Skip to content


Ahmad Ullah Vs. Hafizullah and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Contract
CourtAllahabad High Court
Decided On
Case NumberCivil Revn. No. 113 of 1959
Judge
Reported inAIR1961All173
ActsCode of Civil Procedure (CPC) , 1908 - Sections 100, 101 and 115; Arbitration Act, 1940 - Sections 30, 33, 39 and 41; Contract Act, 1872 - Sections 23
AppellantAhmad Ullah
RespondentHafizullah and ors.
Appellant AdvocateS.N. Kackker, ;G.P. Bhargava and ;S. Sadiqali, Advs.
Respondent AdvocateIqbal Ahmad and ;Aqiq Hasan, Advs.
DispositionApplication dismissed
Excerpt:
(i) arbitration - revision - section 115 of code of civil procedure,1908 - award - without accepting set-aside - held, the matter was finally decided the alternative lies for revision. (ii) award - sections 30 and 33 of arbitration act,1940 - reference invalid - objections well accepted - held, the lower court is well within its right to decide the award and to pass necessary judgments. - - have cropped up after the said case was brought (mokadma mazkur dakhil karney ke bad kuch nizayat aur bhi).'then it is said in connection therewith:.....not vested in them.10. learned counsel for the appellant has further argued that this point of invalid reference should have been taken in proceedings under section 33 and not under section 30 of the arbitration act and for that purpose he has relied on the case of shah and co. v. ishar singh kirpal singh and co. : air1954cal164 , where it has been held :'an application under section 30 is not maintainable on the ground that there was no valid reference or no reference at all and consequently thearbitrators had no jurisdiction to make the award. the proper application to make in such a case would be an application under section 33. the award-in such a case cannot be said to be 'otherwise in? valid' or 'improperly procured'.' on the other hand, learned counsel for the respondents had.....
Judgment:
ORDER

V.D. Bhargava, J.

1. This is an application in revision. Originally it was filed as a second appeal, but a learned brother of mine came to the conclusion that no appeal lay. He, however permitted this appeal to be treated as a revision and, therefore, it is -being decided as a revision.

2. A preliminary objection has been taken by the learned counsel for the opposite party that no revision lies to this Court against an order refusing to record an award and reliance was placed on a Full Bench decision of this Court in the case of Gobind Das v. Mt. Indrawati : AIR1938All557 .

3. Before I deal with the preliminary objection certain facts are necessary. It appears that there was a criminal case pending under Ss. 147/352 and 504, I. P. C. read with Section 106, Cr. P. C. for a long time. Some other disputes about cattle trough, door, nabdan, neeb tree, Nesuba etc. also arose between the parties. The parties by an agreement dated 8th February, 1950 referred their disputes to arbitration of certain persons. The arbitrators gave their award on the 20th of February, 1950. An objection was taken under Section 30 of the Arbitration Act that this award should not be recorded as the reference to the arbitration was made for the purpose of stifling the prosecution during the pendency of a non-compoundable case. That objection has found favour with the courts below and they have refused to record the award. Aggrieved by the decision the appellant has come to this Court.

4. Coming to the preliminary objection, in the case of : AIR1938All557 , it was held :

'Where the Court has set aside an award and superseded the arbitration pending a suit which is consequently to be tried by the Court, the Court cannot be considered to have decided a case within the meaning of Section 115 and no revision lies from such an order. No distinction can be drawn between an order superseding a reference to arbitration before the award has been delivered and after the award has been delivered. In either case the result is that the Court begins to hear the suit in accordance with Para 8 or Para 15 (2) of Schedule 2'.

The Full Bench in that case was only considering a case of reference to arbitration through the intervention of the court. If there is a pending suit and parties agree to refer to arbitration and then for some reason the award is not accepted, then the court is still seized of the case and the arbitration proceeding would be considered to be of an interlocutory nature and, in that event, no case would have been decided; but where the arbitration proceedings take place without the intervention of the court, outside the court, then, in that event, if an application is made requesting the arbitrator to file the award and further a prayer is made that a decree in connection with the award be made and when that award is set aside, there remains nothing pending in the court, and it cannot be said that the case has not been decided. That Full Bench, to my mind, does not apply to the facts of the present case, because that was a case of anarbitration through the intervention of the Court. Under the circumstances it was held that there was no case decided and no revision lay.

5. In case the court has refused to exercise its jurisdiction on a ground that the reference was invalid then this Court can interfere in revision. But the sole question involved in this case is whether the decision of the court below on the point whether the consideration of the reference was to stifle the prosecution or not is correct. To a certain extent this is a mixed question of law and fact As a fact this should be binding upon me in second appeal, but whether those conditions did amount to stifling of prosecution in law and did make the contract illegal under Section 23 of the Contract Act, will be a question of law.

6. In order to consider this aspect we must refer to the agreement itself. The relevant translation of the agreement is as follows :

'We, the first party and second party have been contesting a criminal case under Sections 147/352 and 504, I. P. G. and 106, Cr. P. C. for a long time. Some more disputes about cattle trough, door, nabdan, neeb tree, Nesuha etc. have cropped up after the said case was brought (Mokadma Mazkur dakhil karney ke bad kuch nizayat aur bhi).'

Then it is said in connection therewith:

'We the executants first party and the second party have at present of their own free-will and accord appointed Maulana Ahmad Mian Faruqi as arbitrator to decide our respective disputes outside the court.'

The vernacular words used in connection therewith are 'Uskey mutaliq Fariqain apna apna mamla bagaraz faisla'.

7. On behalf of the appellant it was contended that though there is a reference in this agreement to refer to arbitration about the criminal prosecution but that did not form any consideration for arriving at an agreement to refer and if that did not form part of consideration but was only motive to come to that agreement that agreement cannot be said to have been arrived at for the purposes of stifling the prosecution. Learned counsel for the appellant has placed reliance on the case of Gurumurty Raju v. Narasimha Raju : AIR1954Ori234 , where a Bench of that Court had held:

'To pronounce an arbitration agreement to-be invalid as an attempt to stifle criminal prosecution, it must be established that the withdrawal 08 the criminal case was the consideration for the agreement and not the motive for the same.'

He furth r placed reliance on the case of Jagdish v. Mt. Kausilla Devi, AIR 1947 All 317, where Mr. Justice Allsop had held :

'In determining whether an agreement is void under Section 23, Contract Act, the Courts should' look to the substance of the agreement between' the parties. If there is suspicion of blackmail or extortion or if the contract was based upon a promise really to hamper the administration of law so as to prevent investigation into a criminal' charge which was of interest not only to the persons concerned but to the public at largethen that contract should not be enforced. If, however, there is a bona fide civil dispute which the parties have decided to settle and there happen to be subsidiary proceedings in a criminal court, it would be contrary to public policy and to justice and equity to allow any person to escape his proper legal liabilities on the mere technical ground that there was some understanding that those criminal proceedings would not be pressed to a conclusion.'

8. Learned counsel for the opposite party has relied on the case of Kamini Kumar v. Birendra Nath , where it was held by their Lordships of the Privy Council:

'If it is an implied term of the reference to the arbitration of a civil dispute or an ekrarnama that the criminal complaint already filed would not be further proceeded with then the consideration of the reference or the ekrarnama as the case may be is unlawful and the award or the ekrarnama is invalid quite irrespective of the fact whether any prosecution in law had been started or not.'

He has further relied on the case of Bhowanipur Banking Corporation Ltd. v. Durgesh Nandini Dassi , where it was held that the essence of the contract has to be seen, He has also relied on Malka v. Sardar, AIR 1929 Lah 394, where it was held that the criminal complaint cannot be referred to arbitration and cannot be made a rule of the court.

9. The effect of all these decisions is really to find out from the language of the reference along with the attending circumstances as to what was the consideration for the agreement. In the present case there does not appear to be any doubt that the criminal complaint itself had also been referred to arbitration. In the minds of both the parties the primary dispute was the criminal dispute and the other 'Nizayat' were only supplementary because the words qualifying them are 'aur bhi', which means that they were really not the main dispute, but they had' arisen after the criminal complaint and to my mind from the language of the complaint itself, it is quite clear, that the intention of the parties was to refer the criminal dispute to arbitration and, therefore, the consideration of the reference was, that the criminal complaint would not proceed. No evidence was led by any of the parties to show if there was any other consideration present at that time.

In the circumstances I think the courts below if they had arrived at a finding of fact that this agreement was arrived at to stifle the prosecution, they have not committed any error of law and they have not exercised any jurisdiction not vested in them.

10. Learned counsel for the appellant has further argued that this point of invalid reference should have been taken in proceedings under Section 33 and not under Section 30 of the Arbitration Act and for that purpose he has relied on the case of Shah and Co. v. Ishar Singh Kirpal Singh and Co. : AIR1954Cal164 , where it has been held :

'An application under Section 30 is not maintainable on the ground that there was no valid reference or no reference at all and consequently thearbitrators had no jurisdiction to make the award. The proper application to make in such a case would be an application under Section 33. The award-in such a case cannot be said to be 'otherwise in? valid' or 'improperly procured'.'

On the other hand, learned counsel for the respondents had relied on three cases including a case of this Court, namely, Shukrullah v. Mt. Rahmat Bibi, AIR 1947 All 304, wherein a previous Full Bench decision of this Court and a Privy Council decision on this point had been considered. In the Full Bench case in Mt. Mariam v. Mt. Amina : AIR1937All65 , it was held by a majority that an objection to the validity of the reference to arbitration, on the ground that the reference was illegal, came within the purview of para 15, Schedule II, C. P. C., which would be equivalent, to Section 30. Sir Iqbal Ahmad dissented from this view. The case went up before Privy Council reported in Chhabba Lal v. Kallu Lal , in which they agreed with the view of Sir Iqbal Ahmad. The Bench in this case held :

'The Privy Council has no doubt held that Para 15, Schedule II, C. P. C. which now corresponds to S. 30, Arbitration Act did not apply in such a case, but they have gone still further and have held that if there was no valid reference the award would itself be a nullity. Thus this question can be raised in any proceeding apart from the provisions of S. 30, Arbitration Act. I hold, therefore, that the plaintiffs are certainly entitled to show that the reference itself was invalid, and if they succeed in that, that would certainly result in nullifying the award.'

If, according to this decision the award itself is invalid award and if the court below has held its so, then, in my opinion, this Court in its revisionai jurisdiction cannot interfere with that finding.

11. A. R. Savkur v. Amritlal Kalidas : AIR1954Bom293 , is another case which has taken a similar view. Dealing with Sees. 30 and 33 the Bench had held :

'Whereas Section 30 deals with the grounds on which an award can be set aside, S. 33 is the procedural section which lays down the procedure to be followed in making an application either for the purpose of setting aside an award or for the purpose of setting aside an arbitration agreement. It is futile to attach importance to the fact that Section 33 does not in terms refer to an application to ser aside an award.'

Regarding the scope of Section 33 they have held :

'The expression in Clause (c) of Section 30 'or is otherwise invalid' is not 'ejusdem generis,' it extends the jurisdiction of the Court to set aside an award on grounds other than those mentioned' in Clauses (a), (b) and (c) of Section 30.'

12. In Arjuna Padhana v. Nakula Choudhury : AIR1953Ori75 , a learned Judge of that Court had held :

'The expression 'otherwise invalid' should not be read 'ejusdem generis' with the grounds given in the preceding clause, but is wide enough, to embrace all grounds of attack regarding the validity of an award.'

In the circumstances I think it was within the jurisdiction of the Court below to decide whether the award was a valid or invalid award and if that was an invalid award it can refuse to pass a decree infavour of the award. I, therefore, see no force inthis revision.

13. The application is accordingly dismissed,shut since in this case the parties went to resile fromtheir own agreement I do not think the oppositeparty is entitled to any costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //