1. Defendants 1 to 5 and 14 to 16 are the appellants. This appeal arises out of a suit in forma pauperis for a declaration that the decree in O. S. No. 48 of 1944 passed in terms of the award is not binding on the plaintiff and his brother, the 21st defendant Sukhavasi Basava Chenchayya, that the suit in which the award was made be revived and the plaintiff be permitted to file objections to the award and also for rendition of accounts and redemption of the property mortgaged by his father.
2. Briefly stated, the facts are; Plaintiff and defendant No. 21 are real brothers. Their father, Tatayya, died in 1934. Before long their mother also passed away. They had then an elder brother but he too died in 1944. Tatayya during his lifetime contracted debts. He on his own behalf and as guardian of his three minor sons in that connection eventually executed a usufructuary mortgage deed D/- 15-10-1930 in favour of defendants 17 to 20 in respect of the plaint A schedule properties for a sum of Rs. 6650/- found to be due from him.
One of the terms of the deed was that it should be treated as an out and out sale if the property is not redeemed before 15-3-1932. After the death of Tatayya, defendants 17 to 20 on 15-5-1936 soldi their interest in the suit property to the 1st defendant for a sum of Rs. 1575/-. The defendants 2 to 5 are the undivided sons of the 1st defendant. The other defendants are alienees of portions of plaint A schedule property from the 1st defendant. It is not necessary for the purpose of this appeal to set out in detail these alienations.
Suffice it to say that the plaintiff now called in question these transactions as collusive and as such binding neither on the plaintiff nor on his brother, defendant No. 21. As the plaintiff and defendant No. 21 were orphans at the time and the person wholooked after them was their sister's husband, Nannapaneni Veerayya, the said Veerayya brought a suit O. S. No. 48 of 1944 as the next friend of plaintiff and 21st defendant before the Sub Judge, Tenali for redemption of the mortgaged properties, its possession and rendition of accounts against the defendants as in the present suit.
The suit was resisted inter alia on the ground that the father of the plaintiff, before he died, had, under an oral sale on 4-6-1934, sold his rignt of redemption for a sum of Rs. 75/- and which he admitted in his letter subsequently sent to the 1st defendant. During the course ot proceedings the matter at the instance of the parties was referred to an arbitrator of the parties choice. The petition for submission to arbitration (I. A. No. 1956 of 1945) was made by the parties on 24-9-1945.
The plaintiff and the 21st defendant being minors, permission under Order 32, Rule 7 C. P. C. was applied for. This petition was accompanied by an affidavit duly sworn and the counsel appearing on behalf of the minors certified that in the circumstances of the case a reference to arbitration is beneficial to and is in the interest of the minors. The court, after due satisfaction granted leave to the minors to refer the matter to arbitration. The matter alone was referred to the arbitration on 24-9-1945.
The award after due inquiry was made on 21-11-1945 by the arbitrator and it was filed into Court on 22-11-1945. The 21st defendant, the brother of the present plaintiff who was also plaintiff in that case had become major by that time. An application for declaring the 1st plaintiff (21st defendant) as major and to discharge the guardian was made on 18-11-1945 by his counsel. The alleged major too made an application to that effect personally. He was declared a major on 26-11-1945 and the guardian was discharged.
He then stated to the court in person that he has no objection to the award. The plaintiff's next friend appeared in person and likewise said that he had no objection to the award. All the defendants also said that they had no objection. As all the parties had no objection, the court after due satisfaction pronounced judgment, in conformity with the award, on 26-11-1945 without waiting for the expiry of 30 days prescribed by the statute for setting aside the award.
No application was however made during the Statutory period thereafter for setting aside the award. The minor plaintiff, within three years after his attaining majority, in a separate suit out of which this appeal arises, called in question the order of reference, the award and also the decree passed in conformity therewith. Besides, he applied for rendition of accounts and redemption and possession of the mortgaged property.
3. Defendant No. 1 resisted the claim of the plaintiff on more than one ground. Not only did he contend that the plaintiff's father had sold away his right in the property but also that a separate suit for setting aside the award or decree is incompetent is without any merit and is barred by limitation. The defendants 2 to 5, 6 to 16, 17, 19 and 20 adopted the written statement of defendant No. 1 They however took further pleas. Defendants 9 and 11 pleaded that they sold the property to defendant No. 10 and are not in present possession.
4. On the pleadings, 17 issues in all were raised and alter due enquiry the learned Subordinate Judge of Tenali held that the suit of the plaintiff so far as it touches the validity of either the reference to arbitration or of the award made in pursuance thereof is not tenable in law under the provisions of Sections 31 - 33 of the Arbitration Act but that nevertheless it is open to the plaintiff to challenge the validity of the decree, that the suit tiled in this behalf is within time and that though the decree in O. S. No. 48 of 1944 is not vitiated by fraud or collusion as alleged, it is nevertheless liable to be set aside as it was passed before the expiry ot the time fixed for making an application to set aside the award and the provisions of Section 17 of the Arbitration Act in this behalf being mandatory in character, the decree in contravention of such provisions is a nullity.
5. The main question mooted in this appeal turns upon the true interpretation of Section 17 of the Arbitration Act. That section reads as follows:
'Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.'
The section in substance deals with the judgment to be pronounced by the court, when and how it should be pronounced and also with the limited right of the party to go in appeal. One would do well to bear in mind that when the parties carry their differences into a court of law, but agree to submit them to arbitration and to abide by the decision of the arbitrator of their choice, all that the court then has to do with the matter is to ensure for them an award by the required arbitrator, full and complete on the points in dispute and in no way tainted so that it may be made the rule of the Court.
Of course, it is mainly the duty of the court to sec that this purpose is fully carried out but the parties are also bound in reason to help the court in achieving the purpose. That is why a reasonable time has been allowed to the parties before the judgment is pronounced to be apprised of the defects if any and to make an application to set aside the award if they so choose. It is not necessary for them to wait for full period. They may soon come to feel in all confidence that they can have no objection to the award. Even otherwise, they may elect to exercise their right or waive the same.
If the parties put on notice, raise no objections of categorically state that they can have no objection to the award and the court feels that the award is in order, it is incumbent on the court to make it the rule of the court. As essentially, it is the award that has to be given effect to if the judgment or decree is not in conformity with it, the parties have under the provisions alright of appeal. That, in short, is the scope and object of Section 17 and the procedure embodied therein is intended to advance this cause.
It is possible that the procedure prescribed sometimes may not exactly be followed, but its object be achieved. The question then is, whether this irregularity which has not resulted in prejudice to any party would vitiate the proceeding. That is what we have to answer in this case. The irregularity complained of is that the court did not wait till the expiry of the time allowed for making an application to set aside the award which is 30 days but proceeded to pronounce judgment immediately after the parties had, of their own accord, much earlier than the last date given to them by the statute represented to the court that they have no objection to the award and the court felt that the award was in order.
Obviously enough, but for the representation of the parties the court would have waited for the expiry of the statutory period. No attempt was ever made on behalf of any party to represent otherwise or call in question the award at any time thereafter before the expiry of the statutory period. Evidently, even if the court had waited longer, the result would not have been different. Thus the defect complained of has not resulted in any prejudice or failure of justice.
6. Yet, on the language of the section, it is argued that the provision is mandatory in character requiring its obedience in full and since it has not been followed exactly the order passed is a nullity. A second point raised on the implications of the language of the same provision is that the stipulation of the expiry of the statutory period in relation to pronouncement of judgment constitutes a condition precedent for assumption of jurisdiction by the court and that condition not being fulfilled the order passed is without jurisdiction and therefore null and void.
It is difficult to accede to any of these arguments. The latter contention is founded upon a misconception of the term 'jurisdiction of the court'. A distinction must always be drawn between the elements which are essential for the foundation ot jurisdiction and the mode in which such jurisdiction has to be assumed and exercised. Where the court has undoubted jurisdiction over the subject matter, it is unquestionably competent to exercise judicial power.
If a provision prescribes the mode in which such power is to he exercised by the court by reason of any contravention thereof or irregularity in compliance therewith, it cannot be said to have exercised a Jurisdiction which it does not possess. It can only be said to have assumed or exercised the jurisdiction which it possesses in an irregular manner. Such irregularity in complying with the procedure which is prescribed as essential for the exercise of that jurisdiction is not necessarily incurable; but the same cannot be said in a case where a court lacks inherent jurisdiction over the subject matter of the proceeding for an order passed or judgment rendered therein shall be void.
As observed in Ledger v. Bull, ILR 9 all 191 (P.C.) it is only where a court lacks inherent jurisdiction over the subject-matter of the proceedings, a judgment rendered or order made therein shall be wholly void and as such no reliance can be placed on it even though no steps have been taken to have it vacated or reversed and to such a case the maxim 'consent cannot give jurisdiction' will apply. But where as in this case the court possessing inherent jurisdiction exercises the same in an irregular manner the defect may be cured either by consent or waiver.
To the same effect were the observations of this court in Vishakapatnam Co-operative Motor Transport Ltd. v. M. Subbarao, (S) : AIR1955AP175 ; Chinoy Chalanj and Co. v. Y. Anjiah, AIR 1958 Andh Pra 384 and also Madhav Reddy v. Raja Ram, AIR 1958 Andh Pra 417. In the instant case, it admits of no doubt that the court which pronounced the judgment was a court of competent jurisdiction. It may be remembered that the suit was instituted in that court had thus the seisin of the matter.
The matter was referred by it at the instance of the parties, to the arbitrator. The award was to be sent to that court Indeed it had undoubted jurisdiction after the award is filed, to remit or set aside the award or make it the rule of the court. In this state of affairs, there is no occasion to plead that there was any want of inherent jurisdiction. The only irregularity it' at all there was any, was in pronouncing judgment without waiting for the expiry of 30 days.
It was manifestly an irregularity in exercise of its jurisdiction. Such a defect cannot render the judgment a nullity although the order, on prejudice being shown, may be liable to be set aside in an appropriate proceeding. Thus it is indeed a curable irregularity and the provision contravened being intended for the benefit of the parties even waiver or consent of the parties may cure the detect. It follows therefore that the plea based on the question of want of jurisdiction fails.
7. But, as already pointed out, the legality of the judgment pronounced is questioned also on the ground that the word 'shall' used in the provision making it emphatic renders the provision not merely directory but mandatory in character, the contravention of which per se reduces the order to a nullity. It cannot be laid down as a rule of universal application that a mandatory enactment shall necessarily be considered only obligatory with an implied nullification for disobedience.
To ascertain that character, it is always the duty of the courts of justice to try 'to get at the real intention of the legislature by carefully attending to the whole scope of the statute to be considered.' That is what has been ruled by Lord L. C. Campbell in Liverpool Borough Bank v. Tunner, (1860) 3 Macq HL 808, at p. 822 (vide Ashutosh Siqdar v. Behari Lal, ILR S5 Cal 61 (F. B.) at p. 74). When once the object of the statutory provision is determined and it is ascertained to be based not on grounds of public policy but intended only for the benefit of a particular person or class of persons, the condition prescribed by the statute cannot be considered to be indispensable and it is open to the parties concerned to waive their right because everyone has a right to waive and agree to waive the advantage of law made solely for the benefit and protection of the individual in his private capacity when it can be done without any offence to the public right or public policy. That is what is expressed by the maxim Quilibet potes renuntiare juri prose introductio.
The Full Bench of this court in Satyanarayana v. Venkatasubbiah, AIR 1957 Andh Pra 172 observed that it has always been held that where no public policy is involved, the provisional statute should be held to be directory only. It was also observed that the general rule is that an absolute enactment must be obeyed or observed exactly but it is sufficient if a directory enactment is obeyed or fulfilled substantially. In that case the nature and scope of rule 4 of Order 3 C. P. C. was for consideration before the learned Judges.
The language of the provision was strongly emphatic; yet non-compliance with the provision was considered to he a mere irregularity which could be cured by subsequent compliance, namely, by the pleader subsequently filing a vakalat. In Pratap Singh v. Shri Krishna Gupta, : 2SCR1029 , the Supreme Court had to consider a similar question in an election case where the nominations entered on old forms not brought up to date showed the caste and not the occupation of the candidate which resulted in non-compliance with the rules in force in that behalf. The question arose whether this irregularity rendered the nomination paper void. Their Lordships observed thus;
'We do not think that it is right and we deprecate this tendency towards technicality; it is tha substance that counts and must take precedence over mere form. Some rules are vital and go to the root of the matter; they cannot be broken, others are only directory and a breach of them can be overlooked provided there is substantial compliance with the rules readi as a whole and provided no prejudice ensues; and when the legislature does not itself state which is which judges must determine the matter and, exercising a nice discrimination, sort out one class from the other along broad based commonsense lines.....'
It was held that there was sufficient compliance with the rules. From the above discussion, it follows that the determination of the question whether the judgment or order passed in contravention of any rule is a nullity must depend upon the nature of the rule embodied in the section. If it be held that the judgment passed without full compliance with the rule is absolutely without jurisdiction, it may be treated as a nullity, or if it be held that the rule or the provision contravened is not intended merely for the private benefit of a person but is based upon public policy and therefore cannot be contravened without offence to public policy, even then the same conclusion might follow.
But if on the other hand the object of the rule or provision is to afford protection to the individual litigant or it is intended for his personal benefit it is open to him to waive the benefit thereof and in that case, the irregularity complained of will be inconsequential. Then again the determination of the point whether the order is absolutely without jurisdiction, depends mainly upon the question, whether there was a lack of inherent jurisdiction. If the court has jurisdiction but has committed an irregularity in the exercise thereof by contravening the particular provision, that defect may, on the particular circumstances of each ease, be cured in case it has not resulted in prejudice or miscarriage or failure of justice.
Similarly in order to determine whether a provision is mandatory in character, the nature and scope of the provision must be ascertained whether it is based on public policy. If it is not so, then any irregularity may be cured by consent or waiver. That is the position in law and on the construction of Section 17 of the Arbitration Act we have no doubt that the provision complained of is merely directory and is intended for personal benefit of the litigants and may be waived by the parties. That also, in essence, seems to be the view of various High Courts.
The ruling cited at the Bar may not be on all fours with the present case, but there can be no doubt about the principle emerging therefrom. The oldest case cited before us was Gunga Narain Ghose v. Ram Chand Ghose, 20 Suth WR 311. There the Munsif, instead of allowing ten days as provided in Section 324 of Act VIII of 1859 ordered that the objections to an arbitration award should be filed in one day. The parties had no other course but to comply even though they could not be apprised of the defects within that time. This was followed by a judgment in accordance with the award. The order then was sought to be called in question in appeal. The observations of the learned Judges were as follows:
'The Moonsiff, disregarding that, made an order that the objections to the award should be filed within one day. It was not to be expected that the plaintiff would disregard that order, irregular and improper as it was, and his filing of his objections cannot be considered a waiver of the irregularity. He never consented to take less than the time which the law allowed him. He did not voluntarily file his objections in one day, but upon the compulsion of the order of the Moansiff. And although he had given in his objections, the Moonsiff ought, we think, to have waited until the expiration of the ten days before he gave a judgment if he intended to give it as upon the award.'
The line of reasoning contained in this passage makes it abundantly clear that the contravention of the provision per se was never considered to render the order a nullity. All that was said therein was that the order was irregular and improper and that by filing objections in obedience thereto it cannot! be assumed that the party had waived this irregularity or consented to take less time than what is allowed by law.
Certainly the provision being for the benefit of the parties, the court could not compel them to take less time and if in response to the directions the party had to make under compulsion the application it cannot be said to be voluntary. The breach of the rule therefore cannot but be said to have resulted in prejudice. That is how the order was not supported but interfered with in appeal. Then there is a case of Allahabad High Court in Najumuddin Ahmed v. Albert Puech, ILR 29 All 584.
Here too the court without allowing the parties time prescribed by law for filing objections to the award passed a decree in terms of the award.
It may be remembered that the party in fact had applied for an adjournment of the hearing as he had not obtained a copy of the award but it was rejected. It was held therefore that the learned Judge had proceeded irregularly and that his order may be called in question in appeal. The order was set aside. The other case is of 1910 of the Madras High Court in Velu Pillay v. Appasami Pandaram, 9 Ind Cas 197.
This judgment does not state the full facts of the case. It was a revision petition and having regard to the circumstances of the case, the High Court interfered with the order, for it was passed without allowing 10 days time according to law. Surapparaju v. Narayanaraju, 17 Ind Cas 431 (Mad) was a case where notice of filing of the award which must necessarily be given to the parties was not given and the order thereFore was interfered with. The observations in Subbarao v. Ramalingayya, 67 Mad LJ 377 : (AIR 1934 Mad 619) in relation to the language of para 16 of the Second Schedule to the Code of Civil Procedure is a mere obiter dictum; it does not help the contention of the learned counsel for the respondent.
Esuf Rowther v. Davad Rowther, : AIR1951Mad658 is a case touching Section 17 of the Arbitration Act, 1940. Therein after the arbitrator had filed his award on 19-11-1948 the learned District Munsif without giving any time to the parties concerned passed a decree on the ground that no time for objections was asked for. It was held that it was irregular and the court was bound to wait til! the expiry of 30 days from the date of notice of filing of the award irrespective of the fact whether the parries applied for time or not.
In this particular case, it must further be remembered, the decree was passed on the same day the award was filed and the parties had no time even to file objections for the award. Such an act necessarily cannot be supported because there was no question of waiver or consent of the parties and the provisions of law intended for the personal benefit of the parties could not be thus contravened without prejudice to the parties.
8. The lower court has referred to some of the decisions which are clearly of the view that it is not at all necessary to allow a period of 10 days under Rule 16 of Schedule II C. P. C. for filing objections to the award if the parties agree to the same before the expiry of the period. That is the decision in Ghulam Mustafa v. Mt Halima Bibi, 21 Ind Cas 298 (Lahl which was followed in a latter case reported in Sohamari Bai v. Chatta Ram, 23 Ind Gas 591 : (AIR 1914 Lah 313). The Nagpur High Court also in Panduranga v. Amrit Rao, AIR 1931 Nag 112 accepted the same view.
But the view taken by the Jiidicial Commissioner's courts Sindh In Srikishin Rochumal v. Relumal Pariomal, 34 Ind Cas 845 at p. 848 : (AIR 1916 Sind 79 at p. 81) is different. Therein the validity of the award also called in question. We are however concerned with the other question raised therein. The Subordinate Judge in that case gave judgment on the very day the award was made, without waiting for the time for making an application to set aside the award.
It was observed that under Rule 16 he is notempowered to give judgment until the time for making an application to set aside the award has expired, that this condition is not affected by the consideration that the application may have been made and set aside or that the parties may have stated that they have no objection to urge and that is a condition subject to which jurisdiction to make judgment is conlerred on the court and when that condition is not fulfilled, the judgment is no judgment at all.
9. If these observations are taken to mean that even though there is a waiver or consent and the court acting on the statement of the parties that they have no objections to file, pronounced its judgment the judgment must be regarded as a nullity having been passed before the expiry of 30 days, we respectfully disagree with such a position in law, for, as we have discussed above, the provision is intended for personal benefit of the litigant, that waiver and consent can cure such irregularity and that if no prejudice has been done, there can be no reason why the order should be interfered with. In this premises, we are clearly of opinion that the lower court in the instant case was wrong in holding that in the circumstances of the case, the order passed without waiting for the expiry of the statutory period was without jurisdiction and a nullity.
9a. It is then argued that since according to the provision of the statute a decree in terms of the award could be passed only on the expiry of 30 days, the decree passed in the case should be regarded as a consent decree passed apart from the provisions of the Act and since such a decree could not be passed without compliance with the provisions of Order 32 Rule 7 C. P. C. as it concerned a minor, the decree cannot be valid. In support of this contention, reliance has been placed again on the observations of the Sind Judicial Commissioner's court in 34 Ind Cas 845 :(AIR 1916 Sind 79). We cannot accede to this argument either.
The matter was referred to arbitration after compliance with the provisions of Order 32, Rule 7 C. P. C The award was then made and filed in the court in accordance with law. The court in fact passed the decree on the basis and in terms of the award. All this the court has done purporting to act under the provisions of the Arbitration Act. Obviously enough, the decree was not passed on an agreement or compromise of the parties to attract the provisions of Order 32, Rule 7 C. P. C.
That the parties had stated before court that they have no objection to the award does not render the judgment passed in terms of the award as one passed on agreement or compromise of the parties with reference to suit. Section 17 of the Arbitration Act contemplates only a judgment and decree in terms of the award and not apart from it nor on the agreement or compromise of the parties. The idea of a compromise decree is foreign to its scope and ambit as the award referred to therein means the decision of the arbitrator.
So then, either there will be a decree in terms of the award or none, and the irregularity, if any, in passing such decree may however be curable as discussed above. It is therefore impossible to accept that the decree in question can at all be regarded as a compromise decree. The case may be different where the award has been obtained otherwise than in accordance with the provisions of the Arbitration Act. Then the proviso to Section 47 of theArbitration Act may bo attracted which reads thus:
'x x x x xProvided that an arbitration award otherwise obtained made with the consent of ail the parties interested be taken into consideration as a compromiseor an adjustment of a suit by any court beforewhich a suit is pending.'
The circumstances under which this proviso was enacted has been discussed] in a Full Bench of the Madras High Court in Abdul Rahman Sahib v. Muhammad Siddiq, : AIR1953Mad781 The question in that case was whether an award passed on a private reference in a pending suit can be enforced as compromise in the suit even when one of the parties refused to accept it. On the interpretation of the proviso the learned Judges came to the conclusion that an, award given on a private reference in respect of a matter pending in the suit cannot as such be availed of being an adjustment under Order 23 Rule 3 C. P. C. but if subsequent to such award the parties agree to accept it that may be recorded as a compromise under Order 23, Rule 3 C. P. C. The learned Judges observed:-
'.....the 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; [hat no decree can be passed thereon under the provisions of Order 23, Rule 3 ..... But if after 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'.
Such cannot be the case here, as the award is the consequence of a reference to arbitration through the intervention of the court in accordance with the provisions of the Act. The award embodying the decision of the arbitrator neither in itself nor by reason of the statement of the parries that they have no objection to this award can resolve into a compromise or an agreement of the parties so that the decree passed thereon may be deemed to be one passed under Order 23, Rule 3 C. P. C. It is true that Order 32, Rule 7 is imperative and any non-compliance with it vitiates the order; but that question cannot arise in a case where the judgment is made in conformity with award under Section 17 of the Arbitration Act.
10. The last point raised is that the plaintiff being a minor at the time it is open to him to call in question the validity of the award or the decree based thereon on the ground that his guardian has been grossly negligent in the conduct of the suit. The Arbitration Act is a special enactment and a complete code by itself. It lays down certain procedure with reference to how the legality, existence or effect of an award may be brought into question. Being a special enactment, its provision should have overriding effect. Sections 31 - 33 do not admit of any procedure different from the one laid down therein.
That apart, on facts too, the plea is untenable. The acts that are alleged to constitute gross negligence on the part of the guardian are (i) his giving consent for making a reference to arbitration (ii) his consenting to give plenary powers to arbitrator to decide the matter in dispute (in) his giving advance undertaking not to question the award and (iv) his not filing any objections to the award and not taking time to file objections. So far as points (i), (ii) and (iii) are concerned the court giving sanction for reference to arbitration had considered the matter at the time in the light of the circumstances shown, affidavit and certificates filed.
That cannot certainly be agitated once again, nor in any event by different suit in the face of Sections 31 - 33 of the Act. As regards the alleged act under item (iv) supra, there is nothing on record to show that the guardian could raise any valid objection to the award. Obviously enough he did not file any objections because he could show none. The plaintiff's brother, defendant No. 21 who was a major and was equally interested in the matter, could show none at the time.
That is sufficient to show that there is nosubstance in the allegations made against the guardian that he was guilty of negligence. The courtbelow also was of the same view. Nevertheless, ithas decreed the suit on the main ground that thedecree passed was in contravention of Section 17 ofthe Arbitration Act. This finding, as discussedabove, is not correct and therefore the judgmentand the decree passed in favour of the plaintiffbased thereon cannot be upheld. The appeal isallowed with costs and the suit of the plaintiff dismissed with costs. The plaintiff shall pay the courtfee payable to the Government in the suit.