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Ponnamma Vs. Marampudi Kotamma and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai
Decided On
Reported in(1932)63MLJ610
AppellantPonnamma
RespondentMarampudi Kotamma and ors.
Cases ReferredRukhanbai v. Adamji I.L.R.
Excerpt:
.....is no reason why the position should not be the same when for a like cause the indian arbitration act is inapplicable to an..........not be maintainable. but his contention is that the arbitration in question was one to which the indian arbitration act (ix of 1899) applies. that act requires that there should be a written submission to arbitration. it is common ground that the provisions of the indian arbitration act only apply to the presidency towns. that is made clear by section 2 of the act. if therefore, the act applies to a private arbitration such as this, then it is clear that a written submission to arbitration is required. it is contended by mr. rajah aiyar that the act applies to every arbitration held in madras. on the other hand, it is contended by the respondents that the act applies only to arbitrations started by a written submission to arbitration before a suit is filed and without the intervention.....
Judgment:

Horace Owen Compton Beasley, Kt., C.J.

1. In the trial Court the plaintiff claimed a declaration that she was entitled to the plaint scheduled property and for delivery of possession of it and other reliefs. The defendants set up, amongst other defences, the defence that, disputes having arisen between the parties in or about February, 1928, with regard to the suit property, the matter was referred by them to a caste panchayat which made an award in favour of the defendants holding that the property belonged exclusively to them and pleaded that the plaintiff was bound by that award. The award of the panchayat having been proved at the trial through the leading headman of the caste panchayat, the learned City Civil Judge held that the plaintiff could not raise the same question in the suit having voluntarily submitted her case to arbitration and obtained an award. The plaintiff appeals.

2. It is argued here that there was no written submission to arbitration and that, therefore, the arbitration was not valid or binding upon the parties to it. It is conceded by Mr. Rajah Aiyar for the appellant that, if the arbitration had been in the mofussil, his client would have been bound by the award and that her suit in respect of the same matter arbitrated upon 'would not be maintainable. But his contention is that the arbitration in question was one to which the Indian Arbitration Act (IX of 1899) applies. That Act requires that there should be a written submission to arbitration. It is common ground that the provisions of the Indian Arbitration Act only apply to the Presidency Towns. That is made clear by Section 2 of the Act. If therefore, the Act applies to a private arbitration such as this, then it is clear that a written submission to arbitration is required. It is contended by Mr. Rajah Aiyar that the Act applies to every arbitration held in Madras. On the other hand, it is contended by the respondents that the Act applies only to arbitrations started by a written submission to arbitration before a suit is filed and without the intervention of the Court and that in all other cases the Civil Procedure Code applies. In support of his argument Mr. Rajah Aiyar referred to Rukhanbai v. Adamji I.L.R. (1908) 33 Bom. 69. There the parties to an arbitration suit consented to it being referred to the Commissioner to take the usual accounts and to determine their respective shares. On appearing before the Assistant Commissioner the parties came to an understanding that the matter in dispute should be left to be decided by the Assistant Commissioner in a summary manner without going into formal evidence beyond the accounts, objections and surcharges filed before him. There was no written submission to arbitration. Beaman, J., held that the Indian Arbitration Act applied to such an arbitration; that, as there had been no written submission to arbitration as provided by Section 4 of the Act, there had been no legal and valid reference to arbitration and the Assistant Commissioner's award had no legal foundation and could therefore have no legal consequences; and that, as there had been no reference to arbitration and no award, there could be no adjustment to give effect to under Section 375 of the Civil Procedure Code, which was what the plaintiff applied for. In my view, the Indian Arbitration Act is not a comprehensive Act and does not include all arbitrations and therefore the view taken by Beaman, J., in Rukhanbai v. Adamji I.L.R. (1908) 33 Bom. 69 is not the correct one. It is very probable that the Indian Arbitration Act was designed to suit the convenience of the commercial community in the Presidency Towns, and in order to enable them to decide disputes between themselves without the intervention of the Court and the Act therefore provides for the procedure to be adopted in such cases. It is quite clear that the Act is only intended to deal with cases where there has been a written agreement to submit the differences to arbitration. The Act throughout refers to submissions and a submission is defined in Section 4(b) as 'a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not'. After such a written submission the procedure provides for the intervention of the Court which in the Presidency Towns means the High Court. Courts here have always recognised such informal arbitrations as here and the second schedule to the Code of Civil Procedure by Clause 20 provides for arbitrations without the intervention of the Court. It is conceded that that clause refers to arbitrations whether there has been a written submission to arbitration or not; and it is difficult to see why such arbitrations in the Presidency Towns should be required to originate in a written submission whereas in the mofussil no such written submission is required; and there is abundant authority in support of the principle that an award under such circumstances in the mofussil can be relied upon as a defence in a suit relating to the subject-matter dealt with by it vide Muhammad Newaz Khan v. Alam Khan and indeed it is not disputed by Mr. Rajah Aiyar why should there be any distinction between those cases and informal arbitrations in the Presidency Towns? The Indian Arbitration Act is almost word for word the English Arbitration Act and under the English Arbitration Act such an award is not invalid. In the 12th Edition of Russell on 'Arbitration and Award' it is stated at p. 336:

A parol submission is generally perfectly valid but it is not a submission to which the Arbitration Act applies.

3. In the footnote to paragraph 1071 of Vol. I (2nd Edition) of Halsbury's Laws of England dealing with references by consent out of Court it is stated:

The provisions of the Arbitration Act, 1889, are for the most part inapplicable where the submission is oral; see Section 27, which defines a submission for the purposes of the Act as a 'written agreement'. Consequently, where the submission is oral, the arbitration is governed by the common law.

4. In Muhammad Newaz Khan v. Alam Khan already referred to, A and B had referred certain matters in dispute between them to X. X made his award in favour of A. A made an application under Section 525 of the Code of Civil Procedure to file the award but it was dismissed. B then filed a suit to recover the properties which had formed the subject-matter of the dispute. A set up the award in answer to the claim. The Judicial Committee held that the award was a good and valid one and binding upon B. Their Lordships observed that though the application under Section 525 was refused, that merely left the award to have its ordinary legal validity, that it could not be successfully contended that an award is not valid because the party in whose favour it was had never applied to have it filed in Court and that the refusal to file the award or of an application made to do so could not have the effect that the award can never be relied upon in any suit relating to the subject-matter dealt with by it. The Indian Arbitration Act does not make such awards invalid. It merely deals, in my view, with a particular class of arbitration; and there are no words to be found in the Act rendering other arbitrations invalid. I am satisfied that the law with regard to arbitrations is the same here as in England and that the Indian Arbitration Act applies by Section 4(b) only to arbitrations where there has been a written submission to arbitration in the same way as the corresponding section in the English Act, namely, Section 27, applies to such arbitrations. Both the Acts leave untouched the right of persons to agree to have the differences between them settled in an informal manner. In my view, the learned City Civil Judge was quite right in holding that the Indian Arbitration Act did not apply to the arbitration in question and that the award of the panchayatdars successfully barred subsequent action being taken. For these reasons, this appeal must be dismissed with costs.

Cornish, J.

5. I agree. It was conceded in the Lower Court that the respondents' plea that the suit is barred by an award upon the very subject-matter in dispute between the parties would be a good defence, if the award was valid. But the contention is that the award is not valid because the arbitration, being one governed by the Arbitration Act, was not upon a submission in writing as required by the Act. The consequence of the definition of 'submission' in Section 4 of the Act is that the Act applies only to arbitrations upon written submissions. Where there has been such a submission the award is enforceable in the manner prescribed by Section 15. Where the award is made upon an oral submission it is not enforceable in the manner prescribed by the Act. But it does not follow that an award is invalid and unenforceable because it cannot be enforced by the methods laid down in the Act. Rule 21 of the second schedule to the Civil Procedure Code, equally with Section 15 of the Act, requires that the award shall be filed in Court as a condition to enforcement. But their Lordships of the Judicial Committee held in Muhammad Newaz Khan v. Alam Khan that the validity of an award does not depend upon its having been filed in Court. The Arbitration Act does not say that an award upon an oral submission to arbitration of a matter which might have been the subject-matter of a suit institutable in a Presidency Town shall be invalid and inoperative. Apart from the procedure in the Act and in the second schedule to the Civil Procedure Code for enforcing awards, an award is enforceable by suit; and a suit will be the only means of enforcing an award when it cannot be filed in Court and enforced as a decree. This is the remedy available when an award, being upon an oral reference, is one to which the English Arbitration Act does not apply (see Redman on Arbitration, 4th Edition, p. 312), and there is no reason why the position should not be the same when for a like cause the Indian Arbitration Act is inapplicable to an award. In my judgment, the view held by Beaman, J., in Rukhanbai v. Adamji I.L.R. (1908) 33 Bom. 69, that an award which is not made upon a written submission in an arbitration to which the Act applies has no legal foundation or consequence, is not warranted by anything contained in the Act. In the absence of any other ground being shown for impugning the validity of the award I think the Lower Court rightly held that it barred the appellant's suit.


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