1. This application has been preferred by the original plaintiffs against an order by the District Judge in appeal, dismissing the plaintiffs' application in the nature of a suit to pass a decree in terms of an award.
2. The plaintiffs contracted to purchase groundnuts from the defendants and entered into an agreement with them. One of the terms of the agreement was that in case of any dispute whatsoever arising under the contract the same shall be referred to two Europeans of the Bombay Chamber of Commerce, one to be nominated by each party. If any party failed to nominate an arbitrator within seven days from the date of the request by the other, the other party had the right to nominate both. In case the arbitrators did not agree they would appoint an umpire who must be an European member of the Chamber of Commerce. If the arbitrators did not agree as to the choice of the umpire within three days, the chairman of the Bombay Chamber of Commerce or the gentleman acting for the time being as such would be empowered to nominate one of them. A dispute arose between the parties and the plaintiffs asked the defendants to nominate their arbitrator. That was not done. The plaintiffs then nominated both the arbitrators, who, purporting to act under the Indian Arbitration Act of 1899, made an award, and the plaintiffs filed an application under para. 20 of the second schedule of the Civil Procedure Code to have that award filed and a decree passed in terms thereof.
3. The trial Court acceded to the plaintiffs' request holding that the application under para. 20 was maintainable. The appellate Court reversed that decision and held that this could not be said to be a reference to arbitration within the meaning of the second schedule, and that the Court had no power to pass a decree in terms of the award under para. 20.
4. According to that paragraph, where any matter has been referred to arbitration without the intervention of a Court and an award has been made thereon, any person interested in the award may apply to the Court for filing it. Now ' a reference to arbitration ' has been dealt with in para. 1 of the second schedule, which says that where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may apply to the Court for an order of reference, and under para. 2 the arbitrator shall be appointed in such manner as may be agreed upon between the parties. Now this reference implies that both the parties should appoint some persons as arbitrators and then apply to the Court for an order of reference to arbitration. There is, however, no reference of this kind in the present case. There is only an agreement between the parties, one of the clauses of which is that if any dispute between the parties arises in future, it should be referred to the arbitration in the manner laid down in the agreement. That in my judgment would fall not under para. 20 but under para. 17 of the second schedule which says:
Where any persons agree in writing that any difference between them shall be referred to arbitration, the parties to the agreement or any of them, may apply to any Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court.
So this paragraph refers exactly to the agreement of the kind we have here. The procedure provided for under this paragraph is that an application should be made to the Court for enforcing that agreement, that the other side should be served with a notice thereof to show cause why the agreement should not be filed, and if no sufficient cause is shown, the Court has to direct that the agreement should be filed and it shall make an order of reference to the arbitrator appointed under the agreement. Thus the agreement itself must be filed in suit and the reference to arbitrators, the making of the award and filing thereof are a subsequent stage. It is clear that the Legislature has contemplated a case of a general agreement to refer disputes to arbitration as falling under para. 17, and a specified reference to arbitrators as falling under para. 20. Paragraph 20 refers to a reference by the parties to arbitration about any dispute that might have arisen between them, while para, 17 may apply to future disputes as in the present case. Therefore, I think, the lower appellate Court is right in holding that para. 17 applies, and therefore the trial Court had no jurisdiction to pass a decree acting under para. 20. Besides the award is purported to have been made by the arbitrators under the Indian Arbitration Act, and an application to file such an award cannot be made under Schedule II of the Civil Procedure Code.
5. But at the same time, it does not necessarily follow that the application made by the plaintiffs should be dismissed. As para. 17 applies to the facts of this case, the petitioners should be given liberty to amend their petition so as to make it in conformity with para. 17, and then after it is registered as a suit notice should be issued to the other side.
6. The proper order will therefore be that the petitioners should be allowed to amend their application so as to bring it in conformity with the provisions of para. 17, and the Court will then proceed to act under the procedure provided in that paragraph.
7. The rule is discharged with costs.