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Case Number

Appeal from Original Civil Jurisdiction No. 124 or 1926

Attorney(S)

Messrs Langford James and B. Roy Chaudhuri for the Appellants.
Messrs N.N Sircar and N.C Chatterjea for the Respondents.

Judges

Rankin, C.J
C.C Ghose, J.

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Smart Summary

Summary of Opinion — Appeal concerning the estate of Babu Rajendra Lal Goswami

Factual and Procedural Background

This appeal arises from an order made by Mr. Justice Greaves on a motion on notice dated 12 July 1926, in proceedings described as "In the matter of an arbitration and in the matter of the estate of Babu Rajendra Lal Goswami."

Rajendra Lal Goswami died in August 1917. His Will was proved on 19 December 1917. The Will disposed of various immoveable properties and included detailed provisions for discharging monies owing by him, particularly to persons who had deposits with him.

Due to disputes arising from these provisions, an arbitration under the Indian Arbitration Act was conducted by Mr. Byomkesh Chakravarti, and an award was filed dated 29 July 1918. Under the Indian Arbitration Act, once an award is filed and upheld by the Court it may be enforced as if it were a decree of the Court (see section 15 as discussed in the opinion).

Subsequently Mr. Justice Chaudhuri pronounced a decree which, by consent of the adult parties and with agreed modifications, declared that the award as modified ought to be carried into effect. The opinion notes that this step departed from the usual procedure under the Indian Arbitration Act.

The award included directions charging certain sums on properties; in particular, the award provided that properties to be allotted to Rabindra Nath Chakravarti (an infant at the time of the award) were to be charged with Rs. 13,063, and that upon payment they should be handed over by the executors to Rabindra Nath or his natural guardian.

A subsequent dispute arose because Rabindra Nath sought possession of his property and an account of the executors' dealings (approximately a ten-year accounting). The executors contended that certain estate expenses (probate, Gaya sradh and first sradh of the widow) attributable to Rabindra Nath exceeded Rs. 3,000 and should be paid by him; they also asserted they kept proper books and offered inspection. Rabindra Nath alleged defective books and incomplete disclosure and contended the executors had not accounted for a substantial sum (he estimated about Rs. 10,000) payable to him.

Rabindra Nath moved under the Indian Arbitration Act; on affidavits Mr. Justice Greaves directed the executors to hand over the properties to Rabindra Nath, to deliver papers, documents and moneys standing to his separate account, to furnish accounts, and held that Rabindra Nath would be at liberty to apply for appointment of a Receiver.

The present appeal challenged the propriety of that procedure and the orders made by Mr. Justice Greaves. The Chief Justice (Rankin, C.J.) delivered the judgment allowing the appeal and setting aside the order of Mr. Justice Greaves. Mr. Justice C.C. Ghose agreed.

Legal Issues Presented

Whether a party may obtain partial administration of a deceased testator's estate or orders for possession and accounting on a motion under the Indian Arbitration Act based on an arbitrator's award that refers to matters of administration.
Whether the High Court can, by motion under the Indian Arbitration Act, make orders that have the effect of administering immoveable property of the estate (including ordering delivery of properties and appointment of a Receiver) without an administration suit or an originating summons bringing in the appropriate parties and jurisdictional considerations.
Whether the procedure adopted by Mr. Justice Chaudhuri (treating the award as the basis for a decree and pronouncing a decree in the terms described) and the subsequent orders following from the arbitrator's clause permitting applications to the Court were a correct application of the Indian Arbitration Act and civil procedure analogies invoked.

Arguments of the Parties

Rabindra Nath Chakravarti (applicant who moved under the Arbitration Act)

Rabindra Nath sought to be put in possession of the properties allotted to him under the award.
He demanded an account of the executors' dealings with his property over an approximately ten-year period, alleging that the executors had failed to discharge a sum he estimated at about Rs. 10,000 which they ought to have paid to him.

Executors (responding to the motion)

The executors stated they had no objection to handing over the property but asserted that certain estate expenses (expenses of probate, the Gaya sradh of the testator and the first sradh of his widow) caused them expenditure attributable to Rabindra Nath amounting to over Rs. 3,000, which Rabindra Nath ought to pay.
The executors contended they kept proper books (in the same manner the testator had in life), offered inspection, and provided facilities to Rabindra Nath's accountant.

Table of Precedents Cited

The opinion does not cite any case law precedents by name; it discusses statutory provisions and procedural rules.

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's analysis proceeds from statutory procedure under the Indian Arbitration Act and from the limits of the Court's jurisdiction concerning estate administration:

Statutory framework for arbitration: The Chief Justice explained that under the Indian Arbitration Act an award, when filed and upheld by the Court, can be enforceable as if it were a decree of the Court (the opinion references section fifteen of the Act). Thus, where an award is declared valid and filed with modifications, execution may follow in the ordinary way available for awards.
Departure from proper procedure: The Court observed that Mr. Justice Chaudhuri's pronouncement of a decree declaring the award (as modified by settlement terms in Schedules B and C) to be carried into effect proceeded on an analogy to the Civil Procedure Code (second schedule, r.20) that is inapplicable to the procedure followed under the Indian Arbitration Act. The opinion notes that this appears to reflect confusion about applicable procedure by both the learned Judge and the arbitrator.
Limitations of an arbitrator's powers and of clauses in an award: The Court emphasized that an arbitrator cannot confer upon parties any substantive right to apply to the Court for directions; a clause in the award stating that parties will be "entitled... to apply upon notice ... to the Court for its direction" cannot itself create jurisdiction or transform the nature of relief available under the Arbitration Act.
Nature of the matters decided by the award: The arbitrator had described the matters decided as "matters of administration of the estate of the testator." The Chief Justice observed that because those matters were matters of estate administration, special procedural safeguards and appropriate forms of proceedings are required to administer the estate correctly.
Jurisdictional and procedural posture for administration: The Court held that the High Court had never entertained a full administration suit concerning the estate and thus had no general responsibility to administer the entire estate or to make orders affecting immoveable property scattered across different jurisdictions merely on a motion under the Arbitration Act. The correct procedures for obtaining administration or partial administration are by bringing an administration suit or by originating summons; those routes ensure proper parties are brought before the Court and jurisdictional issues can be addressed.
Proper use of the prior decree/award: The opinion states that the decree of Mr. Justice Chaudhuri (and the arbitrator's award, subject to modifications) could be relied upon in a properly constituted administration suit to establish the validity and binding nature of the arrangement embodied in the award. However, such validity does not permit the Court to effect partial administration by motion under the Arbitration Act or to undertake administration piecemeal by notices of motion.
Prudential concern regarding immoveable property: Given that the estate's immoveable property was scattered and some properties lay outside the original jurisdiction of the Court, the Chief Justice considered it inadvisable for the Court to make orders about immoveable property on the present procedural basis.
Conclusion of procedure impropriety: For these reasons the Chief Justice concluded the procedure adopted below was wrong and that the Court should refuse to enforce the directions made by Mr. Justice Greaves on the motion under the Arbitration Act.

Holding and Implications

Holding: The appeal was allowed and the order of Mr. Justice Greaves was set aside. The Court ordered that no costs be given to either party either in the appeal or in the proceedings before Mr. Justice Greaves (the opinion records that C.C. Ghose, J. agreed).

Implications and immediate consequences:

The specific directions made by Mr. Justice Greaves on the motion under the Indian Arbitration Act (ordering delivery of properties, papers, moneys, and accounts and liberty to apply for a Receiver) were set aside and are not to stand as operative orders on that basis.
If parties wish to obtain administration (or partial administration) of the estate, they must proceed by the proper forms of proceeding provided by law: bringing an administration suit or initiating proceedings by originating summons so that all necessary parties and jurisdictional questions are properly before the Court.
The decree previously pronounced by Mr. Justice Chaudhuri and the arbitrator's award (with modifications) may be used within a properly constituted administration suit to establish the validity or binding nature of the award, but they do not permit the Court to effect estate administration on a motion under the Arbitration Act alone.
No costs were awarded to either side in the appeal or in the proceedings below.
The opinion addresses only the direct effect on the parties in these proceedings; it does not purport to establish any new general precedent beyond the decision to set aside the impugned order and to insist on proper procedure for administration matters.

Solicitors recorded in the report: Mr. J.N. Mitter for the appellants and Mr. S.K. Kar for the respondents. (P.C. appears in the record.)

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Jnanendra Mohan Bhaduri And Anr. v. Sm. Annapurna Debi And Anr.

The Judgment of the Court was as follows:—

Rankin, C.J:— This is an appeal from an order made by Mr. Justice Greaves upon a motion on notice, dated the 12th of July 1926, headed “In the matter of an arbitration and in the matter of the estate of Babu Rajendra Lal Goswami.” It appears that Rajendra Lal Goswami died in August 1917 and that he left a Will which was proved on the 19th of December of that year. By that Will he left various items of immoveable property to various persons and made very complicated provisions for the discharge of certain monies which were owing by him more particularly to persons who had money with him on deposit. Disputes and complications having arisen, there was an arbitration under the Indian Arbitration Act by Mr. Byomkesh Chakravarti. He filed his award which is dated the 29th of July 1918.

Now, according to the procedure provided under the Indian Arbitration Act, that award when filed could be challenged under the Act on various grounds, but if it was upheld by the Court as a good award, the position was that the award would remain filed in Court, and, by the terms of the fifteenth section of the Indian Arbitration Act, it would be enforceable as if it were a decree of the Court: in other words, although it was not a decree and not a judgment of the Court, execution could be taken out on it in the same manner as though it were a decree. What happened, in fact, was that procedure was ignored entirely and a decree was pronounced by Mr. Justice Chaudhuri to the effect that “this Court being of opinion that it would be for the benefit of the said infant Respondent Rabindra Nath Chakravarti the following decree should be made: And the adult parties having agreed to the terms of settlement set forth in Schs. B and C it is declared by consent that the said award as modified by the said terms of settlement ought to be carried into effect and the same is ordered and decreed accordingly.”

It may perhaps be desirable to explain that the award was attacked as invalid before the learned Judge. That was a matter over which the learned Judge had jurisdiction. It was within his power to decide whether the award was a good award or a bad award. That controversy was settled by agreement, and with certain modifications agreed upon, the parties were prepared to treat the award as a good one. I will assume, therefore, that it was possible and reasonable for the learned Judge acting under the Indian Arbitration Act to say that the award being modified by consent of the narties should stand as a good award; and if he had done that and filed it with the modifications I will assume that execution upon the award with the modifications would have been quite in order.

The learned Judge, and I think the arbitrator too, appears to have had in mind a procedure which is entirely unknown to the Indian Arbitration Act. They both proceeded on the analogy of the second schedule of the Civil Procedure Code, under which by r. 20 in the case of an award without the intervention of a Court, the Court shall, if it deems the award to be valid, order it to be filed, and having done that it has power to proceed to pronounce judgment upon the award. Whether that was the kind of confusion in the mind of the persons concerned or not, however, must be a matter of speculation. That award contained at its close a clause to the following effect:—“I further declare that the matters decided by me are matters of administration of the estate of the testator.” Pausing, there, for a moment, the matters were matters of administration of the estate of the testator. If they had not been, this declaration would have been of no effect at all so far as I can see; but they were matters of administration of the estate of the testator. “Any of the parties hereto as also a member or members of the Managing Committee will be entitled and be at liberty to apply upon notice to all other parties interested from time to time to the Court for its direction as occasion arises and in particular for the appointment of a Receiver with necessary directions.” Well, there is no particular object to say in an award that nothing in it shall prevent parties from applying to the Court if they want to apply to the Court. But I may point out that no arbitrator can give to anybody any right to apply to the Court for any direction; and, as far ac I can make out, that paragraph has been a source of a good deal of confusion in the minds of the parties to this litigation.

The award of the arbitrator did direct that certain sums of money were to be charged upon certain properties which were to go to the different beneficiaries, and we are at the moment concerned with the rights of Rabindra Nath Chakravarti who, at the time of the award, was an infant. So far as he is concerned, the award declared that the properties to go to him should be such and such and they were to stand charged with a sum of Rs. 13,063. The award provided that when that had been paid off the properties should be handed over by the executors either to Rabindra Nath or to his natural guardian, as the case might be, as provided in the award.

The controversy which had arisen prior to the application to Mr. Justice Greaves was shortly this: Rabindra Nath wanted to be put in possession of his property by the executors. He wanted also an account of their dealings with his property for some ten years. The executors in the end said that they had no objection to handing over the property, but that in respect of the expenses of probate, the Gaya sradh of the testator and the first sradh of his widow, they had been put to expenses, the share of Rabindra Nath in which amounted to over Rs. 3,000. They said Rabindra Nath ought to pay that money. The second matter of contest was over the account. The executors said that they kept books properly as the testator had done in his own life-time; and that they offered inspection of them and gave all facilities to Rabindra Nath's accountant. On the other hand, Rabindra Nath said that they did not keep proper books, they had not given proper materials to his accountant, and, as a matter of fact, he claimed that they did not discharge themselves of a considerable sum of money, amounting to some Rs. 10,000, as he guessed, which they ought to pay to him. In that state of things what Rabindra Nath did was that he launched a notice of motion under the Indian Arbitration Act and the matter has been dealt with upon affidavits by Mr. Justice Greaves. The learned Judge has directed that the properties which by the award were to go to Rabindra Nath shall be handed over to him. It turns out that at those properties are properties outside the original jurisdiction of this Court although belonging to the estate, but which is one property in the estate which is within the jurisdiction. The learned Judge has also directed the executors to make over to Rabindra Nath all papers and documents and all moneys standing to the credit of Rabindra Nath's separate account and to furnish accounts and he has held that Rabindra Nath would be at liberty to apply for the appointment of a Receiver.

The first thing that has to be examined is whether this procedure is one which can be countenanced and whether it is open to the applicant in such a manner litigate the question which he seeks to litigate. I am of opinion that the procedure is entirely wrong and that this Court ought to refuse any order on any of the matters which have been dealt with by Mr. Justice Greaves. The award of the arbitrator having been filed, it was open to the Court to declare as to its validity and to put that award in the position of an award as to which the parties interested could ask for execution—execution in the ordinary way upon a tabular statement by transfer to any other Court or in any other manner known to law. But it is not the case that this Court has ever had brought before it an administration suit for the whole of the affairs of this testator Kajendra Lal Goswami. This Court has never at any time entertained an administration suit of his estate. It has no responsibility whatever for administering his estate and the idea that, because a wrong form of order was made at the time this award was dealt with under the Indian Arbitration Act or because of what the arbitrator had put in about the parties being at liberty to apply to the Court, therefore any party interested now has only got to launch a motion under the Indian Arbitration Act to get a partial administration of this gentleman's estate, is, I think, entirely erroneous. If persons want to administer this estate, they can bring an administration suit, or if they want a partial administration in certain circumstances, they can do so by originating summons. When they do that, it is not to be doubted that this decree of Mr. Justice Chaudhuri will be perfectly good for the purpose of showing and establishing that the arbitrator's award, subject to the modifications, is a valid and, binding arrangement. What is wanted is not a mere execution of that award as though it were a judgment. If what is wanted is an administration of the estate on the basis of that award, then the Court must be approached properly. It has no right to do it on a motion under the Indian Arbitration Act or to do it without properly bringing in the parties either by a suit or by an originating summons. I think it may very well be that persons might want to bring an administration suit about this estate in a Court other than the High Court. It would be competent for them to bring it to the High Court; but no person will be obliged to bring it to the High Court. Whatever Court it is brought in, the award would be just as valid or as invalid as if he had brought his suit in the High Court. We are dealing with a highly complicated Will, and a great deal of the property is scattered over different parts of the province. It is highly inadvisable to make orders as to immoveable property where the very basis of our jurisdiction is open to challenge. We cannot undertake to administer this estate upon notices of motion brought under the Indian Arbitration Act, though of course under that Act execution can be had.

I do not propose to pronounce upon any one of the questions which have been agitated in Court. I have done my best in this family dispute to induce the parties to try to come to some arrangement and I am quite satisfied that learned Counsel on both sides have done their best in that matter to assist the Court. It appears that their endeavour in that respect is entirely without any result. My conclusion is that if the parties want this matter to be fought out-they must begin and fight it out in the manner provided by law.

In my opinion, this appeal must be allowed and the order of Mr. Justice Greaves must be set aside. We do not propose to give any costs to either party either here or in the proceedings before Mr. Justice Greaves.

C.C Ghose, J.:— I agree.

Mr. J.N Mitter, Solicitor for the Appellants.

Mr. S.K Kar, Solicitor for the Respondents.

P.C

Jnanendra Mohan Bhaduri And Anr. v. Sm. Annapurna Debi And Anr.

Summary of Opinion — Appeal concerning the estate of Babu Rajendra Lal Goswami

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Rabindra Nath Chakravarti (applicant who moved under the Arbitration Act)

Executors (responding to the motion)

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Jnanendra Mohan Bhaduri And Anr. v. Sm. Annapurna Debi And Anr.

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