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Vyankatesh Mahadev Vs. Ramchandra Krishna - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtMumbai
Decided On
Case NumberCivil Appealication No. 251 of 1913
Judge
Reported inAIR1914Bom184; (1914)16BOMLR653
AppellantVyankatesh Mahadev
RespondentRamchandra Krishna
Excerpt:
civil procedure code (act v of 1908), schedule ii, clause 19 fending suit-private reference to arbitration-stay of suit.;after the institution of a suit, the plaintiff and one of the defendants entered into an agreement to submit the matters in difference between them to arbitration. the defendant then moved the court to stay the suit. the lower courts declined to do so. the defendant having applied to the high court;-;dismissing the application, that the agreement did not fall under any of the clauses of the second schedule of the civil procedure code, 1908. - - the court under those sixteen clauses controls completely the whole course of the reference, indeed the reference is its own, and its jurisdiction is never at any time ousted until a good award has been made. there remains only..........of the learned judge would or would not have amounted to irregularity in the exercise of the jurisdiction within the meaning of section 115 of the civil procedure code. rule discharged with costs.
Judgment:

Beaman, J.

1. A suit had been instituted and it is alleged that the plaintiff and one of the defendants after the institution of the suit entered into an agreement to submit the matters in difference between them to arbitration. Thereupon the defendant moved the Court to stay the further progress of the suit. The first Court refused, and on appeal the learned District Judge was of opinion that the defendant's application could not be sustained and that the suit must proceed.

2. We are asked to interfere in the exercise of our revisional jurisdiction and to set aside that order of the learned District Judge. It appears to me that the agreement alleged to have been made between the plaintiff and one of the defendants does not fall under any of the clauses of the second Schedule of the Civil Procedure Code. The first sixteen of those clauses exhaust the whole process of arbitration after the suit has been instituted and the parties desired to submit their differences to arbitration under the control of the Court. The Court under those sixteen clauses controls completely the whole course of the reference, indeed the reference is its own, and its jurisdiction is never at any time ousted until a good award has been made. In the event of an award having been made, but being set aside for any reason, the Court immediately resumes its jurisdiction and completes the trial of the action. The next class of cases provided for in the second Schedule are TEBH those in which persons who have not instituted any legal proceedings desire to submit any difference between them to arbitration. Having agreed to do so either party may then bring the agreement into Court, and, if resisted by the other party, his application to have the agreement filed and further action taken upon it will be treated as a suit. Thereafter, again the Court immediately assumes and retains control of the subsequent arbitration proceedings. The third and the last case provided for in the second Schedule is where the parties who have not come into Court have not only agreed to refer matters in difference between them to arbitration, but have obtained an award. Here again the party desiring to enforce the award may bring it into Court and upon proper proceedings obtain a decree in conformity with it. There remains only one single Clause 18 which is of an exceptional character, and virtually re-enacts a portion of Section 21 of the Specific Relief Act, which is declared to have no applicability to any arbitration proceeding provided for in the second Schedule. That clause, which is also to be found almost in tolidem verbis in Section 19 of the Arbitration Act, provides for a special class of cases in which, after parties have agreed to submit matters in difference between them to arbitration, one of them in violation of such agreement institutes a suit in respect of any or all of those matters. Then the other party may set up in bar of the suit the agreement to submit to arbitration. If this analysis be correct, and I think there is no doubt but that it is, it is clear that what the defendant here relies upon is an agreement nowhere provided for in the second Schedule of the Civil Procedure Code, nor does it fall within the language or the spirit of Section 18, for that section, as I say, is designedly restricted to cases in which the suit com. plained of has been instituted after the agreement to refer to arbitration. It might be objected that no solid ground in reason can be found for refusing to extend the principle of that section to cases where, after a suit had been instituted, parties had privately agreed to submit the matters in difference bet-wean them to arbitration, and in spite of such agreement and in violation of it one of them insists on going on with the suit. The answer to that appears to me to be short and simple, and to cover other objections which might arise upon other points I have very generally indicated, for, in my opinion, where the Court is seized of a cause its jurisdiction cannot be ousted by the private and secret act of parties, and if they, after having invoked the authority of the Court and placed themselves under its superintendence, desire to alter the tribunal and substitute a private arbitrator for the Court, they must proceed according to the law laid down in the first sixteen clauses of the second Schedule. Therefore it appears to me that there is no force whatever in the applicant's contention that a private agreement of this kind is on the same footing as the private agreement contemplated in Clause 17 reproducing old Section 523, nor, as I have just explained, will it give him any right to invoke the assistance of Clause 18. How then could it serve him? Only as a lawful agreement by which the suit had been adjusted wholly or in part. Doubtless any parties litigating in Court have perfect liberty to compose their differences amongst themselves by entering into any lawful agreement, compromise or satisfaction. And when this is done they have only to apply to the Court to act under Order XXIII Rule 3. But it is equally clear that a mere agreement to refer to arbitration, even though it be in other respects valid, could not be such an adjustment in whole or in part of the suit as the Court could give effect to under Order XXIII Rule 3.

3. In my opinion, therefore, the learned Judge below was right and no case whatever has been made out for the exercise of our revisional jurisdiction. I would, therefore, dismiss this application with all costs.

Hayward, J.

4. The plaintiff brought a suit against the defendant Mo. 1 with regard to a certain matter which was subsequently referred by them to private arbitration without leave of the Court. The defendant No. 1 thereupon applied for stay of the suit in consequence of the reference to private arbitration outside the Court.

5. The original Court refused to stay the suit, holding that the reference had been made under a mistake of fact, and that in any case it did not amount to an adjustment of the matter in suit within the meaning of Order XXIII Rule 3, of the Civil Procedure Code.

6. The first appeal Court did not decide the question as to mistake of fact, but held that there was no adjustment inasmuch as there had been no award within the meaning of 0. XXIII Rule 3 and that further the suit could not be held to be barred by the contract to refer as that contract was entered into subsequent to suit, and was not prior to suit as contemplated by Section 21 of the Specific Relief Act. Moreover, it poiuted out that that provision had been repealed by Rule 22 of the second Schedule of the Civil Procedure Code.

7. On this application for revision it has been contended though the contention has not been very seriously pressed, that the submission to arbitration did as a matter of fact amount to a lawful adjustment, but there does not seem to me to be any substance in that contention as there was no resulting award as explained in the case of Rukhanbai v. Adamji (1908) 10 Bom. L.R. 366, I.L.R. 372 13 Bom. 69. and Venkatachala v. Rangiah I.L.R. (1911) Mad. 353. It is to be observed that there was a resulting award in Harakhbai v. Jamnabai (1912) 15 Bom. L.R. 340; I.L.K. 37 Bom. 639. in which case it was held by the present learned Acting Chief Justice that there was a good adjustment within the meaning of Order XXIII Rule 3, to which effect could be given under the saving provisions of Section 89 of the Civil Procedure Code.

8. But it has been contended, and strenuously contended, that a stay ought to have been granted of the suit. It has been argued that notwithstanding the pendency of the suitit was open to the parties to enter into an agreement to arbitrate privately, without leave of the Court, and to proceed to have that private reference to arbitration or the resulting award converted into an independent decree of the Court. It appears to me, however, that the matter is concluded by the wording of Rule 3 and Rule 15 occurring among the first sixteen rules referring to arbitration during pendency of a suit with the consent of the Court. Rule 3 lays down the conditions upon which jurisdiction in the suit shall be withdrawn from the Court and that condition is that there has been an order of reference under that rule by the Court. As no other condition is stated, it must be presumed that that is the only condition under which the suit could be removed from the jurisdiction of the Court. Then again Rule 15 expressly provides the conditions under which jurisdiction in the suit can be resumed by the Court. It states that that can occur when the award either becomes void or has been set aside by order of the Court. Again as these are the only circumstances under which jurisdiction can again be resumed by the Court, it must be presumed that there are no other circumstances under which such jurisdiction could be resumed by the Court. A ruling t0 the contrary has been quoted to us in the case of Harivalabdas Kalliandas v. Utamchand Manekchand I.L.R. (1879) 4 Bom. 1. and it has been pointed out that that ruling was apparently approved of by one of the Judges in the case of Pragdas v. Girdhurdas (1901) 3 Bom. L.R. 431; I, L., but it seems to me that caution must be observed in giving weight to that distant authority in view of the observations of the Privy Council in the case of Gulam khans. Muhammad Hassan I.L.R. (1901) 29 Cal. 76. The Privy Council there appear to have taken the view that the rules corresponding to the present rules of the Code were exclusive, and the only rules permitting arbitration during the pendency of a suit before a Court, and that the succeeding rules corresponding to Rules 17 to 21 of the second Schedule of the Code applied solely to arbitration in matters which had not come as suits before the Court. The Privy Council's decision has been so interpreted both by the Calcutta and Madras High Courts in the cases of Tincowry Bey v. Fakir Chand Bey I.L.R. (1902) Cal. 218. and Venkatachala v. Rangiah I.L.R. (1911) Mad 353.

9. It has also to be observed that stay of a suit instituted after the reference to arbitration would. alone appear to be contemplated by the wording of Rule 18 of the second Schedule which is almost identical with the concluding thirty-seven words of Section 21 of the Specific Relief Act, and that interpretation is borne out by the cases of Peruri Surya Narayan & Co. v. Gullapudi Chinna (1909) 11 Bom. L.R. 1060; I.L.R. 34 Bom. 372. and Ramjidas Poddar v. Howse I.L.R. (1907) 35 Cal. 199. dealing with the corresponding Section 19 of the Indian Arbitration Act. So that this application would have been bound to fail whether it had been possible to have recourse to Rule 18 of the second Schedule of the Civil Procedure Code or the concluding words of Section 21 of the Specific Relief Act or Section 19 of the Indian Arbitration Act. It appears to me, therefore, that this application must be dismissed, and the order of the first appeal Court confirmed, and it is, therefore, unnecessary to discuss the urther question raised whether the decision of the learned Judge would or would not have amounted to irregularity in the exercise of the jurisdiction within the meaning of Section 115 of the Civil Procedure Code. Rule discharged with costs.


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