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Malek Bavaji Amarkhan Vs. Amirkhan Salimkhan and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil;Arbitration
CourtGujarat High Court
Decided On
Case NumberCivil Revn. Appln. No. 1038 of 1976
Judge
Reported inAIR1978Guj42
ActsCode of Civil Procedure (CPC), 1908 - Order 23, Rule 3 - Order 32, Rule 1; Arbitration Act, 1946 - Sections 47
AppellantMalek Bavaji Amarkhan
RespondentAmirkhan Salimkhan and ors.
Appellant Advocate V.V. Mehta, Adv.
Respondent Advocate P.J. Vyas and; M.M. Shah, Advs.
Cases ReferredSoured Nat Mira v. Tribal Dais
Excerpt:
.....in the cases where such recording would result in substantial failure of- justice. a similar view has been taken by allabar bad high court in lakshmi -narain v. whether it is in the interest of minor, if it affects the minors, and whether the compromise or adjustment is lawful or not, and if the court is satisfied about these three ingredients, the court is under an obligation to refer it and to pass a decree accordingly. the alleged agreement or compromise was made, and if it is satisfied that was made, to record it, and the trial court while recording the compromise has to record a finding on the question, whether there was or was not any lawful agreement to compromise or adjust the suit. 'is allowed and the orders of both the courts below are set aside and the matter is rem4nded back..........though the award night have bom obtained in pending suit without the intervention the court. 7be learned district judge, however, dismissed the appeal of the original plaintiff because in his view order xxiii, r. 3 of the civil p. c. requires that before a compromise or an adjustment can be accepted in a suit by a court, the same should have been agreed upon and consented to by the -parties before the cou7rt. 7be learned district judge was also of the view that inasmuch -as no permission was granted under order xxxii, r. 7 of the civil p. c_ to ajubai, the widow of anurkhan for ending into the alleged compromise on behalf of the moors, the same was not legal and binding, in that view of the matter therefore the learned district judge dismissed the appeal of the plaintiff by his order.....
Judgment:

1. The petitioner's mother Rangbai is one of The three daughters of one Sataji Bhiasjikhan; the other two being Mrbai and Ladbui This Rangbai field a a suit for partition of the estate of bet father against the heirs, of her aforesaid two sisters Ordinal defendant No 1 is the son's son and defendants Nos, 2 to 4 are the son's daughter of the aforesaid Hirbai defendant No.5 is the daughter's daughter of Hirbai while defendants; Nos. 6 and 7 are the saw and defendants its. 8 and 9 are the daughters of ladbai. The plaintiff Rangbai died during the Pendency of the suit and, therefore. the present petitioner was brought on the record as hit heir and legal representative- Skniharly original defendant Kk 1, Avairkhan Sahxnkb An, died during the pendency of the out and his mother Seabai and his widow Ajubai and his four daughters, Manubal, Kasubak Ranbai aid Renhbsi6 and two sow Fatehmohmed and Hang were brought an the record as respondents Nos. 1 4) to 1 (1* respectively. It should be noted that defendants Nos, 2 to Q~ supported the plaintiff in her claim for partition of the establish it was only defendant No 1, Aid ~ who contest the suit in his written statement filed in the trial court After his dumb Win rama her Sonbak who to defendant NoL I 4a) supported the plantiff's claim after she was brought on record. It was only defendant No, I (b), Ajubai, the widow of deceased Amirkhan, who contested the suit after the demise of Andrkhan. it should be further noted that in the suit there was an application by the original plaintiff for appointment of Receiver for the estate of Sataji That application was rejected by the trig court with the result that the plantif had gone in appeal against that order before the District Court. Before the appeal reached hearing, it appears that there was a compromise between the parties and the appeal was withdrawn on that ground and it was stated by the parties that the compromise would be produced in the trial court for purposes of getting a decree in terms thereof. y1hen the matter was called out before the trial court, after withdrawal of the appeal, the plaintiff applied for a decree in terms of the award alleged to have been made by the Arbitrator. Original defendant No. 1 (b), Ajubat, Red objections to this application of the original plaintiff. The trial court rejected this application of the plaintiff as the award was illegal since it was obtained in a pending suit without the itervention of the Court The trial court, therefore, dismissed the application of the plaintiff by its order of July 23, IM. The plaintiff, therefore, carried the matter in appeal before the District -Court at Surendranagar by his Civil Appeal No. 38 of 1M. The District Court agreed with the contend0ft Of the shift the trW1 court has A power to record the compromise under 0 XXEL R 3 of the Civil P. C even though the award night have bom obtained in pending suit without the intervention the Court. 7be learned District Judge, however, dismissed the appeal of the original plaintiff because in his view Order XXIII, R. 3 of the Civil P. C. requires that before a compromise or an adjustment can be accepted in a suit by a Court, the same should have been agreed upon and consented to by the -parties before the Cou7rt. 7be learned District Judge was also of the view that inasmuch -as no permission was granted under Order XXXII, R. 7 of the Civil P. C_ to Ajubai, the widow of Anurkhan for ending into the alleged compromise on behalf of the moors, the same was not legal and binding, in that view of the matter therefore the learned District Judge dismissed the appeal of the plaintiff by his order of July 31, 1976. It is this order which has been challenged in this revision before me.

2.It is set-tied Position of law that where in a suit the parties have referred their difference to the arbitration without an order of the Court and an award is made, a decree In terms of the award can be passed by the Court under 0. 23, R. 3 of the Civil P. C. (Vide: Chanbas.;. appeal Gurushantappa Hiremath v. Basadingayya Gokurnaya Hiremath, ILR 51 Bom 908: (AIR 1927 Born 565) (FB) and, Modi Narandas Chhaganlal v. Jamnadas ManeMal, 10 Guj LR 210: : AIR1969Guj76 . Mr. Shah, learned Advocate for respondents Nos. I (b) to I (h) does not dispute this proposition of law. Mr. Shah has, however, tried to support the judgment of the learned District Judge on the ground that under proviso to S. 47 of the Arbitration Act the Court can accept the comprondse only if the consent is given by the parties at the time when the Court is called upon to consider whether the award should be accepted as an adjustment or a compromise. He also supported the view of the learned District Judge that inasmuch as no permission was granted to Ajubai to sign Uds award as alleged by the plaintiff, the agreement, if at all there was any, is voidable as prescribed under 0. 32, R 7 (2) of the Civil P. C., and since Ajubai avoided the agreement, the trial Court was justified in dismissing the application of the petitioner herein, who was the original plaintiff.

3. I am afraid that none of the intentions of Mr. Shah can sustain the order of the learned District Judge. It is no doubt true that V. R. Shah J., who decided the case of Modi Narandas v. Jamnadas : AIR1969Guj76 (supra) observed in para 8 (of Guj LR):,(Para 8 of AIR) in his decision that the language of the proviso to S. 47 of the Act is very clear and the consent should be given by the parties -at the time when the Court is called upon to consider whether the award should be accepted as an adjustment or a compromise. V. R. Shah J., however refrained from entering into any detailed discussion of this question because in his opinion it is not necessary to consider the interpretation of the language of the proviso to S. 47 as it did not apply to the facts of that case. Except this observation of the learned single Judge, I do not think that Mr. Shah can make this proposition good in view of the line of decisions of the Bombay High Court. The jurisdiction to record an adjustment, though not agreed to by the other party, is not taken away (vide: Ruttonsey Lalji v. Pooribai, (1-8,83) ILR 7 Bom 304 and Goculdas Gulabdas Mfg. Co. v. James Scott, ((1892) ILR 16 Bom 202). This Bombay view is incorporated in R. 3 of 0. 23 of the Civil P. C. Rule 3 provides as under:

'3. Where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject-matter of the suit, the Court shall order such agreement, compromise or satisfaction to be recorded and shall pass a decree in accordance therewith so far as it relates to the suit.'

The rule does not confer any discretion on the Court and when it is established that a suit has been adjusted either wholly or in the part by a compromise, it is the duty of the court to record it and pass a decree in accordance therewith save and except in the cases where such recording would result in substantial failure of- justice. The Andhra Pradesh High Court has also taken the same view and a Division Bench consisting of S. Obul Reddi and Venkatrama Sastry JJ. held in Andhra Mensorite Self-supporting Church Society v. Sundramma, AIR 111, Andh Pra 19 that the consent under proviso to S. 47 of Arbitration Act means consent to the reference and also to the award and no further consent to the terms of the award at the time of recording the compromise under 0. 23, R. 3 is necessary. The Division Bench, speaking through Venkatraine, J., observed in para. 8 as under:

'Now the only question is whether the consent to the award should be regarded as a consent given to the compromise itself or whether there should also be a consent to its terms at the time when Court takes up for consideration the application under 0. 23, R. 3, C.P.C. on this question. We are bound by the Full Bench decision of the Madras High Court in Abdul Rahman v. Muhammad Siddiq, : AIR1953Mad781 (FB) in which it was decided as follows:

'We are accordingly of opinion that under the proviso to S. 47, an arbitration award obtained otherwise than in proceedings taken in accordance with the Act cannot without more be , recognized as a compromise or adjustment of the suit; that no decree can be passed there on under the provisions of 0. 23P R. 3; and that the decision in Arumuga Muda liar v. Balasubramania Mudaliar, AIR 1945 Mad 294 should be overruled. But if after an award is made the parties thereto agree to accept it, that will be a compromise -and a decree passed there on could be passed under 0. 23, R.3.'

Mr. Shah for the respondents 1 (b) to 1 (h) urged that there is also another hurdle in the way of the petitioner. 'According to Mr. Shah the award in a pending suit without the intervention of the Court can be recorded as a compromise or adjustment of the suit under 0. 23, R. 3 only if the agreement to refer to the Arbitration by the guardian on behalf of the minor sons is permitted by the Court under 0. 32, R. 7. This view bar. found favour with the learned District Judge, Order 32, R. 7 of the Civil P. C. provides as under:

'7. (1) No next friend or guardian for the suit shall, without the leave of the Court, expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.

(2) Any such agreement or compromL46 entered into without the leave of the Court so recorded shall be avoidable against all parties other than the minor.' This rule prohibits the next friend or guardian to compromise or adjust the suit without the permission of the Court.

The rule therefore, prohibits the guardian-ad litem of the minor or the next friend of minor to compromise or adjust the suit, without the permission of the Court. On the plain reading of the rule, it does not prohibit the natural guardian of minor to settle the dispute outside the Court by making a reference to Arbitrators or by compromising or adjusting the matter amicably between the parties. A similar view has been taken by Allabar bad High Court in Lakshmi - Narain v. Ram Babu : AIR1953All1 ~. in any case whether the compromise or the' adjustment embodied in the award and consented to by the parties subsequently is in the interest of minor or not cancer mainly be inquired by the Court while recording the compromise or adjustment. The learned District judge was, there fore, not justified in rejecting the comromise or the adjustment of the suit as alleged without -holding a formal inquiry as to whether such a compromise or adjustment is in the interest of minors or not, because, it is under the agreement to refer the dispute to arbitration and -an award passed in pursuance there of which can be said to constitute com promise or adjustment. It is the consent given to the award by the pardes sub sequent to the pronouncement of the award that constitutes the compromise or adjustment and the Court is under an obligation whenever a compromise or adjustment of a suit is pleaded to inquire into, whether the compromise or adjustment is lawful or not; whether it is in the interest of minor, if it affects the minors, and whether the compromise or adjustment is lawful or not, and if the Court is satisfied about these three ingredients, the Court is under an obligation to refer it and to pass a decree accordingly.

4. In Misrilal Jalamchand v. Sobachand Jalamchand : AIR1956Bom569 , it Is held that the Court has power under R. 3, where an agreement or compromise is denied, to decide whether as a fact. the alleged agreement or compromise was made, and if it is satisfied that was made, to record it, and the trial Court while recording the compromise has to record a finding on the question, whether there was or was not any lawful agreement to compromise or adjust the suit. The same view has been taken in Soured Nat Mira v. Tribal Dais where the Judicial Committee has held that the words of R. 3 do not in terms appear to confer a discretion, on the Court in recording a compromise and passing decree according to it; but without deciding whether discretion is inherent. or not even if the discretion is inherent,' where no injustice of any kind Is estal6lished, and , it is established that the suit had been adjusted either wholly or in part by a lawful compromise, it is the duty of the court to record the agreement and pass a decree in accordance therewith. The 'Supreme Court has also in Munshi Ram v. - Banwan Lal, I : AIR1962SC903 held that in a reference without the intervention of the Court, the Court has no general jurisdiction- ~ over the subject-matter as in a referents in a pending suit and It the submission is superseded in the former, there is nothing more the Court can do, but in the latter the Court must proceed with the suit before it and give effect to the compromise in suit according to law.

5. In my Opinion, therefore, both the Courts below have acted illegally in refusing to inquire into the validity of the compromise and dismissing the application of the plaintiff to pass a decree in accordance with the terms of the compromise as alleged either on the ground that the arbitration was illegal or on the ground that there was no consent to the award before the Court at the time when the Court was considering the compromise or for want of permission under 0. 32P R. 7 of the Civil P. C. at the time of reference to arbitration.

6. The result is that this revision application. ' is allowed and the orders of both the Courts below are set aside and the matter is rem4nded back to the trial court to inquire into the compromise or adjustment as alleged by the plaintiff and if the Court is satisfied -about the legality of the compromise to record the same and to pass a decree in terms thereof. Rule is made absolute accordingly with costs.

7. Rule made absolute; Case remanded,


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