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KurbanhusseIn Mahomedali Kharodawala Vs. Husseinbhai Mithabhai Dhabu Alias Kanaswala - Court Judgment

LegalCrystal Citation
SubjectProperty;Limitation
CourtMumbai
Decided On
Case NumberSecond Appeal No. 720 of 1943
Judge
Reported in(1948)50BOMLR604
AppellantKurbanhusseIn Mahomedali Kharodawala
RespondentHusseinbhai Mithabhai Dhabu Alias Kanaswala
Excerpt:
indian limitation act (ix of 1908), articles 120 and 144-suit to recover possession of immoveable property-title based on award-period of limitation-award-binding effect.; a suit to recover possession of immoveable property on the strength of the title created by an award is governed by article 144, and not article 120, of the indian limitation act, 1908.; fardunji edalji v. jamsedji edalji (1903) i.l.r.28 bom. 1 : s.c. 5 bom. l.r. 705, sornavalli ammal v. muthayya sastrigal (1900) i.l.r. 23 mad. 593, and bhajja-hari saha banikya v. behary lal basak (1906) i.l.r. 33 cal. 881, followed.; rajmal girdharlal v. maruti shivram (1920) i.l.r. 45 bom. 329: s.c. 22 bom. l.r.377 and nanalal lallubhai v. chhotalal narsidas (1925) i.l.r. 49 bom. 693, not followed.; an award must have its full legal..........title cannot, in our opinion, affect the nature of the suit. in either case it is essentially a suit to recover possession of immovable property; and we are disposed to hold that such a suit would be governed by article 144 of the indian limitation act. both the courts below have, however, taken a contrary view and have held that article 120 applies; in arriving at the said conclusion they have relied upon some reported decisions of this court. it is therefore necessary to examine these decisions.6. the first material decision is to be found in fardunji edalji v. jamsedji edalji i.l.r. (1903) 28 bom. 1. in this case this court was dealing with the plaintiff's claim to recover a certain sum of money with interest due on an sward, and on the failure of the defendant to pay, for the.....
Judgment:

Gajendragadkar, J.

1. The suit giving rise to the present appeal had been filed by the plaintiff to recover possession of four items of immoveable property on the ground that he was entitled to them by virtue of an award made on March 2, 1925. The plaintiff's case was that he, the defendant, and two others were carrying on business in partnership at Dohad, and that the said partnership owned some properties. While the partnership was being carried on, disputes arose between the partners which the partners referred to five persons as arbitrators of their choice and confidence. The arbitrators examined the documents consisting mainly of the account books of the partnership and made their award on March 2, 1925. Under this award the plaintiff was given the properties in respect of which the present suit has been filed. After the award was made by the arbitrators, the plaintiff filed an application under paragraph 20 of schedule II of the Civil Procedure Code in the Court of the First Class Subordinate Judge at Nadiad. The said application was numbered as a suit, but eventually the plaintiff withdrew the said application on the ground that he had recovered some of the properties allotted to him under the award and would have to file a suit for the possession of the remaining properties in the Dohad Court. The application was withdrawn on January 6, 1926, without the Court's permission to file a fresh application in future. Thereafter the plaintiff took no steps until he filed the present suit on February 25,1937, almost precisely within 12 years from the date when the award was made.

2. The claim thus made by the plaintiff was resisted by the defendant on several grounds, only three of which need be mentioned at this stage. It was urged by him that the suit was barred under the provisions of Order XXIII, Rule 1, of the Civil Procedure Code, 1908, by reason of the fact that the application made by him in the Nadiad Court was withdrawn after it had been numbered as a suit. He also urged that the present suit was barred by res judicata. To these two pleas was added a third plea of limitation ; the contention for the defendant being that the suit was one to enforce an award and not one for the recovery of possession of immoveable property, and that such a suit is governed by Article 120 of the Indian Limitation Act. It is obvious that, if Article 120 were to be applied, the suit is clearly beyond time. The three pleas to which I hsve just referred gave rise to three issues which were tried as preliminary issues in both the Courts below. The learned trial Judge negatived the defendant's plea that the suit was barred by Order XXIII, Rule 1 or by res judicata. He, however, accepted the plea made by the defendant that the suit was barred by limitation and so dismissed the plaintiff's suit. He held that the suit was one for the enforcement of the award and was governed by Article 120 of the Indian Limitation Act. When the matter went in appeal, the learned District Judge took the same view on the three questions that arose for his determination, with the result that he dismissed the appeal and affirmed the decree passed by the learned trial Judge. It was against this decree that the plaintiff preferred the present second appeal. When this appeal was argued before Macklin and Bavdekar JJ. on September 27, 1946, Mr. Section M. Shah for the plaintiffs contended that the decision of the Courts below on the question of limitation was wrong ; and he argued that the suit was clearly one for possession of immovable property and as such would be governed by Article 144 of the Indian Limitation Act. Mr. Shah also referred to the fact that the reported decisions of this Court on which the Courts below had relied in dealing with the question of limitation did not strictly apply to the facts of the present case and that some observations in the said decisions may have to be reconsidered since they were in conflict with the consensus of judicial opinion prevailing in the other High Courts in this country.

3. On behalf of the respondents a new point was raised at the hearing of this second appeal. It was urged by Mr. J.C. Shah on behalf of the defendant-respondent that ' an award by itself cannot create rights in immovable property and if that is so it is evident that a suit to obtain possession of land to which the plaintiff was given a title by means of an award would in effect be a suit to enforce an award and the plaintiff could not obtain possession until judicial effect is given to the award. 'The learned Judges took the view that the point thus raised by the respondent was of 'some difficulty and importance,' and so they referred the said point to a Full Bench. That is how this second appeal went before a Full Bench for the determination of the question referred to them. In the opinion of the Full Bench, while considering the question as to whether an award is capable of creating an interest in immovable property it would have to be considered whether the terms of the award itself purport to create such interest, and whether the arbitrators had authority to create such interest. If the answers to these two questions are in the affirmative, then such an award is capable of creating an interest in property 49 Bom. L. Rule 73. With this answer of the full bench the second appeal has come to us for disposal according to law.

4. The award in this case recites that the arbitrators had been given authority by a writing duly executed by all the partners on October 24, 1924, 'to divide their joint property.' The award then proceeds to say that by virtue of the said authority the arbitrators had heard' all the disputes and examined whatever documents and account books that were produced before them and had ascertained dues and outstandings and properties of the partners. They had also taken into account all the matters from the date of the reference paper till the date when the award was pronounced and had considered the rights and liabilities of all the parties in reference to the disputes referred to them. In conclusion the arbitrators effected a division of the properties belonging to the partnership between the partners and serially set out the properties that fell to the respective shares of the partners concerned. It would thus be clear that the arbitrators definitely averred in their award that the dispute that was referred to them was one which had arisen between the partners as regards the division of the partnership properties, and that they had been given authority to divide the said properties after hearing all the partners and considering such evidence as would be produced before them. In the plaint similar allegations were made about the nature of the reference made and the authority of the arbitrators, and the plaintiff had alleged that the award made under the said circumstances was binding on all the partners. On that basis the plaintiff had prayed for possession of the properties to which he was entitled under the award and which had still not been delivered to him by the defendant. In his written statement the defendant raised several contentions in addition to the three which I have already referred to. It was, however, expressly admitted by the defendant that the reference in writing had been made by the parties concerned to five persons; and it has not been denied that pursuant to the said reference an award had in fact been made. The written statement makes several contentions about the unsatisfactory manner in which the award has been made. It has been alleged that certain properties of the partnership have not been divided, and that certain properties exclusively belonging to the defendant have been dealt with as though they belonged to the partnership. It has also been urged in the written statement that Kurbanhussein Lukmanji was not the arbitrator of the defendant's choice and had not been appointed as an arbitrator by the partnership when the reference paper was signed. It is the defendant's case that this Kurbanhussein took part in the abitration proceedings, and the award for that reason would be invalid and not binding on the defendant. Though all these contentions were raised in great detail, the plaintiff's allegation that a reference was made to the arbitrators asking them to divide the partnership properties between the partners has not been denied. In these circumstances it seems to us that it would be reasonable to infer that the parties are not at dispute on the question as to whether the arbitrators had been in fact asked to divide the properties of the partnership. Since the dispute almost entirely centred round the division of the immovable properties belonging to the partnership, it is indeed inconceivable that without giving the arbitrators the authority to divide the properties they could have been asked to decide the dispute in any manner at all. It is true that the reference paper is not on the record, but the absence of the reference paper is, in our opinion, immaterial having regard to the recital in the award as to the contents of the reference paper and having regard to the fact that the allegations made in the plaint in that behalf have not been denied, either expressly or by necessary implication, in the written statement. Assuming that the arbitrators were given authority to divide the properties of the partnership between the contending partners, the next question which arises for decision is, does the award purport to divide the properties? The answer to this question is obvious, and indeed there is no dispute before us on this point. The award does in terms effect a division of the properties of the partnership and proceeds to allot to all the partners the properties to which the arbitrators thought they were entitled. On this view it must be held that the arbitrators had the necessary authority to divide the properties in question and the award made by them has in terms created an interest in the immovable properties in suit in favour of the plaintiff; since the two conditions laid down by the Full Bench are thus satisfied, it follows that the award is in law capable of creating an interest in property in favour of the plaintiff and has in fact created such interest in his favour.

5. That being the position of the award and the rights created under it, the question of limitation would ordinarily have presented no difficulty; the plaint in terms claims to recover immovable property and makes reference to the award as constituting the basis of the plaintiff's title. It is the relief claimed by the plaintiff and not the basis on which the said claim is made that really determines the question of limitation. If the award creates a title in favour of the plaintiff in regard to the properties in suit, the plaintiff's claim to recover possession of the said properties on the strength of the award can, we think, be treated as similar to a claim to recover possession of properties on the strength of a sale deed. In both cases the plaintiff claims to recover possession of certain properties and sets up a title in himself with regard to them. The title in one case may be evidenced by a sale deed and in another by an award. The difference in evidence as to the basis of the title cannot, in our opinion, affect the nature of the suit. In either case it is essentially a suit to recover possession of immovable property; and we are disposed to hold that such a suit would be governed by Article 144 of the Indian Limitation Act. Both the Courts below have, however, taken a contrary view and have held that Article 120 applies; in arriving at the said conclusion they have relied upon some reported decisions of this Court. It is therefore necessary to examine these decisions.

6. The first material decision is to be found in Fardunji Edalji v. Jamsedji Edalji I.L.R. (1903) 28 Bom. 1. In this case this Court was dealing with the plaintiff's claim to recover a certain sum of money with interest due on an sward, and on the failure of the defendant to pay, for the recovery of the said sum from the defendant's property. The defendant resisted the plaintiff's suit on the ground that it was a claim for specific performance which could not be sustained having regard to the provisions of Sections 21 and 30 of the Specific Relief Act. Jenkins C.J., however, negatived this contention (P3):

The first of these objections 'said Jenkins C.J.' proceeds on the assumption that the suit is one for specific performance, but in our opinion it clearly is not; it is a suit for the recovery of money and for relief incidental thereto.

It may be pointed out that after this pronouncement from Jenkins C.J. all the High Courts in India have similarly negatived the contention that a suit to obtain reliefs on the basis of an award is a suit for specific performance. This decision then clearly supports the proposition that a suit to recover money does not cease to be a suit for money as such merely because the claim for money is based, not upon a contract, but upon an award. By parity of reasoning a suit for possession of immovable property would, in our opinion, have to be regarded as a suit for possession of such immovable property, notwithstanding the fact that the claim to the property is based upon the provisions of an award.

7. The next decision is to be found in Rajmal Girdharlal v. Maruti Shivram I.L.R. (1920) 45 Bom. 329 . In the said case the parties to a mortgage had referred their disputes to arbitration out of Court and in due course an award had been made. It was followed by an application under paragraph 20 of the II Schedule of the old Code; but the said application was rejected. The unsuccessful party then sued on the award, but his claim was resisted on the ground that the refusal by the Court to file the award operated as res judicata. A plea of limitation was also raised. Both the pleas were rejected by this Court. While dealing with the question of limitation Macleod C.J. observed that 'the suit is not barred by limitation, because it seems to be settled now that a suit to enforce an award is a suit not provided by any other article of the Limitation Act. Then the time is six years under Article 120.' I may mention that the effect of this decision was to enlarge the period of limitation for the plaintiff's claim on the ground that the claim was one to enforce an award. If it had been held that the claim was one to recover money, the period of limitation would have been three years and not six. Fawcett J. agreed with the conclusion of the learned Chief Justice but contented himself with the observation that the suit was not one for specific performance and as such did not fall within Article 113 of the Indian Limitation Act, In terms the learned Judge referred to the observations of Jenkins C. J. in Fardunji Edalji v. Jamsedji Edalji, I may also point out that, though Macleod C.J. observed that the view which he took about the article of the Limitation Act applicable to the suit with which he was dealing was well settled, no authority was cited in support of the said view and no reference was made to Sornavalli Ammal v. Muthayya Sastrigal I.L.R. (1900) Mad. 593-which had been cited in the course of arguments and which had taken e contrary view. The same view on the question of limitation was taken by Macleod C.J. and Coyajee J, in Nanalal Lallubhai v. Chhotalal Narsidas I.L.R. (1925) 49 Bom. 693 In his judgment Macleod C.J. referred to his prior decision in Rajmal Girdharlal v. Maruti Shivram, and held that Article 120 applied. His attention was invited to the decision of Jenkins C.J. in Fardunji Edalji v. Jamsedji Edalji and it was contended that the ratio of the said decision was inconsistent with the view which he was disposed to take. As I have already mentioned, in Fardunji's case Jenkins C.J. had taken the view that a suit to recover money was a suit to recover money as such and not one for the specific performance of the contract. Macleod C.J., however, dealt with the said decision in these words (p. 695):

The question there was whether a suit on an award was a suit for specific performance, so far as we can gather, there was no question of limitation argued before the Court, nor was it decided that a suit to enforce an award is in reality a suit to recover money directed by the award to be paid to the successful party, so that the period of limitation for such a suit was three years and not six.

It is quite true that in Fardunji's case the question of limitation had not been raised; but it is hardly necessary to point out that Jenkins C.J. had in fact held that the suit before him was in reality a suit to recover money, notwithstanding the fact that the plaintiff's claim was based on an award.

8. The same question had arisen in a different form in Ishram v. Trimbak : AIR1928Bom264 where the claim to enforce a charge created by an award was the subject-matter of the suit. In dealing with the question of limitation Fawcett J. was apparently inclined to hold that a claim to enforce a charge would be governed by Article 132, notwithstanding the fact that the charge had been created by an award. But since the suit with which his Lordship was dealing had been filed within six years from the date when the cause of action accrued, the question as to whether Article 132 or Article 120 applied was immaterial, for on either view the suit was within time ; that is why Fawcett J. did not pursue the point any further. On these authorities the position is that a Division Bench of this Court has held in Fardunji Edalji v. Jamsedji Edalji that a suit to recover movables or money is a suit for the recovery of such movables or money in spite of the fact that the claim is based on an award. On the other hand, there are two decisions of a Division Bench of this Court in which it has been held that a suit to recover money on an award should be regarded as a suit to enforce award to which the residuary Article 120 should be applied. There is apparently some conflict in the views thus expressed; and we think it is open to us to follow either of the two views which appears to us to be reasonable. We would prefer to follow the view expressed by Jenkins C.J. in Fardunji's case. Besides the question of limitation which arises for determination in this case cannot strictly be regarded as concluded by the other decisions to which I have already referred. In the present case we are dealing with plaintiff's claim to recover possession of immovable property; whereas in the said decisions a claim for money or movables was involved. It is of course true that the reasoning adopted by Macleod C.J. is inconsistent with the reasoning which we prefer to adopt, but we are not prepared to say that we are bound by the said reasoning. Besides it may be pointed out that in dealing with the question referred to them the Full Bench- of which I was a member-have cited with implied approval the Madras and Calcutta decisions which hold that claims for possession of immovable property are governed by Article 144 though such claims are based on an award. It may be useful to refer to some of these decisions.

9. In Sarnavalli Ammal v. Muthayya Sastrigal it was held that a suit to enforce an award cannot be regarded as a suit for specific performance of the contract within the meaning of Article 113 of the Indian Limitation Act. It was pointed out that an award is the decision of the tribunal constituted by the parties and is a document which declares title of the parties and is evidence of such title on the date on which the award is made. In that view the suit must be considered as one for the reliefs claimed on the basis of the title as evidenced by the award. To the same effect is the decision of the Calcutta High Court Bhajahari Saha Banikya v. BeharyLal Basak I.L.R. (1906) Cal. 881, wherein it was held that a suit for recovery of possession of land on the declaration of the plaintiff's right thereto on the basis of an award made by the arbitrators appointed by the parties is one to which Article 144 of the II Schedule of the Limitation Act applies and may be brought within 12 years of the date of the award. In repelling the argument that Article 120 should be applied to such a suit, Mookerjee J. observed that the said argument is based on the assumption that an award does not create any rights until it has been enforced either by an application under Section 525 of the Civil Procedure Code (paragraph 20 of the II Schedule of the Civil Procedure Code, 1908) or by a regular suit. He then referred to the decision of the Privy Council in Muhammad Nawaz Khan v. Alam Khan in support of the proposition that 'if an award is valid, it is operative even though neither party has sued to enforce it by a regular suit or by a summary procedure.' 'This conclusion' observed Mookerjee J.' is based upon the elementary principle that, as between the parties and their privies, an award is entitled to that respect, which is due to the judgment of a Court of last resort. The award is in fact a final adjudication by a Court of the parties' own choice, and until impeached on sufficient grounds in an appropriate proceeding, an award, which is on the face of it regular, is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive.' With these observations I respectfully agree. The Allahabad High Court has taken a similar view. In Sarnavalli Animal v. Muthayya Sastrigal the argument that a claim made for certain reliefs on the strength of the provisions of an award amounts to a claim on a contract was negatived, and it was observed that it cannot on that ground be contended that awards are contracts, because it would then have to be similarly contended that directions in a will or codicil to execute a particular settlement are also contracts. It was also pointed out that, though an award springs out of an agreement to submit to arbitration, an award itself is a decision of the arbitrators binding upon the parties as a decision. It was accordingly held that in such circumstances a suit based upon an award to recover possession of immovable properties must clearly fall under Article 144 of the Indian Limitation Act. As observed by the Privy Council in Muhammad Nawaz Khan v. Alam Khan an award must have its full legal effect and it is binding on the parties as much as a decree of the Court would be, and the binding character of the award is not shaken merely by reason of the fact that the summary procedure available to the parties to have a decree in terms of the award has not been adopted or has proved infructuous. If the award amounts to a decision of the domestic tribunal on the points in dispute between the parties, we see no difficulty in holding that a claim to recover immovable properties on the strength of the title created by such an award must be treated as a claim to recover immovable properties and as such it must be governed by Article 144. That being our view, we must hold that both the Courts below were wrong in treating the plaintiff's suit as barred by limitation.

10. This decision on the question of limitation does not however terminate the proceedings in the suit; but instead it necessitates a remand of the case to the trial Court for the determination of the remaining issues. We accordingly set aside the decree passed by the lower appellate Court and remand the suit to the trial Court for disposal according to law.

11. Having regard to the fact that this litigation has already been unduly protracted, we direct that the learned trial Judge should deal with this suit as expeditiously as he can after the record and proceedings are received in his Court.

12. The appellant will be entitled to his costs in this Court. Costs in the lower appellate Court and in the trial Court will be costs in suit.


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