1. This is a defendant's application in revision against an order of the Civil Judge of Aligarh dated 16th January 1947 where. by he allowed an appeal against an order of the Munsif of Koil who had rejected the application of the plaintiff-opposite party for setting aside an award. The suit was referred to arbitration on the statements of the counsel for the parties. This statement was recorded not by means of an application but upon a court rubkar and was signed by the parties in the presence of the Court. The arbitrator so appointed made an award. Both parties raised objections to it. The objection of the defendant-applicant merely related to the order regarding costs in the award. The objections of the plaintiff-opposite party were several but we are concerned only with his objection that the reference to arbitration was invalid, as it was not in writing, as required by the Arbitration Act. The objection of the defendant applicant, with regard to costs, was overruled and we are not concerned with it any further. All the objections raised by the plaintiff-opposite parties were also overruled and a decree in terms of the award was passed by the Munsif. The plaintiff-opposite party appealed to the lower appellate Court. The lower appellate Court held that the agreement of reference was invalid, as there was no application in writing and the statement of the counsel for the parties was not,' such an application. In the result he set aside the Munsif's order, and dismissed the case with a direction that it may be tried and disposed of after recording evidence of both the parties according to law. Against this order the defendant has come up in revision to this Court.
2. As we have stated already the reference was made upon the statement of the counsel recorded on rubkar by the Court which was signed by them. Section 2, Clause (a), Arbitration Act defines an 'Arbitration agreement' as 'a written agreement to submit present or future differences to arbitration whether an arbitrator is named there-in or not.' This section supersedes para. 1 of Schedule 2, Civil P.C., which was in these terms:
Parties to suit may apply for order of reference:
(1) Where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may, at any time before judgment is pronounced, apply to the Court for an order of reference.
(2) Every such application shall be in writing and shall state the matter sought to be referred.
When Schedule 2, Civil P.C., was in force, it was held that the statement of counsel or of parties, duly signed by them, as in the present case was an application in writing within the meaning of the said paragraph: vide Mahabir v. Manohar Singh A.I.R. (11) 1924 ALL. 540. The language of Section 2 (a), Arbitration Act does not even mention an application: it only requires an agreement in writing. The authority quoted above will apply with greater force to the language used in the Arbitration Act. There can, therefore, be no doubt that there was a valid reference to arbitration in the present case and the learned Judge of the Court below was entirely wrong in holding the contrary.
3. A preliminary objection, however, has been raised on behalf of the plaintiff-respondent to the effect that this Court has no power in the exercise of its revisional jurisdiction, to interfere with the decision of the lower appellate Court- firstly because no 'case' has been decided by the lower appellate Court and secondly because the decision of the lower Court was merely wrong in law and no question of jurisdiction was involved.
4. Now Section 115, Civil P.C. runs as follows:
Revision: The High Court may call for the record of any case which has been decided by any Court subordinate to such High Court and in which no appeal lies thereto, and if such subordinate Court appears:
(a) to have exercised a jurisdiction not vested in it by law, or
(b) to have failed to exercise a jurisdiction so vested, or
(c) to have acted in the exercise of its jurisdiction illegally or with material irregularity, the High Court may make such order in the case as it thinks fit.
5. So far as the objection that there was no 'case' decided by the lower Court is concerned, there is no substance in it whatsoever. The lower Court has entirely disposed of the appeal. The appeal was certainly a case which was pending before the lower appellate Court. This has been finally disposed of by the order under revision. A case has, therefore, been decided. The argument of the learned Counsel was that it has been held in this Court that a decision of a Court, setting aside an award and ordering the case to be heard on merits, is not a case decided. In support of this argument learned Counsel drew our attention to a Full Bench decision of this Court reported in Govind Das v. Indrawati : AIR1938All557 . That, however, was a case in which the trial Court before whom the suit was pending had decided that the award was invalid and had set down the case for hearing on the merits. On those facts it was held that the suit was still pending before the lower Court and the order setting aside the award was merely an interlocutory one, and no revision lay against it. That was, therefore, not a case of an appellate Court setting aside an award and disposing of the appeal before it and so the Full Bench case is not applicable to the facts of the present case.
6. We may, however, point out that the Full Bench case was decided when the present Arbitration Act of 1910 had not come into force and when no appeal was provided for against an order setting aside an award. Under the present Arbitration Act, Section 39 provides for an appeal Against an order setting aside an award. When-'ever the Legislature provides for an appeal against an order, it may be presumed that the proceedings terminating in the order are of sufficient importance to be treated separately from [the suit itself, and to form a 'case decided'. The proceedings in the present case, therefore, must 'be taken to be a 'case' disposed of by the order.
7. The second objection, however, namely, that the decision of the lower Court does not involve any question-of jurisdiction is of considerable difficulty and much confusion prevails about the correct interpretation of the provisions of Section 115, Civil P.C. in this regard.
8. As pointed out by the Privy Council in Balkrishna Udayar v. Vasudeva Ayyar A.I.R. (4) 1917 P.C. 71,
the section applies to jurisdiction alone, the irregular exercise or non-exercise of it or the illegal assumption of it. The section is not directed against the conclusions of law or fact in which the question of jurisdiction is not involved.
9. The illegal assumption and non-exercise of jurisdiction have reference, usually to the initial stage of a case. Where a Court could not have tried a case, but has in fact, tried it there is an illegal assumption of jurisdiction. Where it could have tried a case but has refused to try it, there is a refusal to exercise jurisdiction. Both these things usually happen at the commencement of a trial. A Court has to find out the limits of its jurisdiction. This enquiry will be a preliminary enquiry collateral to the main issues in the case. Where a Court has correctly assumed jurisdiction and commenced the trial it may exercise that jurisdiction contrary to the fundamental principles of judicial procedure or to the procedure laid down by law or may decide a case without applying its mind to important facts proved on the record or to the provisions of a statute or under some misapprehension of facts. In all these cases it acts illegally in the exercise of its jurisdiction. This acting illegally clearly happens after the Court has validly assumed jurisdiction.
10. When dealing with this question it has sometimes been observed that Section 115, Civil P.C. does not deal with questions of law or fact and that it deals with questions of jurisdiction alone. This is a loose way of expressing succinctly a correct idea. A question of jurisdiction is also a question of law or/and fact. What is meant by saying that Section 115 does not deal with questions of law and fact is that Section 115 does not deal with questions of law and fact which do not involve a question of jurisdiction.
11. Again it has been said that where a Court has jurisdiction to try a case, it has jurisdiction to try it rightly or wrongly. This also is rather a loose way of stating a correct proposition. Every Court of limited jurisdiction before trying a case has to determine a preliminary question whether it has jurisdiction to try it. The decision of this question may depend upon the determination of certain questions of law or fact or both. A determination of these questions though necessary to be made by the tribunal concerned, is open to review by the superior Court because it is well settled that a Court cannot assume jurisdiction by deciding wrongly that facts exist upon the existence of which its jurisdiction depends : vide Bhagwandin v. Gir Har Saroop Similarly it cannot assume jurisdiction by deciding wrongly that the law gives it jurisdiction when, on a correct interpretation, the law does not give it jurisdiction. Nor can it refuse to exercise jurisdiction by deciding wrongly, that the law does not permit it to do what the law on a correct interpretation requires it to do.
12. As was observed by Sir Shah Sulaiman, Ag. C.J. (as he then was) in Abdul Wahid v. Tribhuwan Das : AIR1931All756 .
Of course, in most oases a failure to exercise jurisdiction is based on an erroneous view of the law that the Court has no jurisdiction. The mere fact that the failure proceeds on an error of law would not take the case out of: Section 115 (b), Civil P.C.
13. So also when a Court upon a wrong view of the law adopts a wrong procedure in the exercise of its jurisdiction 'it acts illegally' within [the meaning of Section 115, Clause (c), Civil P.C. Here 'again we have to deal with a question of law though a question of law arises not in determining the merits of the claim of a party but in determining the mode in which the Court acts or the procedure which the Court adopts.
14. Thus where parties agree in writing to refer a suit to arbitration and the Court on a wrong view of the law holds that there is no proper application before it, it acts illegally in the exercise of its jurisdiction because in rejecting the agreement the Court adopts for itself a wholly wrong procedure. The law required it to refer the matter to arbitration and have the case (decided by the arbitrator. Instead of doing that the Court attempts to try the suit itself. This is clearly a case in which the Court acts illegally in the exercise of its jurisdiction. This was the view taken by a Full Bench of this Court in Mt. Mariam v. Mt. Amina : AIR1937All65 . That was a case in which there was a reference to arbitration by the guardian of a minor. Leave to refer to arbitration had, however, not been obtained under Order 32. Rule 7, Civil P.C. The suit was referred to arbitration and, on receipt of the award, an application was made to the Court challenging the validity of the proceedings on the ground that the reference to arbitration was invalid. The Court decided that the reference was valid and passed a decree in terms of the award. In revision, a Full Bench of this Court held that the Court acted with illegality and with material irregularity in the exercise of its jurisdiction in referring the matter to the arbitrators and that this Court could interfere in revision. The Privy (Council case of Ghulam Khan v. Muhammad Hassain 29 Cal. 167 was distinguished by the Full Bench upon the ground that in that case there was no illegality in the reference to arbitration. We may also refer to the case of Mohammad Aijas Alt v. Basant Rai : AIR1932All665 , where it was held that a revision was entertainable upon the ground that a reference to arbitration was invalid.
15. The lower appellate Court by deciding (that there was no valid reference to arbitration and that, therefore, the case should not have been referred to the arbitrator but that it should have been tried by the trial Court and in ordering the trial Court to try the case itself, has acted illegally in the exercise of its jurisdiction : vide Ram Iqbal Rai v. Talessari Kuari : AIR1930All713 ., and its order' is, therefore, revisable.
16. In our opinion this Court has jurisdiction to revise the order of the lower appellate Court. We would, therefore, allow this revision, set aside the order of the lower appellate Court and restore that of the trial Court. The applicant shall have his costs of the lower appellate Court as well as of this Court. In respect of the costs of the trial Court the order of the trial Court shall stand.