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Thota Chenna Kesavulu, Minor, by Mother and Guardian Butchi Venkamma and ors. Vs. Thota Veeraswami and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration;Family
CourtChennai
Decided On
Reported inAIR1933Mad862; (1933)65MLJ755
AppellantThota Chenna Kesavulu, Minor, by Mother and Guardian Butchi Venkamma and ors.
RespondentThota Veeraswami and ors.
Cases ReferredGhulam Khan v. Muhammad Hassan
Excerpt:
.....father was still alive. 5. it is well enough settled that where a dispute is referred to arbitrators through the court the scope of their enquiry is the scope of the suit itself as disclosed by the pleadings and that they have no jurisdiction to extend it either as regards the subject-matter or the persons affected by it. 523, a case which like the present one arose upon an application in revi-sion. if there were no minors involved this would no doubt dispose of the objection, because it was perfectly competent to the parties to compromise upon this matter and for the arbitrators to accept the compromise......be said in passing, has cast very heavy liabilities upon the minor children of these two deceased sons. the plaint appears to me to show clearly that there was no intention to extend the liabilities in this manner. in para. 4 it is stated that sitaramayya kept the promissory notes and other documents as per b schedule and retained them in his possession. in para. 5 it is stated:as regards the b schedule notes and documents he (i.e., sitaramayya) was collecting the debts, getting renewals of the documents, lending moneys at interest, with the idea of augmenting them and discharging debts with the assistance of chinna kotayya, the father of the 4th defendant, and sriramulu, the father of defendants 5, 6 and 7, who were his educated sons, and had knowledge of accounts and business.4. there.....
Judgment:

Curgenven, J.

1. This Civil Revision Petition is presented against an order of the District Munsif of Tenali confirming an award passed in O.S. No. 450 of 1927 on his file dismissing the objections of the petitioners, who are defendants 4, 6, 7 and 8, and making the award a decree of the Court. The plaint stated that one Thota Sitaramayya had seven sons, of whom the four eldest were respectively the 1st defendant, plaintiff and the 2nd and 3rd defendants. The 3rd defendant died pending suit. The remaining three sons had died at earlier dates, Kotayya, the 5th son, leaving the 4th defendant, a minor, Sriramulu, the 6th son, leaving three minor children, defendants 5 to 7, and Raghavalu, the 7th and last son, leaving a widow, the 8th defendant. In 1912 Sitaramayya, according to the plaint, made an incomplete or provisional partition. The property we are concerned with consisted of land and outstandings. Of the land he allotted about 20 acres to each of his sons, reserving a small amount of about 5 acnes (shown as Schedule A in the plaint) in his own hands. His intention was, that later on any inequalities in this partition should be rectified as far as possible from this Schedule A land and, if any member was then found to possess an excess, that he should pay for it into a common fund at the rate of Rs. 500 per acre. He kept control of the outstandings until the time of his death in 1919, when the plaint alleges an arrangement according to which Kotayya, the 5th son, and Sriramulu, the 6th son, undertook the management of this property. The suit was filed to obtain a permanent division of the land by the method laid down by Sitaramayya and to secure a partition of the outstandings, an account to be taken of sums alleged to have been appropriated by the two managing brothers during the time of their management.

2. After issues were framed an application was made and granted to refer the dispute to five arbitrators who in due course passed an award. A number of objections were taken to this award before the Lower Court. The main objection pressed in this Revision Petition is that both as regards the division of the land and of the outstandings the arbitrators went beyond the terms of their reference and therefore beyond their jurisdiction.

3. I will deal first with the question of the outstandings. It is necessary to ascertain what were the nature and extent of the claim with regard to these preferred in the plaint and raised by the issues. The matter concerns the legal liability to account on the part of the 5th and 6th sons, Kotayya and Sriramulu. The contention of the petitioners is that such liability even according to the plaint only arose when upon the death of Sitaramayya they assumed management of the property. The arbitrators on the other hand have gone back into the period of Sitaramayya's lifetime and have taken into consideration a number of instances in which payment of debts was received by these two sons, some of them even going back to the period before the division of 1912. It is objected, and I think rightly, that the arbitrators had no warrant upon the pleadiligs and the issues framed by the Court to adopt this course; a course which, it may be said in passing, has cast very heavy liabilities upon the minor children of these two deceased sons. The plaint appears to me to show clearly that there was no intention to extend the liabilities in this manner. In para. 4 it is stated that Sitaramayya kept the promissory notes and other documents as per B Schedule and retained them in his possession. In para. 5 it is stated:

As regards the B Schedule notes and documents he (i.e., Sitaramayya) was collecting the debts, getting renewals of the documents, lending moneys at interest, with the idea of augmenting them and discharging debts with the assistance of Chinna Kotayya, the father of the 4th defendant, and Sriramulu, the father of defendants 5, 6 and 7, who were his educated sons, and had knowledge of accounts and business.

4. There is not a word in the plaint to suggest that Sitaramayya was not fully competent to keep the control of this business in his own hands or that his sons behaved during his lifetime in any such manner as would render them liable as de facto managers. It is then expressly stated that upon the father's death these two sons, who had been managing these affairs until then and had knowledge of them, should manage the A and B schedule properties and keep accounts regularly and show them to the others until the properties were partitioned; and that according to this arrangement the two brothers took possession of the notes and documents and were managing them. All that the plaint alleges further is that after their deaths their widows, the mothers of the minor children, had been making attempts to appropriate the money. The issue framed by the Court upon this question is the third, 'Who managed the joint properties after the death of Sitaramayya'? and it is significant that the issue was framed in this form although the defence set up was that the two eldest sons, the 1st defendant and the plaintiff, and notKotayya and Sriramulu, had been throughout in management of the property. When the case went to the arbitrators they framed their own issues, but this issue was reproduced practically verbatim as the fourth. Notwithstanding that the scope of the enquiry was clearly defined in this manner, the arbitrators proceeded to make enquiry as to the member of the family who had in fact received payment of each outstanding, over a period which extends from 1906 onwards. To take as an instance the debts alleged to have been collected by Kotayya, the father of the 4th defendant, there are eleven such debts shown as collected by him during Sitaramayya's lifetime, 3 in 1906, 1 in 1908, 4 in 1910, 2 in 1911, and 1 in 1918. All but one of these relate, it will be seen, to the period before the 1912 partition. There is a twelfth debt shown as collected in 1921. To each sum thus collected interest at 6 per cent, has been added from the date of realisation, the whole amount of principal being Rs. 4,352-7-5 with interest amounting to no less than Rs. 7,225-6-3, in all Rs. 11,577-13-8, which has been debited against the minor son of the deceased man. I am not however specially concerned to enquire into the merits of the arbitrators' decision except for the purpose of considering whether this Court will be justified in interfering in revision. It is enough to say that I am quite satisfied that in so far as they have burdened the children of these two deceased brothers with responsibility for acts done by them before their father's death they have gone beyond the due scope of their enquiry. I am wholly unable to follow the learned District Munsif when he says that upon the pleadings it is perfectly clear that the arbitrators were authorised to take into account the management of the property by these two brothers while their father was still alive. It seems to me patent from the terms of the plaint that the plaintiff never contemplated any such course.

5. It is well enough settled that where a dispute is referred to arbitrators through the Court the scope of their enquiry is the scope of the suit itself as disclosed by the pleadings and that they have no jurisdiction to extend it either as regards the subject-matter or the persons affected by it. The leading case in this country is the Privy Council judgment in Ram Protap Chamria v. Durga Prosad Chamria , a case which related not only to the inclusion by the arbitrators of a person not a party to the suit but also the settlement of certain questions neither raised nor foreshadowed in the plaint. When a reference is made by the Court under the second schedule to the Code of Civil Procedure,

It is incumbent,' their Lordships say, 'upon arbitrators acting under such an order strictly to comply with its terms. The Court does not thereby part with its duty to supervise the proceedings of the arbitrators acting under the order. An award made otherwise than in accordance with the authority by the order conferred upon them is, their Lordships cannot doubt, an award which is 'otherwise invalid' and which may accordingly be set aside by the Court under paragraph IS of the same schedule.

6. Nor can there be any doubt that both the arbitrators^ who so exceed their duties and the Court itself which nevertheless passes a decree in terms of the award are acting in excess of their jurisdiction. This has been held by a Bench of this Court in Ramaszvami Chettiar v. Venkatarama Aiyar (1924) 49 M.L.J. 523, a case which like the present one arose upon an application in revi-sion. Mr. Lakshmanna for the respondents has argued that the proceedings of arbitrators must not be subjected to too strict a test and that it is enough if they have followed the general purport of the pleadings loosely construed. I do not think that the mere application of a lenient standard will suffice here to enable me to find that the arbitrators have acted within their jurisdiction. And it was all the more necessary that they should have scrupulously adhered to the terms of their reference in this case, because they were dealing with the alleged liability of men now dead and represented only by minor children in the guardianship of their mother. For these reasons I think both that this Court has a right to interfere in revision and that it ought to do so.

7. With regard to the partition of the land, I have already set out the arrangement which according to the plaint was proposed by Sitaramayya. Here again the arbitrators have not proceeded according to the plaintiff's version of what had to be done, but in lieu of arranging for the payment of Rs. 500 per acre for any excess, they have taken land from some of the defendants and given it to others. Thus 2.30 acres have been taken from the 4th defendant and 0.94 acres from defendants 5 to 7. The explanation given for this departure is that all the parties consented to it. If there were no minors involved this would no doubt dispose of the objection, because it was perfectly competent to the parties to compromise upon this matter and for the arbitrators to accept the compromise. It was not however open to them to accept the consent of the guardians of the minors without the sanction of the Court accorded under Order 32, Rule 7, Civil Procedure Code. A further point has been raised that the guardians did not in fact really consent but, however suspicious the circumstances may appear, the Lower Court has found upon this point that the consent was given and I am bound by that finding. I think there is no doubt that the award upon this point is vitiated by the circumstance that it departs from the pleadings and is not cured by the valid consent of all parties. But I do not think that the very guardians who are found to have given their consent can now come forward, as they do, and plead that that consent will not affect the rights of the minor defendants. An objection of this character has been considered in Golnur Bibi v. Sheikh Abdus Samad I.L.R. (1930) 58 Cal. 628. In that case, which was also a case of arbitration, some guardians who entered into agreements subsequently turned round after the award was made and preferred an appeal against it. It is pointed out that the absence of Court sanction does not render a decree passed upon a compromise void, only voidable at the option of the minor, and that no other party can call it in question except the minor, either on attaining majority or before then through a next friend. It is observed that in the Privy Council case in Ghulam Khan v. Muhammad Hassan (1901) L.R. 29 IndAp 51 : I.L.R. 29 Cal. 167 : 12 M.L.J. 77 (P.C.), one of the grounds taken against the decree was that the guardian of the minors had agreed to refer without the Court's leave and yet their Lordships firmly put aside the contention that an appeal would lie. I do not think that upon the application of the guardians in revision I ought to set aside this part of the award upon the ground contended for.

8. The only other point relates to the number of arbitrators who functioned at the hearings. It is true that on many occasions only three of the five arbitrators took part, but no exception was taken to this at the time and the matter is not one, in my view, which should form a basis for revision, no ground being given to suppose that the merits of the award were thereby affected.

9. Under Rule 14(a) of the Second Schedule of the Code of Civil Procedure, the Court may remit any matter referred to arbitration to the re-consideration of the same arbitrator or umpire where the award determined any matter not referred to arbitration, unless such 'matter can be separated without affecting the determination of the matters referred. The portion of the award which deals with Schduld B is separable from that relating to the land, but the component parts of Schuld B itself are not separable. I think therefore that the only course is to refer for re-consideration the portion of the award relating to the outstandings, leaving the remainder as it stands. So far as the order of the Lower Court relates to this part of the award, I must hold it is without jurisdiction and set it aside and direct it to pass an order in accordance with law. The respondents will pay the petitioners' costs of this petition.


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