Skip to content


Ram Harakh Singh Vs. S. Mumtaz HusaIn and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration ;Civil
CourtAllahabad
Decided On
Reported inAIR1949All679
AppellantRam Harakh Singh
RespondentS. Mumtaz HusaIn and anr.
Excerpt:
- - it is further urged that if ram harakh singh had succeeded in his application, the benefit would have accrued to arjun singh as well, though the latter was pleading against his own interest presumably in collusion with the mortgagee. it may be that arjun singh in proceedings before the arbitrator may well have supported the mortgagee in showing that the profits of the property during the relevant period will not be sufficient to discharge the mortgage debt......his son ram harakh. the interest of gajraj singh as co-mortgagor upon his death devolved upon arjun singh. ram harakh instituted proceedings for redemption of the property under section 12, u.p. agriculturists' relief act, impleading, besides mumtaz husain mortgagee, his co-mortgagor arjun singh as a defendant. his case was that he was entitled to redemption without payment of any amount as the entire mortgage money had been paid out of the usufruct of the property. the mortgagee's defence was that the profits were inadequate and a considerable amount was still due under the mortgage. curiously enough arjun singh in his defence supported to some extent the case of the mortgagee. in para. 15 of his written statement he stated that the profits of the property mortgaged after deduction.....
Judgment:
ORDER

Ghulam Hasan, J.

1. This revision under Section 115, Civil P.C., raises a point of soma interest. The point arises in this way. Surat Singh and Gajraj Singh made a mortgage of certain property in favour of Mumtaz Husain for Rs. 1,500. Surat Singh died leaving his son Ram Harakh. The interest of Gajraj Singh as co-mortgagor upon his death devolved upon Arjun Singh. Ram Harakh instituted proceedings for redemption of the property under Section 12, U.P. Agriculturists' Relief Act, impleading, besides Mumtaz Husain mortgagee, his co-mortgagor Arjun Singh as a defendant. His case was that he was entitled to redemption without payment of any amount as the entire mortgage money had been paid out of the usufruct of the property. The mortgagee's defence was that the profits were inadequate and a considerable amount was still due under the mortgage. Curiously enough Arjun Singh in his defence supported to some extent the case of the mortgagee. In para. 15 of his written statement he stated that the profits of the property mortgaged after deduction of the costs of realisation are very small and the value of the mortgaged property is less than the mortgage money. He admitted that he was the owner of half the mortgaged property. The principal issue in the case was : 'What net profit the mortgagee could have made with due diligence from the mortgaged property?'

2. After filing the written statement Arjun Singh does not appear to have taken any part in the proceedings and on 8th April 1946, Ram Harakh and Mumtaz Husain both agreed to refer the case to the decision of Mr. Narain Lal, Advocate as arbitrator. The Court accordingly appointed him as arbitrator. The arbitrator gave an award on 30th May 1946. The mortgagee objected to the award. It appears that Arjun Singh subsequently appeared and stated that he had no objection either to the appointment of the arbitrator or to the award made by him. This statement was made on 31st July 1946. The learned Munsif dismissed the objection of the mortgagee and passed a decree in accordance with the award.

3. On appeal by the mortgagee the learned Civil Judge set aside the decree and remanded the case for trial from the stage at which the reference was made and to decide the case according to law. The view taken by the appellate Court is that Arjun Singh as a necessary party was interested in the reference, although the proceedings against him were ex parte and as he did not join the reference, the reference was invalid and the award based thereon inoperative. The fact that Arjun Singh subsequently ratified the proceedings did not cure the defect which was fatal to the reference.

4. In revision before me it is contended on behalf of Ram Harakh Singh that the view taken by the lower appellate Court is wrong and in setting aside the reference and the award the Court below acted without jurisdiction, The question which falls to be considered depends upon the interpretation of the word 'interested' in Section 21,. Arbitration Act, which is the same as para. 1 of Schedule 2, Civil P.C. The section runs thus:

Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference.

5. The question is whether Arjun Singh was interested within the meaning of Section 21 in the matter in difference between the applicant on the one hand and the mortgagee on the other. It is urged before me that the applicant Ram Harakh Singh was claiming redemption without payment of any amount, while the mortgagee was claiming a large sum of Rs. 1500 before redemption was effected and in this Arjun Singh far from supporting him was really supporting the mortgagee in that he said that the profits of the property were small and the value of the mortgaged property was less than the value of the mortgage money. In other words, that he was siding with the mortgagee against his own pecuniary interest. It is further urged that if Ram Harakh Singh had succeeded in his application, the benefit would have accrued to Arjun Singh as well, though the latter was pleading against his own interest presumably in collusion with the mortgagee. The argument, in my opinion, does not take the case out of the purview of Section 21. There is nothing in the section to restrict the meaning of the word 'interested' only to a case where the person is claiming something in his favour and doss not cover a case where he is pleading against his own interest. It may be that Arjun Singh honestly felt that the mortgagee was entitled to some money from the mortgagors in view of the inadequacy of the profits or it may be due to collusion. An enquiry into the motives of Arjun Singh would in my opinion be [unnecessary and irrelevant. The fact, however, remains that the matter in difference between the parties to the case was on what amount redemption should be decreed in favour of the mortgagors and in this question it cannot be denied that both the mortgagors were equally interested. It may be that Arjun Singh in proceedings before the arbitrator may well have supported the mortgagee in showing that the profits of the property during the relevant period will not be sufficient to discharge the mortgage debt. This action of his would have been detrimental to his own interest, but he was none the less interested in the decision of the matter in difference arising between the parties to the suit-There is authority for the proposition that where all the parties interested have not agreed that the matter be referred to arbitration, any award that may have been given is invalid and the fact that proceedings against some of the defendants who did not join in the reference were ex-parte does not render the award valid (Imtiaz Khan v. Dost Mohammad Khan and Ors. A.I.R. (20) 1933 Oudh 384 and ML Ghafooran v. Abdul Hamid A.I.R. (25) 1938 Oudh 154.

6. It was also argued that Arjun Singh having ratified the proceedings subsequent to the making of the award, the proceedings became valid. I am not prepared to accede to this contention. Subsequent ratification does not validate the reference which was void at its conception (inception?). As was observed in T.S. Subba v. Appadurai Aiyar and Ors. : AIR1925Mad621 , the foundation of the Court's jurisdiction is the consent of all the parties, See also Gopal Das v. Baij Nath and Ors : AIR1926All238 .

7. The next contention was that the reference was valid under Section 24, Arbitration Act. That section, however, requires that:

Where some only of the parties to a suit apply to have the matters in difference between them referred to arbitration in accordance with, and in the manner provided by, Section 21, the 'Court may, if it thinks fit, so refer such matters to arbitration (provided that the same can be separated from the rest of the subject matter of the suit) in the manner provided in that section....

The interest of the two mortgagors in the pre-sent case was inseparable. Whatever decision was arrived at in the arbitration proceedings, it would have enured to the benefit of both or operated equally against them, if the decision favoured the mortgagee. It is not possible to give a decree to one of the mortgagors without payment of any amount and to pass another decree making the redemption conditional upon payment of a certain amount to the mortgagee. The decision in Jagrup Ram Kasaundhan v. Kashi Prasad Gupta and Ors : AIR1934All658 , is therefore distinguish, able upon the facts. There the suit was brought by the transferee of a promissory note against the executant of the promissory note impleading the transferor as a pro forma defendant. The transferor did not join the reference and it was held declaring the award valid that whatever might be the interest of the transferor, it was not interest within the meaning of para. 1 of Schedule 2 and that it was separable from that of the executant of the promissory note. Section 24, therefore, does not help the applicant.

8. I hold, therefore, that the decision arrived at by the lower appellate Court cannot be disturbed. The application fails and is dismissed with costs.


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