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Poran Lal and ors. Vs. Rup Chand and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Reported inAIR1931All761
AppellantPoran Lal and ors.
RespondentRup Chand and ors.
Excerpt:
.....behalf of the respondents that inasmuch as on a previous occasion the plaintiffs had failed to nominate an arbitrator and the court had to appoint b. another irregularity was that no formal' application was made to the court by the defendants requesting the court to appoint some one as arbitrator on the ground that the plaintiffs had failed to nominate one. the court should consider whether it should supersede the arbitration or whether it should allow time to the parties to serve the necessary notice and then appoint an arbitrator in case they fail to do so......that the arbitration be superseded. the court rejected this application and appointed one babu bimal prasad as an arbitrator by an order dated 3rd september 1929. the order itself merely appointed b. bimal prasad as an arbitrator, but it was construed by the lower court as amounting to a reference to b. bimal prasad as the sole referee. it should be mentioned that the arbitrators other than madho ram had neglected to act as arbitrators, though they had not positively refused to act as such. b. bimal prasad also refused to act as an arbitrator on 5th september 1929. by an order dated 7th september 1929, the court appointed mr. girraj bahadur as an arbitrator, directing the parties to pay rs. 150 as his remuneration. on 28th november 1929 the plaintiffs applied for revocation of the.....
Judgment:

Niamatullah, J.

1. This is an application for revision by the plaintiffs and arises out of a suit brought by them for partition of family property. The parties agreed, on 8th June 1929, to refer the dispute between them to the arbitration of four parsons, including one Madho Ram as an umpire. Accordingly an application was presented on 24th June 1929 asking for a reference to the aforesaid arbitration. Accordingly the matter was so referred. Madho Ram refused to act. By an order, dated 23rd August 1929, the Court directed the parties to nominate another arbitrator in place of Madho Ram. Before any nomination could be made by the parties, the plaintiffs applied, on 2nd September 1929 praying that the arbitration be superseded. The Court rejected this application and appointed one Babu Bimal Prasad as an arbitrator by an order dated 3rd September 1929. The order itself merely appointed B. Bimal Prasad as an arbitrator, but it was construed by the lower Court as amounting to a reference to B. Bimal Prasad as the sole referee. It should be mentioned that the arbitrators other than Madho Ram had neglected to act as arbitrators, though they had not positively refused to act as such. B. Bimal Prasad also refused to act as an arbitrator on 5th September 1929. By an order dated 7th September 1929, the Court appointed Mr. Girraj Bahadur as an arbitrator, directing the parties to pay Rs. 150 as his remuneration. On 28th November 1929 the plaintiffs applied for revocation of the reference, expressing their unwillingness to proceed with the arbitration; but that application was rejected. On 9th December 1929 the plaintiffs again applied for the revocation of reference. This was also rejected. On 16th January 1930, the plaintiffs took objection to the legality of the appointment of Mr. Girraj Bahadur as arbitrator. The application was rejected. Some proceedings took place before the arbitrator after 16th January 1930. The present application for revision was filed in this Court on 7th March 1930. It appears that the award was made by Mr, Girraj Bahadur on 12th March 1930, and filed 'in due course in the Court below.

2. One of the grounds taken in revision has reference to the power of the Court to appoint Mr. Girraj Bahadur without previous notice having been given by the defendants to the plaintiffs to nominate an arbitrator as required by Rule 5, Schedule 2, Civil P. C. It is not in dispute that no notice was given by the defendants to the plaintiffs to appoint an arbitrator in place of either Madho Ram or B. Bimal Prasad. It is argued that Mr. Girraj Bahadur was appointed in continuation of proceedings following the order of the Court dated 23rd August 1929, by which time was given to the parties to nominate an arbitrator. It is said that B. Bimal Prasad refused shortly after his nomination and the appointment of Mr. Girraj Bahadur by the Court must be considered to be part of the proceedings started by the Court's order dated 23rd August 1929. I am unable to take this view of the matter, The Court had to fill up the vacancy by the refusal of Madho Ram to act; and when the parties neglected to make a nomination for which an opportunity was given to them by the order dated. 23rd August 1929, the Court appointed B. Bimal Prasad. This marked the termination of one stage of the proceedings. It could not at that time be anticipated that B. Bimal Prasad would refuse, as he subsequently did on 5th September 1929. The Court should have adopted the procedure laid down by Rule 5 after B. Bimal Prasad refused to act as an arbitrator. In the absence of notice by one of the parties to the other to appoint an arbitrator, the Court had no power to appoint Mr. Girraj Bahadur in place of B. Bimal Prasad. This view was taken by a Bench of this Court in Jagannath Sahu v. Chhedi Sahu : AIR1929All144 and also in Abdul Gani v. Din Dayal [1919] 41 All. 578. I am clearly of opinion that the Court had no power to appoint Mr. Girraj Bahadu to act as arbitrator without the formalities required by Rule 5, Schedule 2, Civil P.C. being observed.

3. It is argued that no case has been decided within the meaning of Section 115, Civil P. C. and therefore no revision can lie. The argument implies that the stage when a case is decided has not yet arrived and will arrive in future when a decree is passed on the foot of the award. I think that the order of the Court dated 7th September 1929 appointing Mr. Girraj Bahadur as the arbitrator and making a reference to him, does amount to a case decided within the meaning of Section 115, Civil P. C. To take any other view would be to put a premium on unnecessary proceedings in which a large number of witnesses may be examined by the parties and the award which the arbitrator might eventually make may be declared by the Court to have been made by the arbitrator who had been illegally appointed and had in consequence no jurisdiction. I am therefore of opinion that on a reference being made to an arbitrator whom the Court had no power to appoint, a ' case ' should be considered to have been decided within the meaning of Section 115 so as to empower this Court to interfere in revision.

4. It has been argued by the learned advocate for the respondent that great delay occurred in applying for revision and that the applicants had acquiesced in the appointment of Mr. Girraj Bahadur by taking part in the arbitration proceedings before him. I have already referred to no less than two applications having been made by the applicants for revocation of the reference, both of which were dismissed by the Court. Finally they objected specifically to the appointment of Mr. Girraj Bahadur though the objection made no reference to Rule 5, Schedule 2, Civil P. C. In view of these circumstances, it cannot be said that the applicants acquiesced in either the appointment of Mr. Girraj Bahadur or the decision of the case by arbitration. It is quite clear that the plaintiffs were throughout anxious to have the matter decided by the Court and to have the arbitration superseded. No case of acquiescence, in my opinion, has been made out; and if the appointment of Mr. Girraj Bahadur was invalid so as to make an award made by him to be considered illegal the applicants are entitled to have the appointment of Mr. Girraj Bahadur set aside by this Court in revision instead of waiting till such time that an award is made and a decree based thereon is passed by the Court. It has been pointed out that the application for revision is directed against the Court's order of 5th February 1930, rejecting the plaintiffs' application, dated 16th January 1930 which prayed

that the arbitration proceedings may be declared null and void and the case may be heard or any other arbitrator with the consent of the parties may be duly appointed,

which order at any rate does not amount to a case decided within the meaning of Section 115. It is not necessary to decide whether the order dated 5th February 1930 is one which can be the subject of an application for revision; as I am clear that the Court's order, dated 7th September 1929 by which Mr. Girraj Bahadur was appointed an arbitrator and a reference was made to him, is an order which the Court had no power to pass. Accordingly the whole proceedings subsequent to that order must be considered to be tainted with illegality. Consequently if the order of 7th September 1929 can be revised, as I think it can be, all proceedings following that order must necessarily fall through. In this view of the case I allow this application in revision, set aside the order of the Court dated 7th September 1929 and direct it to proceed according to law.

Sulaiman, Ag. C.J.

5. This revision purports to be against an order refusing to declare that the arbitration proceedings are null and void. The order is either in the exercise of the discretion of the Court or is a decision that in law the arbitration is not void. I am clearly of . opinion that no revision would lie from this order. But as pointed out by my learned brother, it has been brought to our notice that the earlier order of 7th September 1929 is open to serious objection. I would therefore agree to that order being set aside unless there is any estoppel against the applicants.

6. No doubt the application is filed rather late, i.e., about six months after the passing of that order; but it cannot be said that the applicants acquiesced in it and that their conduct amounted to estoppel. On several occasions they protested against the arbitration and applied to the Court for its revocation. It is quite clear to my mind that if there has been a grave illegality or material irregularity, it would be open to the applicants to challenge the award on that ground even after a decree in terms of it hats been passed. It would therefore be a saving of time, labour and money if on being satisfied that the decree will have to be set aside, we were to interfere even at this stage. In the case of Jagannath Sahu v. Chhedi Sahu, it has been held by a Bench of this Court that the appointment of a new arbitrator which is not authorized is a case decided within the meaning of Section 115, Civil P. C. As the Full Bench case in Pudhu Lal v. Mewa Ram A.I.R. 1921 All. is not directly against this view, I am not prepared to differ.

7. It may be assumed in favour of the respondents that the Court had power to appoint one arbitrator in place' of the four when they neglected to act; and it may therefore be assumed that the appointment of B. Bimal Prasad was not necessarily irregular. But when B. Bimal Prasad refused to act, the Court without waiting for the defendants to serve a notice on the plaintiffs or without giving time to the parties to appoint a fresh arbitrator, proceeded to appoint Mr. Girraj Bahadur as the sole arbitrator and fixed a fee for him. This was on 7th September 1929.

8. There is certainly authority for the view that if the procedure laid down in Rule 5, Schedule 2, as regards the giving of notice and the opportunity to the other party to be heard, is not followed, the Court has no power to appoint a new arbitrator. It is however not necessary for me to decide in this case whether the Court would be acting without jurisdiction and its order would be ultra vires if that procedure had not been followed. It may well be said with equal force that the rule as to notice and the opportunity to the opposite party to be heard is a rule of procedure, and the failure to comply with it would not amount to want of jurisdiction. I have however no doubt in my mind that the act of the Court would be illegal and there would be material irregularity in procedure so as to bring the case within the scope of Section 115. As pointed out by my learned brother, there were several irregularities in this case. Not only was no notice served by the defendants on the plaintiffs calling upon them to nominate an arbitrator in place of the one who had refused to act but there was even no opportunity given to the plaintiffs to be heard. It has been contended on behalf of the respondents that inasmuch as on a previous occasion the plaintiffs had failed to nominate an arbitrator and the Court had to appoint B. Bimal Prasad the subsequent proceedings consequent upon the refusal of B, Bimal Prasad in which the Court appointed Mr. Girraj Bahadur must be considered to have been in the same continuation. This contention cannot be accepted. When the Court passed a definite order appointing B. Bimal Prasad on 3rd September 1929, the previous proceedings came to an end; and a fresh right to serve notice on the opposite party arose when B. Bimal Prasad in his turn also refused to act. I therefore agree that it was the duty of the Court to wait for a week after the service of a fresh notice or at any rate, to give sufficient time to the parties to nominate an arbitrator in place of B. Bimal Prasad before it formally appointed Mr. Girraj Bahadur. Another irregularity was that no formal' application was made to the Court by the defendants requesting the Court to appoint some one as arbitrator on the ground that the plaintiffs had failed to nominate one. As already pointed out, no date was fixed for the disposal of this matter and the parties were not heard before the order appointing Mr. Girraj Bahadur was passed. The order therefore has been both unfair and unjust to the plaintiffs, and I agree that it ought to be set aside.

9. The application in revision is allowed to this extent: that the order of 7th September 1929 is set aside and the case is sent back to the Court below with direction to proceed under Rule 5, Schedule 2, Civil P.C., and to dispose of the case according to law. The Court should consider whether it should supersede the arbitration or whether it should allow time to the parties to serve the necessary notice and then appoint an arbitrator in case they fail to do so. Under the circumstances of the case the parties should bear their own costs of this revision.


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