court under Order 32, Rule 7. The Court noted reliance on this Madras decision by the petitioner but did not accept its view as authoritative for the present case; the decision was distinguished on the facts and procedure adopted in that case.
Lutawan v. Lachiya (1914) 36 All. 69 Allahabad High Court holding that an agreement to refer to arbitration is not the type of agreement contemplated by Order 32, Rule 7 (i.e., that lack of a petition under that Rule does not necessarily invalidate an order of reference made by the Court). Relied upon by the Court to support the proposition that, where the reference is by order of the Court, arbitrators possess jurisdiction to proceed and complete the arbitration notwithstanding that a petition under Order 32, Rule 7 was not preferred.
Annada Krishna Dey v. Jogendra Nath Dey (1908) 8 C.L.J. 294 Approval by Maclean, C.J., of the Allahabad view regarding Order 32, Rule 7 and agreements to refer. Cited to reinforce the Court's acceptance of the Allahabad position and to support the conclusion that lack of a petition under Order 32, Rule 7 did not ipso facto oust arbitrators of jurisdiction where the Court had itself ordered the reference.

Court's Reasoning and Analysis

The Court proceeded in a structured manner, addressing jurisdictional and substantive objections in turn and considering relevant authorities cited by the parties.

  1. Preliminary jurisdiction (Section 115): The Court acknowledged the strong preliminary objection that interference under Section 115 with a decree passed in accordance with an award may be inappropriate, citing the Judicial Committee's observations in Ghulam Khan v. Mahomed Hassan. However, it refused to adopt a rigid, universal rule barring all revision: the Court accepted that Section 115 may be invoked where arbitrators or the Court have exceeded jurisdiction or there has been material irregularity in the proceedings. Nonetheless, the Court found the present case to fall within the restraint indicated by the Judicial Committee.
  2. Whether the award was filed in time: The Court examined the order made when the award had not been submitted and noted that the officer who passed the order intended to extend the time for filing the award to 10th November (although not stated expressly). The Court considered the authority of Digambari Bewa v. Joy Narain Das and interpreted it as permitting the present order to be treated as an extension. Because the award was filed on 4th November 1922, the Court concluded it was filed within the intended extension and therefore not invalid for being out of time.
  3. Whether Order 32, Rule 7 vitiated the reference where a minor was represented without a petition under that Rule: The Court analysed the effect of an order of reference made by the Court (as opposed to a private agreement between parties). It relied on the distinction drawn by Lord Macnaghten in Ghulam Khan between three kinds of arbitration (ordered by the Court; party agreement seeking Court sanction; private agreement without Court). For references ordered by the Court (Head I), the Court observed that preliminary irregularities in the agreement to refer cannot thereafter be attacked to deny jurisdiction to proceed, because the actual reference is the Court's order. The Court cited Lutawan v. Lachiya and Annada Krishna Dey in support of the proposition that where the Court, in its discretion, made an order of reference, the arbitrators possessed jurisdiction to proceed and complete the arbitration even if no petition under Order 32, Rule 7 had been preferred. The Court declined to follow the contrary Madras view for the present procedural posture, and further noted that the Madras case had involved a separate suit by the minor rather than revision under Section 115.
  4. Whether arbitrators exceeded their reference (kobala issue): The Court considered the objection that the arbitrators exceeded their remit by going beyond determining genuineness of the kobala. The lower Court had overruled this objection, and the High Court found no justification to conclude that the lower Court acted without jurisdiction or with material irregularity. The High Court therefore found no sufficient ground for interference under Section 115 on this point.
  5. Conclusion on relief: Applying these reasoned steps, the Court held that even if an error was made in overruling the Order 32, Rule 7 objection, it did not amount to such an irregular exercise of jurisdiction or error of law as would justify interference under Section 115. Similarly, the award was not out of time. Hence the proceedings seeking to set aside the award by revisional Rule were found to be misconceived.

Holding and Implications

Holding: The Court's final disposition was to DISCHARGE THE RULE (i.e., the application under Section 115 was dismissed).

Consequences and immediate effects:

  • The decree passed by the Munsif in accordance with the award is not set aside and stands.
  • The Court assessed costs against the petitioner and fixed the hearing fee at two gold mohurs.
  • The Court declined to lay down a general rule that Section 115 can never be used to review decrees made under awards; rather, it confirmed that interference under Section 115 remains available in cases of excess of jurisdiction or material irregularity, but that no such grounds were made out here.

The opinion did not purport to establish any sweeping new principle; it applied existing authorities and principles (including the Judicial Committee's observations in Ghulam Khan and decisions such as Lutawan v. Lachiya and Annada Krishna Dey) to the facts and procedural posture of the case and refused relief on that basis.

    Debir-Ud-Din v. Amina Bibi

    1. This Rule is directed against the judgment and decree passed by the Munsif of Uluberia on the 30th November, 1922, according to the award filed in the suit. Two substantial objections are taken to the decree passed by the lower Court. First, that the Munsif had no jurisdiction to pass a decree in accordance with an award filed after the time fixed by the Court for the filing of it, and, secondly, that the agreement to refer the matter to arbitration was entered into on behalf of a minor plaintiff by his mother without the sanction of the Court. The award, therefore, is not valid in law and should not be enforced.

    2. A preliminary objection has been taken to the effect that no petition in revision lies against a judgment and decree passed in accordance with an award filed in the suit following the arbitration proceedings under Schedule II to the Civil Procedure Code; and in support of this submission reference has been made to the case of Ghulam Khan v. Mahomed Hassan [1902] 29 Cal. 167. There is a great deal of force in the objection, but at the same time, I am not prepared to lay down as a general rule that in no case in which an award has been filed and decree passed in accordance therewith can this Court interfere under Section 115, Civil Procedure Code. It is conceivable that there may be cases in which the arbitrators or the Court may have exceeded their jurisdiction or acted with material irregularity in the conduct of the proceedings. But I am of opinion that the present case is covered by the observations of their Lordships of the Judicial Committee in the case referred to.

    3. With regard to the first ground of the objection, it appears that the matter was referred to the arbitration of certain persons and the 10th November 1922 was fixed for the filing of the award. On that date, the award not having been filed the Court passed the following order. The arbitrators have not submitted their award. Issue Takid at once fixing the 10th November for hearing. The officer who had passed that order was the same officer who passed the decree; and he says that his intention in passing that order was to extend the time to the 10th November for the filing of the award, though he had not said so in so many words. Stress is laid upon the case of Digambari Bewa v. Joy Narain Das (1912) 16 C.L.J. 573, and it is contended on the authority of that case that, unless the Court expressly extends the time to file an award, the mere adjournment of the case to a future date cannot be taken to have extended the time. On a close examination of the case it, however, appears that it is an authority for the proposition that an order like the present may be taken as an order for extending the time for filing the award. In that case the final order was for the disposal of the case on the evidence to be produced by the parties before the Court on the adjourned date. The learned Judges held that would not be an extension of time for filing the award. In my opinion, by the order passed by the learned Munsif on 23rd October, the Court intended to extend the period for the filing of the award to the 10th November. The award was filed on the 4th November 1922. It thus appears that the award was filed in time and is not invalid on the ground that it was filed out of time.

    4. The second objection is based on Order 32, Rule 7, and it is said that the agreement to refer the matter to arbitration is an agreement which requires the sanction of the Court; and reliance is placed upon the decision of the Madras High Court in Devluru Vijaya Ramayya v. Venkat Subba Rao (1916) 39 Mad. 853. The Allahabad High Court has taken a different view and it has laid down authoritatively that an agreement to refer to arbitration is not such an agreement as is contemplated by Order 32, Rule 7. See the case of Lutawan v. Lachiya (1914) 36 All. 69. There is no direct authority on the point in this Court but the Allahabad view was approved by Maclean, C.J., in the case of Annada Krishna Dey v. Jogendra Nath Dey (1908) 8 C.L.J. 294. Personally speaking, I think that the decision of the Allahabad High Court is correct. But it is not necessary to pursue the matter further because, in the view I take of the powers of this Court to interfere under Section 115, Civil Procedure Code, this application is incompetent. A similar objection on the ground of the agreement not having been entered on behalf of a minor with the sanction of the Court was taken in the case before the Judicial Committee, namely, the case of Ghulam Khan v. Mohammed Hassan [1902] 29 Cal. 167. Their Lordships, without dealing specifically with this objection, remarked that no appeal lies from a decree passed in accordance with the award and that a petition in revision under section 622 of the old code will be more objectionable as it will destroy finality of arbitration proceedings. Assuming that the lower Court has committed an error of law in overruling the objection that the agreement was not validly entered into by the minor plaintiff, I do not think that it has committed any such irregular exercise of jurisdiction as would justify us in interfering with the decree passed. I may observe in passing that the case on which great reliance was placed by the petitioner, namely, the Full Bench decision of the Madras High Court above alluded to, was a case in which a separate suit was filed by the minor on the ground that he was not bound by the award or the decree based thereon as be was not a party to the agreement and the decree was not challenged in revision.

    5. One other ground is taken, namely, that the question referred to the arbitrator for determination was whether the kobala which was sought to be set aside was genuine or not; but the arbitrators have gone further than that and found that the kobala was executed by the deceased Khoda Bux but that there was a partial failure of consideration and was executed by the deceased under circumstances as would render it liable to be set aside. The Court below has overruled that objection and has not acted without jurisdiction or illegally or with material irregularity in determining that question. I do not think that a strong case has been made out for our interference under Section 115, Civil Procedure Code. The Rule is, therefore, discharged with costs. We assess the hearing fee at two gold mohurs.

    Page, J.

    6. I am of the same opinion. This is an application for a Rule under Section 115, Civil Procedure Code, calling upon the opposite party to show cause why a certain award should not be set aside. Two contentions have been urged by the applicant in support of the Rule. The first, is that the arbitrators had no jurisdiction in the matter because the award was made after the time had passed within which the arbitrators were bound to make their award. But the Court has found

    " that the time were duly extended by the Court and within such extension of time the award was made."
    There is no substance in the first contention.

    7. The second contention is this. It is urged that the award was made on a reference ordered by the Court, but that one of the parties thereto was a minor represented by a guardian and that the provisions of Order 32, Rule 7 had not been complied with and, therefore, that the whole basis of the arbitrator's jurisdiction was destroyed and that the award was not validly made and is null and void. The question, therefore, is whether or not the arbitrators possessed jurisdiction to make the award. Now in considering that question it is necessary to bear in mind that this reference to arbitration was not created merely by agreement between the parties. It was ordered by the Court, and that fact, in my opinion, materially affects the jurisdiction of the arbitrators. This question was for consideration by the Judicial Committee of the Privy Council in the case of Gulam Khan v. Muhammad Hassan [1902] 29 Cal. 167. Lord Macnaghten in giving the judgment of the Board referred to the different forms of arbitration, under three heads. The first head related to occasions where the parties to a litigation desire to refer their differences to arbitration, and an order of reference is made by the Court. The second head relates to occasions where the parties without having recourse to litigation, enter into an agreement to refer their differences to arbitrators to obtain the sanction of the Court to the award that is made; and the third head relates to occasions where the agreement to arbitrate is made by the parties without any reference whatever to the Court. In dealing with arbitrations under Head I, that is to say, arbitrations which are ordered by the Court, Lord Macnaghten makes the following observation:

    " In cases falling under Heads II & III, the provisions relating to cases under Head I are to be observed so far as applicable. But there is this difference which does not seem to have been always kept in view in the Courts in India. In cases falling under Head I the agreement to refer and the application to the Court founded upon it must have the concurrence of all parties concerned and the actual reference is the order of the Court. So that no question can arise as to the regularity of the proceedings up to that point."
    Now what happened in this case was that the parties to the suit agreed that the matter in dispute between them should be referred to arbitration by order of the Court and one of the parties was an infant appearing by a guardian. On the application for an order of reference being made it was open to the Court in its discretion either to grant or to refuse the application. Having regard to the circumstances, the Court in this case in its discretion made an order of reference. The Court had jurisdiction when hearing the application for an order of reference to consider a petition under Order 32, Rule 7; but whether it did so or not, the order of reference will stand, and no question could arise thereafter as to the regularity of the proceedings which were preliminary to the order of reference. Now in my opinion, the effect of the order of reference was that the arbitrators possessed jurisdiction to proceed with and to complete the arbitration notwithstanding the fact that a petition has not been preferred under Order 32, Rule 7. See the case of Lutawan v. Lachiya ( 1914) 36 All. 69. With great respect, I am not prepared to accept the view to the contrary which was expressed by the Madras High Court in the case of Davaluru Ramayya v. Davaluru Venkata Subba Rao ( 1916) 39 Mad. 853. It is to be observed, however, that in that case the form of proceeding adopted was not application to the Court to exercise its jurisdiction under Section 115, but a suit by the minor to set aside the compromise. Whether the minor is entitled to dispute the validity of the award in a suit, I ex-press no opinion, but having regard to the provisions of Section 115, Civil Procedure Code I find myself unable to come to the conclusion that in this case there was any error of law or in respect of jurisdiction committed which calls for the exercise of the jurisdiction which the High Court possesses under the provisions of this section. In these circumstances, I agree that this proceeding is misconceived and that the Rule should be discharged.

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    Comments

    Debir-Ud-Din v. Amina Bibi
    (Jan 9, 1924)