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Gogan Ram Lachmi NaraIn Vs. Narsang Dass and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Arbitration
CourtPunjab and Haryana High Court
Decided On
Case NumberFirst Appeal No. 59 of 1951
Judge
Reported inAIR1953P& H216
ActsArbitration Act, 1940 - Sections 14, 17 and 21
AppellantGogan Ram Lachmi Narain
RespondentNarsang Dass and ors.
Appellant Advocate E.C. Mital, Adv.
Respondent Advocate K.L. Kapur, Adv.
DispositionAppeal allowed
Cases ReferredMt. Wiran Vali v. Hira Nand
Excerpt:
.....and the award was made in favour of the plaintiff, one of the objections taken was that all the parties interested had not joined in the reference but in spite of this it was held that this was a good reference. ram-rup raut',air 1924 pat 33 (b). 8. in the present case the suit could have been effectively brought only against the father and the suit as framed was against the three defendants each one of whom was to be severally and jointly liable, and in a case such as this a reference made by the father would certainly bind him in regard to the claim made against him and it cannot be said that there could not be severance of interest of the defendants. , the learned judges held that the same guardian who had entered into the agreement and submitted to the arbitration could not..........pleaded that there was no reference on behalf of the sons and both of them pleaded that as all the parties interested were not parties to the reference; it was void 'ab initio'. 5. in para. 9 of the plaint the plaintiffs asked the defendants to render accounts and to pay the money. in para 10 of the plaint it was alleged that the defendants lived in india. in the relief clause a decree was asked for against the defendants as individuals and there was no claim against the firm as such.6. the learned subordinate judge held that the reference was only on behalf of the father and not on behalf of all the three defendants, that the reference was in accordance with section 21, arbitration act, that there was no joint hindu family of the defendants, that the reference by the father was in his.....
Judgment:

Kapur, J.

1. This is a plaintiff's appeal brought against an order of Mr- Pritam Singh Jain Senior Subordinate Judge, Hissar, setting aside an award which was passed in favour oC the plaintiff in a suit brought against the defendants.

2. On 3-11-1949 the plaintiff, a Joint Hindu family firm through Kunj Lal, Managing proprietor, brought a suit for the recovery of Rs. 12000/-and rendition of accounts against Narsang Das and his two sons Hazari Lal and Durga Dat, proprietors of firm Gobind Ram Narsang Das carrying on business at Ganga Nagar in Bikaner State. Of the defendants only Narsang Das appeared and proceedings were 'ex parte' against his two sons. An objection was raised that the Court had no jurisdiction to try the suit.

3. On 23-10-1950 there was a reference to arbitration of one Badrl Narain Mahajan of Hissar of the whole dispute. This application for reference was signed on behalf of the plaintiff firm by Kunj Lal and his Advocate and by Narsang Das defendant and his Advocate Mr. Mahabir Parshad. Statements of the parties were also recorded and were signed by Kunj Lal, Narsang Das and their respective counsel. On 30-11-1950, an award was made for Rs. 19,044/11/- against all the defendants.

4. On 29-12-1950, two sets of objections were filed, one by the father and the other by the two sons. The sons pleaded that the father had no authority on their behalf and that there was no notice to them to appear ana the lather pleaded that there was no reference on behalf of the sons and both of them pleaded that as all the parties Interested were not parties to the reference; it was void 'ab initio'.

5. in para. 9 of the plaint the plaintiffs asked the defendants to render accounts and to pay the money. In para 10 of the plaint it was alleged that the defendants lived in India. In the relief clause a decree was asked for against the defendants as individuals and there was no claim against the firm as such.

6. The learned Subordinate Judge held that the reference was only on behalf of the father and not on behalf of all the three defendants, that the reference was in accordance with Section 21, Arbitration Act, that there was no joint Hindu family of the defendants, that the reference by the father was in his individual capacity and not as the head of the firm and that although the plaintiff had applied to strike out the names of defendants 2 and 3 on 15-2-1951 it could not be allowed at that stage and as the award was against all the defendants it was bad and therefore it was set aside. The plaintiff has come up in appeal to this Court.

7. The sole question which has been agitated before me is whether in the circumstances such as these where the plaintiff did not want to proceed against the two defendants, the sons of Narsang Das defendant, the award could be filed against defendant 1 Narsang Das. Counsel for the-plaintiff-appellant submitted that the relief claimed by the plaintiff was against all the defendants and that it was open to him at any stage to withdraw his claim against any one of the defendants and as he had done so on 15-2-1951 the case was governed by the rule laid down in -- 'Bankey Lal v. Chotey Miyan', AIR 1931 All 453 (A).

That was a ease where a suit was brought for the recovery of money for the price of goods against Bankey Lal and Munna Lal. Although Bankey Lal and the plaintiffs agreed to refer the matter in difference to arbitration and the award was made in favour of the plaintiff, one of the objections taken was that all the parties interested had not joined in the reference but in spite of this it was held that this was a good reference. The learned Judges observed that the mere fact that defendant 2 did not join would not debar the parties agreeing to an arbitration from making a reference to arbitration. Referring to para. 1 of Schedule II, Civil P. C. which is identical in terms with Section 21 of the present Arbitration Act the learned Judges said :

'This does not mean that all the parties who are contesting a suit must necessarily join in arbitration. There may be cases in which it would not be possible to decide a case by compartments, i.e., where an arbitrator may be appointed to decide a part of the case and the Court should decide the rest of it; such a case would be a suit for partition, for example. But where the interest of the defendants may be severed, as in this case, there does not appear to be any bar to some of the contesting defendants joining with the plaintiffs in referring the matter in difference between them to arbitration.'

And the learned Judges relied on the rule which was laid down in -- 'Raghunath Sukul v. Ram-rup Raut', AIR 1924 Pat 33 (B).

8. In the present case the suit could have been effectively brought only against the father and the suit as framed was against the three defendants each one of whom was to be severally and jointly liable, and in a case such as this a reference made by the father would certainly bind him in regard to the claim made against him and it cannot be said that there could not be severance of interest of the defendants. The case is, in my opinion, covered by the rule laid down by, the Allahabad High Court in 'Bankey Lal's case (A)' and no case has been cited which has differed from the opinion given by the Allahabad High Court and in Sarkar's Law of Arbitration at page 275 this case seems to have been referred to with approval.

9. Respondents' counsel Mr. Krishan Lal Kapur referred to several cases and submitted that in cases such as the one that is now before me where reference is made by one of the defendants the Court would have no jurisdiction to proceed with the reference. He has relied in the first instance on a Full Bench judgment of the Calcutta High Court in -- 'Laduram Nathmull v. Nandalal Karuri', AIR 1920 Cal 113 (2) (C). That was a suit for redemption by a mortgagor and the insolvent mortgagee was not a party to the reference and as a matter of fact he did not appear in the suit. It was held that the award was invalid as the court had no jurisdiction. Even in this case the learned Chief Justice observed :

'I cannot help feeling in this case that the upholding of this order may involve some hardship upon the appellant and that if proper steps had been taken at the time of the application for reference, either to strike out the name of Nilmoney Das as a defendant in the suit or to modify the terms of the application, the result which has now been obtained might have been different.'

Again at page 114 the learned Chief Justice said :

'I think it is obvious from the terms of this clause that it was contemplated that in certain cases all matters in difference in the suit might not be referred; and that when only some matters in difference in the suit were referred, the consent of the parties who were interested in those matters, would be sufficient. That, however, is not this case, because, as I have already pointed out, the order of reference was that all matters in difference in this suit including the question of costs should be referred. Having regard to the allegations in the plaint, the relief asked for therein and the form of the order of reference to which I have just referred, in my judgment, it is impossible to say that Nilmoney Das was not a party interested in the matters which were referred.'

The reason why the award was set aside in that case was that considering the allegations in the plaint and the relief asked for and the form of reference it was impossible to say that Nilmoney Das was not a party interested. But the facts of the present case are quite different as what I have stated above would show.

10. Reference was then made to another judgment of the Calcutta High Court in -- 'Gonur Bibi v. Abdus Samad', AIR 1931 Cal 211 (D). This was a case under para. 15 of Schdule II, Civil P. C. as it then existed. There were certain minors in the suit on whose behalf the guardian had joined the reference, but on an objection being taken that no leave of Court was taken as required by Order 23, Rule 7, Civil P. C., the learned Judges held that the same guardian who had entered into the agreement and submitted to the arbitration could not subsequently turn round and urge that the reference was bad and the proper procedure was that the minors could apply for review. This case, in my opinion, has no application to the facts of the present case.

11. Mr. Kapur then referred to an earlier judgment of the Allahabad High Court in --'Haswa V. Mahbub', '10 Ind Cas 559 (All) (E). That case no doubt goes very near to the facts of the present case, but in that case there was no-prayer giving up any of the defts. and it was the plaintiff who wss the unsuccessful party and he raised the objection that all the defendants, who were interested in the case, had not joined in the reference which in my opinion is a very different circumstance.

12. Whether a party is interested within the meaning of the word as used in Section 21 Arbitration Act decision has to be made on the facts of each case : see -- 'Mt. Wiran Vali v. Hira Nand', AIR 1931 Lah 126 (F). And in this case I am of the opinion that if the plaintiff is prepared to give up defendants 2 and 3 the two sons and does not claim any relief against them, they are not really parties interested. It was open to the plaintiff to proceed against the father and be satisfied with a decree against him. It was not necessary for him to implead the two sons as defendants and after he has cone it; it was open to him to have the names of the sons struck off, and there is no reason why he should not be able to do so after the award is made. In 'AIR 1931 All 453 (A)' the party was given up at the first appellate stage.

13. As I have said before, I am of the opinion that the rule laid down in 'Bankey Lal's. case (A)' applies to the facts of this case and should have been followed by the learned Judge.

14. Mr. Fakir Chand Mittal for the appellant raised another objection to the order of the learned senior Subordinate Judge & that was that he had raised the plea that all the defendants were members of a joint Hindu family and the firm was a joint Hindu family firm. That question was not adjudicated upon as evidence was taken only on affidavits and Mr. Mital wanted to argue that the learned Judge should have allowed him to produce evidence on this point. As I am of the opinion that the appeal must succeed on the other question that I have discussed above, I do not think it necessary to go into this matter.

15. I would, therefore, allow this appeal, set aside the order of the learned Judge and order that the matter be proceeded with. The case is therefore remanded. I direct that the parties appear in the trial Court on 11-5-1953.

16. In the circumstances of the case I leavethe parties to bear their own costs throughout.


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