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  • Article 158 of the schedule to the Indian Limitation Act
  • Article 158 of the Limitation Act
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  • Article 158 of the schedule to the Indian Limitation Act
  • Article 158 of the Limitation Act
Smart Summary

Factual and Procedural Background

The plaintiff, a minor, sued through his mother as next friend in 1922 for partition of the estate of his late father, Prasanna Cumar Roy (died 1908). Defendants included the plaintiff's half-brother, his nephew (son of a deceased half-brother), the brother's wife and a fourth defendant who disclaimed interest. The plaintiff was acknowledged to be entitled to one-third of the estate; the remainder was held by his brother and nephew who did not seek separation of their respective shares inter se.

Schedule Cha to the plaint listed numerous moveable items claimed as part of the joint estate, including alleged cash sums and other items (notably Rs. 96,000 said to be advanced on loan, Rs. 12,000 in cash in the Calcutta house, 30 guineas in Kesholpur house, boilers and machinery valued at Rs. 20,000, and 2000 maunds of paddy). The defendants' written statement denied the accuracy of the list and, in particular, denied ownership of the cash items.

On 24 July 1923 the parties compromised many matters; a preliminary decree embodied the compromise. Paragraph 14 of the compromise (as in the preliminary decree) abandoned the plaintiff's claim to Rs. 96,000 and provided that Babu Basanta Kumar Mitra (former Receiver of the estate) would partition the other moveable properties within one month and the parties would accept his partition. Babu Basanta Kumar Mitra made a division and a list (purported award) was filed in court on 30 July 1923.

The Subordinate Judge treated the partition filed by Babu Basanta Kumar Mitra as an award under the second schedule to the Code of Civil Procedure, rejected the plaintiff's objections as time-barred and unproved, and entered a final decree in accordance with the award. The plaintiff appealed; defendants raised a preliminary objection that paragraph 16, clause (2) of the second schedule bars appeals except on narrow grounds (that the decree is in excess of or not in accordance with the award). The plaintiff also sought revision to set aside the award and to have a court-appointed commissioner effect partition.

Legal Issues Presented

  1. Whether paragraph 14 of the compromise amounted to a submission to arbitration (i.e., appointment of an arbitrator) or merely an agreement to have a court-appointed commissioner effect partition.
  2. Whether the person nominated (Babu Basanta Kumar Mitra) entered upon arbitration and made a valid award within the meaning of the second schedule to the Code of Civil Procedure.
  3. Whether procedural formalities for an award (notice of intended division, filing of the award, notice of filing) were complied with and whether any irregularity (such as absence of the plaintiff) vitiated the award.
  4. Whether the award could be set aside on substantive grounds alleged by the plaintiff (insufficiency or unfairness of allotted articles; omission of items in Schedule Cha; fraud or collusion; want of notice or presence).
  5. Whether, in view of paragraph 16 of the second schedule, an appeal lies from the decree giving effect to the award except on the limited grounds prescribed.
  6. Whether a revision application should be entertained to set aside the award and remit or appoint a commissioner in place of the arbitrator.

Arguments of the Parties

Appellant's Arguments

  • The compromise clause did not constitute a submission to arbitration; it merely agreed that partition should be carried out by a commissioner nominated by the parties.
  • No arbitration took place and no award was made in accordance with the requirements of the second schedule.
  • The alleged award/list was filed without proper notice to the plaintiff and without the plaintiff's presence, rendering it invalid.
  • The articles allotted to the plaintiff were insignificant and less than his rightful share.
  • Not all items listed in Schedule Cha were partitioned (notably cash sums, 2000 maunds of paddy, boilers/pumps/pipes), and some items were omitted.
  • The partition was fraudulent and made in collusion with Defendant No. 1.
  • Relied on authority (In re, Cams Wilson and Greens) to argue that where there is no dispute between parties as to a right, there can be no reference to arbitration.

Defendants' Arguments / Court-Recorded Defences

  • Preliminary objection: paragraph 16, clause (2) of the second schedule precludes an appeal from a decree giving effect to an award except on limited grounds (decree in excess of or not in accordance with the award).
  • Denial of the existence of the cash items alleged by the plaintiff; assertion that only 400 maunds of paddy existed (not 2000). Some boilers and machinery existed but were of negligible value and only fit for scrap; defendants offered that the plaintiff could take them, which offer was not accepted.
  • Certain items (e.g., silver utensils) were asserted to belong to the family idol and therefore not subject to partition.
  • Implied defence that the arbitrator had been properly nominated by the parties and acted within the scope of the reference; the partition/list filed was an award and was properly filed and notified to the parties' pleaders.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
In re, Cams Wilson and Greens Principle that where parties have no dispute as to the right (e.g., a voluntary transaction to sell/buy at a price fixed by a valuer), there is nothing in dispute which can be referred to arbitration. The Court distinguished that case from the present facts, holding that here there were matters in dispute as to which articles formed part of the joint estate and how they should be allotted; therefore the present case was capable of being referred to arbitration.
Ghulam Khan v. Mahamad Hassan Referenced in relation to whether the appellate court should entertain an application in revision to set aside an award (i.e., the limited scope for revisional interference with awards). The Court expressed doubt whether a revision application ought to be entertained in the present circumstances and noted that entertaining revision would effectively extend the grounds of appeal beyond those prescribed in the schedule. The Court relied on the principle that remittal or setting aside by higher court is permissible only on narrow grounds (e.g., refusal to exercise jurisdiction, acting without jurisdiction, illegal action, or material irregularity) — none of which were made out here.

Court's Reasoning and Analysis

The court proceeded through a sequence of legal determinations grounded in the terms of the compromise, the second schedule to the Code of Civil Procedure (CPC), and the applicable rules on notice and limitation:

  1. Nature of the appointment: The court analyzed paragraph 14 of the compromise and concluded that the parties agreed to submit differences concerning partition of moveable properties to the sole arbitrament of Babu Basanta Kumar Mitra and to accept his decision as final. The court distinguished an officer appointed by the court as a commissioner (whose selection the court controls and whose decisions can be challenged before the court) from an arbitrator (selected by parties whose decision is binding subject only to the limited grounds in the second schedule). On that basis the court held there was a submission to arbitration.
  2. Whether an order of reference by the Court existed: The court held that the preliminary decree embodying the compromise (which directed the arbitrator to partition within a month) constituted an order of the Court within paragraph 3(1) of the second schedule, and thus satisfied the requirement that the Court refer matters in difference and fix a time for the award.
  3. Whether an award was made: The court examined the document filed on 30 July labelled “list of moveables given to Bholanath Roy...” The list set out items in detail, was signed by the arbitrator and dated; the court concluded no special form is required and that the list constituted an award. The absence of pre-existing challenge to its form and the fact the arbitrator was not called to deny it supported this conclusion.
  4. Notice and filing formalities: The arbitrator gave written notice to pleaders on 26 July proposing to make division on 29 July. The pleaders were shown the judge’s order sheet entry of 1 August recording the filing; both pleaders initialed that entry. The court relied on O.3, R.5 CPC (service on pleader) and explained that initialing the order sheet constituted a waiver of any claim for more formal notice. The court therefore found notice of filing to be sufficient and not a ground for setting aside.
  5. Time bar and limitation: The court observed that objections to an award must be made within the time prescribed (Article 158 of the Limitation Act is referred to). The Subordinate Judge held that no objection was made in the prescribed time (and the appellate court noted that the time allowed by Article 158 had likely expired). The plaintiff obtained a belated extension and ultimately filed objections after the statutory period had expired; the court treated the objections as time-barred.
  6. Merits of alleged grounds for setting aside: The court reviewed the plaintiff's specific allegations (insignificant allotment, omissions from Schedule Cha, fraud/collusion, absence and want of notice). It found no foundation or proof for fraud or collusion; noted the plaintiff called no evidence to substantiate claims of omitted items or false inventories; accepted defendants' denials regarding cash and the reduced quantity of paddy and the low value of machinery; and concluded the arbitrator had determined allocation and that the judge was not persuaded to remit or set aside the award on any available ground under paragraph 16.
  7. Scope of appeal and revision: The court emphasized paragraph 16(2) of the second schedule which severely limits appeals from a decree giving effect to an award (only permitted where decree is in excess of or not in accordance with the award). Because no such ground was urged, the appeal could not succeed. The court expressed reluctance to entertain the revision application (citing Ghulam Khan v. Mahamad Hassan) and observed that remittal or other relief could only be granted if there had been refusal or excess of jurisdiction, illegal action, or material irregularity — none shown.

Holding and Implications

Final Disposition: The court dismissed the appeal and dismissed the application in revision. The judgment of the Subordinate Judge — refusing to set aside the award and directing a final decree for partition of moveable properties in accordance with the award — was affirmed. Costs were awarded to the respondents who had appeared.

Implications: The practical consequence is that the partition effected by the arbitrator (Babu Basanta Kumar Mitra) was upheld and the moveable properties were to be divided and possessed in accordance with that award. The court treated the compromise and preliminary decree as a valid submission to arbitration, accepted the list filed by the arbitrator as a valid award, found procedural formalities (notice to pleaders and filing) adequate, and held the plaintiff's objections either time-barred or unproved. The opinion did not purport to establish a novel legal principle beyond application of the established framework in the second schedule to the CPC and the rules cited; it resolved the present dispute by applying those existing statutory and procedural provisions.

Judge(s): Dawson-Miller, C.J. (author of opinion); Mullick, J. concurred. Appeal dismissed.

    Bholanath Roy v. Bata Krishna Roy

    Dawson-Miller, C.J:— The appellant, a minor, instituted through his mother as next friend a suit for partition of the estate of his late father Prasanna Cumar Roy impleading as defendants his half-brother, his nephaw (the son of a deceased half-brother) and his brother's wife. There was also a fourth defendant who disclaimed any interest in the estate and with whom we are not concerned. P.C Roy died in 1908 leaving a considerable estate including both moveable and immovable property and his family remained in joint possession until the present suit was brought in 1922. The plaintiff is admittedly entitled to a third share in the estate, the remainder going to his brother and nephew who do not ask for separation of their shares inter se.

    2. Schedule Cha of the plaint contains a list of the moveable properties which the plaintiff alleges form part of the joint estate and of which he claims his share. The schedule includes, in addition to furniture and other household effects a sum of Rs. 96,000 said to be advanced on loan, Rs. 12,000 in cash in the Calcutta house and 30 guineas in the Kesholpur house where the family resided, some boilers and machinery valued in the schedule at Rs. 20,000, and 2000 maunds of paddy. The written statement denies the accuracy of the plaintiff's list, and in particular denies the existence of the cash items stating that they do not and never did belong to the joint estate. It sets out a list of the moveables alleged to be those included in the estate. There were many matters in conflict between the parties but we are concerned in this appeal with the partition of the moveable property.

    3. On the 24th July 1923 the parties effected a compromise of the matters in dispute between them, and on the same day a preliminary decree was passed by the Subordinate Judge embodying the terms of the compromise. By para. 14 of the compromise, as embodied in the preliminary decree, the plaintiff gives up his claim to Rs. 96,000 on account of the money-lending business, and the partition of the other moveables claimed was referred to Babu Basanta Kumar Mitra, the former Receiver of the estate of P.C Roy, who was to partition the same within one month.

    4. In due course the, partition was made by Babu, Basanta Kumar Mitra and was filed in Court. The plaintiff took certain objections to it, but the learned Subordinate Judge considered that, under para. 14 of the compromise, Babu Basanta Kumar Mitra was appointed sole arbitrator, and that his partition was an award within the meaning of the second schedule to the Code of Civil Procedure. He held that the plaintiff's objections to the award were out of time having been filed more than 10 days after notice of the filing of the award had been given to him. He further considered that the objections had not been proved and ordered a final decree in the suit to be entered in accordance with the award partitioning the moveables.

    5. From this decree the plaintiff has appealed. The defendants raise a preliminary objection that under the provisions of paragraph 16, Clause (2) of the second schedule of the Code no appeal lies from, a decree giving effect to an award except, on the ground that the decree is in excess of or not in accordance with, the award, and the present appeal is not based on any such ground. The plaintiff has also filed an application in revision asking neon various grounds to set aside the award, and appoint a commissioner to partition the moveables.

    6. The appellant contends that there was no reference to arbitration, that no arbitration took place and that no award was made. It is necessary therefore to consider in detail the circumstances under which the partition was made and subsequently filed in the Court of the Subordinate Judge. Paragraph 14 of the compromise read as follows:

    That the plaintiff has neither any right nor any claim in respect to the money which was claimed on account of the money lending business out of the moveable properties described in schedule Cha of the plaint, For this reason the plaintiff abandons his claim. With regard to other moveable properties claimed it is settled, that the aforesaid Babu Basanta Kumar Mitra the former Receiver of the estate of P.C Roy will partition the same within one month from this date and the parties will accept the said partition.

    7. The appellant contends that this clause amounts to no more than an agreement that the partition of the moveables shall be carried out by a commissioner nominated by them and is not a submission to arbitration. In my opinion by the clause in question the parties agreed to submit the differences between them as to the partition of the moveable properties to the sole arbitrament of Babu Basanta Kumar Mitra and to accept his decision as final. He was chosen by them and the confidence reposed in him was probably due to the fact that for some years after the death of P.G Roy he had been Receiver of the estate and presumably had special facilities for dealing with the matters in dispute. The essential difference between a commissioner, appointed to effect a partition and an arbitrator appears to me to be that the former is an officer selected and appointed by the Court in whose selection the parties have not as of right, any choice, whereas the latter is a person selected by the parties in whose selection the Court has no choice. In the former case the parties have expressed no consent to be bound by the decision of the Commissioner who is appointed by the Court under the provision of S. 75 and O. 26, R. 13 of the CPC and whose decision the parties may challenge before the Court passing a final decree. In the latter case they have expressed such consent and cannot challenge the arbitrator's decision on questions of fact or law except ion the limited grounds contained in the second schedule of the Code. I consider therefore that there was a submission to arbitration.

    8. It remains to consider whether the arbitrator entered upon the arbitration and made an award. On the 26th July he gave notice in writing to the pleaders of both parties reciting that he had been nominated by them in the suit to divide the moveable properties belonging to the joint estate and stating that he proposed to make the division on the 29th July at Kesholpur the joint residence of the parties. Although this notice was received by the pleader for the appellant no one appeared on the appellant's behalf on the 29th July, nor was any application made for a postponement. The arbitrator having attended at Kesholpur made a division of the properties and signed a list of the moveables given to the plaintiff as his share on the 30th July. This list was filed in the Court on the same day and on the 1st August the Judge's order sheet contains the following entry:

    A list of some moveables given to minor plaintiff Bhola Nath Roy filed in Court yesterday by Babu S.D Banerjee, pleader purporting to have been signed by Babu Basanta Kumar Mitra. Let it be kept on the record and inform the parties aud put up when final decree will be passed.

    9. This order was shown to the pleaders of both parties who initialed the same. No objection was taken to the partition, until the 27th August when the plaintiff moved the Court to be allowed 10 days time to file objections and was granted 10 days as prayed. I doubt whether the learned Judge has power to extend the time for filing objections assuming that the list filed on the 30th July, notice of which was given to the appellant's pleader on the following day, was an award, for the time allowed by Article 158 of the Limitation Act for setting aside the award had already expired. However that may be the plaintiff failed to lodge objections even within the extended time granted by the order of the 27th August but on the 27th September he filed two petitions. In the first he gave certain, reasons for not filing his objections earlier and prayed that the objections might be accepted that day. The second is the petition of objection containing the reasons why the partition of the arbitrator should not be accepted. The Subordinate Judge ordered that the defendants should be informed and the petitions be put up on the date fixed by which I presume is meant the date for final hearing. After some delay owing to the time for the partition of the immovable property having been extended the case came before the Court for final hearing on the 10th May 1924 when the appellant's objections to the award were heard, and, on the 14th May judgment in the suit was delivered and a final decree was passed for the partition of the moveable and immoveable properties. With regard to the moveables the appellant's objections to the award were disallowed and the moveables were divided in accordance with the award. The objections taken in the petition before the Subordinate Judge may be summarized as follows:

    (1) That the articles given to the appellant were insignificant and less than those justly due to him;

    (2) that all the properties mentioned in schedule Cha of the plaint had not been divided;

    (3) that the partition was fraudulent and made in collusion with the Defendant No. 1; and,

    (4) that the partition was made in the absence of the appellant and without giving him proper and timely notice.

    10. The appellant called no evidence in support of his objections. The learned Subordinate Judge was of opinion that by the terms of the compromise the division of the moveables was referred to arbitration. He held that there was a reference to arbitration by order of the Court. The order being contained in the preliminary decree which incorporated the terms of the compromise and fixed a time for making the award as prescribed in paragraph 3 of the second schedule. As no objection was taken within the time prescribed by Article 158 of the schedule to the Indian Limitation Act he held that the objections were time barred. He further found that there was no foundation for the charges of fraud and collusion and no attempt had been made to prove them, and he was not satisfied that any other moveables beyond those partitioned existed for which the defendants could be held accountable. He refused to set aside the award and passed a decree for final partition and separate possession of the moveables in accordance with the award. He did not in terms consider the question of remitting the award nor was he asked to do so by the petition of objection which merely prayed:

    that a competent person might be appointed by the Court as Commissioner to effect partition of the moveable properties mentioned in schedule Cha of the plaint according to the terms of the compromise decree after setting aside the partition made by the said Babu Basanta Kumar Mitra and rejecting the report submitted by him.

    11. It was argued before us that there was nothing in dispute between the parties which could be referred to arbitration sand that therefore no arbitration took place. Reliance was placed on the case of In re, Cams Wilson and Greens(1). In that case the parties to a contract for sale agreed the one to buy and the other to sell at a price to be determined by a valuer and the question was whether the valuation so arrived at was an award made on reference to arbitration. The Court held that there was nothing in dispute between the parties and therefore nothing which could be referred. Both parties were agreed, the one to sell and the other to buy at a price to be fixed by a valuer whatever it might be. It was not the case where the parties were claiming the right either to buy from or to sell to the other and differing as to the amount of the consideration. The transaction was a purely voluntary one and there was no dispute as to their rights which could be referred to arbitration. There is no analogy between that and the present case where the plaintiff claims a legal right to partition and the parties are in dispute both as to the articles to be divided and the allotment between them. I hold therefore that there were matters in dispute which could he and were referred to arbitration.

    12. It was next contended that there was no order of reference by the Court within the meaning of paragraph 3(1) of the second schedule. The paragraph provides that the Court shall by the order refer to the arbitrator the matters in difference which he is required to determine and shall fix such time as it thinks reasonable for the making of the award and shall specify such time in the order. The preliminary decree embodying all the terms of the compromise was, in my opinion, a compliance with the provisions of paragraph 3(1) and was accepted at the time by the parties without question. It directed the arbitrator to partition the moveable properties claimed within a month. It was an order of the Court and any further order would have been redundant. I may add that the appointment of the arbitrator is by paragraph 2 of the schedule to be made in such manner as may be agreed upon between the parties and the evidence shows that he was appointed by them.

    13. Next it was argued that no award was in fact made and that the list of properties signed by the arbitrator as the share given to the plaintiff was not an award. No special form of award is prescribed in the schedule. The arbitrator's duty was to determine which of the articles should be allotted to the plaintiff as his third share of the whole. The list which constitutes the award is headed “list of moveables given to Bholanath Roy plaintiff in Suit No. 465 of 1922 of the Subordinate Judge's Court in Dhanbad.” The articles given are see out in detail and the document is signed by the arbitrator and dated. No objection was taken to the form of it at any stage until the hearing of the appeal, nor was the arbitrator called, as he might have been, at the hearing to prove that it did not in fact constitute his award. In my opinion the plaintiff's contention on this point fails.

    14. It was further contended that no notice of the filing of the award was given to the parties under paragraph 10 of the schedule. The fact is that the pleaders of both parties were shewn the order of the 1st August 1923 recording the filing of the award and initialed the order sheet as an acknowledgement that they had notice of the filing. Referenoe is made to O. 48, R. 2 and O. 5, Rr. 9 and 10 of the CPC relating to the service of the summons and requiring that all notices shall be served in the manner provided for the service of summons, but O. 3, R. 5 provides that any process may be served on the pleader of any party, whether the same is for the personal appearance of the party or not, and shall be presumed to be duly communicated and made known to the party whom the pleader represents and unless the Court otherwise directs shall be as effective for all purposes as if the same had been given to or served on the party in person. The materiality of the service consists in the fact that the party is properly made aware of the matter contained in the notice; but if the party or his pleader, where notice is served on him, dispenses with the compliance of the correct formalities prescribed he cannot afterwards object that although he in fact had notice the service was not directly in accordance with the formalities prescribed. The intialing of the order sheet by the pleader when produced before him is, in my opinion, a waiver of his right to any more formal notice, and he did in fact appear on the 27th August and ask for time to put forward his objections and did not on that occasion allege that he had no notice of the filing of the award. Again he petitioned the Court on the 27th September, the 10 days having expired, to be allowed to file objections that day and the fact that he had no notice of the filing of the award finds no place amongst his objections to it. In my opinion the award cannot be set aside on this ground nor is any appeal on such ground permissible.

    15. It was also urged that the arbitrator effected the partition in the absence of the plaintiff without giving him proper and timely notice. The learned Subordinate Judge says in his judgment that the division was made in the presence of the plaintiff, but we are informed by the learned advocate who appears for him that this is an error. Even so notice was duly given to the pleader three days before the partition was made, the time allowed for making the award being one month, and no evidence has been adduced to show that this was not timely notice or that any inconvenience was suffered thereby. In my opinion the notice was sufficient.

    16. It was also objected that the award was had because it did not partition all the moveable properties mentioned in schedule Cha of the plaint. In particular the cash and the 2000 maunds of paddy and the boilers, pumps and pipes (the last item being valued in the plaint at Rs. 20,000) were referred to as having been omitted. The defendants, on the other hand, deny the existence of the cash and say that there were 400 maunds of paddy only. With regard to the boilers, pumps and pipes they admit that some old boilers and machinery, long disused, exist, but say they have no value except as scrap iron and if sold would not pay the cost of removal. They are quite willing that the plaintiff should take them away but this offer was not accepted. Other articles claimed in the plaintiff's schedule such as silver utensils valued in the plaint at Rs. 1,500 belong to the family idol and are not subject to partition, but if there is any substance in the plaintiff's contention and if any of the articles claimed as not partitioned exist it was for him to make out his case before the learned Subordinate Judge but he called no evidence in support of it. It was for the arbitrator to determine which and how much of the articles in question would fall to the plaintiff's share and this he has done. It may well be that many of the articles claimed in schedule Cha do not exist aud even if they did it was for the arbitrator to make the partition which he has done. The learned Judge has not seen fit to remit the award; in fact he does not appear to have been asked to do so and he has refused to set it aside upon any of the grounds upon which he may set it aside under paragraph 16 of the schedule. In these circumstances under paragraph 16 no appeal lies against the decree unless it is either in excess of or not in accordance with the award and the appeal must fail. With regard to the application in revision I doubt very much whether wo should entertain such an application at all: see Ghulam Khan v. Mahamad Hassan(2). To do so in the present case would be in effect to extend the ground of appeal beyond those prescribed in the Schedule. In the prayer in the application for revision we are not in fact asked to remit the award but merely to set it aside and in any case we could not remit it unless the Court had refused to exercise a jurisdiction vested in it or had acted without jurisdiction or had acted illegally or with material irregularity in the exercise of its jurisdiction and no such case has been made out. In my opinion the appeal should be dismissed with costs to the respondents who have appeared. The application in revision is also dismissed.

    Mullick, J.:— I agree.

    17. Appeal dismissed.

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    Comments

    Bholanath Roy v. Bata Krishna Roy
    (Jan 29, 1926)