Changalroya Chetti And Ors. v. Raghava Ramanuja Doss And Ors.

1. The defendants 1 to 3 and 5 to 8 are the appellants The defendants 1 to 3 alone and the plaintiff agreed to abide by the decision of the District Munsif passed as an arbitrator. The defendants 4 and 5 who are majors and who are interested in the litigation remained ex-parte as also the guardian of the minor defendants 9 and 10. The defendants 6 to 8 are minors represented by their guardians, defendants 1 and 2. So far as the defendants 6 to 8 are concerned, it might be taken (though the defendants 1 to 3 do not expressly say so in the statement given to the District Munsif) that their guardians the defendants 1 and 2 agreed to abide by the District Munsif's decision on behalf of these minors also.

2. The District Munsif as such arbitrator dismissed the plaintiff's suit on a mere inspection of the disputed house sites without referring to the evidence of the plaintiff's witness already examined and apparently without allowing an opportunity to the plaintiff to prove his case further against the ex-parte defendants 4, 5, 9 and 10.

3. On appeal by the plaintiff, the Subordinate Judge set aside the District Munsif's decision on the following grounds:

1. There was no valid reference to arbitration under schedule 2 paragraph 1 to the Civil Procedure Code as the defendants 4 to 10 did not join in the reference.

2. The judgment of the District Munsif (which was also the award), was passed on the date of the award itself, without giving to the plaintiff 10 days' time to apply to set aside the award under schedule 2, paragraph 16(1).

3. The reference to arbitration on behalf of the minors (the defendants 6 to 8) not having been made with sanction of the court, the reference was invalid under Order 32 Rule 7.

4. The Subordinate Judge accordingly remanded the suit to the District Munsif for fresh disposal according to law. In this appeal against the Subordinate Judge's order of remand, it was contended as follows:

3rd ground: The decision of the District Munsif was in the nature of an award and no appeal lay.

5th ground: The lower Court erred in assuming that the provision in paragraph 1 of the 2nd schedule to the Civil Procedure Code would in terms apply to this case.

7th ground: No appeal would lie from the decree passed on an award even if it is illegal (evidently, schedule 2 paragraph 16, clause is relied on in this ground).

5. Two other points not clearly raised in the grounds of appeal were also argued, namely, (1) that the defendants 6 to 8 (though their guardians did not expressly state that they gave their consent on the minors' behalf) were bound by the consent given by their guardians, (2) that in any event, the decision was voidable by the minors under Order 32 Rule 7(2) and not at the instance of the plaintiff (who appealed to the Sub-Court).

6. I think that a consent given by the parties to abide by the decision of a Court is not such a reference to arbitration as is contemplated by the provisions of Schedule 11 to the Civil procedure Code,

7. In In re Nimmagadda Peda Naganna (1914) 26 I.C 355 I made the following observations :

"An agreement not to appeal is binding on the parties, the consideration being their mutual consent to refer the matter in dispute to the court as an arbitrator."

The application to the court itself to act as arbitrator is not an application coming under the Civil Procedure Code, Schedule II, paragraphs 1 and 2, which paragraphs clearly contemplate the passing of an order of reference under Schedule II paragraph 3, the fixing of a time by the court in that order for the making of the award by the arbitrator (other than the court) and the court's not, acting further in the matter till the time expires. They all clearly contemplate a reference to a third person or third persons (other than the court) as arbitrator or arbitrators.

8. When an award is made by the court itself acting as arbitrator, there is no separate judgment to be passed as distinguished from the award itself. As said in Nidamarthi Mukkanthi v. Thammania Ramayya (1902) I.L.R. 26 M. 76 at 77 the decision of the court "must be looked on as an award." The Code nowhere contemplates that when the Court itself is the arbitrator, it must give first a separate award, then wait for objections to the award made by itself, hear such objections as a court to its own award as arbitrator and lastly pronounce judgment on the award if it does not set it aside. The provisions of the Civil Procedure Code, which are naturally applicable and were clearly intended by the legislature to apply only to awards made by an arbitrator other than the court and which are clearly inapplicable and would be almost grotesque when applied, to an award made by the court itself acting as an arbitrator, cannot be invoked in the latter class of awards." I adhere to my above view and hold that where the court itself acts as an arbitrator on a question of fact, the reason why an appeal does not lie is not because the provisions of Schedule II, Civil Procedure Code, (including the provisions in paragraph 16, Clause 2, which forbids an appeal in certain cases) apply to the award made by the court but because on general principles of jurisprudence, a party cannot go back on his consent to abide by the decision of an arbitrator after the award is given just as he cannot resile from the obligations arising from an executed contract. I am aware that in Nidamarthi Mukanthi v. Thammana Ramayya (1902) I.L.R. 26 M. 76 (Bhashyam Aiyangar and Moore JJ.) the award by the Court is treated on the footing of an award under Chapter 37 of the old Civil Procedure Code corresponding to the present Schedule II and that Sections 521 and 522 corresponding to paragraphs 15 and 16 of the new Code are referred to in the. short judgment delivered by the learned judges, While the decision itself is, if I may say so with respect, correct, I venture to doubt if the reason based on the assumed applicability of Sections 521 and 522 can be supported. In Sayad Zain v. Kallabhai (1899) I.L.R. 23 B. 752 the learned judges say at page 755 " Here the parties agreed that they would abide by the decision of the Subordinate Judge. The fact that the express provisions of Chapter 38 of the Civil Procedure Code were knowingly disregarded, shows that the proceedings were extra cursum curiae and thus the judgment of the Subordinate Judge was in the nature of an. arbitrator's award against which an appeal cannot be entertained, if the competency of the appellate court is objected to by the party holding the judgment. (See Burges v. Morton (1896) A.C. 136)." The learned Judges in this case clearly held that it is not by reason of the provisions of . Chapter 38 that the appeal does not lie but, on general principles of jurisprudence. Turning to Burges v. Morton (1896) A.C. 136 Lord Halsbury says at page 138: " My lords, it has been held in this House that where with the acquiescence of both parties, a Judge departs from the ordinary course of procedure and, as in this case, decides upon a question of fact, it is incompetent for the parties afterwards to assume that they have then an alternative mode of proceeding and to treat the matter as if it had been heard in due course. They are precluded from treating the matter as subject to appeal. The Court of Appeal had no jurisdiction to entertain the question." As Lord Westbury put it in Bickett v. Morris (1866) L.R. 1 H.L. Sc. 47 the decisions in these cases proceeded upon the personal incompetency of the parlies to raise an objection to the correctness of the court's award as arbitrator by way of an appeal and not on any statutory or other provision.

9. The reasons therefore given by the learned Subordinate judge and the contentions of the appellants' vakil based on the provisions of Schedule II cannot in my opinion be supported.

10. I might however, state that assuming that the provisions of Schedule II do apply to a submission to the court, the decision in Najmuddin Ahmad v. Albert Puech (1907) I.L.R. 29 A. 584 lays down that the judgment on an award if the judgment is pronounced in contravention of the provisions of schedule II, paragraph 16 (1), does not fall under paragraph 16 (2) and hence there is no prohibition of an appeal from such a judgment.

11. The Privy Council decision in Ghulam Khan v. Mahomed Hussain (1901) I.L.R. 29 C. 167 (P.C.) does not affect this particular question. There the provisions of the first three paragraphs of Section 522 corresponding to Schedule II, paragraph 16 Clause 1 had been complied with and so the judgment given was a judgment according to those provisions and hence the fourth paragraph of Section 522 corresponding to Schedule 11 paragraph 16 Clause 2 did apply and their Lordships of the Privy Council therefore held that no appeal lay.

12. In the present case, the judgment on the award was pronounced without allowing any opportunity for an application to be made to set it aside and hence without hearing and deciding any objection. The decision in Najmuddain Ahmad v. Albert Puech (1907) I.L.R. 29 A. 584 directly applies assuming for agrument's sake (as I said before) that Schedule II applies to the award made by a Court acting out of its ordinary procedure.

13. So far as the defendants 6 to 8 are concerned I am inclined to agree with the appellant's learned vakil that their guardians (the defendants 1 and 2) did evidently intend to refer a question of fact to the arbitration of the District Munsif on behalf of the said minors also and the Subordinate Judge's opinion that the award is invalid owing to the minor defendants 6 to 8 not having joined, cannot therefore be supported. But he rightly relied on the fact that the defendants 4, 5 9 and 10 did not join in the reference. A perusal of the plaint clearly indicates that the defendants 4, 5, 9 and 10 were as much interested in the suit as the other defendants and hence the decision in Vythianatha Aiyar v. Vaithialinga Mudaliar (1915) M.W.N. 847 (assuming it to have been rightly decided) has no application as it was assumed in that case that the ex-parte defendants were not interested in the suit.

14. In the result, I am inclined to hold that if the District Munsif acted properly in accepting the position of an arbitrator under the circumstances of this case, his judgment which is in the nature of an award as between the plaintiff and the defendants 1 to 3 and 6 to 8 is binding on these parties as between themselves just as a lawful contract is binding on the parties thereto. But the suit as between the plaintiff and the defendants 4, 5, 9 and 10 could not be decided by the District Munsif as an arbitrator and he ought to have given a decision in the suit so far as they were concerned on the materials placed before him as a court. He, however, dismissed the plaintiffs' suit against the defendants 4, 5, 9 and 10 also, merely on the impression he formed at his local inspection and on no legal evidence and without pronouncing on the evidence already adduced before him as a court and without giving an opportunity to the plaintiff to proceed with the trial against those defendants.

15. It is true that those defendants have not been prejudiced and did not appeal to the Subordinate Judge, the plaintiff who consented to abide by the court's decision as an arbitrator having been the appellant. But the Subordinate Judge was entitled to consider on appeal the illegality of the District Munsif's judgment against the plaintiff in favour of the defendants 4, 5, 9 and 10 and to set it aside. It might be said that he should then have set the Munsif's decree aside only so far as it dismissed the plaintiff's suit against the defendants 1 to 3 and 6 to 8. But it would be a wholly inconvenient and anomalous thing that where several defendants have got the same interest, the plaintiff's suit should be dismissed in respect of some defendants and decreed against others. The two decrees would be inconsistent and unworkable. It is, on this ground, that Schedule II paragraph 1 rightly insists that a reference to arbitration even when made to an arbitrator who is not a court should be by " all the parties interested ". (The former Code Section 506 was even more stringent and in its literal sense insisted on all parties whether interested or not, joining in the reference). Though, as I said already, paragraph 1 of the Schedule II does not apply to a case where a court departing from its function of deciding in the ordinary way is asked to decide a question of fact extra cur sum curiae at the request of parties, the court should follow the rule laid down in Schedule II paragraph 1(1) and refuse to act as an arbitrator unless all the parties interested agree. In this particular case, the District Munsif acted with material irregularity and illegally in consenting to decide the suit as arbitrator even as between the defendants 1 to 8 and 6 to 8 on the one hand and the plaintiffs on the other hand, as the defendants 4, 5,9 and 10 who were interested in the dispute in the same way as the other defendants did not join and as his decision as an arbitrator, would not bind the plaintiff so far as his claim was made against the defendants 4, 5, 9 and 10 and the futility of his decision as an arbitrator when some of the parties did not join was apparent.

16. Though the Subordinate Judge did not base his order setting aside the dismissal of the suit against the defendants 1 to 3 and C to 8 also on the above ground 1 think that we might support it on that ground, namely, that the District Munsif acted illegally in accepting the position of an arbitrator when all the parties interested did not join in consenting to his acting as such. I might add that the District Munsif seems to have, when writing his judgment, forgotten altogether that there were other parties in the suit besides those who consented to abide by his decision on inspection (see paragraph 4 of his judgment).

17. Finally, even if no appeal lay against the District Munsif's judgment (in the nature of an award) because Schedule II Civil Procedure Code applies to such an award because it had not been set aside by an application under schedule If paragraph 16 and because paragragh 16(2) also applied, I should be prepared in revision to set aside the District Munsif's decision : See Velu Pillai v. Appasami Pandaram (1910) 21 M.L.J. 444 : (1911) 1 M.W.N. 141 and Baikunta Nath Goswami v. Sita Nath Goswami (1911) I.L.R. 38 C. 421 as affected with illegalities and irregulari ties and I would pass a decision in the same terms as those of the Subordinate Judge,

18. In the result, the appeal is dismissed, but as the plaintiff's own conduct led to the illegal decision of the District Munsif, I would make no order as to costs.

Spencer, J.

19. I agree. In Nidamarthi Mukkanti v. Thamanna Ramayya (1902) I.L.R. 26 M. 76 Say ad Zani v. Kalabai (1899) I.L.R 23 B. 752 and Baikunta Nath Goswami v. Sita Nath Goswami (1911) I.L.R. 38 C. 421 which are all cases of Munsifs or Judges arbitrating between the parties in suits over which they had jurisdiction, it is stated that their decision in each case "must be looked on as an award" or "was in the nature of an arbitrator's award". In the last named case Chitty, j., goes so far as to say it was an award, and in this and the Madras case allusions are made to the sections of the old Code which provide for references to arbitration. But I agree with my learned brother that parties who give their consent to the court itself acting as an arbitrator are debarred from afterwards questioning the court's decision, not by reason of the procedure prescribed in the Code but because they are bound by their agreement.

20. In this case even if the District Munsifs decision is treated as falling under the rules laid down in Schedule II of the Civil Procedure Code, an appeal lies on the authority of Najmuddin Ahmad v. Albert Puech (1907) I.L.R. 29 A. 584 on account of that court's failure to allow time for objections before passing its decree.

21. I feel some hesitation in assuming, as was done in Ishar Has v. Keshab Deo (1910) I.L.R. 32 A. 657 and Vaithinatha Aiyar v. Vaithialinga Mudaliar (1915) M.W.N. 847 that all parties, who remain ex-parte at the trial of a suit, even if they are minors or persons whose presence is necessary to enable the court to adjudicate effectually and completely on the issues, are not "parties interested " within the meaning of paragraph 1 of Schedule II, Civil Procedure Code.

22. I think that the plaintiff was entitled and bound to prove his claim against those parties, who did not join in the agreement to have the suit decided in a particular manner, and I hold that even if no appeal lay to the Sub-Court against the District Munsifs decision we should not interfere with an order which we should ourselves have passed if the matter had come up to this court on revision, especially when it is one that as it stands, does substantial justice between the parties.

23. The Civil Miscellaneous appeal should therefore be dismissed on the terms proposed.