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Rayalaseema Bank Ltd. Vs. Tharigopala Pedda Narayanappa and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Civil
CourtAndhra Pradesh High Court
Decided On
Case NumberLetters Patent Appeal Nos. 101 and 107 of 1959 and 77 of 1960
Judge
Reported inAIR1961AP483
ActsArbitration Act, 1940 - Sections 39(1) and 39(2)
AppellantRayalaseema Bank Ltd.
RespondentTharigopala Pedda Narayanappa and anr.
Appellant AdvocateM.N. Sastry and ;B. Ramarao, Advs.
Respondent AdvocateA. Bhujanga Rao, ;T. Venkatappa and ;D. Chennabasappa, Advs.
DispositionAppeals dismissed
Excerpt:
.....collected need not have correlation with actual service in exactitude but if it is shown that substantial portion of the fee is expended or the purpose for which it is levied, it would be justified. expressum facit cessare tacitum sections 4 & 3: [v.v.s. rao, n.v. ramana & p.s. narayana, jj] meaning when there is express mention of certain things, then anything not mentioned is excluded. - we are in entire agreement with the reasoning of the learned judges of the bombay high court in air1952bom229 .16. clause 44 of the amended letters patent, applicable to this court, clearly enacts that they (sic) are subject to the powers of the indian legislature. 89 of 1959, which was filed by the appellant-bank it was clearly stated in the petition that the amount due to the bank from the..........against the decision of sanjeevarao naidu, j. l.p.a. 77/60 and l.p.a. 107/59 arise out of the learned judge's decision in a. s. no. 252 of 1957. l.p.a. no. 101 of 1959 arises out of the order of the learned judge in c.m.p. no. 7142 of 1959 in a, s. no. 252 of 1957.2. we will first deal with l.p.a. 77/60 which arises out of a. s. 252/57. that appeal was filed against the judgment and decree of the additional district judge, anantapur in o.p. no. 39/52 converted as o. s. 23/56. it will be necessary to state briefly the facts connected with that suit.3. the 1st respondent before us, tharigopala pedda narayanappa had certain dealings with the 'rayalaseema bank ltd.' (appellant before us), in respect of which the bank claimed that a sum of rs. 7560/- was due from the 1st respondent. the.....
Judgment:

Seshachalapati, J.

1. These three connected appeals filed under Clause 15 of the Letters Patent against the decision of Sanjeevarao Naidu, J. L.P.A. 77/60 and L.P.A. 107/59 arise out of the learned Judge's decision in A. S. No. 252 of 1957. L.P.A. No. 101 of 1959 arises out of the order of the learned Judge in C.M.P. No. 7142 of 1959 in A, S. No. 252 of 1957.

2. We will first deal with L.P.A. 77/60 which arises out of A. S. 252/57. That appeal was filed against the judgment and decree of the Additional District Judge, Anantapur in O.P. No. 39/52 converted as O. S. 23/56. It will be necessary to state briefly the facts connected with that suit.

3. The 1st respondent before us, Tharigopala Pedda Narayanappa had certain dealings with the 'Rayalaseema Bank Ltd.' (appellant before us), in respect of which the Bank claimed that a sum of Rs. 7560/- was due from the 1st respondent. The dispute was referred to Meduthula Narayanappa, the second respondent as sole arbitrator, on 2-9-1949. The arbitrator passed an award On 7-10-1952, holding that the 1st respondent should pay the ''Rayalaseema Bank Ltd.' a sum of Rs. 133-6-0. He communicated the award by post to the appellant-Bank on 9-10-1952.

4. The Bank filed O.P. No. 39 of 1952, which was later converted into O.S. No. 23 of1956, praying for the setting aside of the award passed by the arbitrator on the grounds: first, that he was guilty of misconduct and secondly, that the award was not pronounced within four months after the arbitrator had entered upon the reference.

5. The trial court settled two principal issues:

(1) Whether the award is vitiated by gross misconduct and partiality of the arbitrator?

(2) Whether the award was passed 4 months after the date of reference, and if so, whether the award was vitiated?

6. After hearing the counsel and considering all the circumstances disclosed In the case, the learned Judge held that the award passed by the arbitrator on 7-10-1952 was made much later than 4 months after he had entered upon the reference and was therefore in contravention of Clause (3) of Schedule (1) of the Indian Arbitration Act. In view of his finding on Issue No. 2 the learned Judge did not find it necessary to record any finding on Issue No, 1. The learned District Judge decreed the suit with costs.

7. The first respondent thereupon filed a regular appeal in this Court--A. S. No. 252 of1957. That appeal was heard by . Sanjeevarao Naidu, J., on 5-9-1959. The learned Judge allowed the appeal, holding that the decree of the District Court, setting aside the award under Section 33 of the Arbitration Act was wrong. Instead of driving the parties to fresh proceedings the learned Judge thought it appropriate to direct the District Judge to pronounce a judgment in accordance with the award.

8. Aggrieved by that decision, the Bank has filed the present appeal, under Clause 15 of the Letters Patent.

9. Mr. Bhujanga Rao, the learned counsel for the first respondent has raised a preliminary objection that the present appeal filed under Clause 15 of the Letters Patent, ig not maintainable. On a careful consideration, we are of opinion that this preliminary objection should prevail.

10. Clause 15 of the amended Letters Fatent issued to the Madras High Court under Chapter 15, 28, 29 Victoria, which applied to this Court provides for an appeal from the judgment of one Judge of the High Court Sub-rule (5) of Rule 2 of the Rules of the High Court of Andhra Pradesh (Appellate Jurisdiction) provides that

'every appeal under Clause 15 of the Letters Patent shall be heard by a Bench of two Judges other than the Judge who heard the appeal or the matter.'

Clause 44 of the Letters Patent enacts that theprovisions thereof are subject, inter alia, to thelegislative powers of the Governor-General-in-Council.

11. This appeal arises under Section 39(1) of the Indian Arbitration Act. Section 39 is in these terms:

APPEALABLE ORDERS.

'(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order:

(i) Superseding an arbitration;

(ii) On an award started in the form of a special case;

(iii) Modifying or correcting an award;

(iv) Filing or refusing to file an arbitration agreement;

(v) Staying or refusing to stay legal proceedings where there is an arbitration agreement;

(vi) Setting aside or refusing to set aside an award; Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.

(2) No second appeal shall lie from an order passed in appeal under this section but nothing in this section shall affect or take away any right to appeal to the Supreme Court.'

12. The contention of Mr. Bhujanga Rao is that Section 39(2) of the Indian Arbitration Act enacts a clear embargo on a further appeal from the decision of a single Judge made in appeal under Section 39(1) of the Act.

13. There is direct authority for the position contended for by the learned counsel Mr. Bhujanga Rao. In Radha Krishna Murthy v. V. Ethirajulu Chetti and Co., AIR 1945 Mad 184, an identical question fell for decision by a Bench of the Madras High Court. Leach, C. J. speaking for the Bench observed:

'It is contended that this appeal does not lie by reason of Sub-section (2) of Section 39 which saysthat no second appeal shall lie from an order passed in an appeal under the section, although nothing in the section shall affect or take away a right to appeal to Hig Majesty in council. This objection is sound. It is true that Clause 15, Letters Patent, if it stood alone, would allow the appeal; but Clause 44, Letters Patent says that the provisions are subject inter alia to the legislative, powers of the Governor-General in Legislative Council. The Indian Arbitration Act is an Act of the Central Legislature and the provisions of Section 39 must prevail.'

The above decision was followed by another Bench of the Madras High Court In Re, Mathuraman Chettiar, : AIR1953Mad395 - The same view was taken by a Bench of the Calcutta High. Court in R, Wright and Partner Ltd. v. Governor General in Council, ILR 1948-2 Cal 265 where the decision in AIR 1945 Mad 184 was followed. The learned Judges held that except under Section 39 of the Arbitration Act, 1940, no appeal lies against any order under the Act and to that extent the right of appeal given by Clause 15 of the Letters Patent of the Calcutta High Court was curtailed and restricted.

In Madhavdas Devidas v. Vithaldas Vasudeodas, : AIR1952Bom229 a Bench of the Bombay High Court consisting of Bavdekar and Chainani, JJ. also took the same view and have approved and followed the decision of Leach, C. J. in AIR 1945 Mad 184.

14. The learned counsel for the appellant has drawn our attention to two Bench decisions which, have taken a contrary view. The first ot these is a decision in Hanuman Chambers of Commerce Ltd. Delhi v. Jassa Ram Hira Nand, AIR 1948 Lah 64.

The learned Judges in that case took the view that the embargo enacted under Section 39(2) of the Indian Arbitration Act refers to the appeals under Sections 100, 109 and 110 of the Civil Procedure Code, and would not apply to appeals under Clause (10) of the Letters Patent of the Punjab High Court, corresponding to Clause 15 of the Madras High Court Letters Patent. In other words, the learned Judges thought that the prohibition against second appeals has no relevance with respect to what were termed in that decision as 'inter-court appeals.' The same view was taken by the East Punjab High Court in Banwari Lal Ram Deo v. Board of Trustees, Hindu College, Delhi, AIR 1949 EP 165.

15. With great respect to the learned Judges, who decided the above two cases, we are unable to accept the view that an appeal from a single Judge to a Bench of two Judges of the High Court under the appropriate clauses of the Letters Patent is, excluded from the scope of the Interdict with respect to Second Appeals enacted in Section 39(2) of the Indian Arbitration Act.

We are unable to accept the view that the expression 'Second Appeal' used in Section 39(2) of the Act must be understood in the technical sense of appeals to the High Court under Section 100' C.P.C. The words 'second appeal' must be understood in their ordinary signification andmeaning. Section 39(1) of the Arbitration Ace provides for appeals against the orders referred to in Clauses 1 to 6 and from no others. The appeals filed with respect to those orders would be the first appeals. What Section 39(2) enacts is that there shall be no Second Appeals, except the right to appeal to the Supreme Court.

The word 'Second' in its normal significance means 'next after the first'. So understood a Second Appeal means a further appeal, that is, an appeal from the order passed in appeal. It is that category of appeals that is in express terms interdicted under Section 39(2) of the Act. The saving with respect to the right of appeal to the Supreme Court, in our view, puts ,the matter beyond all controversy. We are in entire agreement with the reasoning of the learned Judges of the Bombay High Court in : AIR1952Bom229 .

16. Clause 44 of the amended Letters Patent, applicable to this Court, clearly enacts that they (sic) are subject to the powers of the Indian Legislature. We are therefore, of opinion that inasmuch as Section 39(2) of the Act prohibits Second Appeals, except the right of appeal to the Supreme Court, the present appeal filed under Clause 15 of the Letters Patent against the order of a single judge passed in appeal under Section 39(1) of the Indian Arbitration Act, is not maintainable.

17. In the view we have taken as to the competency of this appeal, it is unnecessary to go into the merits of the case. The appeal is dismissed with costs.

L.P.A. No. 101 of 1959:

18. This is an appeal directed against the order of Sanjeeva Rao Naidu, J., dated 5-9-1959 in C.M.P. No. 7142 of 1959 refusing to refer A.S. No. 252 of 1957 to a Bench, in the application aforesaid it was stated that the value of the subject matter of the appeal was more than Rs. 7,500 and that, therefore, under Clause (c) of Sub-rule (3) of Rule 1 of the Appellate Side Rules, a single Judge of the High Court had no jurisdiction to hear the same and that it should be accordingly posted before a Bench.

19. Clause (c) of Sub-rule (3) of Rule 1 of the Appellate Side Rules provides that every appeal from an original decree, when the value of such appeal does not exceed Rs. 7,500 may be heard and determined by a single Judge. The rule had been amended subsequently by enlarging the pecuniary jurisdiction of a single Judge. But it is common ground that on the date when Sanjeeva Row Nayudu, J. heard the appeal it was the unamended rule that was in force, which prescribed that a single Judge may hear and determine appeals from original decrees, where the value of such appeals did not exceed Rs. 7,500.

20. The learned Judge found that the value of the subject-matter of the appeal was only Rs. 4,879-2-0 and that, therefore, under Clause (c) Sub-rule (3) of Rule 1 of the Appellate Side he had jurisdiction to hear and determine the appeal. That his conclusion as to the value of the subject-matter is right, permits of no doubt. In O.P. No. 89 of 1959, which was filed by the appellant-Bank it was clearly stated in the petition that the amount due to the Bank from the second respondent is Rs. 4,879-2-0 (principal with interest thereon at Rs. 7-1/2 per cent)

In the decree passed by the trial court, the value of the suit is stated as Rs. 4,879-2-0. In A.S. No. 252 of 1957 filed by the 1st respondent the value of the subject-matter of the appeal was said to be the same amount, viz., Rs. 4,879-2-0. There is, therefore, no doubt that the value of the subject-matter of the appeal was only Rs. 4,879-2-0 and the learned Judge was perfectly competent to hear and determine the same under the Appellate Side Rules.

21. Mr. N. M. Sastry, the learned counsel for the appellant states that in the instant case, the value of the subject-matter must be determined with reference to the subject-matter of dispute in the arbitration reference and, inasmuch as the disputed sum in the arbitration reference was Rs. 7,560 that sum should be taken as determinative of the value of the subject-matter of the appeal. Reference was made to Sections 2(c) and 31 of the Indian Arbitration Act in support of the contention that the jurisdiction of the Court both for the suit and for the appeal is the subject-matter of the reference. So construed, it is contended, by the learned counsel that the learned Judge was incompetent to hear the appeal and any decision by him would be a nullity.

22. We are unable to accede to this contention. It is true that in cases of arbitration, it may be difficult to determine the pecuniary value of the reference as Held in Jagannadh Pershad v. Hazarilal, : AIR1953All509 . In that case, it was held that the value of the entire property dealt with by the award should be taken into account and not the value of any share in the total assets as the criterion for judging the valuation of the suit and the proposed appeal. The decision has clearly no bearing on the present case.

Here, the appellant bank as the petitioner under Section 33 of the Indian Arbitration Act has expressly stated that the sum due from the 1st respondent is Rs. 4,879-2-0. That was because, though the original claim in the reference to the arbitration was put as Rs. 7,560 since then, certain amounts were remitted by the arbitrator and, therefore, the claim was limited only to the amount stated in paragraph 7 of the petition, That being so, we are in agreement with the learned Judge that the pecuniary value of the subject-matter of A.S. No. 252 of 1957 was less than Rs. 7,500.

23. In the view we have taken that the decision of the learned Judge 85 to his jurisdiction to hear and determine the appeal is correct, we consider it unnecessary to deal with the question as to whether the learned Judge's order declining to refer the appeal to a Bench of two Judges is a 'Judgment' within the meaning of Clause 15 of the Letters Patent.

24. We cannot, however, part with this case without expressing with respect, our dissent from the view taken by Sanjeeva Row Nayudu, J. that the Appellate Side Rules are not statutory rules, but mere administrative instructions. In the preamble of the Appellate Side Rules, it is stated

In express terms that they were made 'by virtue of the powers conferred by the enactments set out in Appendix I, thereto, and of ail other powers hereto enabling. In Appendix I, the enactments under which the Appellate Side Rules have been made are recited there as follows:

'Enactments Referred To in The Introductory Rule'.

1. 24 and 25 Vie- C. 104-Sections 13 and 14.

2. The Letters Patent of the High Court of Judicature, at Madras, 1865.

3. The Code of Civil Procedure, 1908 and the, Acts amending the same.

4. The Constitution of India.

5. The Andhra State Act. 1953 (Central Act) XIX of 1953).

6. The Andhra Court Fees Act and Suits Valuation Act, 1958.

7. The Hyderabad Court Fees Act VI of 1324 F.'

25. It is therefore not open to any doubt that these Rules having been made under those I various enactments, are certainly Statutory Rules. If authority were needed for a proposition which, to us is so obvious, we need only refer to a passage in the Judgment of the Full Bench of this Court in Venkateswarlu v. Sreedharla Satyanarayana, 1956 Andh WR 117 at P, 119 ((S) AIR 1957 Andh Pra 49 at p. 50). It was held there by Viswanatha Sastry, J. that:

'The power to frame rules regulating its practice and procedure conferred on the High Court under Parliamentary enactments and the Letters Patent is preserved by Article 225 of the Constitution corresponding to Section 223 of the Government of India Act, 1935, which takes us back to Sections 106 and 108 of the Government of India Act, 1915. Section 108 of the Government of India Act. 1915, corresponds to Sections 13 and 14 of the High Courts Act, 1861. It is unnecessary to reproduce these statutory provisions or Clauses 36 and 37 of the Letters Patent. Suffice it to say that these provisions empower the High Court to make rules for regulating the practice of the court and to provide by its own rules for the exercise by one or more Judges or by division courts constituted by two or more Judges of the original and appellate jurisdiction vested in the High Court The Chief Justice of the High Court is the authority to determine which judge is to sit alone and which judges are to constitute division courts. The Appellate Side Rules having been made by the High Court under statutory authority referred to above, if they have a meaning and effect inconsistent with the Acts authorising them or if they are in excess of the powers conferred thereunder or if they contravene the provisions of other enactments, they are pro tanto ultra vires. Otherwise they have the force of law and are binding on all the Judges of the court as held by a Full Bench of the Madras High Court in District Magistrate, Trivandrum v. M. Mappillai, 1939-2 Mad LJ 135 : (AIR 1939 Mad 120) affirmed by the Judicial Committee in Ma-then C. P. v. District Magistrate, Trivandrum,, 1939-2 Mad LJ 406 : (AIR 1939 PC 213). See also Shaik Mastan Saheb v. Balarami Reddi, : AIR1953Mad958 .

(26) So far as we can, see there is nothing to the decision of the Full Bench referred to above which can lend support to the view that the Appellate Side Rules have been made for administrative convenience and that they are not meant to interfere with the powers of the High Court under the General Law which enables the Single Judge of the High. Court to dispose of appeals of whatever value where such appeals lie to the High Court, and that if the Appellate Side Rules should so circumscribe the jurisdiction of a Sin-file Judge, they would be ultra vires and infructuous. On the contrary, Viswanatha Sastry, J. observed:

'The argument that each Judge of the High Court has jurisdiction to exercise all the powers of the High Court and that the apportionment of work among the several Judges under the rules is only for administrative convenience, ignores the true nature and effect of the Rules. Cases falling within Rule 2 of the Appellate Side Rules can only be heard by a Division Bench and a single Judge would have no jurisdiction to hear them.'

27. We need not pursue this question further, for we have no doubt that on the merits the learned Judge was right in holding that the value of the appeal was only Rs. 4,879-2-0 and therefore, he had a right to hear and determine the same without referring the appeal to a Bench as prayed for by the appellant.

28. This appeal, therefore, fails and is accordingly dismissed, but in the circumstances, we make no order as to costs.

L.P.A. No. 107 of 1959.

29. This is an appeal filed against the direction contained in the judgment of Sanjeeva Row Nayudu, J. that the District Court should pass a decree in terms of the award.

30. M. N. M. Sastry, the learned counsel for the appellant-Bank states: First, that all that the learned Judge should have decided was, whether, the decision of the District Court setting aside the award under Section 33 of the Indian Arbitration Act was right or wrong, and a direction that he (District Judge) should pass a decree in terms of the award was extraneous to the appeal. It is also contended by him that such a direction is manifestly severable from the judgment and decree and, therefore, he is entitled to file a separate appeal. It is lastly contended that that direction would be judgment within the meaning of Clause 15 of the Letters Patent.

31. It seems to us that this appeal must fail on a very short ground. The learned Judge gave the direction, which is now impugned in this appeal, as an integral part of his judgment. The decree that has been drafted in pursuance of the judgment is as follows:

1. That the decree of tie lower court be and hereby is set aside and the suit dismissed;

2. That the award be and hereby is remitted back to the Addl. District Court, Anantapur for pronouncement of the judgment according to the award in the case, followed by a decree in terms of the award;

3. That the 1st respondent (plaintiff) do pay to the appellant (2nd defendant) Rs. 324-13 nPs.towards his costs in this appeal in the High Court and Rs. 154/- towards his costs in opposing the suit in the lower court.

32. The direction which is now challenged before Us has been incorporated in the decree. The appellant-Bank filed a substantive appeal against the decision of Sanjeeva Row Nayudu, J. in P. A. No. 77 of 1960 and a separate appeal with respect only to a portion of the judgment and decree would not lie. We have dismissed L.P.A. No. 77/60 as not being competent.

33. This appeal also should accordingly be dismissed.

34. It fails and is dismissed, but without costs.


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