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Manni Lal Vs. Pahlad Das - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1937All141
AppellantManni Lal
RespondentPahlad Das
Excerpt:
.....the parties to drigbijai singh for arbitration was perfectly legal. 4,000 to manni lal was in existence and if the arbitrator had been distinctly told to file that award he would have at once filed it. 2 schedule 2 which shows that on a reference being made to the arbitrator a time limit must be fixed for the filing of the award, the contention is that in so far as the original order of reference to drjgbijai singh did not state the time within which-the award should be filed the reference was bad in law......which had made the order of reference had ceased to exist he did not file it in any court. the award adjudged pahlad das to be liable to refund rupees 4,000. laced with the difficulty that the court through whose intervention the reference had been made had ceased to exist, manni lal applied to the court of the munsif of banda under para. 20, schedule 2, civil p.c., for an order that the award be made a rule of the court. the munsif's court was apparently chosen because the arbitrator had awarded rs. 4,000 to manni lal which was within the pecuniary limits of the jurisdiction of the munsif of banda. manni lal's application was, however, dismissed by the munsif on the ground that the reference having been made by a court, para. 20, schedule 2, civil p.c., was inapplicable. accordingly.....
Judgment:
ORDER

1. This is an application by one Manni Lal for revision of an order passed by the Additional Subordinate Judge of Banda in a case under para. 17, Schedule 2, Civil P.C. The case hag a long history behind it and it is necessary to state the circumstances which led to the present application for revision. The opposite party Pahlad Das sold certain zamindari property to Manni Lal under a sale deed for an ostensible consideration of Rupees 10,000 as far back as 13th December 1923. When Manni Lal applied to the Revenue Court for mutation of names, objection was taken by Pahlad Das to the sale being given effect to. The revenue Court refused mutation and Manni Lal insisted on tha price being refunded to him. Pahlad Das disputed Manni Lal's right to a refund of the price. The dispute between tha parties was referred by them to the arbitration of five persons including one Raja Ram. The agreement was embodied in a formal document dated 22nd March 1930. Manni Lal applied to the Court of the Additional Subordinate Judge of Banda under para. 17, Schedule 2, Civil P.C., for an order that the agreement of reference be filed. Pahlad Das objected to the application being granted, inter alia, on the ground that Raja Ram, one of the five arbitrators, was a relation of Manni Lal, a fact which had been concealed from him. Parties compromised the differences that were in existence at that stage by modifying the previous agreement of reference so far as the personnel of the arbitrator was concerned. They agreed to make Drigbijai Singh the sole arbitrator in the case. This was done on 15th October 1930 when the Court made an order of reference to Drigbijai Singh. It is clear that Drigbijai Singh had been previously consulted by the parties and was present in Court when the order of reference was recorded.

2. The Court of the Additional Subordinate Judge which was only a temporary Court was abolished soon afterwards and the case was consigned to the record room. Drigbijai Singh made an award within a reasonable time, but apparently because the Court which had made the order of reference had ceased to exist he did not file it in any Court. The award adjudged Pahlad Das to be liable to refund Rupees 4,000. laced with the difficulty that the Court through whose intervention the reference had been made had ceased to exist, Manni Lal applied to the Court of the Munsif of Banda under para. 20, Schedule 2, Civil P.C., for an order that the award be made a rule of the Court. The Munsif's Court was apparently chosen because the arbitrator had awarded Rs. 4,000 to Manni Lal which was within the pecuniary limits of the jurisdiction of the Munsif of Banda. Manni Lal's application was, however, dismissed by the Munsif on the ground that the reference having been made by a Court, para. 20, Schedule 2, Civil P.C., was inapplicable. Accordingly Manni Lal's application was returned for presentation to the proper Court. Manni Lal felt the difficulty of deciding for himself as to which of the civil Courts of the Banda district was the proper Court. He made an application to the Subordinate Judge for review of a certain order passed by the Additional Subordinate Judge. It is not clear which particular order was sought to be reviewed, but in view of the order of the Subordinate Judge it is not necessary to make any further comment on that aspect of the application. The Subordinate Judge ruled that as the Court of the Additional Subordinate Judge had ceased to exist, no application for review was maintainable. Manni Lal applied a second time for the matter being reopened but without success. Finally he moved the District Judge and asked for an order directing his case under para. 17 being re-opened and the same being transferred to the Subordinate Judge.

3. The District Judge acceded to this request and directed the Subordinate Judge to take seisin of the case. An appeal from the order of the District Judge preferred by Pahlad Das was infractions. In the meantime the Court of the Additional Subordinate Judge was re-established at Banda and the case was eventually transferred to his Court. When he took up the case the position was that Drigbijai Singh had made an award but had not filed it in Court in the circumstances already stated. The first action taken in the case was an application by Pahlad Das objecting to a fresh reference being made to Drigbijai Singh to arbitrate. Apparently it was contemplated by the Court that the first reference made to Brigbijai Singh be ignored and a fresh reference be made to him and he be required to make an award in pursuance thereof. Prom what has been discussed before us we think that the difficulty which was felt by the Court was that the first order of reference, though recorded by the Court, was riot communicated to the arbitrator. It was doubted as to whether the arbitrator would have jurisdiction to make an award in the absence of an. order of reference being served upon him. It was therefore considered to be. necessary that a fresh reference be made to the arbitrator and the Court's order served upon him. Pahlad Das took objection to this procedure mainly on the ground that the arbitrator, having already made an award, has expressed an opinion on the merits and if a fresh reference were made he was not likely to give a different award. Incidentally he impeached the impartiality of the arbitrator. The principal question which the Additional Subordinate Judge was called upon to decide was whether a fresh reference should be made to the arbitrator or whether, as Pahlad Das desired, the arbitration should be revoked. The learned Judge accepted the contention of Pahlad Das to the effect that the arbitrator was not likely to bring an impartial mind to bear upon the case. The learned Judge went on to make some remarks as regards the arbitrator's conduct in making his award. In the end he held that a case existed for the Court revoking the reference to the arbitrator. The learned Additional Subordinate Judge was of opinion that he could revoke a reference to arbitration in the exercise of his inherent power under Section 151, Civil P.C. The present application for revision impugns the legality of this order and the question which we have to decide-is whether the lower Court was justified in revoking the reference to arbitration.

4. It is strenuously contended on behalf of Pahlad Das that no revision lies from the order revoking the arbitration. If the Additional Subordinate Judge had inherent power to revoke the reference his order cannot be attacked on the merits in revision. But we do not think such power exists apart from the provisions contained in Schedule 2, Civil P.C. On the contrary we are of opinion that the lower Court failed to appreciate the legal position of the parties and acted without jurisdiction, and, at any rate, illegally and with material irregularity. There can be no doubt that, the order of the Court dated 15th October 1930 referring the dispute between the parties to Drigbijai Singh for arbitration was perfectly legal. The fact that it was not served upon Drigbijai Singh was, in the circumstances of the case, a trifling irregularity. Where the reference is through a Court the arbitrator will, of necessity, he informed of the agreement of the parties and the order of reference, so that he might make his award within a time to be fixed by the Court, but where the arbitrator is fully aware of the terms of the order of reference, accepts the office of the arbitrator and actually decides the controversy between the parties by giving an award, the mere fact that the order of reference was not formally communicated to him would not vitiate the arbitration.

5. When the case was re-opened the learned Additional Subordinate Judge should have proceeded from the stage at which he found the case according to the record before him. He should have called upon the arbitrator to file his award within a time to be fixed by it. This seems to have been done, but everyone concerned seems to have understood the order as referring to the award to be made by the arbitrator on a fresh reference. The arbitrator was given time for such award repeatedly and did not file any. Eventually the parties moved the Court to decide the preliminary question as to whether the arbitration should be revoked. The Court then proceeded to decide this question and passed the order which is in question in revision. As a matter of fact the Court should have called upon the arbitrator to file the award which he had already made and which Manni Lal wanted to be made a rule of the Court before the Munsif. There is no doubt that the award granting Rs. 4,000 to Manni Lal was in existence and if the arbitrator had been distinctly told to file that award he would have at once filed it. We think that the lower Court misconceived the correct legal position and proceeded to decide whether the reference should be revoked. The reference having already been made and an award having already been given the only question which remained to be decided was whether the award was valid. The proper procedure as already indicated, was that the arbitrator should have been directed to file the award within a reasonable time and on the award being filed ten days should have been given to the parties to file their objections, if any, to the validity of the award. If any objection had been taken the same should have been disposed of. The Court would then have been in a position either to uphold the award and make it a rule of the Court or to supersede the arbitration. In this view the order of the lower Court impunged in revision must be set aside and that Court should be directed to proceed as indicated above.

6. We may mention that the learned advocate for Pahlad Das laid stress on form No. 2 Schedule 2 which shows that on a reference being made to the arbitrator a time limit must be fixed for the filing of the award, The contention is that in so far as the original order of reference to Drjgbijai Singh did not state the time within which-the award should be filed the reference was bad in law. We are of opinion that this contention is not sound. The arbitrator derives his authority from the agreement of the parties and the order of reference gives effect to that agreement. In an ordinary case a date has to be fixed before which the arbitrator should file the award, but where the order of reference itself does not fix a date and the Court subsequently intimates to the arbitrator the time within which the award should be filed, we do not think that the irregularity, if any, would affect the validity of the award. In the present case the original order of reference did not fix the time within which the award should be filed, but if the Court fixes a time limit now and calls upon the arbitrator to file an award within that time and the award is filed we do not think that any objection to the validity of the award can be reasonably taken. In the result we set aside the order of the Additional Subordinate Judge dated 15th March 1934 and direct, that the lower Court should require the-arbitrator to file the award already made by him within a time to be fixed by it and on the award being filed it should allow ten days to the parties to file objections, if any, and then proceed according to law. In all the circumstances of the case we order the parties to bear their own costs in this Court. We are informed that the Court of the Additional Subordinate Judge of Banda has again ceased to exist. If this is so the case shall be heard by the Subordinate Judge of that district.


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