1. This revision petition raises an interesting question involving the interpretation of Section 25, Clause (i), of the Bombay Agricultural Debtors Relief Act.
2. The facts are as follows : The petitioners executed a sale-deed, dated January 17, 1936, conveying certain fields for a sum of Bs. 2,500 in favour of the opponent. The petitioners continued to be in possession of the conveyed fields. A dispute arose between the parties regarding the nature of the transaction, and that dispute was referred by them to the decision of an arbitrator. The arbitrator gave his award on December 18, 1940. The award stated that the transaction dated January 17, 1936, was a sale out and out. The award further stated that the petitioners were to remain in possession of the conveyed fields and were to pay Rs. 2,500 in 10 instalments of Rs. 250 per annum and, after the whole of the amount of Rs. 2,500 was paid, the opponent was to execute a sale-deed in favour of the petitioners. The petitioners were also directed to pay as rent a sum of Rs. 135 per annum. At first, the petitioners tried to object to the award but, subsequently, gave up the objection, and a decree was passed by a Court in terms of the award. The petitioners paid a sum of Rs. 1,450 under the decree, but committed defaults thereafter. Therefore, the opponent filed darkhast No. 183 of 1950 for recovering possession of the lands. Thereafter, the petitioners made an application under the Bombay Agricultural Debtors Relief Act, for getting the true nature of the transaction dated January 17, 1936, adjudicated. The application was filed under Section 24 of the Bombay Agricultural Debtors Relief Act. The petitioners contended that the true nature of the transaction was a mortgage. The opponent contended that the transaction was, in fact, an out and out sale, and, secondly, that the contention of the petitioners was barred by the provisions of Section 25, Clause (i), of the Bombay Agricultural Debtors Relief Act. That section is as follows:
25 Nothing in Section 24 shall apply to-
(i) any transfer which has been finally adjudged to be a transfer other than a mortgage by a decree of a Court of competent jurisdiction or by a Board established under Section 4 of the repealed Act;...
The Bombay Agricultural Debtors Relief Court came to the conclusion that the true nature of the transaction was that it was a mortgage, and that the contention of the petitioners was not barred by Section 25(i) of the Bombay Agricultural Debtors Relief Act. Aggrieved by the decision, the opponent went in appeal. The appellate Court agreed with the finding of the Bombay Agricultural Debtors Relief Court that the transaction was, in fact, a mortgage, but, disagreed with the view of the Bombay Agricultural Debtors Relief Court that the contention of the petitioners was not barred by Section25(i). The appellate Court came to the conclusion that the award decree came within the purview of Section 25(i), and, accordingly, it held that the Bombay Agricultural Debtors Relief Court was prevented from adjudicating the true nature of the transaction by virtue of the award-decree. Aggrieved by the decision, the petitioners have come in revision.
3. On the aforesaid facts, the first point which was argued by Mr. Jahagirdar on behalf of the petitioners-debtors was that an award-decree does not come within the purview of Section 25(i) of the Bombay Agricultural Debtors Relief Act. His argument was that, in order that a decree may come within the purview of that clause, it is necessary that the adjudication should be by a Court. He contended that an arbitrator was not a Court within the meaning of Clause (i) aforesaid. Mr. Jahagirdar submitted that the word 'court' has been denned in the Indian Evidence Act and also in the Indian Arbitration Act. The definition in the Evidence Act is that
'Court' includes all Judges and Magistrates, and all persons, except arbitrators, legally authorised to take evidence.
The denition in the Arbitration Act is that a Court
means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit.
There is no doubt that an arbitrator is not a Court within the meaning of these two Acts. But the wisdom of construing a word used in the Bombay Agricultural Debtors Relief Act by reference to the definitions in other Acts may be doubted. The Acts are not in pari materia. I do not think it would be proper to base a decision on the subject on these definitions. Mr. Jahagirdar, then, relied upon the definition of the word 'Court' as given in the Bombay Agricultural Debtors Relief Act. The definition is:
'Court' means the court of the Civil Judge (Senior Division), having ordinary jurisdiction in the area where the debtor ordinarily resides and if there is not such Civil Judge, the Court of the Civil Judge (Junior Division), having such jurisdiction,...
The contention of Mr. Jahagirdar was that the word 'Court' as used in Section 25(i) would mean a Court as defined in the Bombay Agricultural Debtors Relief Act. I do not think, I can agree with this submission of Mr. Jahagirdar. The definition does not apply if a contrary intention appears from the subject or context. I have no doubt whatsoever that the context in which the word 'Court' is used in Clause (i) of Section 25 shows that the Court meant by the Legislature in that clause is not the Court as defined in Sub-section (3) of Section 2 of the Bombay Agricultural Debtors Belief Act. The expression 'Court of competent jurisdiction' in Clause (i) of Section 25 means a Court competent to deal with the dispute regarding the transfer referred to in Clause (i). If the argument of Mr. Jahagirdar were to be upheld, it would mean that only an adjudication of a Civil Judge (S.D.) or (J.D.), as the case may be, would operate as a bar, but an adjudication by the higher Courts such as the District Court or High Court would not be a bar. It is unreasonable to hold that the Legislature could have intended such an extraordinary and unusual result. No reason can be discovered as to why the Legislature should have preferred the decisions of subordinate Courts to those of the higher Courts and give to the former a value higher than to the latter. However, whilst I am not satisfied with the reasons' advanced by Mr. Jahagirdar in support of his contention that an arbitrator is pot a Court, I do agree with his submission for another reason. A Court, ordinarily, is an institution established by the State and has jurisdiction, inspite of the opposition of the parties, to decide matter legally and properly brought before it. An arbitrator, on the other hand, is the creature of the consent of the parties and derives jurisdiction from such consent.
4. However, in my judgment, the fact that an arbitrator is not a Court, does not settle the question about the scope of Section 25(i). That fact is not at all germane for reaching a decision about the applicability of Section 25(i). In order that an adjudication regarding the nature of a transfer may be a bar, it is not germane to inquire whether it is by a Court or an arbitrator. The real question to determine is whether the adjudication was by a decree of a competent Court. Even though an adjudication initially may have been made by an arbitrator, it will still be a bar provided the adjudication relied upon is not that of the arbitrator but it happens to be merged in the decree of a competent Court, If and when such a merger takes place and, in law, the decree is the final document adjudging the rights of the parties, the adjudication would nonetheless be by the decree of a Court even though the adjudication by the arbitrator was the source of the adjudication embodied in the decree. Mr. Jahagirdar's contention was that, in order to be a bar, the adjudication must be by a Court and the fact that the adjudication is by a decree is not the essence of the matter. I do not agree. The submission of Mr. Jahagirdar is contrary to the plain language of the section. If the argument of Mr. Jahagirdar were correct, then the language which would have been used by the Legislature would have been 'Nothing in Section 24 shall apply to a transfer which has been finally adjudged by a Court of competent jurisdiction.' Such is not the language used by the Legislature. What the Legislature states is that the transfer must be one adjudged by a decree of a competent Court. The latter expression is a whole and composite expression and every word therein is important and not merely the word 'Court'. Therefore, the real question to be determined is whether the nature of the transaction has been adjudged to be a sale by a decree of a competent Court. Now, when an award is given and an application is made in a competent Court to file it, obviously, the proceedings are started to obtain a decree from that Court and if the Court does pass a decree, the decree is not that of the arbitrator but is that of and by the Court.
5. The further submission made by Mr. Jahagirdar was that, in order that Clause (1) of Section 25 may apply, it is necessary that the Court should have applied its mind on the subject of the nature of the transaction and should have reached a decision after taking into consideration the evidence adduced by the parties. It was contended that such was not the case. What had happened was that only the arbitrator had applied his mind on the subject, and the Court, having regard to the provisions of the Arbitration Act, had no choice but to pass an-award decree. It was contended that, under the Arbitration Act, it is only on certain specific grounds that the Court can refuse to pass a decree in terms of an award, but, if those grounds are non-existing, then, the Court has no choice in the matter and it is bound to pass a decree in terms of the award. Therefore, it was contended that the award had no sanctity of the adjudication of a competent Court. I do not think I can agree with the submissions. Clause (i) of Section 25 does not state in terms that the Court should have applied its mind before passing a decree. All that it states is that the adjudication must have been by a decree of a competent Court. Mr. Kotwal's contention was that diverse processes may be adopted by a Court before it comes to pass a decree; but, whatever may be the processes which the Court may adopt, once a decree is passed, it is passed by the Court and not by the arbitrator. What happens in an award-decree is that, instead of the Court adjudicating the dispute, by consent of the parties, a private individual becomes the Judge, and, if the Court, later on, passes a decree in terms of the award, the decree is the decree of the competent Court and not of the arbitrator. It is true that if the award remains at the stage of the award and does not ultimately get merged into a decree then, no sanctity attaches to the adjudication such as is conferred by Clause (i) aforesaid. But once an award gets merged into a decree, then the decree has the full imprimatur of a decision given by a Court and, then, there is no distinction between a decree passed by a Court after itself appreciating the merits of the dispute and a decree passed on an award given by an arbitrator. In my judgment, having regard to the language of Section 25(i) aforesaid, there is a great deal of force in the arguments advanced by Mr. Kotwal, and I have no hesitation in accepting them. In my judgment, the true test which should be applied for the purpose of determining whether a transaction falls within the purview of Clause (i) or not, is to find out whether the adjudication was made by a decree, and if the decree is passed by a Court of competent jurisdiction, then, the Bombay Agricultural Debtors Relief Court is precluded from re-agitating the matter. In my judgment, all the ingredients of Clause (i) have been satisfied in the present case and I have no doubt that the conclusion which was reached by the appellate Court on the subject is correct.
6. The aforesaid view is very much supported by the ruling reported in Vyankatesh Chimaji v. Sakharam Daji I.L.R. 1896 21 Bom. 465. The question which the Court had to consider in the ruling was whether a decision given by an award-decree constitutes res judicata. The division bench came to the conclusion that such a decision does attract the principle of res judicata. Section 11, Civil Procedure Code, which deals with res judicata uses the expression 'Court of competent jurisdiction.' The words used in Section 25(i) of the Bombay Agricultural Debtors Relief Act are the same.
7. The rest of the judgment is not material to the report.