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D. Shamanna Vs. D. Gangappa - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKarnataka High Court
Decided On
Case NumberSecond Appeal No. 468 of 1966
Judge
Reported inAIR1971Kant112; AIR1971Mys112; (1970)2MysLJ478
ActsArbitration Act, 1940 - Sections 47; Code of Civil Procedure (CPC) , 1908 - Order 23, Rule 3
AppellantD. Shamanna
RespondentD. Gangappa
Appellant AdvocateV. Tarakaram, Adv.
Respondent AdvocateT.T. Amble and ;A.C. Nanjappa, Advs.
DispositionAppeal allowed
Excerpt:
.....also votes casted were less than three times number of votes cast against resolution. meeting convened held to be contrary to act . registration of amended bye-laws is not proper. - i fail to see why the parties should signify their consent to the award only when the matter comes up for consideration before the court and why a court of law should ignore an alleged consent given by the parties outside the court......or adjustment of the suit by any court before which the suit is pending, provided all the parties consented to the award.7. it is not however, clear from this when the consent is to be obtained. there are two views expressed on this point by different high courts. one view is that the consent must be there at the point of time when the court is taking the award into consideration as a compromise or adjustment. the other view is that the consent for the decision might be given outside the court.8. in my opinion, the proviso to section 47 does not rule out the award to which the consent was given before it comes up for decision in the court. the court will record the compromise straightway if there is a consent of all the parties at the time of its consideration. if a party.....
Judgment:

1. This appeal arises from a decree and Judgment dated 17-2-1966 made in R. A. No. 122 of 1965 by which the learned District Judge, Tumkur, has confirmed the decision of the Second Addl. Munsiff, Tumkur, in O. S. No. 864 of 1960.

2. The suit out of which the above appeal arises was instituted by the respondent for a declaration and injunction and alternatively for possession, inter alia contending that he is the owner of the schedule property and that the defendant has no manner of right, title or interest in it. The main contention of the defendant was that the dispute in respect of the suit property with the consent of the plaintiff was referred to a group of panchayatdars who have given their decision that the suit schedule property shall belong to the defendant and that, that decision was assented to by the plaintiff. It was further contended that the reference and decision being admittedly after the filing of the suit, must be held to be binding on the plaintiff.

3. Both the courts have not given any finding about the truth of the consent given by the plaintiff to the decision of the panchayatdars. But they have proceeded on the ground that the said decision cannot be acted upon, as it is in the nature of an award by the arbitrators without the intervention of the Court. The suit, therefore, came to be decreed against which the defendant has preferred this Second Appeal.

4. The main contention of Sri V. Krishna Murthy the learned counsel for the appellant is that the decision of the arbitrators was consented to by the plaintiff and it can therefore be regarded as a compromise or adjustment of the suit falling squarely within Order XXIII Rule 3, Civil P. C. He also relies upon the proviso to Section 47 of the Arbitration Act, 1940.

5. The question for consideration therefore, is about the true scope and effect of the proviso to Section 47 of the Arbitration Act, which reads as follows:

'Section 47. Subject to the provisions of Section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder: Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending.'

6. This proviso provides that an arbitration award otherwise obtained without the assistance of the Court may be taken into consideration as a compromise or adjustment of the suit by any Court before which the suit is pending, provided all the parties consented to the award.

7. It is not however, clear from this when the consent is to be obtained. There are two views expressed on this point by different High Courts. One view is that the consent must be there at the point of time when the Court is taking the award into consideration as a compromise or adjustment. The other view is that the consent for the decision might be given outside the Court.

8. In my opinion, the proviso to Section 47 does not rule out the award to which the consent was given before it comes up for decision in the Court. The Court will record the compromise straightway if there is a consent of all the parties at the time of its consideration. If a party however, disputes his consent, the court is required to make an enquiry about it with its undisputed jurisdiction for the purposes of satisfying itself whether the suit has been adjusted by any lawful agreement or compromise. The Court while recording a compromise is not enforcing the award. It is only treating that award as a compromise or adjustment of the suit within the meaning of Order 23, Rule 3, Civil P. C.

9. This view finds support from the Full Bench decision of the Madras High Court in Abdul Rahaman Sahib v. Muhammad Siddig : AIR1953Mad781 , in which Venkatarama Ayyar, J,. speaking for the Court observed as follows:--

'We are accordingly of opinion that under the proviso to Section 47, an arbitration award obtained otherwise than in proceedings taken in accordance with the Act cannot without more be recognised as a compromise or adjustment of the suit; that no decree can be passed thereon under the provision of Order 23, Rule 3; and that the decision in AIR 1945 Mad 294, Armuga Mudaliar v. Balasubramania Mudaliar should be overruled. But if, after an award is made, the parties thereto agree to accept it, that will be a compromise and a decree based thereon could be passed under Order 23, Rule 3.'

In the earlier portion of the judgment, the learned Judge has referred to the various decisions of the other High Courts taking a contrary view and has also explained the reason which led to the introduction of the proviso to Section 47 of the Act.

10. With the greatest respect, I am in full agreement with the view expressed by the learned Judge in the decision aforesaid. This view is also supported by the decisions in Rameshwar Lal v. Mangilal : AIR1964Pat374 , Nazir Mohammed v. Kasturchand Gomaji and Co. AIR 1951 Mys 57 and Salima Bibi v. Md. Ibrahim Saheb, AIR 1962 Andh Pra 123.

11. Mr. Nanjappa the learned counsel for the respondent contended that such an award cannot be taken into consideration even under Order 23, Rule 3 unless a joint consent of all the parties interested is forthcoming before the Court in which the suit is pending. This contrary view has no doubt been accepted by the decisions in Jugaldas Damodar Modi and Co. v. Pursottam Umedbhai and Co. : AIR1953Cal690 Zeauddin v. Abdul Rafique : AIR1952Pat66 and Phool Narain v. Madan Gopal AIR 1955 Raj 162.

12. With respect, I dissent from this view. I fail to see why the parties should signify their consent to the award only when the matter comes up for consideration before the Court and why a court of law should ignore an alleged consent given by the parties outside the Court. If the award is agreed to, after it is given and if it is disputed before the Court, that will have to be enquired into as in any disputed adjustment. If the consent is proved to have been given, no matter where it is, it operates as an adjustment and a decree in terms there of will have to be passed under Order 23, Rule 3. If one party, however, makes out a case that he has not given his consent to the award, no decree could possibly be passed by the Court.

13. For the reasons stated above, this appeal is allowed. The judgment and decree of both the courts below are set aside and the case is remitted back to the trial Court for holding an enquiry to find out whether the plaintiff has signed Exhibit D-l arid to decide the case in accordance with the observations made above and as per law.

14. In the circumstances, there will be no order as to costs.


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