Dular Koeri And Others Appelants v. Payag Koeri .

Collister, Bajpai and Braund, JJ.:— This is a reference to this Pull Bench which has raised a difficult question, The circumstances are fully set out in the refering order dated the 27th of October, 1941. Shortly put, what has happened is that the parties to the suit during its pendency agreed, or are alleged to have agreed, to refer their dispute to six named persons. Those six named persons on the 7th of September, 1939, produced what is called an “award”. On the 11th of September, 1939, that is four days later, the plaintiffs in the suit made an application under O. XXIII, R. 3 of the First Schedule to the Civil Procedure Code to have that “award recorded as an “adjustment” of the suit by “a lawful agreement or compromise”.

Before the Munsif it was held that it might be so accepted and recorded, and at the same time the Munsif disposed of an objection taken by the defendant that the “award” itself was invalid because of certain alleged misconduct on the part of the arbitrators. In first appeal before the Civil Judge, he took the view, relying on a number of authorities, that in no circumstances could an “award” produced as a result of an arbitration wholly outside of the provisions of the Second Schedule to the Code be recorded as an adjustment by agreement or by compromise and he disposed of the appeal on that ground only, not finding it necessary, therefore, to go into any other question.

When the matter came in second appeal before this Court, it became apparent that an extremely difficult question of law was involved in the question whether an award arrived at in these circumstances, and challenged when it was presented to be recorded, could be found to be an adjustment by way of agreement or compromise. It was in those circumstances that the matter was referred to this Full Bench.

We have heard carefully and with considerable patience all the authorities which have been produced before us. It now transpires, however, that, whatever may be the correct solution to the serious conflict of opinion over this matter among the Courts of India, the question is now one which has become almost wholly academic. The rock on which Indian legal opinion has split in this matter is S. 89 of the Civil Procedure Code. In view of the course we are proposing to take, we need not go into the merits of the dispute because it is sufficient for us to say that for all future practical purposes the difficulty has now been removed by S. 47 of the new Arbitration Act of 1940, which not only repeals S. 89 of the Code, but replaces it by a new section which makes the matter quite clear. In these circumstances the practical importance of the reference to this Pull Bench has largely disappeared. Apart, however, from that, we have, as we have said, very carefully considered all the authorities. We find, among others, that there is already a Full Bench decision of our own Court in Gajendra Singh v. Durga Kunwar 1925 47 All. 637. which does constitute an authoritative decision of this Court and it is in accordance with the view which has also been expressed by an exceedingly strong Full Bench of the Bombay High Court in Chanbasappa Gurushantappa Hiremath v. Basalingayya Gokurnaya Hiremath 1927 51 Bom. 908.. Though there are decisions in other High Courts in the opposite sense, we feel, upon the principle of stare decisis, that it would not be proper for us in the special circumstances of this case to reopen the question in this Court and possibly to have to overrule a Full Bench of our own Court. As we have pointed out, the matter is not one of practical importance for the future.

For these reasons, without in any way indicating any reasoned view whether the decisions of those High Courts which do not agree with our own are right or wrong, we feel it right to follow the existing Full Bench decision of our own Court. For these reason; we shall record a formal answer to the reference to us by saying that an award made during the pendency of a suit between the parties and concerning the matter or some of the matters in that suit as a result of an arbitration out of Court may constitute an adjustment by lawful agreement or compromise within the meaning of O. XXIII, R. 3 of the First Schedule to the Civil Procedure Code and can be recorded as such.

That leaves to be dealt with the question which was decided by the Munsif, but was not dealt with by the learned Civil Judge whether upon the facts of this case there has been any award at all in the sense of an award properly pronounced by the arbitrators and procured without any such fraud as would vitiate it. The appellant was, we think, entitled to have that question dealt with by the learned Civil Judge in first appeal and, accordingly, the proper course for us to take is to direct that the first appeal shall now be sent back to the Civil Judge and he shall be directed to deal with it according to law upon the footing of the answer which we have now given to the reference before us. We shall, therefore, formally set aside the order made by the Civil Judge and remand the first appeal to him to be dealt with as we have indicated. Costs will abide the result before the Civil Judge.

Order set aside.