The Judgment of the Court was delivered by
Oldfield, J.:— I have had the advantage of reading the judgment to be delivered by my learned brother and, as I agree with it, I propose to deal only, with one aspect, of defendants' case.
Stated at its strongest, their case was that their dispute with plaintiff and twenty-third defendant involved adjudication on two distinct matters, firstly their right and plaintiffs' to recover the property in twenty-third defendant's possession from him, secondly their rights against plaintiffs to a particular share in it, if it in fact was recoverable. On the first point, for the reasons given by my learned brother, there could be no valid submission to arbitration without twenty-third defendant's concurrence and, although the record does not indicate what method of decision, if any, was really in the parties' minds, the wording of paragraph 2, Exhibit 1, is in fact inconsistent with any intention on their part to submit this part of the case. But, it is argued, the absence of any valid submission on this point does not affect the validity of the submission on the other above referred to, in which twenty-third defendant had and could have no interest, since, if he was to surrender the property, the shares in which it was afterwards to be divided would not be his concern. It is possible that there is nothing in paragraph 1, schedule II, of the Code of Civil Procedure irreconcilable with this statement of defendants' case and that the interest of the parties contemplated therein is in the question referred, not in the case as a whole. But it is unnecessary at present to decide whether that is so, because the assumption in defendants' argument, as stated above, that twenty-third defendant had no interest in the result of the submission to arbitration is incorrect in two respects. For firstly the submission included the question of the validity of an adoption, on which plaintiffs' right to sue at all depended; and secondly twenty-third defendant, if he purchased in good faith, may be entitled to have his items assigned, to his alienor in order that his transfer might, so far as possible, remain effective. In these circumstances the submission cannot be accepted as valid, and I therefore concur in the decree proposed by my learned brother.
Seshagiri Ayyar, J.:— Plaintiffs and defendants Nos. 1 to 10 claim to be the nearest heirs of the deceased owner of the plaint properties. The suit was brought for a division of the properties and for setting aside certain alienations in favour of the other defendants. There was a dispute among the heirs as to whether adoptions set up by the defendants Nos. 1 to 7 were true and valid. After the settlement of the issues, on the 25th September 1916, plaintiffs and defendants Nos. 1 to 11 agreed that the matter in dispute should be referred to the decision of three arbitrators Paragraph 3 of the agreement says;
“They have further agreed that the rest of the defendants except the twenty-third defendant who was declared ex parte be exonerated from the suit with the respective properties in their possession as per schedule attached hereto.”
That is to say, these heirs agreed that the alienations in favour of defendants other than the twenty-third should not be contested. Apparently as the twenty-third defendant was ex parte, they did not exonerate his property from the suit. It was suggested by Mr. Narayanamurti that, in fact, the claim against the twenty-third defendant was withdrawn. There is nothing on record to justify such an assumption. On the other hand the express language of the agreement to refer shows that the alienation in favour of the twenty-third defendant was not accepted as binding. Subsequent to the agreement, on the 17th of April 1917, the plaintiffs and the defendants Nos. 1 to 7 settled the shares to which they were entitled and asked the arbitrators to determine, after examining the parties themselves, the following issues:—
“First part of the 2nd issue, 8th issue, 9th issue, 10th issue, 11th issue, 12th issue and 18th issue.”
The arbitrators by a majority decreed the claim in a particular manner. There was a minority decision also. The Court accepted the award of the majority and passed a decree in accordance there with. Against that decree the present petition has been presented.
The main objection argued by Mr. Anantakrishna Ayyar related to a point not specifically put forward in the Court below, but, as that relates to jurisdiction, I fail to see how we can refuse to adjudicate upon it. The short point is this: the twenty-third defendant was a party against whom relief was claimed in the original plaint. He was ex parte. In the agreement to refer the parties to the reference did not exonerate him from liability. In these circumstances, is the reference a valid one and had the Court jurisdiction to accept the reference and to act on it? I am constrained to hold that the Court had no jurisdiction to refer the dispute to arbitration. It is to be regretted that the legal advisers should not have taken steps either to include the twenty-third defendant in the reference or to exonerate him in terms from liability.
The question turns upon the interpretation to be placed upon the words parties ‘interested’ in section 1 of the second schedule to the Civil Procedure Code. In the old Code of 1882 section 506 provided ‘if all the parties to a suit desire’ and so on. In the place of those words we have in the present section tbeae words: “Where in any suit where the parties interested agree.” It was strenuously argued by Mr. Narayanamurti that if a person is ex parte he is not an interested party. He is supported by some authorities which with all deference I am unable to follow. It has been consistently held in Allahabad the it if a person is ex parte he is not a party interested. Ishar Das v. Keshab Deo(1) and the earlier cases have taken this view. Reference may also be made to Ajudhia Prasad v. Badar-ul-Husain(2). In Vaithianatha Iyer v. Vaithialinga Mudaliar(3), a Bench of this Court took the same view. Phillips, J., says:
“Further in the present case the appellant has no equitable claim to set aside the decree, for by remaining ex parte he left the conduct of the suit in the hands of the Court, and it is really immaterial to him whether the suit was decreed upon examination of witnesses in Court or upon an award made by arbitrators. By not contesting, the suit he submitted to whatever decree might be passed, provided that it was not in excess of the relief claimed.”
With all deference I am unable to accept this conclusion. A person may remain ex parte for various reasons. He may be too poor to defend the suit. He may think that his co-defendants would fight his case and that it is not necessary for him to put in a separate defence. He may trust to some obvious defect in the case of the plaintiff which should attract the attention of the. Judge. He might also have kept away from the Court because he had confidence in the judicial capacity of the presiding officer. These considerations do not apply to a reference to arbitrators. The ex parte defendant knows nothing about their capacity, character or antecedents. Simply because a defendant; is ex parte it does not follow that he consented to his case being decided by arbitrators. Farther if a person is ex parte he has got a right of appeal if the decision goes against him. He may satisfy the Appellate Court that on the materials placed before the Judge, his conclusion was wrong, or that the Judge had taken a wrong view of the law, or that the procedure had been irregular. In the case of an award all these rights could not be exercised. Therefore by remaining exparte a defendant cannot be said to have consented to the arbitrators disposing of his case and to giving up the right of appeal against the decision that may be passed against him. After giving my best consideration to the cases which have been cited, I am unable to accept the view taken in them that a defendant who is ex parte is not interested in the dispute. As regards Sivalinga Pillai v. Marutha Pillai it is enough to say that in that case it was held that the ex parte defendant had no interest in the suit. On the other hand, in Girija v. Kanai and the earlier case in Seth Dooly Chand v. Mamuji Musaji, it was held that the ex parte dafendant does not cease to be an interested party.
The next argument was that there is nothing to prevent a few among the parties to the suit adjusting their differences by submitting them to the decision of arbitrators. Granting for a moment without deciding that a partial reference is possible because a partial compromise is allowed by law and also a partial adjustment, it is not clear whether a partial award is within the right of parties. I am, however, not prepared to hold that in this case the twenty-third defendant was not interested in the decision of the questions which plaintiff and defendants 1 to 11 submitted for the consideration of the arbitrators. For example the extent; of the impeachability of the alienation in his favour will depend upon whether the adoption in dispute was really made or not and some of the other questions covered by the uses which the arbitrators were called upon to try also relate to matters in which the twenty-third defendant was to some extent interested. Therefore this is not a case in which the subject-matter of the reference was one in which the twenty-third defendant had no interest. It follows, that the twenty-third defendant was a person interested in the whole suit as well as in the particular subject matter of the reference and that, as he was not a party to the reference, the order referring the matter to the arbitrators was ultra vires and without jurisdiction. In this view all subsequent proceedings must be regarded as infructuous and must be set aside. The decree of the lower Court must be reversed and the Subordinate Judge must be directed to deal with the suit on the merits. Costs will abide the result.
K.R