Skip to content


Babulal and anr. Vs. Ramswarup - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtRajasthan High Court
Decided On
Case NumberCivil Misc. Appeal No. 71 of 1956
Judge
Reported inAIR1960Raj240
ActsArbitration Act, 1940 - Sections 37(5)
AppellantBabulal and anr.
RespondentRamswarup
Advocates: C.L. Agarwal, Adv.
DispositionAppeal dismissed
Cases ReferredThakur Prasad v. Baleshwar Ahir
Excerpt:
.....of section 14, and on the obvious necessity of adequately recognising and safe-guarding the rights of parties under section 39, section 37(5) should be interpreted to entitle to a suit to claim exclusion of the period taken in appeal against an order setting aside sale and the same principle may in appropriate cases be extended to revisions also......which was taken in prosecuting his appeal and revision against the order of the court of the first instance setting aside the award. he, consequently, reversed the decision of the trial court but as the period taken in appeal and revision has to be ascertained, vide his order dated 30-7-1(sic) he remanded the case to the trial court for asce(sic) ing that period and deciding the question of (sic) tion after giving benefit to the plaintiff of the period taken in appeal and revision.5. the defendants have filed the present appeal and challenged the order of the additional district judge. the plaintiff-respondent in spite of notice of appeal did not appear in this court and the appeal was heard ex parte.6. shri c.l. agarwal addressing on behalf of the appellant has very vehemently contended.....
Judgment:

L.N. Chhangani, J.

1. This is a defendant's appeal under Order 43 Rule l(u) of the Code of Civil Procedure against the appellate order of the Additional District Judge of the former State of Ajmer dated 30-7-1956 reversing the decision of the original court on the point of limitation in a money suit.

2. The relevant facts for the proper appreciation of controversy between the parties may be stated in a little detailed manner as follows:

The plaintiff Seth Ramswarup carries on business at Naya Nagar. The defendants entered into some transactions of purchase and sale of cottonseeds, til, gur and makki and silver with the plaintiff in the year 1942. A sum of Rs. 1896/15/- was found due to the plaintiff from the defendants and was acknowledged by him on 25-4-1946. There were subsequent transactions between the parties; some resulting in losses and others in gains. The defendants made some payments. In the end the plaintiff became entitled to recover Rs. 2,430/11/3 on 24-12-48. On 24-12-1948, the plaintiff took steps to recover his amount through arbitration proceedings through the Chamber Saraifa, Naya Nagar.

The arbitrators after enquiry gave an award in favour of the plaintiff for an amount of Rs. 2336/13/-on 22nd August, 1951 and informed the parties accordingly. An award was filed in the court of Sub-Judge, Naya Nagar for passing a decree in terms of the award. But the Sub-Judge, vide his order dated 13-5-1952 set aside the award. An appeal by the plaintiff against the order of the Sub-Judge setting aside the award was dismissed by the District Judge, Ajmer on 8-11-1952, and further revision to the Judicial Commissioner met the same fate on 16-2-1953. Thereafter, the plaintiff filed the present suit claiming a decree for Rs, 2489/6/9.

He pleaded that he was prosecuting his claim through the arbitrators and thereafter in the court where the award was filed and subsequently before the appellate and revisional court and claimed exclusion of the period taken before the arbitrators and in the court of the first instance, which set aside the award and thereafter, in the appellate and the revisional court. The defendant opposed the plaintiff's suit and, inter alia, pleaded the bar of limitation. The trial court framed a number of issues; issue No. 8 being on the question of limitation. It was framed as follows:

Is the suit within time? ;'

3. The trial court held that the plaintiff was entitled to the exclusion of the period up to the date of the trial court's order setting aside the award but he is not entitled to the exclusion of the period taken in filing an appeal before the District Judge and a further revision before the Judicial Commissioner and in this view of the matter, he held the plaintiff's suit as barred by limitation and dismissed it.

4. On an appeal by the plaintiff, the Additional District Judge, Ajmer came to a contrary conclusion. He held that the plaintiff is entitled to exclude the period which was taken in prosecuting his appeal and revision against the order of the court of the first instance setting aside the award. He, consequently, reversed the decision of the trial court but as the period taken in appeal and revision has to be ascertained, vide his order dated 30-7-1(SIC) he remanded the case to the trial court for asce(SIC) ing that period and deciding the question of (SIC) tion after giving benefit to the plaintiff of the period taken in appeal and revision.

5. The defendants have filed the present appeal and challenged the order of the Additional District Judge. The plaintiff-respondent in spite of notice of appeal did not appear in this Court and the appeal was heard ex parte.

6. Shri C.L. Agarwal addressing on behalf of the appellant has very vehemently contended that the word 'court' in Section 37 sub-section (5) can only mean the court of the first instance and cannot include an appellate court or a revmonal court and, therefore, the period spent subsequent to the order of the original court setting aside an award in prosecuting an appeal or revision against the order o the' court of the first instance cannot be excluded. He emphasised the definition of 'court' in Section 2(c) and cited some cases where the word has been given a narrow interpretation in discussing the provisions of the Arbitration Act.

In Abani Bhusan v. Hemchandra, AIR 1947 Cal 93 the word 'court' as appearing in Section 21, came up for interpretation in connection with a question whether the appellate court can refer the matter in dispute in appeal to an arbitration and the learned Judges held that the 'court' in Section 21 means the court of the first instance only and, therefore, an appellate court cannot make a reference to arbitration. In Moradhwaj v. Bhudardas, (S) AIR 1955 All 353 the Allahabad High Court in dealing with the question of the competence of the appellate court to make reference to arbitration, interpreted the word 'court' in the same manner but it did not agree with the Calcutta High Court on the question of the competence of the appellate court to make references to arbitration.

Applying Section 107 C. P. C. with the help of Section 8 of the General Clauses Act, it held that an appellate court can refer the matter in dispute to arbitration. As against the cases relied upon by Shri Agarwal, I may refer to Thakur Prasad v. Baleshwar Ahir, AIR 1954 Pat 106 where Jamuar J. sitting with Ramaswami J. took a contrary view and observed as follows:

'I see, therefore, no reason why a restricted meaning should be given to the word 'suit' as used in Section 21, Arbitration Act. In my opinion, the term 'suit' in that section ought not to be taken to exclude an appeal. I, for myself, find no good ground for the legislature, while giving power to the Court of original jurisdiction to make an order of reference under Section 21, Arbitration Act, to exclude an appellate Court from making such an order'.

The conclusion was reached on the important considerations (a) that under the law prior to the Act, an appellate court had the power to make an order of reference, (b) that the Act is a consolidating Act, (c) that in construing statutes consolidating laws there is a presumption that the law was not intended to be altered.

7. This controversy relates to Section 21 and although I feel inclined to follow the Patna view, I do not express any final opinion, as in my judgment considerations relevant under Section 21 of the Act cannot be extended and invoked to limit the meaning of the word 'court' in Section 37(5). Section 21 contemplates a question regarding the competence of the appellate court to discharge functions conferred upon the court of the first instance. No such question arises in connection with Section 37(5).

It cannot be denied that in view of a clear provision of appeal under Section 39 against an order setting aside award or refusing to set aside an, award, the appellate court's competence to reverse an order of the court of first instance and to set aside an award maintained by the court of first instance or to uphold an award set aside by the original court, cannot be doubted. The question under Section 37 simply is whether while the appellate court has jurisdiction to exercise functions, a suitor resorting to appeal can claim exclusion of time taken in appeal when admittedly he is entitled to the exclusion of time taken in the court of first instance. There is fundamental difference in the two cases and an analogy of Section 21 will be quite misleading and the observations made for the interpretation of the word 'court' in that context are of no help in interpreting Section 37(5).

A critical examination of the Calcutta case will show that the reasoning of that case cannot be applied to a case under Section 37(5). The main consideration that prevailed with the Judges in that case was that the provisions of Section 107 C. P. C. empowering the appellate court to exercise the powers of the original court could not be extended to the making of the references, It was pointed out that the only provision in the Arbitration Act for extending the Civil Procedure Code generally to arbitration matters are contained in Section 41 of the Arbitration Act and therein it was provided that the provisions of the Civil Procedure Code shall apply to all proceedings before the court and to all appeals under this Act.

An appeal in the kind of cases before the Calcutta High Court does not lie under the Arbitration Act but under the general law and, therefore, section 107 C. P. C. could not be invoked by the appellate court for making a reference. Under Section 39 of the Arbitration Act, an order setting or refusing to set aside an award has been made appealable and appeals against orders setting or refusing to set aside awards certainly will lie under the Arbitration Act and, therefore, Section 107, C. P. C., must be attracted in cases of this type, and the reasoning of the Calcutta case cannot be extended to this case. We must bear in mind that the appellate court and the revisional court in exercising appellate or revisional jurisdiction is quite competent to set aside the awards, even though the original court may not have thought it proper to set aside and, therefore, if we interpret the word 'court' in S, 37 to mean only the original court, there will be a serious anomaly where an award is set aside by an appellate court. In that case on the argument of the learned counsel for the appellant, there can be no case for exclusion of the period in terms of Section 37 of the Arbitration Act.

The legislature cannot be imputed to have intended such an absurd result. It appears, therefore, quite reasonable and fair in the context of Section 37 to interpret the word 'court' in Section 37(5) so as to include the appellate and the revisional court, at any rate, when the award is set aside by an appellate or revisional court. This position could not be successfully met by the learned counsel for the appellant. He, however, urges that when an award is set aside by the original court, in that case a litigant should not be entitled to exclude the period taken in a further appeal or revision against the order setting aside the award.

The obvious short answer to this argument is that we cannot interpret the word 'court' differently because of the variations in circumstances of individual cases. When for one purpose, discussed above, the word 'court' must include the appellate Of revisional court, there is obviously no adequate reason for interpreting it differently when the award is set aside, by the original court.

8. The matter may be approached from another angle. Section 39 gives a suitor right of appeal against an order setting aside award and very naturally he must be allowed to pursue his right without any kind of restriction or risk. A view that in case of failure in appeal in any subsequent litigation he cannot claim exclusion of time taken in appeal cannot but seriously restrict, if not altogether deprive him of his right. This could never have been intended by the Legislature.

It will be useful to point out at his stage that Section 37 contains provisions relating to limitation, and sub-section (5) corresponds with Section 14 of the Limitation Act. Under that section the time taken in conducting proceedings in appeal can be excluded on the wordings of the section itself. It is of course me that Section 37(5) does not adopt the language of Section 14 for appeal purposes but the difference in language need not be emphasised to infer a different legislative intent. The general principles of Section 14 being wellknown the legislature very presumably remained content with general language only.

I have no hesitation in holding that on the general principles of Section 14, and on the obvious necessity of adequately recognising and safe-guarding the rights of parties under Section 39, Section 37(5) should be interpreted to entitle to a suit to claim exclusion of the period taken in appeal against an order setting aside sale and the same principle may in appropriate cases be extended to revisions also.

9. On a very careful consideration of the various aspects of the matter, I have no doubt that on a fair and reasonable construction of Section 37, the word 'court' should include the appellate and revisional court and that the plaintiff is entitled to the exclusion of the period taken by him in filing appeal and revision against the order of the court setting aside the award. The view taken by the lower court appears to be quite correct and calls for no interference. There is no merit in this appeal and it is consequently dismissed. The respondents having not appeared there will be no order as to costs.

10. Learned counsel for the appellant has applied for leave to appeal. As an important question of law is involved, the leave is hereby granted.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //