1. This is a Letters Patent appeal1 by the defendants against the judgment and decree of Chaturvedi J., passed in Second Appeal No. 695 of 1950.
2. The plaintiff-respondent Pyaribai was in the keeping of one Deolal, who was the predecessor in interest of the present appellants. She purchased two houses situate in Bharkapara, in the town of Rajnandgaon, by sale deeds dated 6-6-1922 and 30-4-1924. Latterly, disputes arose between her and Deolal as regards the ownership of the houses. The matter was accordingly referred to arbitration by the parties. The arbitrators gave an award on 20-4-1935, in which it was held that only Deolal way and would be in possession of the two houses and Pyaribai had no right thereto.
3. Pyaribai filed Civil Suit No. 5 of 1937 against Deolal in the Court of Sub-Judge First Class, Rajnandgaon, to set aside the award and for a declaration of her title to the house in dispute. Before that suit was filed she had obtained a decree against two debtors in Civil Suit No. 60-B of 1936 of the Court of Sub-Judge Second Class, Durg. Thereafter, Deolal filed Civil Suit No. 111A of 1937 in the Court of Sub-Judge Second Class, Durg, against Pyaribai for a declaration that he had the right to recover the amount due under the decree in Civil Suit No. 60-B of 1936.
The claim laid by Deolal was resisted by Pyaribai on the ground that the money belonged to her and that the award entitling Deolal to the debt was void. The Court decided that the money was not advanced by Deolal and that the award was vitiated by the misconduct of the arbitrators. In that view a decree dismissing Deolal's suit (No. 111A of 1937) was passed on 30-3-1939. As against that decree Deolal filed an appeal but that appeal and Pyaribai's suit (No. 5 of 1937) were dismissed on 8-9-1939 on the ground that the parties had amicably settled their dispute out of Court.
4. In the suit out of which this appeal arises there is a concurrent finding of all the Courts that the consideration for the purchase of the two houses in dispute was paid by Pyaribai out of her own money. This is a finding of fact and was not open to challenge in second appeal. In fact, the second appeal could have been disposed of on these two findings of fact alone. However, the parties went into the question whether the derision in Civil Suit No. 111A of 1937 operated as res judicaca on the issue: whether the award was binding upon Pyaribai. That question was answered against the appellants by the learned Single Judge and that was the only point which was argued before us.
5. On this question it was contended that since the dispute as regards the validity of the award was settled by private treaty and was not the subject of any decision in appeal from the decree in Civil Suit No. 111A of 1937, the finding that the award was vitiated by misconduct of the arbitrators was not binding upon the parties. It is true that the decree cannot operate as res judicata during the time an appeal is pending: Annamalay v. Thornhill, AIR 1931 PC 263. However, when the appeal is dismissed, whatever the grounds, the decree appealed from becomes operative find would bind the parties: see District Board, Dar-bhanga v. Suraj Narain, AIR 1936 Pat 198.
Here it has not been proved that in the compromise between the parties any change was effect-ed in regard to the binding nature of the award. Accordingly the decree parsed in Civil Suit No. 111A of 1957 would operate as res judicata on that question. The learned Single Judge was, therefore right in holding that the decree in Civil Suit No. 111A of 1937 operated as res judicata between the parties on the question of the validity of the award.
6. The result is that the appeal fails and is dismissed with costs.