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Lalchand Vs. Mahabir Prasad and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Arbitration
CourtRajasthan High Court
Decided On
Case NumberCivil Revision No. 424 of 1968
Judge
Reported inAIR1970Raj236; 1969()WLN413
ActsArbitration Act, 1940 - Sections 31
AppellantLalchand
RespondentMahabir Prasad and anr.
Appellant Advocate C.L. Agrawal and; Ram Ratan, Advs.
Respondent Advocate Sumer Chand Bhandari, Adv.
DispositionRevision allowed
Cases ReferredJai Singh v. Mangtoo
Excerpt:
.....composite suit has to be filed in the civil court.;(b) arbitration act, 1490 - registration land revenue act and rajasthan tenancy act--award of composite nature-whether be filed in civil court.;the rajasthan tenancy act does not lay down that no dispute, regarding matter about which relief cap. be granted by the revenue court upon a suit being, instituted can be decided by an arbitrator. nor is there any such prohibition contained in the rajasthan land revenue act or any other local act ousting the jurisdiction of an arbitrator in a reference made in a case in which no suit is pending in a revenue court. the arbitration act, 1940 which applies to disputes relating to rights of every nature prescribed the procedure for enforcing an an award and if it can be enforced by this..........p. kanoria:--i have to inform you that certain disputes and differences have arisen between me and shri mahabir prasad sharma and we have mutually decided to refer the matter to you for arbitration. i would, therefore, request you to look into the matter and make your award which will be binding on me.'3. it is alleged that on the same day he sent one letter in english and one in hindi to shri kanoria. these letters have been written by him in his own hand and were filed by the arbitrator in the court of the additional district judge along with the award. the english letter runs as follows:--'i thank you for your letter of the 6th oct., 64 and i am very happy that you have kindly agreed to arbitrate into my disputes and differences with sri mahabir prasad ji sharma who too has agreed to.....
Judgment:
ORDER

Jagat Narayan, J.

1. This is a revision application against an order of the Additional District Judge, Bundi, holding that he has no jurisdiction to entertain an application under Section 14 of the Arbitration Act in respect of the award which was filed before him.

2. Lalchand and Mahabir Prasad entered into a partnership the object of which was to carry on cultivation after purchasing land. Lalchand was residing in Champaran District in Bihar and was the financing partner. Mahabir Prasad was the working partner. Lalchand advanced money to Mahabir Prasad from time to time for purchase of land, agricultural implements, carts etc. for carrying on the work of cultivation and for constructing necessary building for this purpose. Mahabir Prasad purchased some land in the name of Lalchand and some in his own name. The partnership commenced in 1961. Disputes arose between the partners. Mahabir Prasad left the farm and took up service in 1963. In 1964 Lalchand and' Mahabir Prasad decided to have the disputes between them decided by one of Shri H. P. Kanoria of Calcutta. On 10-10-64 Lalchand addressed the following letter to Shri H. P. Kanoria:--

I have to inform you that certain disputes and differences have arisen between me and Shri Mahabir Prasad Sharma and we have mutually decided to refer the matter to you for arbitration. I would, therefore, request you to look into the matter and make your award which will be binding on me.'

3. It is alleged that on the same day he sent one letter in English and one in Hindi to Shri Kanoria. These letters have been written by him in his own hand and were filed by the arbitrator in the Court of the Additional District Judge along with the award. The English letter runs as follows:--

'I thank you for your letter of the 6th Oct., 64 and I am very happy that you have kindly agreed to arbitrate into my disputes and differences with Sri Mahabir Prasad Ji Sharma who too has agreed to abide by your award. .

So far the nature of dispute is concerned it centres round the non-submission of account regarding my Matunda land which was purchased from my funds but now he is claiming wrongly half of it on account of something which he has done taking undueadvantage of confidence which I had reposed on him. You have to decide if the entire lands are of mine or he has any share in it and also the amount which is payable by Sim Mahabir Prasad to me after taking proper account and how the lands, of which he has wrongly taken deeds in his name and in the name of his son, have to be transferred or otherwise secured to me. As desired in your above letter I am sending herewith the letter duly signed by me along with the details of dispute and hope that you would kindly fix some date during the next week and inform me telegraphically.'

4. On 7-11-64 Mahabir Prasad addressed the following letter to Shri Kanoria:--

'I have to inform you that certain disputes and differences have arisen between me and Shri Lalchand Chhajar and we have mutually decided to refer the matter to you for arbitration. I would, therefore request you to look into the matter and make your award which will be binding on me.'

5. On 9-11-64 he addressed to him a letter in Hindi in which he gave his version of the dispute.

6. The above letters constitute the arbitration agreement in the present case from which the disputes between the parties may be gathered. These letters show that there was dispute as to the amount paid by Lalchand to Mahabir Prasad for purchasing land and for carrying on the partnership business of cultivation. There was also dispute about the terms of the partnership agreement. According to Lalchand the whole of the land purchased for carrying on the cultivation was to remain in the ownership of Lalchand who had advanced money. The case of Mahabir Prasad was that half of the land purchased out of the funds provided by Lalchand was to be owned by Mahabir Prasad who was the working partner. Another point in dispute was that Lalchand maintained that no accounts had been rendered by Mahabir Prasad of the monies advanced by Lalchand for the partnership business. Mahabir Prasad on the other hand maintained that he had borrowed about Rs. 27,000/- and had invested it in the partnership business. Shri Kauoria gave the following award:--

'I, the undersigned, having been requested by Shri Mahabir Prasad Sharma and Shri Lalchand Chhajar to adjudicate on a dispute between the said parties in connection with the purchase of land at Matunda for running an agricultural farm as their joint venture in the year 1961, have considered all the papers and evidence submitted to me and hereby decide and award as follows:--

1. Shri M. P. Sharma will be entitled to the ownership of 18 acres of land purchased for Rs. 2390/- and will also get possession of the small house.

2. Shri M. P. Sharma will pay to Shri L. C. Chhajar the sum of Rs. 1926/- onpossession of the property mentioned in (1) above.

3. Shri L. C. Chhajar will be entitled to the ownership of 160 acres of land and the assets shown in the Balance Sheet prepared by me enclosed hereto save and except the small house referred to in (1) above which' will become the property of Shri M. P. Sharma.

4. The profits and losses for the third cultivation year shall be on account of Shri L. C. Chhajar.

5. Shri M. P. Sharma will be personally liable for all liability arising out of the amounts borrowed by him for the purpose of the joint venture.

6. The expenditure incurred by the respective parties for the fourth year of cultivation and subsequent years and the produceraised on the lands will be apportioned andshared in accordance with the lands awarded to the parties. The value of the produceshall be calculated at the current marketprice.

7. Lands are to be registered in the name of the respective parties as per details set out above.

Amongst the assets shown in the balance sheet were the following:--

Buildingsworth

Rs. 4108.00

Livestock

Rs. 2945:00

Cycle

Rs. 200.00

Carts

Rs. 580.00

The award thus relates to the dissolution ofpartnership and distribution of assets andliabilities of the partnership. These assetsincluded tenancy land as well as non-agricultural properties like buildings, cattle,cycle, carts and cash. Under term No. 2of the award Mahabir Prasad is to payRs. 1926/- to Lalchand. Section 2(c) andSection 31 of the Arbitration Act run asfollows:--

'2. In this Act, unless there is anything repugnant in the subject or context,--

..... (c) 'Court' means a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court;'

'31. (1) Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates.

(2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court-in which the awardunder the agreement has been, or may be filed, and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the award has been, or may be filed, and to no other Court.

(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court.'

7. It is clear from the above provisions that the award is to be filed in the Court which would be competent to entertain a suit about the subject-matter of the dispute. The learned Additional District Judge held that a suit about the dispute which was referred to the arbitration of Shri Kanoria could only be filed in the Revenue Court. This finding is erroneous. As has been pointed out by me above, the dispute related both to the tenancy land as well as to non-agricultural properties. A composite suit relating to tenancy land as well as non-agricultural property could only be filed in the Civil Court if the cause of action in respect of the two sets of property is the same.

8. Civil suits are of course governed by the Code of Civil Procedure. Revenue suits are also governed by the same Code. Order 2, Rule 2, C. P. C. runs as follows:--

'(1) Every suit shall include the whole of the claim which the plaintiff is entitled to make in respect of the cause of action; but a plaintiff may relinquish any portion of his claim in order to bring the suit within the jurisdiction of any Court.

(2) Where a plaintiff omits to sue in respect of, or intentionally relinquishes, any portion of his claim, he shall not afterwards sue in respect, of the portion so omitted or relinquished.

(3) A person entitled to more than one relief in respect of the same cause of action may sue for all or any of such reliefs, but if he omits, except with the leave of the Court, to sue for all such reliefs, he shall not afterwards sue for any relief so omitted.'

9. It is therefore clear that only one suit could be filed by Lalchand in respect of the matter to which the reference relates. A suit could only be filed in the Civil Court because the Revenue Court is not competent to grant relief in respect of non-agricultural properties of the nature involved in this suit.

10. That a composite suit has to be filed in the Civil Court was held in the following decisions:--

Hardayal, v. Jaggasingh, AIR 1969 Raj 89, Rattu v. Mala, 1968 Raj LW 375 = (AIR1968 Raj 212), Sukhdeo v. Basdeo, 1935 All LJ 582 = (AIR 1935 All 594).

In Hamirsingh v. Peeth Singh, ILR (1951) 1 Raj 81 the cause of action' for the relief regarding abadi land was entirely different from that in respect of tenancy land. That case is distinguishable.

11. In Gulla v. Doliya, ILR (1952) 2 Raj 355 the plaintiff filed a suit seeking declaration of his tenancy rights in a well and for division of his share in the land attached to the well and both these reliefs were triable exclusively by the Revenue Court. He had claimed the relief of permanent injunction and damages. The latter two reliefs could not be granted by the Revenue Court under the law as it stood at that time. It was held that the essential reliefs in the plaint were obtainable from the Revenue Court and so that Court alone had jurisdiction to try the suit. This case is also distinguishable. In the present case the Revenue Court has no jurisdiction to divide non-agricultural assets and liabilities between Lalchand and Maha-bir Prasad. It cannot therefore be said in the present case, as could be said in Gulla's case, that some relief can be granted by the Revenue Court in respect of the whole of the cause of action. In respsect of a part of the cause of action in the present case the Revenue Court cannot grant any relief whatsoever.

12. I accordingly hold that a suit in the matter to which the reference relates could only be instituted in the Civil Court.

13. I may refer to some other decisions which were cited before me. The decision in. Lachhman Das v. Jaimni Das, AIR 1933 Lah 732 (2) is no longer applicable as it was given when the Arbitration Act, 1940 had not been enacted. The Code of Civil Procedure contained provisions relating to passing decrees on the basis of awards and this Code was equally applicable to revenue Courts. The Rajasthan Land Revenue Act only provides for arbitration in matters pending before the revenue Court (see Sections 68 and 69). The revenue Court is not competent to pass a decree on the basis of an award made in a matter about which no suit is pending before it.

14. In Bithal Das v. Shri Nath Das, AIR 1949 All 360 it was held that having regard to the definition of the word 'Court' in Section 2(c) and the terms of Section 31 tie jurisdiction of a Court for passing a decree in terms of the award depends upon the questions which form the subject matter of reference to the arbitration, and not on the terms of the award. The U. P. Land Revenue Act did not contain any provision for arbitration without the intervention of a Court or arbitration with the intervention of the Court where there is no pending proceeding. In this view of the matter it was held that the Revenue Court could not entertain an application for the passing of a decree to termsof such an award and that a decree on-suchan award could only be passed by the CivilCourt.

15. A contrary view was taken by the Judicial Commissioner of Himachal Pradesh in Jai Singh v. Mangtoo, AIR 1962 Him Pra 10 in which it was held that no decree can be passed on an award relating to tenancy land by any Court. With all respect I am of the opinion that the view taken by the Division Bench in the Allahabad case is correct. The Arbitration Act provides for the passing of a decree on the basis of an award irrespective of the nature of the property. Under Section 207 of the Rajasthan Tenancy Act the jurisdiction of the Civil Court is only barred in those matters in which relief can be granted by the Revenue Court. This is however a matter in which no relief can be granted by the revenue Court. Therefore the Civil Court alone has jurisdiction to 'pass' a decree on the basis of an award relating to tenancy land where reference to arbitration was made without the intervention of the Court. It is noteworthy that the Rajasthan Tenancy Act does not lay down that no dispute regarding matters about which relief can be granted by the Revenue Court upon a suit being instituted can be decided by an arbitrator. Nor is there any such prohibition contained in the Rajasthan Land Revenue Act or any other local Act ousting the jurisdiction of an arbitrator in a reference made in a case in which no suit is pending in a revenue Court. The Arbitration Act 1940 which applies to disputes relating to rights of every nature prescribes the procedure for enforcing an award and if it can be enforced by this procedure then it is an effective award. I accordingly hold that an award of a composite nature as in the present case can be enforced by getting the award filed in the competent Civil Court having pecuniary and territorial jurisdiction in the matter. Such Court in the present case is the Court of the Additional District Judge, Bundi, in which the award should be filed and which is competent to pass decree on the basis of the award.

16. I accordingly allow the revision application with costs, set aside the order of the trial Court and direct it to proceed with the arbitration proceedings in accordance with law.


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