The Judgment of the Court was as follows:—
Cammiade, J.:— This appeal arises out of a suit for declaration of the Plaintiff's title to certain lands and for recovery of possession. During the pendency of the suit, a composition was arrived at between the parties in criminal proceedings pending between them, relating, apparently, to the same lands. The parties agreed to refer the matter in dispute to the arbitration of the zemindar. When the zemindar gave his award, the Defendant, in whose favour the award was made, filed it in Court and prayed that a decree be passed in accordance therewith. The Plaintiff refused to abide by the award, making various allegations against the zemindar. The learned Munsif who tried the suit held that the award was an adjustment of the matters in dispute within the meaning of r. 3, Or. 23 of the Code of Civil Procedure, and he passed a decree in accordance with this award.
On appeal, this decision was reversed on the ground that the above finding on the question of law was erroneous. The learned Subordinate Judge who heard the appeal remanded the suit for trial on the merits.
The Defendant has appealed to this Court.
A preliminary objection is taken on behalf of the Respondent that no second appeal lies. This objection is based on sub-sec. (3), sec. 100 of the Code, which provides that no appeal shall lie from a decree passed by the Court with the consent of parties. In the present case, the learned Court of Appeal below has held that consent of parties did not exist, and has granted no decree. The objection, therefore, is not maintainable.
The on a reference to arbitration, without the intervention of the Court, during the pendency of a suit, may be recorded as an adjustment of the matters in dispute under the provisions of r. 3, Or. 23, when one of the parties objects to its being so recorded. This matter has been considered in its various aspects in a series of cases, and no further light can be thrown upon it. There is no judicial pronouncement by a Bench of this Court on the question; but there are two reported decisions of Mr. Justice Rankin, as he then was sitting on the Original Side of this Court, namely, the cases of The Dekari Tea Company v. The India General Steam Navigation Company (1) and Amar Chand Chamaria v. Banwari Lal Rakshit (2). In both these cases, the learned Judge held that an award made on a reference to arbitration during the pendency of a suit neither made under the second Schedule to the Code of Civil Procedure nor under the Arbitration Act could not be enforced in the suit. In the second case mentioned above, his Lordship expressed his disagreement with the view taken by the High Court of Bombay in the case of Manilal Motilal v. Gokul Das Raoji (3), that such a submission could be enforced in the suit under the general law of contract.
There is practically universal agreement that sec. 89 of the Code, of Civil Procedure is a bar to the enforcement of the award as such, although Fawcett, J., in the case of Manilal Motilal v. Gokul Das Raoji followed the dictum of Davar, J., in Harakbhai v. Jamnabai (4) that r. 3, Or. 23 came within the meaning of the words “any other law for the time being in force” in sec. 89 of the Code of Civil Procedure. With all respect to the learned Judge, I agree with the contrary view taken in the same case by McLeod, C.J, and the reasons given by him.
As regards the view that, in spite of the provisions of sec. 89, an award made on a reference to arbitration during the pendency of a suit is enforceable under the general law of contract, it seems to me that there are strong reasons against its acceptance. As has been pointed out by Rankin, J., in Amar Chand Chamaria v. Banwari Lal Rakshit and by McLeod, C.J, in Shavakshaw v. Tayab Haji (5) the Code makes elaborate provisions for the control by the Court of proceedings in arbitration held on a reference through the Court, and it is inconceivable that the legislature intended that it should be open to the parties to cast aside these provisions and carry on the proceedings in any way they choose. Of course, if the parties agree about the result of the proceedings, there is an end of the matter; but, if they do not, the fact that the proceedings are illegal nullifies the award of the arbitrator. If indeed the view expressed in the case of Manilal Motilal v. Gokul Das Raoji were correct, an award made in such circumstances should be enforced even if both parties objected to it. Such was the case in Ghulam Khan v. Muhammad Hassan (6). Their Lord ships of the Judicial Committee have laid it down very clearly in that case, that once a suit has been instituted all proceedings in arbitration are subject to the contract of the Court. It is not permissible to the parties to deprive the Court of its jurisdiction by private reference to arbitration; and no award made on such reference, unless consented to by both parties can be enforced in the suit.
The view of the law taken by the learned Subordinate Judge is correct. This appeal is, accordingly, dismissed with costs.
Cuming, J.:— I agree.
S.C.M