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  • Odgers
  • Curgenven, JJ.
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Smart Summary

Case Summary — Revision of Decree Confirming an Award (District Munsif of Ongole)

Factual and Procedural Background

The District Munsif of Ongole framed a decree dated 17 April 1923 in terms of an award. The petition before the revisional Court challenges that decree. The petitioners are defendants 3 and 4, who are reversioners of one Kottayya. The suit in the lower Court arose from a mortgage executed by Kottayya's widow; the suit was filed after her death. The mortgagees were predecessors in title of defendants 1 and 2, and the plaintiff is an assignee of those mortgagees. The central dispute in the original suit was whether the mortgage bound the reversioners.

The parties are alleged to have agreed to refer the dispute to arbitration under Schedule 2, paragraph 1 of the Code of Civil Procedure. Defendants 1 and 4 were minors when the suit commenced; the proceedings relevant here concern defendant 4, who was represented by his mother acting as guardian ad litem. The petition to refer to arbitration dated 6 October 1922 was not signed by that guardian, and the petitioners challenge the validity of the reference and the consequent decree. The District Munsif proceeded on the arbitration award and held that the award was binding on the minor defendants. The present matter is a civil revision petition attacking that decision.

Legal Issues Presented

  1. Whether the reference to arbitration was valid as regards defendant 4, given that the guardian ad litem did not sign the written petition to refer the suit to arbitration.
  2. Whether the guardian ad litem could validly consent on behalf of the minor to a reference empowering the arbitrator to make an award after an enquiry or without conducting any enquiry (i.e., whether such a waiver of procedure was permissible for a guardian to make).
  3. Whether the manner in which the arbitrator conducted the enquiry (including reliance on his own knowledge and oral enquiries) rendered the award void for want of natural justice or otherwise removed jurisdiction from the Court to make a decree in accordance with the award.
  4. Whether the revisional Court should interfere with a decree made on an award — i.e., the scope and limits of revision in matters where a decree follows an arbitral award.

Arguments of the Parties

Petitioners' (Appellants') Arguments

  • The petition to refer the suit to arbitration was not signed by the guardian ad litem of defendant 4; therefore, the reference (as to defendant 4) was invalid and the Court had no jurisdiction to enter a decree based on the award.
  • The guardian ad litem had no right to consent to a reference that empowered the arbitrator to make an award either after making enquiries or without making enquiries — such a consent purportedly surrendered procedural protections of the minor and could not be validly given by the guardian.
  • Allegations (as raised below) that the arbitrator might be biased or that the arbitrator had become “unjust” — supporting an objection to the award and its procedures — were relied upon to attack the award's validity.

Respondent's Arguments and Evidence

  • The guardian ad litem (the mother) did in fact consent to the reference: she was present in court and assented orally; she later participated in communications with the arbitrator (including a petition dated 27 November 1922 to the arbitrator asking him not to proceed), and in her testimony admitted consenting to the reference because she believed the arbitrator would favour her.
  • The statutory requirement that the application to refer "shall be in writing" is directory and not mandatory; therefore, the absence of the guardian's signature on the written petition does not invalidate the reference.
  • The arbitrator, though authorised to proceed "after making enquiry or without making enquiry," did in fact rely on personal knowledge and oral enquiries and gave reasons (e.g., concluding the widow could not maintain herself from the income of the lands). The method adopted did not, in the circumstances, amount to such a denial of natural justice as to render the award void.
  • The revisional jurisdiction should not be exercised to upset decrees based on awards except for limited grounds (e.g., no jurisdiction to refer or decree exceeding the award); none of those exceptional grounds were made out here.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Shoma Sundaram Iyer v. Abdul Latiff That the provision "the application shall be in writing" in para. 1, Sch. 2, CPC is directory and not mandatory. Used to support the conclusion that the guardian's lack of signature on the written petition did not necessarily invalidate the reference to arbitration.
Umed Singh v. Sobhang Mal (also cited as Umed Singh v. Seth Sobhan Mal Dhadha) Para. 1, Sch. 2 does not require that the writing be signed; presence and assent of guardian in Court may suffice; the "in writing" requirement is not mandatory. Relied on to show that not all parties need sign the written application and that oral assent/presence can establish consent to reference.
Sanyasi Rao v. Venkata Rao (Chintalapudi Venkata Rao) Held that where an arbitrator conducted enquiries and obtained information behind the backs of parties (one-sided information), the procedure could vitiate the award and the guardian could not waive the minor's right to object; guardian's conduct could amount to gross negligence. The Court distinguished that decision as fact-specific and a first appeal; it did not treat Sanyasi Rao as directly controlling here because the arbitrator in the present case did make inquiries openly and the record did not show the same irregularity or gross negligence.
Ghulam Khan v. Muhammad Hassan Authority on the limited nature of revision in arbitration matters and the undesirability of allowing revision that would undermine finality of awards. Cited to support the proposition that revision should not lightly disturb decrees passed on awards and that finality of awards is a policy consideration against broad revision.
Vaithinatha Aiyar v. Subramanya Aiyar Authority concerning the scope of revisional power in matters relating to awards (cited alongside Ghulam Khan). Relied on for the limited scope of revision and the general reluctance of Courts to overturn decrees based on awards.
N. Krishnamurthi v. G. Ganpathi Lingam That Courts will not usually interfere in revision with a decree passed on an award; interference justified only where there was no jurisdiction to refer or the decree is in excess or not in accordance with the award. Applied to conclude that none of the exceptional grounds for interfering in revision were made out in the present case.
Batcha Sahib v. Abdul Gunny Statement that the legislature's policy is that judgments in accordance with awards should be final and that revision should not be entertained unless it is clear the Judge exercised jurisdiction wrongly. Quoted to reinforce the principle of finality of awards and to support dismissal of the revision petition absent clear jurisdictional error.
P. Pavana Panda v. Narasinga Panda Cited as authority for the proposition that if a minor was not a party to the reference, the award could be void. Mentioned by Curgenven, J. as an example of authority, but the Court found evidence of consent in this case and thus treated the cited authority as distinguishable or inapplicable on the facts.
Luxumibai v. Hajee Widina Cossum Authority for the proposition that the requirement "the application shall be in writing" is directory, not mandatory. Used, along with other authorities, to support the conclusion that lack of a signed written application does not necessarily invalidate a reference to arbitration.
Tekat Mal Oswal v. Ananda Moy Basu Another authority cited for the proposition that the "in writing" provision is directory. Relied on to bolster the view that formal signature on the written petition is not an absolute prerequisite where consent can be otherwise established.
Vijaya Ramayya v. Venkata Subba Rao Cited on the point of non-compliance with Order 32, Rule 7 and the effect of such omission on the validity of the reference. Referred to by Curgenven, J. for the proposition that omission under O.32 R.7 might validate or affect the reference; the Court noted that this point was not raised in the grounds of revision and did not consider it further.

Court's Reasoning and Analysis

Odgers, J.

  1. On the first ground (absence of guardian's signature): Odgers, J. examined the documentary record and oral evidence. He observed that the guardian had filed a petition to the arbitrator dated 27 November 1922 (asking him not to proceed) which began by saying both parties had appointed the arbitrator and that the records were sent to him. The guardian (mother) in evidence as P.W.1 admitted that she consented to the reference because she thought the arbitrator would favour her, and she admitted preference for the petition of 27 November because she wanted arbitration to proceed only if favourable.
  2. Odgers, J. relied on authority (e.g., Shoma Sundaram Iyer and Umed Singh) to hold that the statutory requirement that the application be "in writing" is directory; all parties need not sign the written petition. He concluded that the guardian did in fact consent to the appointment of the arbitrator and to the reference, so the first ground failed.
  3. On the second ground (whether guardian could consent to a reference allowing award after enquiry or without enquiry): Odgers, J. discussed Sanyasi Rao v. Venkata Rao, acknowledging that in that case the arbitrator's procedure (making enquiries behind the backs of parties) vitiated the award and the guardian could not waive the minor's right to object. However, Odgers, J. treated Sanyasi Rao as fact-specific and a first appeal rather than a revision. He noted that here the arbitrator in fact relied on both personal knowledge and oral enquiries and reached conclusions (that the widow could not maintain herself and the debt was binding on heirs). Given the familial nature of the reference, the arbitrator's relationship to parties, and the subject matter, Odgers, J. was unwilling to insist on strict judicial forms; he found no sufficient basis to hold the reference or award invalid on this ground.
  4. On the scope of revisional power: Odgers, J. cited authorities (Ghulam Khan; Vaithinatha Aiyar; N. Krishnamurthi; Batcha Sahib) illustrating the limited grounds for revision of decrees founded on awards and the legislature's policy favouring finality. He concluded that revision should not be used to reopen such matters except for clear jurisdictional error or where decree exceeds the award. As no such grounds were made out here, Odgers, J. dismissed the revision petition with costs.

Curgenven, J.

  1. Curgenven, J. addressed the absence of the guardian's signature and observed that the petition to refer was not signed by the guardian but found evidence (oral testimony and affidavits) that the guardian was present, assented orally, and later acted inconsistently with an assertion of no consent. He considered the guardian's later claim that she was ignorant of the arbitrator's relationship to parties to be contradicted by her own testimony. He relied on Umed Singh and related authorities to treat the "in writing" requirement as directory and to accept proof of assent short of signature.
  2. Curgenven, J. also noted that the point regarding Order 32, Rule 7 and any omission thereunder was not raised in the grounds of revision and therefore could not be entertained at this stage.
  3. On the nature of the arbitrator's enquiry and natural justice: Curgenven, J. acknowledged the broad terms of the reference (empowering award after enquiry or without enquiry) and that the arbitrator had a free hand. He considered Sanyasi Rao but found insufficient material on the present record to discredit the arbitrator's conduct. Given the arbitrator's personal knowledge, relationship to the parties, and the subject matter (whether the widow could maintain herself), he held that the methods actually adopted were not necessarily objectionable and that ordinary judicial forms need not be strictly followed by an arbitrator in such matters. Finally, he agreed with the general proposition that revision is not the proper forum to upset decrees based on awards unless jurisdictional defects are shown.

Holding and Implications

HOLDING: The civil revision petition is DISMISSED. The petitioners' grounds — that the guardian ad litem's lack of signature invalidated the reference and that the guardian could not waive procedural rights by consenting to an arbitrator's power to decide with or without enquiry — were rejected. Costs were awarded to respondent 1.

Implications:

  • Direct effect: The decree framed by the District Munsif on the arbitrator's award stands; the petitioners' challenge in revision fails and they must pay the costs of respondent 1.
  • On legal principle: The Court reaffirmed that the requirement that an application to refer be "in writing" is, in the cited authorities, directory and not necessarily a jurisdictional bar if assent can be otherwise established (for example by presence and oral consent). The Court distinguished cases condemning one-sided procedures by treating them as fact-specific; where the arbitrator actually makes open enquiries and the record does not show procedural unfairness or gross negligence by the guardian, the award will not be set aside in revision.
  • On revisional scope: The decision underscores the limited role of revision in matters where decrees follow awards — revision will not lightly disturb such decrees unless jurisdiction to refer is absent or other narrow, recognised exceptional grounds are made out. The Court emphasized the policy of finality of awards and the caution required before upsetting them in revision.
  • No new binding precedent was laid down; the Court applied and distinguished existing authorities and refused to interfere on the facts before it.

Order pronounced: Petition dismissed.

Show full summary ...

    Gudipoodi Subbayya v. Kotapalli Seshayya

    Odgers, J.:— This is a petition to revise the judgment of the District Munsif of Ongole, dated 17th April, 1923, wherein he framed a decree in terms of a certain award. The petitioners (defendants 3 and 4) are the reversioners of one Kottayya. The suit was brought against them by the plaintiff on a mortgage by Kotayya's widow and was filed after her death. The mortgagees were the predecessors in title of defendants 1 and 2, and the plaintiff is an assignee from them. The question in the suit was whether the mortgage was binding on the reversioner and the parties are alleged to have agreed to refer the matter to arbitration under Sch. 2, para 1, Code of Civil Procedure. Defendants 1 and 4, were minors when the suit commenced. We are not concerned with the first of these. The latter was represented by his mother in the suit and the first question raised before us is that as his guardian ad litem did not sign the petition to refer the suit to arbitration dated 6th October, 1922, there has not, at least as far as defendant 4 is concerned, been a valid reference under Sch. 2, Code of Civil Procedure. The petition in question stated that the parties have agreed to abide by the award of one Potheneeni Raghavulu passed by him after making enquiry or without making enquiry and without having anything to do with the appeal.

    2. It is suggested that the mother's thumb impression was taken to the original of the petition, but there is no evidence to support this. The first remark to make is that this ground has not been taken in the lower Court, but that does not preclude us from considering it here, because it must be held to go to the question of jurisdiction. It is quite clear that the jurisdiction of an arbitrator under the 1st clause is founded on the consent of parties that he shall decide the matter referred to. Now the question is did all the parties consent, or rather did the guardian of defendant 4, consent to this reference on his behalf? It has been held in several cases that the provision of the paragraph that the application shall be in writing is directory only and not mandatory: see Shoma Sundaram Iyer v. Abdul Latiff(1). It appears from the records that the guardian seat a petition to the arbitrator dated 27th November, 1922, requesting him not to proceed with the arbitration, because there was a rumour that he was going to give a decision against the defendants and in favour of the plaintiff. This petition begins:

    Both the parties in the above suit have appointed you as panchayatdar and for the disposal of the suit we sent the records to you.

    3. It is said that cannot be taken as antedating the consent of the guardian to the reference to arbitration and that it shows only that the widow was willing to join in the reference and so requested the arbitrator not to proceed with the award.

    4. That position seems to me on the facts, untenable, for in her evidence as P.W 1, she says she consented to the reference as the arbitrator agreed to favour her and she quite frankly says that she preferred the petition just referred to, because the arbitration should not be proceeded with unless the result was going to be favourable to herself. A Brahmin wrote the petition, because the pleader's clerk refused to write it saying:

    I (witness) have no business to do it after having consented to the reference.

    5. It seems to me, therefore, that there is no doubt that the guardian of the minor, defendant 4 did consent to the appointment of the arbitrator in the first instance and to the reference of the matter in dispute to arbitrators. That all the parties need not sign the application is plain from the decision of the Privy Council in Umed Singh v. Sobhang Mal(2). There it appears that the parties had signed the agreement including the guardian ad litem of the minor appellant and Mr. Somayya for the petitioner urges that the reasoning of their Lordships' decision is that this agreement was presented to the Court along with the petition which was not signed by the minor appellant's guardian. Their Lordships, however, do not base their decision on the existence of any such agreement and they point out that para. 1, Sch. 2, does not require that the writing should of necessity be signed, that the guardian was in Court, and assented to the application and that, therefore, no injustice has arisen. It seems to me, therefore, that there is no substance in the 1st point taken for the petitioner, namely that the consent of defendant 4's guardian ad litem was not given to the reference to arbitration.

    6. The 2nd point argued is that the guardian ad litem had no right to consent on behalf of the petitioner to a reference empowering the arbitrator to pass an award after conducting an enquiry or without conducting any enquiry. The case put forward as authority for this position is Sanyasi Rao v. Venkata Rao(3). The arbitrator was to come to a conclusion either on his own information or on the other information known in the village or by examining witnesses of both the parties if he thought necessary. The arbitrator admitted that he enquired of witnesses behind the back of the parties and that he collected information and obtained an admission from the defendant's mother without noting them down in writing. The question according to the learned Judges was whether the minor defendant was bound by such surrender by his guardian of his legal right that the witnesses should be examined in the presence of parties and whether such a procedure makes the award otherwise invalid within the meaning of Section 15, Sch. 2 of the CPC. It was said that it was improper to get information from one side in the absence of the other and to utilize the information not accessible to others. The learned Judges were of opinion that this procedure vitiated the award and that the defendant's guardian could not waive the minors' right to object to this irregular procedure. Further one of the learned Judges at least found that the guardian's conduct amounted to gross negligence. Now that was a matter in a first appeal and not in revision as here and I think it must be taken to be a decision on the particular facts of that case. But the fact here is that although the arbitrator was empowered to proceed with or without any enquiry he, as a matter of fact, relied not only on his own knowledge but also from what he ascertained by oral enquiries and he came to the conclusion that the widow could not maintain herself from the income of the lands of her late husband and that the debt in question was, therefore, binding on the heirs. It seems to me that in cases of this sort where the parties have refrered the matter to an arbitrator related to all of them one cannot expect too precise an insistence on the forms of judicial procedure. The arbitrator was no doubt referred to because he was a relation and known to both the parties and was more or less in possession of the facts of the case. It does not seem to me to have been anywhere raised that this reference to arbitration was improper on this ground. It is noteworthy that in the affidavit in support of her objection petition dated 12th December, 1922 the mother states that the arbitrator posted the case to the 27th November, 1922 and ordered the parties to be present with witnesses and she put in her petition on the 27th November, 1922 because she found or she thought that the arbitrator had “become unjust.” She nowhere says that she was not a consenting party to the reference, nor that the reference is invalid because of the clause referred to. In the order on this objection petition the Petitioner, according to the learned District Munsif, alleged that she was ignorant of the relationship between the arbitrator and defendants 1 and 2 at the time of the reference, but in the witness-box she stated that she knew of the relationship even at that time. The Munsif came to the conclusion that none of the charges propounded in the objection petition were sustainable and he also held that the award was binding on the minor defendants.

    7. As to the power of the Court to revise in these arbitration matters reference has been made to Ghulam Khan v. Muhammad Hassan(4), and Vaithinatha Aiyar v. Subramanya Aiyar(5). In the first of these cases the Privy Council thought that revision was, if possible, more objectionable than appeal as, if an application to revise were admissible in cases like that before their Lordships, the finality of any award would be open to question. In N. Krishnamurthi v. G. Ganpathi Lingam(6) Mr. Justice Oldfield held that the Court will not usually interfere in revision with an order such as a decree passed on an award. The only way in which interference can be justified is that there was no jurisdiction to refer to arbitration at all, or that the decree is in excess or is not in accordance with the award. Neither of the latter grounds have been argued before us and in Batcha Sahib v. Abdul Gunny(7), Sir Arnold White, C.J, pointed out that the policy of the legislature is that judgments in accordance with the award should be final and unless it is quite clear that the learned Judge has exercised the jurisdiction wrongly there should be no interference in revision. It, therefore, seems to me that there is no ground to interfere in revision in this case and that both the grounds urged by the petitioners must fail. The civil revision petition is dismissed with costs of respondent 1.

    8. Curgenven, J.:— The first objection raised in this case is that the minor was not a party to the reference to arbitration and that, therefore, the Court had no jurisdiction to make an order in accordance with the award; and P. Pavana Panda v. Narasinga Panda(8) has been cited as authority for the proposition that the award would be void. The question is whether the District Muusif's warrant referring the matter to arbitration was drawn with the concurrence of all the parties. We find that the petition to refer the matter was not signed by the guardian of defendant 4, but I do not think that necessarily disposes of the matter. The argument that has been addressed to us is that the guardian was present and consented orally to the course proposed and that no formal application was necessary. There appears to be no doubt both from the oral evidence given by the guardian herself and from the affidavit filed in support of her objection petition to the award that the plea that her consent was not given is entirely an afterthought. The plaintiffs themselves assert in their affidavit that the guardian was present in the lower Court and consented to refer the matter to arbitration; and having regard to the attitude which the guardian herself took up before the lower Court I think that this clearly represents the truth. We have, therefore, proof of consent by the guardian to the application to the Court to refer the matter to arbitration. It appears to me that the circumstances are similar to those dealt with in Umed Singh v. Seth Sobhan Mal Dhadha. In that case there was au agreement signed by all the parties which I think their Lordships of the Privy Council used as evidence of the concurrence of all. There was further an application which although not signed by the guardian of the minor was held sufficient to conform to the provisions of para 1, Sch. 2 Code of Civil Procedure. There is ample authority for the proposition that “the application shall be in writing” is merely directory and not mandatory: see Luxumibai v. Hajee Widina Cossum(9), Shoma Sundaram Iyer v. Abdul Latiff and Tekat Mal Oswal v. Ananda Moy Basu(10). It appears to me, therefore, that there is satisfactory proof that the minor's guardian consented to the reference, and, I will only add that this question was not raised before the lower Court and no evidence was gone into, so that it can hardly be raised here in a revision petition. We are also asked to interfere under the provisions of O. 32, R. 7 inasmuch as the provisions of that rule had not been complied with by the guardian, and Vijaya Ramayya v. Venkata Subba Rao(11) was quoted for the position that such omission would validate the reference. This point was not raised in the grounds of revision, or even in the supplementary grounds, and I do not think that it can be considered now.

    9. The remaining point has reference to the nature of the terms of reference and the method adopted by the arbitrator in investigating the question referred to him. The terms of reference undoubtedly gave him a very free hand, because they authorised him to give his award after going into the contentions or not going into the contentions of both parties. What he actually did is stated in his award, and the argument is addressed to us that the method he adopted was opposed to natural justice and that no guardian should have consented to such an arrangement in the interests of the minor. Reference has been made to Sanyasi Rao v. Chintalapudi Venkata Rao which was a first appeal so that the learned Judges could treat the question as one of fact and law, whereas the question to be considered here is only one of jurisdiction. The conduct of the arbitrator in that case was seriously impugned, but here I do not think there is sufficient material for discrediting the course which the arbitrator actually took. The nature of the enquiry which should be undertaken may depend on the nature of the questions referred to the arbitrator and here the question was whether the widow could live upon her resources without incurring any debt. The arbitrator was a relative and had personal knowledge of her affairs, and further he was in a position to make a personal inquiry, and I do not think that the methods which he in fact adopted were necessarily objectionable. It is not essential that in every case the ordinary rules of judicial procedure should be followed by an arbitrator inquiring into a matter of this kind. It has been held in the case to which my learned brother has referred that in general the revision of decrees based upon awards is objectionable and I consider that it would not be justifiable for such a ground as this, since no question of jurisdiction is involved. I agree that the civil revision petition must be dismissed with costs of respondent 1.

    10. Petition dismissed.

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    Comments

    Gudipoodi Subbayya v. Kotapalli Seshayya
    (Mar 8, 1927)