1. This is an application in revision against a decree passed by the learned Small Cause Court Judge of Cawnpore. The applicant here was the defendant in the suit. The date fixed for the hearing of the suit was 29th November 1937. On that date the counsel for the parties made a statement which literally translated runs as follows:
We appoint Daroga Baljit Singh as a referee. Let the case be decided upon any statement which, ho may make in Court after taking the statements of the parties. We shall have no objection.
2. The decision of the application really turns upon the true interpretation to be put upon this statement of the counsel as to the power which it conferred on Daroga Baljit Singh. The question is whether by this statement Baljit Singh was appointed only a referee who was to make a statement in Court which Court was to decide the case, or as an arbitrator who had to make an award finally settling the dispute between the parties. It appears that on the same date, and probably soon after the statement of the counsel was recorded by the Court, Daroga Baljit Singh was called and he also made a statement to the following effect : 'I have no objection to decide the case.' After recording these statements of the counsel and Baljit Singh the Court passed an order as follows : He should put in his statement by 15th December 1937.' On 13th December 1937, the present applicant made application in the Court below purporting to be under Section 151, Civil P.C., in which he said that he did not want to have the case decided by the Munhasar-ilah, and prayed that the order appointing Baljit Singh as Munhasar-ilah should be cancelled and the case be decided by the Court. This application was rejected by the Court below with the following order:
No reason is given why the applicant wants to bade out. I see no reason to set aside the order of reference at the applicant's sweet will. The parties were do finitely told that they must consider all the facts freely before applying for having the case referred. Files.
3. It may be added here that on 14th December the referee made an application praying for further time, and upon that application the Court passed the following order : 'it is an old case. The referee must put in his statement by 31st December 1937.' Daroga Baljit Singh put in a written statement on 20th December 1937. This statement is clearly an award imposing upon the applicant the liability to pay Rs. 50 to the plaintiff in the suit. In the body of the statement the referee says that he made a thorough inquiry on the spot and had heard the parties. When the case was taken up for hearing on 23rd December 1937 the present applicant made another application in which he prayed that the statement filed by the referee should not be accepted and the Court should proceed to decide the case. In this application a reference was also made to the previous application dated 13th December 1937. Upon this application the Court passed the following order:
The referee sent in his written statement on 20th December 1937. This application is put in today. Before this, the applicant filed an application on 20th December 1937 and in that application ho gave no reason why he wanted to resile from the reference. That application was therefore rejected. In my opinion, it is not now open to the applicant to attribute motives to the referee and have his decision sot aside because the decision has gone against him. I cannot allow this application. Rejected.
4. Having thus rejected the application, the Court proceeded to pass a decree in terms of the statement put in by the referee. Hence the present application. The argument on behalf of the applicant is that there is nothing in the law to prevent a party who agrees to refer the dispute to a referee from resiling from that agreement and insisting on the case being decided by the Court instead of in accordance with the statement of a referee. Reliance is placed in support of this contention on two decisions of this Court, one in Tumman Singh v. sheodarshan Singh 0065/1929 : AIR1930All162 , and the other in Bishambhar v. Radha Kishunji : AIR1931All557 . In the former case, the parties to a suit agreed to abide by the statement of a particular person who was accordingly summoned by the Court for recording his statement. But the very next day one of the parties made an application to the Court stating that he would not like to be bound by the referee's statement because he had reasons to believe that the referee was related to the other party. The Court made an inquiry into the matter and, coming to the conclusion that the allegation regarding the relationship between the referee and the other party was false, proceeded to take down the referee's statement and ultimately passed a decree in the terms of that statement. In these circumstances, it was held by a Bench of this Court that the party who had refused to be bound by the referee's statement after entering into an agreement at first that he shall be so bound could resile from that agreement before the referee made any statement in accordance with it. In the other case the parties to a suit agreed to abide by the statement of a pleader without an oath being administered to him, but before the pleader had made any statement and before any decree had been passed by the Court in accordance with that statement the plaintiff resiled from the agreement on the ground that the pleader was going to decide that there was a separation between the plaintiff and his deceased cousin effected by the mere fact that in his will he had stated that he was separate. It was again held by a Bench of this Court that it was open to the plaintiff to resile from the agreement. If the statement made by the counsel for the parties in the present case on 29th November 1937 is interpreted in the sense that Daroga Baljit Singh was appointed only as a referee and he had to make a statement upon which the Court had to decide the case, the two cases cited above would clearly govern the present case because it hi clear that the applicant had put in an objection on 13th December before Daroga Baljit Singh had made any statement in Court. The learned Small Cause Court Judge seems to be of the opinion that if the parties agree to abide by the statement of a referee, they cannot resile from that agreement even before the referee makes his statement. This position is clearly repelled by the two cases cited above.
5. It has however been argued on behalf of the opposite party that the counsel's statement dated 29th November 1937, really amounted to a reference to arbitration and hence the parties could not resile from that agreement. It is therefore necessary to analyze the statement in question in order to decide whether it was in effect an agreement to appoint Daroga Baljit Singh as an arbitrator who was to make a final award in the case, or only as a referee who had to make a statement in Court upon which the Court had to pass its own decision. On behalf of the opposite party great stress had been laid upon the fact that in the body of the statement in question there is a provision authorizing Daroga Baljit Singh to take the statements of the parties, and it is contended that the conferment of this power upon him made him an arbitrator and not merely a referee. In support of this contention, reliance had boon placed upon certain observations made by Sulaiman C.J. in the Special Bench case in Mt. Akbari Begam v. Rahmat Husain : AIR1933All861 . The relevant passage of the judgment of the learned Chief Justice in that case runs as follows : In concurrence with the opinions of the learned bridges who have made this reference, I hold that agreement to abide by the statement of a particular witness is in substance not a reference to arbitration. The essence of arbitration is that the arbitrator decides the case and his award is in the nature of a judgment which is later on incorporated into a decree of the Court. The arbitrator can either proceed on the basis of his own knowledge or make inquiries and take evidence and then give his decision on such evidence. But, where the parties agree to abide by the statement of third person or a referee, the referee merely makes a statement according to his knowledge or belief and the Court then decides the case and pronounces its judgment on the basis of such statement and passes a decree thereon. The referee is not authorized to make inquiries and take evidence and then pronounce his decision on the basis of such evidence. He is called upon to make a statement according to his knowledge or belief. In the case of an arbitration, as the arbitrator's award is an expression of opinion and his procedure resembles that of a Court, the party is entitled to file objections and challenge the validity of his award. The making of a statement by a referee or a third person has no resemblance to a proceeding conducted by him as if he were a Court of law, and accordingly there can be no procedure for filing objections as to its validity.
6. It is further argued that the statement made by Daroga Baljit Singh on the same date, as recorded by the Court, shows that he accepted the position of an arbitrator who had the power to decide the case and not merely that of a referee. Lastly, considerable stress is laid upon the application made by the present applicant on 13th December 1937 in which he described Daroga Baljit Singh as Munhasar-ilah and stated that the parties intended at first that they shall abide by his decision of the case. Upon a careful consideration of all the circumstances of the case, I. find that the argument on behalf of the opposite party, though very plausible, cannot be allowed to prevail. The question in issue had really to be decided upon the basis of the counsel's statement dated 29th November 1937. The subsequent application made by the present applicant on 13th December is not, in my opinion, of much use because any statement contained therein might have been due to a misapprehension on his part of the agreement into which his counsel had entered. The power conferred on Daroga Baljit Singh has really to be determined upon the interpretation of the counsel's statement. Now it has to be borne in mind that the counsel must be presumed to have fully realized the difference between a referee and an arbitrator, and the distinction between an award and a statement. The counsel's statement under consideration', clearly states that Daroga Baljit Singh was being appointed as a referee and he was to make a statement in Court. It is true that it was further provided that he might make his statement after taking the statements of the parties to the suit. But I do not think that the addition of this provision can have the legal effect of altering the character of Daroga Baljit Singh as determined by the statement. In the Special Bench case referred to by the learned Counsel for the opposite party there was no question in issue as to whether a certain person to whom the dispute had been referred by the parties was to be deemed to be an arbitrator or a referee. The observations made in the judgment of the learned Chief Justice upon which the learned Counsel had relied do not warrant the proposition that a referee can never be authorized by the parties to examine the parties before making his statement in Court. I find further that the learned Small Cause Court Judge always referred to Baljit Singh as a referee and directed him to put in his statement and not his award. It must be presumed that the learned Judge realized the difference between a referee and his statement on the one hand and an arbitrator and his award on the other.
7. I am therefore of the opinion that the statement made by the counsel in this case on 29th November 1937 had the effect of appointing Daroga Baljit Singh only as a referee who had to make a statement in Court, and not as an arbitrator who could finally decide the case by his award. In that view of the statement it must be held in the light of the cases referred to above, that the present applicant was not barred by anything in the law from resiling from the agreement to appoint Daroga Baljit Singh as referee. The learned Small Cause Court Judge was therefore clearly wrong in rejecting the application made by the present applicant on 13th December 1937 and in proceeding to accept the written statement filed by Daroga Baljit Singh on 20th December 1937 and proceeding to pass his decree thereon. The result there-fore is that I allow this application and setting aside the decree passed by the Court below, direct that the suit shall be restored and decided in accordance with law. The applicant shall have the costs of this Court from the opposite party.