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Dharma Gauda Vs. Ganapati Gauda and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtOrissa High Court
Decided On
Case NumberSecond Appeal No. 296 of 1960
Judge
Reported inAIR1964Ori21
ActsArbitration Act, 1940 - Sections 32
AppellantDharma Gauda
RespondentGanapati Gauda and ors.
Appellant AdvocateR.C. Misra and ;S.C. Mohapatra, Advs.
Respondent AdvocateB.K. Pal, ;D.P. Mohapatra and ;S. Acharya, Advs.
DispositionAppeal dismissed
Cases ReferredChand v. Union of India
Excerpt:
.....within 12 years of the suit. that the defendant-1 had failed to prove that item no. he disbelieved the story of entrustment of the iron safe by the plfi. 6, he has clearly admitted that the property under conve-yance fell to his share in the award dated 28-3-42. the plaintiff's case also is that the award had been acted upon. their lordships held that the suit which the appellants filed clearly raised the question with regard to the existence and validity of the award and such a suit was expressly barred under section 32. this view was accepted by the high courts of patna, bombay, madhya pradesh and punjab as i will presently discuss. tilottama panigrahini, 20 cut lt 304. that case is clearly distinguishable. on the other hand the plaint clearly recited that the plaintiff is entitled..........which was actually registered on 30-3-42.according to the plaintiff, the three items of the suit properties, amongst others, were allotted to him in the award, and each of the parties took possession of the respective properties that fell to his share and was in enjoyment of the same as owner thereof. in about the year 1944, the plaintiff shifted to village jugudi entrusting the defendant 1 with the two suit-houses (items 1 and 2) for collecting the rents therefor from the tenants and to pay the same to the plaintiff. regarding the third item of the suit-property which was an iron safe, it was alleged by the plaintiff that he entrusted it to defendant 1 only for safe custody with the understanding that it should be returned to him whenever demanded. on return from jugudi the.....
Judgment:

R.K. Das, J.

1. This is a plaintiff's second appeal against the confirming judgment dated 14-5-1960 of the Additional Subordinate Judge, Berhampur, dismissing' his suit for eviction, possession and for recovery of arrears of rent from the defendant.

2. The plaintiff and defendant 1 are the sons of one Raju Gouda, all of whom were members of a Hindu Mitakshara joint family. Difference having arisen amongst them, they referred the matter for settlement to three named Arbitrators including P. W. 3 and executed a Muchalika in favour of the arbitrators (Ext. 1) on 16-6-1941 and registered it on 17-6-41. It was agreed therein that the arbitrators would partition all their properties both ancestral and self-acquired. But defendant No. 1 later on gave a registered notice (Ext. 10) on 27-2-1942 cancelling the said Mucha-Kka which however, he withdrew by Ext. 11, and thus agreed to abide by the award of the arbitrators. The arbitrators gave their, award (Ext. 2) on 28-3-42 which was actually registered on 30-3-42.

According to the plaintiff, the three items of the suit properties, amongst others, were allotted to him in the award, and each of the parties took possession of the respective properties that fell to his share and was in enjoyment of the same as owner thereof. In about the year 1944, the plaintiff shifted to village Jugudi entrusting the defendant 1 with the two suit-houses (items 1 and 2) for collecting the rents therefor from the tenants and to pay the same to the plaintiff. Regarding the third item of the suit-property which was an iron safe, it was alleged by the plaintiff that he entrusted it to defendant 1 only for safe custody with the understanding that it should be returned to him whenever demanded. On return from Jugudi the plaintiff demanded of the defendant for handing over possession of the suit-houses and the rents thereof as also the iron safe, but as the defendant failed to do so, he served registered notice through his Advocate and later on filed the present suit.

3. I may indicate here a brief description of the three items of the suit properties :

(1) Item No. 1 is a thatched house within the Municipal limits of Berhampur town new holding No. 350/3.

(2) Item No. 2 is also a thatched house bearing new door 417/11 (old No. 108/14) within the Municipal limits of Berhampur Town :

(3) Item No. 3 is an iron safe with two locks valued at Rs. 100/- and Rs. 204/- has been claimed as arrears of rent in respect of items (1) and (2) above.

4. Defendant No. 2 has been added as a party, as according to the plaintiff she as a tenant was in occupation of the house, item No. 2 above. Defendants 3 and 4 have been added as parties as they are in possession of Item No. 1 of the suit properties and defendant No. 4 claimed title for the same. According to the plaintiff, defendant 1 nominally sold away the house in item No. 1 to Puni Sahuani, deceased mother of D-3 on 30-8-41 by Ext. C-1, who in her turn sold the same to defendant No. 4. Plaintiff challenges this alienation by defendant No. 1 in favour of Puni as void and inoperative.

5. According to defendant-1 the Muchalika and the award are invalid and have not been acted upon. So far as Item No. 1 of the suit property is concerned, it originally belonged to Puni Sahuani, who nominally transferred the same to the ist Defendant in the year 1938 by a Kabala Ext. B/1 and according to previous arrangement with Puni the property was again reconveyed to her under Ext. C-1. In respect of item No. 2 of the suit property, defendant-1 alleged that it was his self-acquisition purchased with the funds of his wife; and he has all along been in possession and enjoyment of these properties, and the arbitrators had no right to allot these properties to the share of the plaintiff. Regarding item No. 3 his case was that the iron safe was purchased by him in the year 1929 from out of his own funds.

6. Defendant-2 was ex parte and defendants 3 and 4 practically supported the contention of defendant-1 and said that since the date of purchase by Puni, she has been in continuous possession of the 1st item of the suit properties and after her death they are in possession and the plff. was never in possession of the said house, nor had the arbitrators any authority to award the said house to the plaintiff.

7. The learned subordinate Judge agreeing with the findings of the learned Munsif held that the suit was filed beyond 12 years from the date of the award and the plaintiff had failed to prove his possession of the suit houses within 12 years of the suit. That the defendant-1 had failed to prove that item No. 2 was his self-acquisition and the suit house in item No. 1 no longer remained as family property of the parties and on the date of the award the arbitrators had no authority to allot the same to the plaintiff and the award was given beyond time. He disbelieved the story of entrustment of the iron safe by the plfi. to defen-dant-1. He thus dismissed the plaintiff's suit in full. It is against this decision the present appeal has been filed.

8. Mr. B. K. Pal, learned counsel for the respondent, raised a preliminary objection that the claim in suit being based upon an award the present suit is hit by Sections 32 and 33 of the Arbitration Act, and is not maintainable. To appreciate this argument of the learned counsel, it is necessary to examine some facts concerning the award itself. The fact that a reference was made to arbitrators cannot be disputed in view of the Muchalika (Ext. 1), executed by both parties. It also appears that the arbitrators gave their award (Ext. 2) which was registered on 30-3-42. Though defendant No. 1 sought to cancel the Muchalika he subsequently withdrew from that position as would appear from Ext. 11. Thus the Muchalika executed by the parties was allowed to stand and the arbitrators had full authority to effect partition of all the family properties between the plaintiff and the defendant-1 and their father Raju Gouda.

A list of properties was also made over to the arbitrators one of whom (P.W. 3) had stated that in pursuance of the Muchalika the arbitrators made allotments of the properties in respect of all the parties to the Reference. It is the case of the plaintiff that the arbitrators made a wrong disposal of eight Bharanams of land in favour of his sister Srimati Goudini, though they were not authorised to do so, and made some alterations in the award. In spite of this allegation, the plaintiff accepted the award and the present claim in the suit is based upon the award itself.

According to the defendant No. 1 the arbitrators before passing the award did not take any statement or list of properties from the parties. The award was given at his back and the same has not been acted upon. It, however, appears that the defendant-1 acted upon the award as he admitted to have executed and registered a sale-deed (Ext. 6) in favour of one Biswanath in respect of some properties which fell to his share in the award. In the recitals in Ext. 6, he has clearly admitted that the property under conve-yance fell to his share in the award dated 28-3-42. The plaintiff's case also is that the award had been acted upon. Thus, it is clear that the award (Ext. 2) had been acted upon by both parties. The question next to be considered is whether the present suit to enforce a claim under the award is maintainable, or if the suit is hit by Section 32 of the Arbitration Act.

9. Mr. Pal, in support of his contention re-lied upon a decision reported in Mulchand Jotha-jee v. Rashid Jamshed Sons and Co., AIR 1946 Mad 346. In that case there was a reference to arbitrators and award was duly given. The parties did not ask the arbitrators to file the award in the Court. After the delivery of the award the appellants filed a suit claiming that the award had become final, conclusive and binding on the parties. The respondents there denied that there was any valid reference to arbitration and consequently they averred that there was no proper award. Their Lordships held that the suit which the appellants filed clearly raised the question with regard to the existence and validity of the award and such a suit was expressly barred under Section 32. This view was accepted by the High Courts of Patna, Bombay, Madhya Pradesh and Punjab as I will presently discuss.

10. In a case reported in Ram Chander Singh v. Munsi Mian, AIR 1950 Pat 48 the suit was filed for recovery of some money payable under an award. Defendant challenged the award and pleaded the bar to the suit under Section 32. Their Lordships relying upon the aforesaid Madras decision held that such a suit is not maintainable. Two later decisions of the Patna High Court reiterated the same view : Sia Kishori, Kuer v. Bhairavi Nandan Sinha, AIR 1953 Pat 42 and Govt. of India v. Jamunadhar Rungta, AIR 1960 Pat 19.

11. In a case of Bombay High Court reported in Narbada Bai v. Natvarlal Chunilal, AIR 1953 Bom 386 an award passed in pursuance of an arbitration agreement and the plaintiff based his claim on the award. There also the question of maintainability of the suit came up for consideration. Their Lordships relying upon the aforesaid Madras, and Patna decisions held that the expression 'effect of the award' in Section 32 is wide enough to cover a suit to enforce an award. Although the party may not in terms ask for a decision of the Court to give effect to the award the fact that he asks the court to enforce the award must result in the Court giving a decision upon its effect and therefore such a suit was not maintainable.

The same view was also taken by the Madhya Pradesh High Court in a case reported in Shyam Singh Jaswant Singh v. Prahalad Singh Tikaram, AIR 1962 Madh Pra 66 where their Lordships relying upon the aforesaid Madras decision and the case reported in AIR 1953 Pat. 42 held that 'whatever the pleadings may be if the suit is one in essence to enforce an award duly given by the arbitrators dealing with the very dispute which is the subject-matter of the suit or to get rid of it, the suit is not competent.' The same view was also expressed in a single Judge decision of the Punjab High Court reported in RadhaKishan v. Gangaram, AIR 1951 Punj 151. These decisions undoubtedly support the contention of the respondent.

12. Mr. Misra the learned counsel for the appellant relied upon a Division Bench decision of our High Court reported in Paramananda Pa-nigrahi v. Tilottama Panigrahini, 20 Cut LT 304. That case is clearly distinguishable. There the plaintiff did not enforce any claim on the basis of an award. Their Lordships took notice of the aforesaid Madras case reported in AIR 1946 Mad 346 but distinguished it on the ground that the plaintiff's suit was not based upon the award. Their Lordships held that 'We are unable to accept the contention that the suit is barred under Section 32, as the plaintiffs do not make any averment to the effect that the award has become final and conclusive between the parties and the party's rights are to be governed by the award. On the other hand the plaint clearly recited that the plaintiff is entitled under the Hindu Law to separate residence and maintenance'. In the present case, however, the suit is primarily based upon the award itself.

13. Reliance was also placed on behalf of the appellants in the cases reported in Suryana-rayana v. Venkata Reddy, AIR 1948 Mad 436 and Munshilal v. Modi Brothers, ILR (1948) 1 Cal 81 : 51 CWN 653. Both these cases were referred to by the above Division Bench decision of the Orissa High Court.

14. In AIR 1948 Mad 436, an award was passed on a reference to arbitration. The plaintiff in his plaint though admitted about the award alleged several grounds of invalidity against the same and notwithstanding the award sued for partition. The defendants pleaded the award and the bar of a suit under Section 32. Their Lordships observed that notwithstanding its apparent wider language, it had to be read only as precluding a suit praying for the relief, for which an application is provided under Section 33. Their Lordships said that the words 'no suit shall lie' in Section 33 cannot be read as prohibiting a defence which involves a decision upon the existence, effect and validity of an award. They explained and approved the decision reported in AIR 1946 Mad 346 and observed that the view taken earlier was not inconsistent with the view taken in the latter case.

15. In the Calcutta case the learned Judge was not dealing with a suit filed to enforce an award and the question that arose for determination was whether the Karta of a joint family carrying on business was competent to enter into a reference for arbitration and whether the award in such an arbitration is valid. The case is therefore clearly distinguishable from the present case where the suit claim is based upon the award and in a way it is a suit to enforce the award itself. No doubt in that case the learned Judge observed that there is no bar to a party to an arbitration proceeding to bring a regular suit to enforce the award.

16. The principle of law laid down in AIR 1948 Mad 436 and ILR (1948) 1 Cal 81 were approved by the aforesaid decision of our own High Court and their Lordships observed that :

'that it is therefore beyond controversy that a suit to enforce a claim arising under an award is entertainable and what is prohibited is a suit to obtain a decision about the validity and effect of an award.'

It is contended that this decision is binding oa this Court whatever, might be the view expressed by other High Courts in India. That may be so, but in the aforesaid Division Bench decision our High Court has also specifically held that where a suit involves a decision regarding the effect of an award it is barred under Section 32. The interpretation of the words 'effect of the award' has been given in the aforesaid decision of the Bombay High Court in AIR 1953 Bom 386 where it was held that the expression is wide enough to cover a suit to enforce an award. In that view of the matter, it must be held that the present suit is hit by Section 32.

17. The other case relied upon by Mr. Misra -is a single Judge decision of the Nagpur High Court reported in Nanhelal Anandilal v. Singhai Gulab Chand, AIR 1944 Nag 24. The learned Judge no doubt took the view that it is open to a person interested in an award to sue for the enforcement of the same. Now as shown above, several High Courts have taken a contrary view. In a case reported in AIR 1960 Pat 19 their Lordships of the Patna High Court after reviewing the decisions of the various High Courts of India on the point held :

'That an award cannot be enforced by a suit and if it comes to the notice of the Court that the subject-matter of the suit has been adjudicated upon by arbitration and the parties have accepted the award and acted upon the same or the prescrib-ed period of challenging the award has elapsed it is the duty of such a Court to refuse to give any relief to the plaintiff.'

In this connection, it is necessary to quote some observations made by their Lordships of the Supreme Court in a case reported in Hanskumar Ki-shen Chand v. Union of India, AIR 1958 SC 947 touching the proceedings in arbitration. Their Lordships said;

'When the parties enter into an agreement to have their dispute settled by arbitration, its effect is to take the proceeding out of the hands of the ordinary Courts and to entrust it to a decision of what has been termed as a 'private' tribunal.'

This shows the sanctity that is attached by the Courts to the Arbitration Proceedings.

18. In view of this position, it must be held that the plaintiff's suit is not maintainable. It is thus unnecessary to go into the merits of the case. The suit of the plaintiff is thus dismissed and so also this appeal. In view of the nature of the controversy, and the plea taken by the parties, both parties to bear their own costs throughout.


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