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Jatindra Nath Bhattacharyya v. Manindra Nath Bhattacharyya And Ors.
Structured Summary of the Provided Legal Opinion
Factual and Procedural Background
The suit concerned possession of a small plot of land of about 15 cottahs between two brothers. The suit was filed on 27 April 1923. On 28 April 1923 the parties filed an application headed "Agreement to refer" which stated disputes between the parties in relation to the land in the suit and other lands, and appointed three pleaders (Babu Mohendra Nath Maiti, Srinath Samanta and Basanta Kumar Sarkar) as arbitrators. The Munsiff made an order on the same day referring the case to those arbitrators "as prayed for by the parties."
The arbitrators made an award in relation to the suit on 28 September 1923 and, on the same day, made a separate award concerning other matters referred to in the 28 April petition that were outside the matters in dispute in the suit. The plaintiff objected to the award; on 8 October 1923 the Munsiff overruled the objections and made a decree in accordance with the award dismissing the suit with costs. The plaintiff appealed, contending that the initial reference to arbitration was illegal because it included matters outside the suit, and therefore the arbitrators lacked jurisdiction to make an award that could support a decree.
Legal Issues Presented
- Whether an application for reference to arbitration filed in a suit that includes matters outside the subject-matter of the suit renders the Court's order of reference illegal and void, thereby depriving the arbitrators of jurisdiction to make an award enforceable by a decree.
- Whether awards made by arbitrators can be dealt with separately when one award relates to matters before the Court (the suit) and another award relates to other disputes between the parties under a separate agreement (Abichalnama).
- Whether this Court has jurisdiction in revisional proceedings to entertain an attack on the jurisdiction of the Court below to make an order of reference (raised in relation to the applicability of Section 115, Civil Procedure Code and Section 107 of the Government of India Act).
Arguments of the Parties
Appellant's Arguments
- The decree made on the basis of the arbitrators' award should be vacated because the reference to arbitration was initially illegal: the parties' application to refer included not only matters in difference in the suit but also various other matters outside the suit, rendering the entire reference void.
- The appellant relied on the observations of Mr. Justice Rankin in the case Ram Protap Chamria v. Durgaprasad Chamria to support the proposition that one arbitration cannot validly cover matters within the Court's jurisdiction and matters without the Court's jurisdiction combined, and contended that where the application to refer included non-suit matters the whole reference must be void.
- The appellant further relied on the Privy Council's treatment of those observations, arguing that the Privy Council's comments did not negate the binding force of Justice Rankin's observations.
The opinion does not contain a detailed account of the defendants' or respondents' separate legal arguments beyond the recordation of the agreement to refer, the subsequent awards, and the fact that the Munsiff and Subordinate Judge upheld the decree based on the award.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Ram Protap Chamria v. Durgaprasad Chamria (observations of Mr. Justice Rankin) | It was observed that one and the same arbitration cannot validly cover matters within the jurisdiction of the Court and matters without the jurisdiction of the Court, between parties to the suit and persons not parties, or be partly under a court order and partly under a private agreement. | The Court treated Justice Rankin's observations as limited to the particular facts of that case (where non-parties were included and awards were intermixed) and held they could not be applied as a broad rule to invalidate a court's reference where the facts differ; the Court distinguished the earlier case on its facts. |
| Ram Protap Chamaria v. Durga Prosad Chamaria (Privy Council on appeal from the same case) | The Privy Council stated it would reserve its opinion on whether there might be exceptions to the comprehensive statement quoted from Justice Rankin. | The Court noted the Privy Council's reservation and used it to support the view that Justice Rankin's statement was not an absolute rule and must be read in light of the facts of the earlier case. |
Court's Reasoning and Analysis
The Court undertook a fact-based analysis, focusing on whether the present case matched the facts of the Chamria cases such that the strong observations of Justice Rankin would apply to render the present reference void.
The Court identified the distinguishing facts in the Chamria decisions: in that earlier matter, the reference included persons who were not parties to the suit and covered matters both in and out of the suit; the arbitrators' award intermingled findings so that the portions relating to the suit could not be segregated from those relating to matters outside the suit, and the conclusions in respect of the suit were "plainly coloured" by views taken on other questions to which the suit had no reference.
By contrast, in the present case the parties (the two brothers) not only filed an application before the Court referring matters in difference in the suit, but also entered into a separate private agreement (described as an Abichalnama) on the same day to refer other disputes to the same arbitrators. The arbitrators made two distinct awards: one under the Court's order dealing with matters in the suit, and another under the separate agreement dealing with other disputes. The second award (on the separate agreement) appears on the record but has not been acted upon in any proceedings below.
The Court reasoned that the mere inclusion of other matters in the parties' application for reference does not of itself vitiate the Court's order of reference if the Court, in fact, limited its referral to the matters in difference in the suit. The Court observed that where the parties separately agreed to refer non-suit matters to arbitrators (by an Abichalnama) and the arbitrators made distinct awards, there is no reason to hold the award relating to the suit to be invalid merely because a separate award on other matters exists.
The Court examined the award and concluded it was possible to treat the awards separately: the award in respect of the suit was not so connected to the other award as to be "plainly coloured" by the arbitrators' views on other questions. The Court cited a passage in the award indicating that the arbitrators had not directed a defendant to fill certain excavations on another piece of land because that matter had been allotted to the defendant in a separate award, and noted that the filling up had no connection with the suit (which concerned one half share of 15 cottahs only).
On the preliminary procedural objection that there was no second appeal or power of revision under Section 115 of the Civil Procedure Code or Section 107 of the Government of India Act, the Court stated it was unnecessary to discuss the point at length but indicated that where the jurisdiction of the Court to make an order of reference is attacked, this Court has the power to revise such an order in revisional jurisdiction and that an application to that effect was before the Court. The Court did not elaborate further because it resolved the appeal on the merits.
Holding and Implications
Appeal dismissed with costs.
Direct effect on the parties: The Court upheld the decree made by the Munsiff dismissing the suit (which was based on the arbitrators' award) and dismissed the plaintiff's appeal, with an order for costs against the appellant.
Implications as stated in the opinion: The Court held that (i) the mere fact that an application for reference mentions other matters outside the suit does not automatically vitiate a Court's order of reference limited to matters in difference in the suit; and (ii) where arbitrators make separate awards — one under a Court order dealing with suit matters and another under a distinct private agreement dealing with other matters — those awards may be treated separately so long as the award relating to the suit is not coloured or dictated by the arbitrators' views on the other questions. The opinion does not purport to lay down a broader or novel precedent beyond these conclusions, and no new legal principle beyond the application to the facts was announced.
No other orders were considered necessary by the Court in relation to the pending application concerning the other award on the record.
1. This appeal arises out of a suit for possession of a small plot of land measuring about 15 cottahs.
2. The litigants are two brothers and after the filing of the suit there was a reference to arbitration. The arbitrators made an award and a decree followed upon that. There was an appeal against that decree on the ground that the reference itself was bad and no decree could follow upon that award. The Subordinate Judge upheld the decree of the. Munsiff. The present appeal is by the plaintiff and his case is that the decree should be vacated on the ground that the reference to arbitrators was initially illegal and therefore the arbitrators had no jurisdiction to make an award.
3. The facts upon which this contention is put forward are these : The case was filed on the 27th April 1923. On the 28th April 1923 an application was filed in Court by the plaintiff and the defendants which was headed as an 'Agreement to refer'. In that document it was stated that there are disputes between the parties in connexion with the laud in the above suit as also other lands and to settle disputes with regard to the said suit as also other matters, we do hereby appoint Babu Mohendra Nath Maiti, Srinath Samanta and Basanta Kumar Sarkar, pleaders.
4. In the second paragraph the defendants undertook not to alter the character of the lands in suit until the settlement of the suit and in the third paragraph it was prayed that orders might be issued upon the arbitrators to settle the present disputes among the plaintiffs and the defendants on the following matters.
5. Then followed several items of disputes. It is unnecessary to state anything further with regard to the provisions of this application just now. Upon that an order was made on the same day by the Munsiff to this effect:
Let the case be referred to the arbitrators Babu Mohendra Nath Maiti, Sriunth Samanta and Basanta Kumar Sarkar as prayed for by the parties.
6. The arbitrators made their award with reference to the suit on the 28th September 1923. On that very day they made another award with regard to matters in dispute, which were referred to in the petition of the 28th of April with regard to matters which were outside the matters in dispute in the suit. That award has not been the subject of any other proceeding in the Court below but it is on the record. Objections were made to the award by the plaintiff and on the 8th of October 1923 those objections were overruled, by the Munsiff and a decree was made in accordance with the award dismissing the suit with costs. The point urged is that the application that was filed by the parties to the suit on the 28th of April 1923 referring to arbitration relates not only to matters in difference in dispute, in the suit but also to various other matters. The reference to arbitration by the Court was illegal and without jurisdiction and we have to decide this short point.
7. Reference has been made to the observations made in the case of Ram Protap Chamria v. Durgaprasad Chamria by Mr. Justice Rankin where it is observed:
In my judgment, it is quite impossible that one and the same arbitration should be held as to matters within the jurisdiction of the Court and matters without the jurisdiction of the Court; between the parties to the suit and between them and other persons : under the Code provided by the indian arbitration act and under the Code provided by the second schedule : under the superintendence and control of the Judge who has seisin of the suit and of the Judge disposing of business under the indian arbitration act: partly upon an order of reference and partly under an agreement.
8. It is argued by the appellant that these observations mean that whenever there is an application for reference to arbitration in a suit which is pending in Court under the first paragraph of the second schedule of the Code of Civil Procedure, if it includes other matters which are not the subject-matter of difference in the suit itself, the whole reference is void although the Court might have made an order for reference with regard to the subject matter of the suit alone.
9. It is further argued that the observations of the Privy Council on appeal from the same case in Ram Protap Chamaria v. Durga Prosad Chamaria with reference to the aforesaid observations of Mr. Justice Rankin do not take away from the binding force of those observations. Their Lordships observed after reciting a portion of the observations already cited:
Their Lordships desire to reserve their opinion upon the question whether there may not be exceptions to that comprehensive statement.
10. In our opinion the observations of Mr. Justice Rankin must be taken along with the facts of that case. In that case a reference was made by the parties to the suit as well as persons who were not parties to the suit and it referred to matters in difference in the suit as well as various other matters which concerned persons not parties to the suit, and the award of the arbitrators mixed up all the questions in controversy between the parties to the reference, and it was impossible to detach one set of the award from the other. This would be made clear from the observations of their Lordships of the Judicial Committee which run thus:
In their Lordships' judgment such an award is in no true sense one made in obedience to the order of May 23, 1922, While it would not be easy to segregate the findings with reference to the matters in question in the suit from those not so in question-the findings in which Amardoyi was interested from those in which she was not, it is, their Lordships think, impossible to uphold an award in relation to a suit the conclusions of which were plainly coloured, if not dictated, by the view taken by the arbitrators of other questions between the parties or some of them to which the suit had no reference.
11. I ought to state here that the order of the Court of May 23, 1922, referred to above was an order referring all matters in difference in the suit between the parties to the suit as in the present case. The question, therefore, we have to see is whether the state of facts in the present case is the same as in the case of Chamria y. Chamria so as to bring into operation the observations of Eankin, J., limited as they must be, with reference to the opinion of the Judicial Committee. In our opinion, Mr. Justice Rankin made those observations with Reference to the particular facts of the case. We do not think that Mr. Justice Rankin was of opinion that if the parties to the suit applied to the Court for an order of reference with regard to the matters in difference in the suit and on the same day made a reference to arbitration without the intervention of the Court with regard to other matters in dispute between the parties by a separate agreement, the order pf reference made by the Court with regard to the subject matter of the suit can be questioned on the ground of illegality, or invalidity, and if the arbitrators made separate awards with regard to the different matters there is no reason why those awards being otherwise good should not be considered to be enforceable. To go a step further if the parties in their application for reference to arbitration with regard to matters in difference in a suit put in other matters of difference but the Court makes a reference to the arbitrators only with regard to the matters in difference in the suit without any objection of the parties, there is no reason to suppose that such reference should be considered to be illegal.
12. In the present case 1 ought to have stated that the parties in addition to the petition that they filed in Court actually entered into a separate agreement to refer matters in dispute outside the subject matter of the suit to the same arbitrators and the arbitrators acted upon that agreement which they describe as an Abichalnama in their award with regard to those matters. Therefore, the matter stands thus, that the arbitrators made two awards, one with regard to the matters in difference in the suit under the order of reference by the Court, and another which was not with reference to the subject matter of the suit on the strength of the Abichalnama or agreement of the parties. As I have already said the award with regard to the other matters although on the record has not been acted upon in any way. The Subordinate Judge points out that it will be open to the parties if they so desire to take steps with regard to that award under paragraphs 20 and 21 of the second schedule of the Code of Civil Procedure. Our conclusion, therefore, is that the mere fact that other matters were referred to in the application for making the order of reference does not vitiate the order as made by the Court. Then with regard to the question whether the awards can be dealt with separately or the award which is now the subject matter of controversy in this case is so connected with the other award as it may be said to have been plainly coloured by the view taken by the arbitrators on the other questions which they decided by the other award. On going through this award it does not seem to us that it can be so held. There is a passage at the bottom of the award that the arbitrators have not directed the Defendant No. 1 to fill up certain, excavations on another piece of land as that was allotted to the defendant in a separate award. That question of the filling up of the excavations was not the subject matter of the suit and had no connexion with it. The subject matter of the suit was with regard to one half share of 15 cottas of land only. On the grounds set forth above we do not think that the plaintiff can complain that the reference was invalid and without jurisdiction.
13. A preliminary objection was taken before us that there is no second appeal against the decree nor can this Court revise the decree under Section 115 of the Civil P.C. or under Section 107 of the Government of India Act. In the view we take, it is unnecessary to discuss the question in detail but it seems to us that where the jurisdiction of the Court to make the order of reference is attacked, this Court has power to revise the order in revisional jurisdiction and there is an application before us to that effect.
14. However as we take the view that on the merits the appeal fails, this appeal must be dismissed with costs. No other order on the application is necessary.
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