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Radha Kishna and anr. Vs. Natmal Bubna - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtRajasthan High Court
Decided On
Case NumberCivil Reference No. 10 of 1961
Judge
Reported inAIR1963Raj193
ActsCode of Civil Procedure (CPC) , 1908 - Sections 105 and 115; Arbitration Act - Sections 33 and 39(1)
AppellantRadha Kishna and anr.
RespondentNatmal Bubna
Appellant Advocate C.L. Agarwal, Adv.
Respondent Advocate R.K. Rastogi, Adv.
Cases ReferredSwarup Narain v. Gopi Nath
Excerpt:
.....that for a purpose like that no limitation had been provided under the limitation act. the learned trial judge held that the application filed by the opposite party before him was one under section 33 of the arbitration act challenging the validity of the arbitration agreement and the award and praying for setting aside of the award and, therefore, such an application was governed by article 181 of the limitation act and not by article 178. he further held in this connection that an application for setting aside an award was not dependent on an application for filing the award, and that all that was necessary was that the award, should have been before the court, before it was called upon to set it aside and as the petitioner before him had himself subsequently produced the award, the..........33 of the arbitration act was maintainable and whether it was not barred by time.the learned trial judge held that the application filed by the opposite party before him was one under section 33 of the arbitration act challenging the validity of the arbitration agreement and the award and praying for setting aside of the award and, therefore, such an application was governed by article 181 of the limitation act and not by article 178. he further held in this connection that an application for setting aside an award was not dependent on an application for filing the award, and that all that was necessary was that the award, should have been before the court, before it was called upon to set it aside and as the petitioner before him had himself subsequently produced the award, the.....
Judgment:

Modi, J.

1. This is a reference by a learned Single Judge and arises out of a revision which was pending before him in an application under the Arbitration Act, which has admittedly not been finally decided by the trial Court.

2. In view of the conclusion at which we have arrived as regards the competence of this reference, it is necessary to set forth a few facts :--

3. On the 22nd of February, 1957, an application was made by Nathmal Bubna, respondent here, with a prayer that the award made by one Fateh Chand Paliram Jhunjhunu-wala in a dispute between him and the petitioners here, who were opposite parties in the trial Court, be declared to be invalid, illegal and inoperative and should, therefore, be set aside. This application was made under Section 33 of the Arbitration Act. Along with this application a further application was also made on the same day under Section 14(2) of the Arbitration Act praying that the arbitration agreement and the award be sent for from the said arbitrator and that he be ordered to file the same in Court. These applications were inter alia opposed by the petitioners as barred by time and as being non-maintainable. It was contended in this connection that the application for the filing of the award had been made after 90 days of the date of the service of the notice of the making of the award and was, therefore, barred by Article 178 of the Limitation Act and further that the application for the setting aside of the award was not maintainable because such an application could only be made under Article 158 within 30 days of the service of the notice of the filing of the award which award had never been filed and the filing whereof was barred by time.

Thereafter, the opposite party here withdrew its application under Section 14(2) of the Arbitration Act and maintained that it was unnecessary to get the award filed in Court under Section 14(2) of the Act as it was attacking the award as a nullity and all that it wanted to be done was that the award should be summoned by the arbitrator as evidence for the purposes of Article 33 of the Arbitration Act. It was also contended that for a purpose like that no limitation had been provided under the Limitation Act. In these circumstances, the two questions which arose before the trial Court were, whether the application filed by the opposite party under Section 33 of the Arbitration Act was maintainable and whether it was not barred by time.

The learned trial Judge held that the application filed by the opposite party before him was one under Section 33 of the Arbitration Act challenging the validity of the arbitration agreement and the award and praying for setting aside of the award and, therefore, such an application was governed by Article 181 of the Limitation Act and not by Article 178. He further held in this connection that an application for setting aside an award was not dependent on an application for filing the award, and that all that was necessary was that the award, should have been before the Court, before it was called upon to set it aside and as the petitioner before him had himself subsequently produced the award, the bar of Article 158 or Article 178 would not arise, and the application filed before him for setting aside the agreement as well as the award was maintainable. In this view of the matter, the learned Judge fixed a date for the summoning of the arbitration agreement and for further proceedings in the case. A revision was then filed by the petitioners here against the aforesaid order which came for disposal before a learned Single Judge which has resulted in the present reference.

4. A preliminary objection was raised before the learned Single Judge that the revision was not maintainable inasmuch as the points decided by the trial Judge against the petitioners before the High Court could well be raised in an appeal which could be brought to this Court under Section 39(i)(vi) of the Arbitration Act. This objection seems to be apparently based on a Full Bench decision of this Court in Swarup Narain v. Gopi Nath, ILR (1953) Raj 483 : (AIR 1953 Raj 137 (FB)), although no direct reference thereto has been made in the order of reference. The question which was, therefore, posed by the learned Judge in this connection was whether the final order which may be passed by the trial on the application under Section 33 would be appealable to this Court under Section 39(1)(vi) of the Arbitration Act? In order to answer this question, the learned Judge after a consideration of a number of sections of the Arbitration Act and the nature of the questions raised by the dispute between the parties came to the following conclusion : -

'In accordance with the opinion expressed by me above all the grounds on which the award is attacked in the present case including the grounds relating to the invalidity of the arbitration agreement fall under Section 30. If the trial Court holds that the award is invalid and sets it aside or holds that it is valid and refuses to set it aside, an appeal would lie against its order under Section 39(1)(vi) and no revision application would be entertainable at this stage.' Even so, the learned Judge thought fit to refer-a number of questions to a larger Bench and this is how the present reference has come before us. The questions set out by the learned Judge are as follows -

1. Is the filing of an award or its signed copy necessary before it can be set aside by the Court?

2. Is it necessary for the above purpose that the award should be filed in Court in the manner provided in Section 14(2), that is (a) at the instance of a party or under the directions of the Court, (b) by the arbitrator or under his authority?

3. It is necessary that before an application for setting aside an award is made, the award or its signed copy is duly filed in Court or can the award be filed subsequently during the course of the proceedings to set it aside?

4. Do the words 'or is otherwise invalid' in Clause (c) of Section 30 of the Act embrace an objection which challenges the existence or validity of the arbitration agreement?

5. (a) Does the Arbitration Act distinguish between an application for setting aside an award and an application for the adjudgment of an award to be a nullity?

(b) If not, does it contemplate that all applications challenging an award must be applica-tions for setting aside the award which are gov-erned by Article 158 of the Limitation Act?

5. At the very outset of the arguments before us, the same preliminary objections has beenstrenuously raised by learned counsel for the oppo-site party as was raised before the learned SingleJudge. The contention is that the questions whichhave been decided by the trial Court against thepetitioner here could well be made the subject-matter of an attack by them in any appeal whichwould lie and might be brought to this Courtfrom the final order passed by the trial Court inthis case, and that being so, the conclusion wasirresistible on the view taken by the Full Benchin Swarup Narain's case, ILR (1953) Raj 483 :(AIR 1953 Raj 137 (FB) ) (supra), that the revi-sion which was filed by the petitioners was in-competent, and it was further contended that inthat state of circumstances, any reference by the learned Single Judge was and should be held to be incompetent, It was further stressed in this connection that the learned Single Judge himself had come to the conclusion that an appeal would he against the final order of the trial Court in the present case under Section 39(1)(vi) of the Arbitration Act to this Court and, therefore, no reference in such circumstances was competent.

6. We have considered this contention with all the care which it deserves and feel constrained to hold that it is well founded. The basic questions which fall for consideration in this connection are whether the final order to be passed by the trial Court could be challenged in appeal to this Court, and further whether the questions which have been decided against the petitoner by the trial Court could be made the subject-matter oi contest in that appeal. The test by which we should answer the second of these questions as provided by Swarup Narain's case, ILR (1953) Raj 483 : (AIR 1953 Raj 137 (FB) ), is to be found in Section 105 of the Code of Civil Procedure. That section, leaving its immaterial portion, reads as follows -

'Save as otherwise expressly provided, no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but, where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal.'

The question, therefore, is whether the decision of the trial Court on the points decided by it against the petitioners are such that it can be properly postulated of them that they affect the decision of the case on the merits. We have no doubt that both the questions, namely, of limitation and of the maintainability of the application, are questions which do affect the decision of the case in that manner. In fact as we look at the matter, there cannot be two opinions on this aspect of the case.

7. The other question which remains to consider is whether the final order passed by the trial Court in the case would be applicable to this Court. This question, in our opinion, need not present any formidable difficulty. The application filed by the opposite party in connection with the impugned arbitration agreement and the award is to have them set aside. That being so, we consider the controversy whether this application really falls under Section 30 or Section 33 of the Arbitration Act to be more or less of an academic nature. The prayer of the opposite party definitely is that the award be set aside. That prayer has either to be granted or refused by the trial Court to decide the application; and once it is so decided, we are unable to see how such an order could be held to fall outside the ambit of Section 39(1)(vi) of the Arbitration Act which clearly provides for an appeal against an order setting aside or refusing to set aside an award. In this view of the matter and having regard to the valuation subject-matter of dispute before the trial Court we have no manner of hesitation in saying that the final order of the trial Court after all the issues therein have been decided, will lie to this Court, and as we have held above, the findings on the questions which have been decided by that Court against the petitioners will be perfectly capable of being contested in this Court as being questions affecting the merits of the case in the appeal before this Court,

8. The only other question which remains for us to consider is whether in these circumstances the present reference is competent, or whether we have jurisdiction to answer it. This takes us back to the Full Bench decision of this Court in Swarup Narain's case, ILR (1953) Raj 483 : (AIR 1953 Raj 137 (FB)). As we understand that decision, it clearly bars our revisional jurisdiction in a case like the present. What it has laid down is that where it is open to a party to raise a ground of appeal in the High Court under Section 105, Civil Procedure Code, from the final decree or order with respect to any order which has been passed, during the pendency of the case, it should be held that an appeal in that case lies to the High Court within the meaning of the term 'in which no appeal lies thereto' appearing in Section 115 of the Civil Procedure Code. And, therefore, where such an order can be challenged in the High Court under Section 105 Civil Procedure Code in first or second appeal to it from the final decision of a suit or a proceeding, the revision must be held to be incompetent. It is only when the order in question cannot be challenged in the High Court, whether in first or second appeal or even by way of a ground under Section 105 in appeal from the final decision of the case, that it can be said that no appeal lies to the High Court, and it is only in such cases that it can exercise its extraordinary jurisdiction under Section 115 to look into the correctness of the order as required by that Section.

9. We should also like to make it clear before we conclude that this Full Bench decision which is the leading case of our Court on the subject and which is fully binding on us makes no distincton between orders which are 'merely interlocutory' and other orders passed during the pendency of a case but which in the language of the learned single Judge may be in the nature of final decisions on a part or even the main part of the case; and this decision therefore equally bars a revision as much against the one class of orders as the other, so that where a first or second appeal lies to this Court from the final order or decree of the Court of first instance wherein such an order has been passed and the order is one affecting the merits of the case and which therefore could be made a ground of appeal therein, a revision against either class of orders must be held to be entirely non-maintainable. With all respect therefore we find ourselves unable to agree with the learned Single Judge in so far as his order of reference may be founded on any such distinction. In the result, we can see no escape from the conclusion that the revision to this Court in the present case is altogether incompetent. If that be the conclusion to which we are inevitably driven, then it must follow that the revision must stand dismissed, and it is only a corollary from this to hold that the learned single Judge had no jurisdiction to proceed further with the case before him and make a reference therein as he has done. Putting the whole thing from a different angle, what we would say is that when the very foundation falls, the superstructure cannot possibly survive and must fall with it.

10. For these reasons, we hold that the learned single Judge had no jurisdiction to entertain the revision or make the present reference therein and by parity of reasoning it has to be held that we have no jurisdiction to deal with the reference in the exercise of the revisional jurisdiction of this Court. The preliminary objec-tion must therefore prevail.

11. In these circumstances, we have no alternative but to discharge the reference, and the revision must stand dismissed. Having regard to all the circumstances of the case, we would leave the parties to bear their own costs of the reference as well as the revision.


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