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Kunji Lal Vs. Durga Prashad and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad
Decided On
Judge
Reported in6Ind.Cas.127
AppellantKunji Lal
RespondentDurga Prashad and ors.
Excerpt:
civil procedure code (act xiv of 1882), sections 13, 521, 525 - order refuting to file an award on the ground of misconduct--whether a, decision in a suit--fresh suit whether barred--res judicata. - .....was held by four judges out of five that no appeal lay from an order disallowing an application to file an award under section 525. that decision proceeded on the grounds that the order was not a decree and it seems to us that this involves a decision that the proceedings under the application did not constitute a suit: this decision was followed in the case of katic ram v. babu lal a.w.n. (1903) 234. the case of ghulam khan v. muhammad hassan 29 c. 167 : 29 i.a. 157 to which we have already referred was cited in this case: the learned judges described the remarks of their lordships of the privy council in debendro kumar bundopadhya v. bhupendro narain butt 16 c. 182 at p. 184 as a dictum and that the words used by their lordships referred only to an order granting leave to file an.....
Judgment:

1. This appeal arises out of a suit which was brought to enforce an award. The defence was that there had been an application under Section 525 of the Code of Civil Procedure, Act XIV of 1882, to file the award, that the filing of the award was resisted on the ground of misconduct of the arbitrators, that the Court refused to file it on that ground and that, therefore, the present suit was barred by the provisions of Section 13 of Act XIV of 1882. The Court below decided in favour of this contention and hence the present appeal. It is contended on behalf of the appellant, that the refusal to file the award cannot possibly operate as res judicata because the order of the Court refusing to file the award on the ground of the misconduct of the arbitrators was not a decision made in a suit and that the only matter before the Court on that application was the question whether or not the award should be filed. On behalf of the respondents, it is contended that the refusal to file the award on the grounds mentioned must be deemed to be a decision in a suit and the Court having decided the very issue on the application, the question as to the validity of the award cannot be again raised and that the plaintiff's suit is accordingly barred. Section 525 of the Code of Civil Procedure, Act XIV of 1882, provides as follows: 'When any matter had been referred without the intervention of a Court of justice and an award has been made thereon, any person interested in the award may apply to the Court of the lowest grade having jurisdiction over the matter to which the award relates that the award may be filed in Court. The application shall be in writing and shall be numbered and registered as a suit between the applicant as plaintiff and other parties as defendants. The Court shall direct notice to be given to the parties to the arbitration other than the applicant acquiring them to show cause within a time specified why the award should not be filed.' Section 526 then provides: 'if no ground such as it mentioned or referred to in Section 520 or Section 521 be against the award, the Court shall order it to be filed, and such award shall then take effect as an award made under the provisions of this Chapter.' If the application after it has been numbered and registered as a suit could be treated as a suit in the proper sense of the word, the order of the Court whether it granted the application to file the award or refused it would be a decree. The order refusing to file the award would be appealable as a decree and the order granting leave to file the award would also be appealable subject perhaps to the provisions of Section 522 of the Code of Civil Procedure. We think that a great deal can be said in favour of the argument that the Legislature intended that when the application was numbered and registered it should be deemed a suit. The Court as soon as it has numbered and registered the application is bound to consider the matters mentioned in Section 520 and Section 521, one of the matters mentioned in Section 521 is the very question, which was tried in the present case, namely, whether or not there had been a misconduct on the part of the arbitrators. It seems to us that it is hardly likely that the Legislature intended to provide this machinery to try such questions and that the finding could be re-opened immediately by bringing a regular suit. It seems to us that the trying of such question a second time involves the parties in a large amount of unnecessary litigation, and a waste of the time of the Court. In the case of Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 157, Lord Macnaghten says: 'The question appears to their Lordship to turn upon the true construction and effect of the provisions of the Code of Civil Procedure relating to arbitration. The decisions of the Indian Courts on those provisions are so conflicting that it may be useful to state generally the conclusions at which their Lordships have arrived on some of the disputed points brought to their attention in the course of the argument.' Their Lordships then proceed to deal with the matter under several heads. The third head was where the agreement of reference is made and the arbitration itself takes place without the intervention of the Court and the assistance of the Court is only-sought in order to give effect to the award.' At page 183 of the Report, Lord Maonaghten says--'In cases falling under Heads II & III the provisions relating to cases under Head I are to be obeserved so far as applicable. But there is this difference which does not seem to have been always kept in view in the Courts in India. In cases falling under Head I the agreement to refer and the application to the Code founded upon it must have the concurrence of all parties concerned and the actual reference is the order of the Court, so that no question can arise as to the regularity of the proceedings up to that point. In cases falling under Heads II and III proceedings described as a suit and registered as such must be taken in order to bring the matter--the agreement to refer or the award as the case may be--under the cognizance of the Court. That is or may be a litiguous proceeding; cause may be shown against the application, and it would seem that the order made thereon is a decree within the meaning of that expression as defined in the Civil Procedure Code.' We are inclined to think that where their Lordships refer to the order made thereon, they must have referred not only to an order granting leave to file the award but also to an order refusing such leave. We, how-over, feel that we are bound by the authority of certain rulings of this Court. In the Full Bench case of Bhola v. Gobind Dayal 6 A. 186, it was held by four Judges out of five that no appeal lay from an order disallowing an application to file an award under Section 525. That decision proceeded on the grounds that the order was not a decree and it seems to us that this involves a decision that the proceedings under the application did not constitute a suit: This decision was followed in the case of Katic Ram v. Babu Lal A.W.N. (1903) 234. The case of Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 157 to which we have already referred was cited in this case: the learned Judges described the remarks of their Lordships of the Privy Council in Debendro Kumar Bundopadhya v. Bhupendro Narain Butt 16 C. 182 at p. 184 as a dictum and that the words used by their Lordships referred only to an order granting leave to file an award. In the case of Basant Lal v. Kunji Lal 28 A. 21 : 2 A.L.J. 450 : A.W.N. (1905) 165 the same question arose. The decision of their Lordships of the Privy Council in Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 157, as also the decision of this Court in Katic Ram v. Babu Lal A.W.N. (1903) 234, were referred to and it was again held that the order refusing to file the award was unappealable on the same ground namely that it was not a decree. Of course the only reason for holding it not to be a decree was that the order was not made in a suit. The High Courts of Calcutta and Madras have taken a different view. It was suggested that perhaps this appeal might be referred to a iarger Bench. We have considered this method. There is no doubt that at the time when the Court refused the application to file the award, the plaintiff in the present suit could not have appealed against the order having regard to the rulings of the Court. His only remedy was to bring a fresh suit. We, therefore, think that we ought to follow the decisions of this High Court in the cases of Katie Ram v. Babu Lal A.W.N. (1903) 234 and Basant Lal v. Kunii Lal 28 A. 21 : 2 A.L.J. 450 : A.W.N. (1905) 165. We, therefore, hold (following the rulings referred to) that the issue as to the misconduct of the arbitrators was decided in a proceeding which was not a suit within the meaning of Section 13 of Act XIV of 1882 and that the decision on the said issue accordingly cannot operate as res judicata. We, therefore, allow the appeal and set aside the decree of the Court below. As the suit-was decided on the preliminary point, we remand the case to the lower Court with directions to re-admit the suit on its original number in the register and proceed to determine it on the merits. Costs will abide the result and costs in this Court will include fees on higher scale.


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