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Muthyala Narayanappa Vs. Muthyala Ramachandrappa - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai
Decided On
Reported inAIR1931Mad28; 129Ind.Cas.638; (1931)60MLJ676
AppellantMuthyala Narayanappa
RespondentMuthyala Ramachandrappa
Cases ReferredBala Pattabhirama Chetti v. Seetharama Chetti I.L.R.
Excerpt:
- - paragraph 18 relating to stay of suit enacts that the court should be satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement to refer to arbitration before a suit filed after such agreement could be stayed. 18, the court must be satisfied that there is no sufficient reason to decline to refer the matter in accordance with* the agreement (ex. but it seems to me that such an order of reference (more clearly in the case of death of one of the arbitrators), cannot be deemed to be warranted by clause (4) of para. the view taken in the above case has been fully endorsed in the decision in fazal ilahi v. it was held that no party to the agreement can revoke the submission to such arbitration, unless for good cause.anantakrishna aiyar, j.1. the parties to these cases before us are brothers. by an agreement, dated 31st october, 1926, the parties agreed to have their disputes relating to partition settled by three specified arbitrators. during the course of the arbitration proceedings one of the arbitrators died. one of the brothers filed o.s. no. 8 of 1929 on 22nd march, 1929, against his brother. the 1st defendant in o.s. no. 8 of 1929 applied under para. 18 of the second schedule of the code of civil procedure to have the suit stayed. the court held that the arbitration could go on with a fresh arbitrator that may be appointed by the court. the plaintiff in o.s. no. 8 of 1929 preferred an appeal against that order, and the learned district judge set aside that order, holding that the arbitration.....
Judgment:

Anantakrishna Aiyar, J.

1. The parties to these cases before us are brothers. By an agreement, dated 31st October, 1926, the parties agreed to have their disputes relating to partition settled by three specified arbitrators. During the course of the arbitration proceedings one of the arbitrators died. One of the brothers filed O.S. No. 8 of 1929 on 22nd March, 1929, against his brother. The 1st defendant in O.S. No. 8 of 1929 applied under para. 18 of the second Schedule of the Code of Civil Procedure to have the suit stayed. The Court held that the arbitration could go on with a fresh arbitrator that may be appointed by the Court. The plaintiff in O.S. No. 8 of 1929 preferred an appeal against that order, and the learned District Judge set aside that order, holding that the arbitration agreed to between the parties could not go on, as one of the arbitrators was dead, and as there was no provision in the agreement regarding the appointment of a substitute in the place of the arbitrator who is dead. Against the decision of the learned District Judge directing the suit to proceed, the 1st defendant has preferred Civil Revision Petition No. 1034 of 1930.

2. The 1st defendant in O.S. No. 8 of 1929 subsequently filed O.S. No. 27 of 1929 in August, 1929, for enforcing the arbitration after the appointment of a fresh arbitrator in the place of the deceased one. Having regard to the view taken by the learned District Judge in Civil Miscellaneous Appeal No. 19 of 1929 (which is the subject-matter of the revision petition before us already referred to), the learned Subordinate Judge dismissed the suit. Civil Miscellaneous Appeal No. 272 of 1930 has been filed by the plaintiff in O.S. No. 27 of 1929 against the decision of the learned Subordinate Judge in O.S. No. 27 of 1929.

3. The substantial question for decision in the two cases being the same, they were heard together in this Court.

4. The decision of the dispute between the parties turns on the construction of the particular agreement, dated 31st October, 1926, entered into by them, and on the proper meaning to be attached to paras. 17 to 19 of the second Schedule of the Civil Procedure Code.

5. From a perusal of the provisions contained in the second Schedule of the Civil Procedure Code, it seems to me, that when a suit is referred to arbitration when all parties interested agree to the same, the Court has got larger powers, in some respects, in order to complete and effectuate the matter of arbitration. Paragraph 1 of Schedule II enacts that where in a suit all the parties interested agree that any matter in difference between them shall be referred to arbitration they may at any time before the judgment is pronounced apply to the Court for an order of reference. The underlying idea conveyed by paragraph I of Schedule II is that the parties interested are anxious to have the suit settled by arbitration, and not by Court. The details regarding the personnel, etc., of the arbitration in such a case are all taken to be merely secondary and incidental to the matter, the main intention being settlement by arbitrators and not by Court. Seeing that the parties are entitled to apply, at any time in the course of the suit, even after the trial has been closed and the matter is pending judgment, to have the suit referred to arbitration, it seems reasonable that the attempt at arbitration should not prove futile and abortive simply because one of the arbitrators declined to act or one of the parties declined to appoint the arbitrator, or to proceed with the same. Settlement by arbitration being taken to be the dominant idea of the parties, the matter of details regarding appointment of arbitrators, etc., are left to be worked out by the Court in case parties do not agree. Of course if the parties agree as to the manner in which the arbitrators are to be appointed, the Court is bound to adopt that procedure (para. 2). The Court is entitled to make provisions for various matters referred to in paras. 4 and 5: where an arbitrator or an umpire dies, or where the parties cannot agree within a reasonable time with respect to the appointment of an arbitrator, or where the person appointed refuses to accept the office of the arbitrator or refuses to act, etc., provision is made for the Court to appoint an arbitrator after giving notice to the parties. In the case of reference to arbitration of matters |n a pending suit, therefore, there is no question of reference to specified arbitrators only, in the sense that if any such arbitrators decline to act or dies, the arbitration comes to an end.

6. Where, however, parties agree to refer their differences to arbitration, there being no proceedings in Court at that time, then, power is given to the parties to the agreement or to any of them to apply to the Court to have the agreement filed in Court; whereas in the case of a pending suit the consent of all the parties interested is necessary before the application could be made to the Court, for an order of reference. In the second class of cases mentioned above, such application may be made either by all the parties, to the agreement, if they join in the application or by any of them. In the latter case, notice should be issued to the other parties to the agreement to show cause why the; agreement should not be filed. When no sufficient cause is shown, the Court shall order the agreement to be filed, and shall make an order of reference to the arbitrator appointed in accordance with the provisions of the agreement; and it is only in cases where there are no such provisions and the parties cannot agree that the Court could appoint any arbitrator. Thus the provisions contained in the agreement regarding the arbitrators have to be followed and the Court is not entitled to go behind such provisions. This, it seems to me, is made clear by Clause (4), para. 17 of Schedule II. Paragraph 18 relating to stay of suit enacts that the Court should be satisfied that there is no sufficient reason why the matter should not be referred in accordance with the agreement to refer to arbitration before a suit filed after such agreement could be stayed. Paragraph 19 makes it clear that the provisions of Schedule II shall apply only so far as they are consistent with any agreement filed under para. 17. Thus, if the provisions of the second Schedule, Civil Procedure Code, are not consistent with the agreement of the parties, such provisions of the schedule shall not be applicable to such arbitration. In a case coming under paragraph 1 of the Schedule, the Court passes an order of reference to arbitration. In a case coming under paragraph 17 of the Schedule, the Court orders the agreement to be filed, and makes an order of reference to the arbitrator appointed in accordance with the provisions of the agreement, etc. The provisions of the agreement thus govern the, arbitration all through under para. 17, and the provisions contained in the second Schedule of the Code come in so far as they are consistent with the agreement filed under para 17; whereas under para. 1 of the Schedule, the agreement between the parties brings about the order of reference, the subsequent proceedings being left to Court, the Court being directed to respect the unanimous wish of the parties in certain respects only. It should also be noticed that agreements to refer to arbitration future differences also come within the scope of para. 17.

7. One can understand the reason for the difference in the policy underlying the distinction that exists in the two classes of cases mentioned above.

8. The question for construction of the particular agreement of the parties is one for the Court before which the question is raised. The Court should decide, after considering the terms of the agreement, whether any, and which, of the provisions in Schedule II, Civil Procedure Code, are consistent with the terms of the agreement.

9. In the case before us, the reference is to three specified persons. We are not able to gather that the main intention of the parties to the present cases was to have their disputes settled by arbitration in any event, and that the question of the personnel of the arbitrators was only a subsidiary and incidental matter. As I understand the agreement before us, it is a reference to three specified persons only, with a further provision that the award to be binding should be unanimous award of all the three.

10. In this view, seeing that one of the arbitrators in the present case died prior to the commencement of these proceedings in Court, I think that the present is not a case where the proceedings in the suit (O.S. No. 8 of 1929) should be stayed under para. 18 of the second Schedule, Civil Procedure Code, or where the agreement should be ordered to be filed or any order of reference made under para. 17, since the Court could not make an order of reference to the arbitrators appointed in accordance with the provisions of the agreement when one such arbitrators died prior to the commencement of proceedings in Court.

11. Coming to decided cases, it seems to me that the decision in Sadiq Hussain v. Nazir Begam (1911) L.R. 38 IndAp 181 : I.L.R. 33 A. 743 : 21 M.L.J. 1151 (P.C.) does not touch this exact point. It is a decision of the Privy Council, and if the question now before us has been decided directly or even indirectly by the Privy Council, then there would be an end to all discussion. But after having carefully read that decision, I am not able to say that their Lordships have expressed any opinion on the question now before us. All that was decided in that case is this, that the expression 'refusal to act' occurring in the Code includes also a case where an arbitrator never accepted the arbitration but refused to have anything to do with the arbitration, and it is not confined to the case of. an arbitrator accepting the arbitration but subsequently refusing to act. If I understand the facts of the case correctly, a decree already passed by Court on compromise was to be worked out by arbitrators who were to allot to the parties properties in a compact block if possible appertaining to their shares. There was reference to arbitration regarding proceedings in a matter of which the Court had seizin already, and which should be taken only through Court. Substantially there was an order of reference by Court. It is not a case coming under para. 17 of Schedule II.

12. The decision in Bala Pattabhirama Chetti v. Seetharama Chetti I.L.R. (1894) M. 498 decided that the words 'so far as they are consistent with any agreement so filed' occurring in Section 524 of the Code of 1882 corresponding to Rule 19 of Schedule II of the present Code do not mean that the agreement must contain in every case an express provision as to what ought to be done if any arbitrator is unwilling to act in order that a Judge may act in conformity to it. The learned Judges held that the reasonable construction of the said provision was that the action of the Judge under Section 510 should not be inconsistent with the agreement. A Bench of this Court in Ramayya v. Bapayya : (1926)51MLJ440 , on the other hand, laid down that the provisions of the schedule would apply only so far as they are consistent with the agreement filed under para. 17. In that case, one of the parties who referred their disputes to the arbitration of three named arbitrators applied to the Court under para. 17 (1) of Schedule II, Civil Procedure Code, to have the agreement filed in Court. This was done: but in making the order of reference under Sub-clause (4), the Court added a further direction that in case of disagreement among the arbitrators the opinion of the majority should prevail. The question arose whether the said direction was legal or not, as it was not consistent with the agreement which was construed to require the unanimous decision of all the three arbitrators (and not simply of a majority) in order that the award may be binding on the parties. The learned Judges held that the Court could not give any directions which are not consistent with the agreement to arbitration. The reasoning of this decision directly applies to the case before us, and the provisions of paras. 1 to 17 of Schedule II would apply only so far as they are consistent with the agreement filed under para. 17 of the Schedule. As we construe the agreement before us, the provisions of the 2nd Schedule are not consistent with the agreement, regarding the appointment of fresh arbitrators by Court. The agreement was to refer to the arbitration of three specified persons. There is no provision as to what is to happen in case if any of the. three died. In such a case, the Court has no jurisdiction to appoint an arbitrator in lieu of one who died, and consequently a suit filed by a party to the agreement should be tried by the Court. See Ramayya v. Bapayya : (1926)51MLJ440 and the English decisions referred to therein, and Jaitum Bi v. Nabi Saheb (1912) 24 M.L.J. 15.

13. The decision in Mohan Lal v. Damodar Das (1918) 44 I.C. 866, Ma Bu U v. Mating Pe Lan (1917) 42 I.C. 911 and Brooke v. Surdayal (1874) 12 Beng. L.R. App. 13 were also referred to as supporting the above view.

14. The decisions of the Allahabad High Court do not seem to be uniform--see Ahmad Nur Khan v. Abdur Rahman Khan I.L.R. (1919) A. 191, Bhagwan Das v. Gurdayal (1921) 19 A.L.J. 823 and Fazal Ilahi v. Prag Narain I.L.R. (1922) A. 523.

15. The only decision of the Bombay High Court to which our attention was drawn Laxman v. Manjunath I.L.R. (1921) B. 1181 supports the view I am inclined to take. There the agreement provided for arbitration by two specified persons. Subsequently one of the arbitrators expressed his unwillingness to act. A suit having been instituted by one of the parties, an application for stay of the suit was made to Court under para. 18 of the 2nd Schedule. The Lower Court having held that the suit was barred by the agreement to refer it to arbitration stayed the suit. The High Court reversed that order, being of opinion that the Lower Court should have removed the stay and decided the suit on its merits. Sir Norman Macleod, C.J. and Justice Shah observed as follows:

The other arbitrator stated that he refused to act as an arbitrator. A case, therefore, had arisen for an application to the Court to remove the stay of the suit if the parties did not come to an arrangement to remove the difficulties which had arisen, so as to enable the arbitration to proceed. Here the suit was stayed to enable the arbitration to proceed. Facts were proved to show that there were difficulties in the way of the arbitration proceedings. However, it is obvious that the Court ought to have proceeded to deal with the suit and decide it on its merits, as the arbitration had become impossible owing to the parties failing to agree to any particular course being followed after one arbitrator refused to act.

16. The High Court accordingly directed that the suit should not be stayed but tried by the Lower Court and disposed of in accordance with law. The case before us is substantially on all fours with the case before the Bombay High Court though the question is not discussed in that case.

17. The only decision of the Calcutta High Court to which our attention was drawn is that reported in Shasimukhi Debi v. Parbaty Sunkar Roy (1918) 50 I.C. 879 Facts are not fully clear from a perusal of the report, but so far as one could gather the Court would seem to have been of the opinion that the agreement of the parties should prevail in such cases. However, too much reliance could not be placed on this case for the reasons stated already.

18. The present is not a case, where one of the parties to the agreement revoked the agreement without just and sufficient cause, so the decisions reported in Pestonjee Nusserwanjee v. Manockjee & Co. (1868) 12 M.I.A. 112 and Perumalla, Satyanarayana v. Perumalla Venkatarangayya I.L.R. (1903) M. 112 : 13 M.L.J. 311 do not, in my view, apply. No doubt a mere arbitrary revocation by one party of the authority will not be permitted. Further, the death of the arbitrator in this case occurred before any proceedings were taken in Court, and before any order of reference was made by Court. The basis of the decision of the Privy Council in the case reported in Pestonjee Nusserwanjee v. Manockjee & Co. (1868) 12 M.I.A. 112 seems to be that the agreement of the parties in that case was taken really to incorporate the provisions of Section 326 also of the Civil Procedure Code relating to arbitration, though it expressly referred only to Section 327 of the Code (Act VIII of 1859).

19. In my view the balance of authority is in favour of the view that the provisions of paras. 1 to 16 of 2nd Schedule could not be applied to an arbitration outside Court, except in so far as they are consistent with the provisions of the agreement between the parties filed under para. 17.

20. We have already come to the conclusion that on a proper construction of the agreement before us, it is a reference to the arbitration of three specified persons. One of the said three specified persons having died, the Court could not refer the matter to the arbitrators as provided in the agreement of the parties; and the Court had no power itself to appoint an arbitrator in such a case in the place of the arbitrator who is dead. The suit filed by the other party to the agreement in the ordinary Civil Court could not in such a case be stayed under para. 18 of Schedule II, as the arbitration could not go on in the circumstances, as the parties declined to appoint an arbitrator in the place of the one who died.

21. We therefore uphold the order of the Lower Court for the reasons mentioned above, and dismiss the Revision Petition No. 1034 of 1930. For similar reasons the Miscellaneous Appeal No. 272 of 1930 will also be dismissed. We make no order as. to costs in these cases in the circumstances. C.M.P. No. 2485 of 1930 is dismissed.

Sundaram Chetty, J.

22. The appellant and the respondent are brothers. They executed an agreement (Muchilika), dated 31st October, 1926, in favour of three specified arbitrators, referring their disputes regarding the partition of their joint family properties to the arbitration of the said three persons, and agreeing to abide by their decision. The arbitration was proceeded with to some extent, but before its completion one of the arbitrators died. Thereupon, the respondent (Muthyala Ramachandrappa) filed O.S. No. 8 of 1929 for partition of the joint family properties, impleading his brother, the present appellant as the 1st defendant. In the course of that suit, the 1st defendant put in an application under para. 18 of Schedule II, Civil Procedure Code, for a stay of the suit. (I. A. No. 96 of 1929.) The learned Subordinate Judge passed an order on 13th August, 1929, directing the stay of the suit for a specified time. Against this order, an appeal was preferred by the present respondent (the plaintiff in the suit) and the learned District Judge set aside the order staying the suit, and dismissed the application, holding on the strength of the decision in Jaitum. Bi v. Nabi Saheb (1912) 24 M.L.J. 15 that the reference to arbitration became inoperative and of no effect on the death of one of the arbitrators, there being no provision in the agreement to appoint a substitute, if some such contingency should arise. Against this order, the present Civil Revision Petition has been filed. In view of this order of the learned District Judge, the application by 1st defendant under para. 17 of Schedule II, Civil Procedure Code, to have the agreement filed and a reference made to the arbitrators (which was numbered as a suit) was also dismissed by the Subordinate Judge. Against that order of dismissal, the 1st defendant has filed the present C.M.A. In both, the questions involved are substantially the same.

23. Exhibit I is the agreement to refer the disputes to the three arbitrators specified therein, for effecting the partition of the joint family properties. The parties agree to, abide by their decision. There is no provision in the muchilika for the appointment of substitutes, in case of death of any of them, or if any of them refuses to act. In this case, it is admitted that one of the arbitrators named in Exhibit I had died before the application wag made under para. 17 of Schedule II for an order that the agreement be filed in Court.

24. The question involved in both these cases is almost the same. In order to direct the stay of trial in O.S. No. 8 of 1929, under para. 18, the Court must be satisfied that there is no sufficient reason to decline to refer the matter in accordance with* the agreement (Ex. I) to refer to arbitration. With respect to the application under para. 17, if no sufficient cause is shown why the agreement should not be filed, the Court should order the agreement to be filed, and make an order of reference to the arbitrator or arbitrators appointed in accordance with the provisions of the agreement. Now that one of the arbitrators named in the agreement is dead, is the application under para. 17 for an order contemplated therein sustainable, and is the Court bound to make an order staying O.S. No. 8 of 1929?

25. Learned arguments have been addressed by the advocates on both sides and the difficulty of deciding this question is enhanced by the conflict of views expressed in judicial decisions. Before referring to those decisions, I wish to make a few observations. The Court's jurisdiction to order a reference to arbitration is derived from the agreement of the parties, and an order of reference has to be made by the Court in accordance with the provisions of the agreement, and, at any rate, it should not be inconsistent with the intention of the parties disclosed by the agreement on a proper construction of its terms. That being so, it seems to me, that one way of showing sufficient cause why the agreement should not be filed (within the meaning of para. 17) would be, that on account of the happening of a contingency, or an account of altered circumstances subsequent to the agreement, it would not be possible to the Court to make an order of reference in accordance with such intention. Where the agreement is to refer the matter to the decision of three named arbitrators, and one of them subsequently dies, if on an application by one party under para. 17, whew opposed by the other party, the Court, chooses to order the agreement to be filed and make an order of reference to the remaining two arbitrators, such a reference would not be in accordance with the provisions of the agreement. Until after the order of reference is made, the Court cannot apply para. 5 and exercise the power of appointing a new arbitrator in the place of the arbitrator who has died or refused to act. This is clear' from para. 19 of the 2nd Schedule which runs thus:

The foregoing provisions, so far as they are consistent with any agreement filed under para. 17, shall be applicable to all proceedings under the order of reference made by the Court under that paragraph, and to the award and to the decree following thereon.

26. The Court not having the power to appoint a new arbitrator in the place of the one who died or refused to act, before making the order of reference under para. 17, it must be taken that sufficient cause is shown for holding that an order of reference could not be made to the arbitrators appointed in accordance with the provisions of the agreement. (Vide Clause 4 of para. 17.) It must also be noted that there is no provision in Ex. I for the appointment of new arbitrators in case of death or refusal to act of one or other of the arbitrators specified therein. If what I have stated above is the correct view, on a strict interpretation of the provisions of paras. 17, 18 and 19 of the 2nd Schedule, the order of the learned District Judge refusing to stay the suit, and the order of the learned Sub-Judge, dismissing the application put in under para. 17, must be taken to be correct.

27. A number of decisions relied on by the learned advocate for the respondent go to support the view I have taken. In the case in Deutsche Springstoff Actien Gesellschaft v. Briscoe (1887) L.K. 20 Q.B.D. 177 the agreement was to refer the matter to two named arbitrators or their umpire. It was held that if there was no subsisting agreement to refer capable of being carried into effect, the proceedings in the suit could not be stayed under Section 11 of the Common Law Procedure Act, 1854. This principle was followed by a Division Bench of this Court in Jaitum Bi v. Nabi Saheb (1912) 24 M.L.J. 15. The agreement in that case was to refer the matter to three named arbitrators, without any provision in the muchilika for the appointment of new arbitrators in their place. Two of them having declined to arbitrate, it was held that the agreement ceased to be operative and therefore did not bar the suit. In a recent decision in Ramayya v. Bapayya : (1926)51MLJ440 the learned Judges have construed an agreement to refer the matter to three named arbitrators (similar to Ex. I) as implying an intention to be bound by the decision of all the three and not merely of a majority, and in this view it was held that the Court had no power to order tinder para. 4 that the parties should abide by the decision of the majority, because according to para. 19 the provisions of paras. 4 and 5 could be applied only so far as they are consistent with the agreement filed. If, according to the construction of the agreement adopted in the aforesaid decision, the parties wanted to abide by the decision of all the three specified arbitrators, any reference made by the Court to two of them only or after substituting a new arbitrator in the place of one who subsequently died, would not be valid, as it would not be consistent with the provisions of the agreement.

28. The contention of the respondent is lent support by the decisions of some other Courts also. The case in Brooke v. Surdayal (1874) 12 Beng. L.R. App. 13 was decided under the old Code (Act VIII of 1859). Two points were decided. One is that the power of appointing a new arbitrator in the place of one who refused to act could not be exercised under Section 319 before making the order of reference. The other is, that by reason of one of the arbitrators named in the agreement having refused to act, the agreement to refer to arbitration as intended by the parties no longer subsists so as to enable the Court to direct that it should be filed. (Vide also Ma Bu U v. Maung Pe Lan (1917) 42 I.C. 911. In another case decided by the Punjab Chief Court, an agreement to refer to five named arbitrators (without any provision for substituting fresh arbitrators) was held to be inoperative by the death of two of them, before the application was made for filing the agreement in Court. This was regarded as a sufficient reason for refusing to file the agreement under para. 17 (Mohan Lal v. Damodar Das (1918) 44 I.C. 866). The same view has been expressed by the Lahore High Court in Sri Ram v. Sorabji (1919) 51 I.C. 636. But in that case there was a distinct provision in the agreement itself that in case of resignation or death of any arbitrator named therein, another may be appointed in his place. In the case reported in Ahmad Nur Khan v. Abdur Rahman Khan I.L.R. (1919) A. 191 the application under para. 17 for an order that the agreement be filed was dismissed, as the arbitrator refused to act for some reason.

29. On behalf of the appellant, some decisions were relied on as supporting his contention. Two of them are the decisions of the Allahabad High Court. In the case reported in Bhagwan Das v. Gurdayal (1921) 19 A.L.J. 823, one of the three named arbitrators is .alleged to have declined to act. Then one of the parties filed an application under para. 17 to have the agreement filed and a reference made. The learned Judges seem to concede that the Court has no power to utilise the provisions of para. 5, where no order of reference has been made under para. 17. But the fact of one of the three arbitrators refusing to act is taken to be no bar to the Court passing an order under para. 17. It is observed, that an order of reference should be made under para. 17, to pave the way for the next step which is the appointment of another arbitrator. But it seems to me that such an order of reference (more clearly in the case of death of one of the arbitrators), cannot be deemed to be warranted by Clause (4) of para. 17 if its terms are strictly construed. The view taken in the above case has been fully endorsed in the decision in Fazal Ilahi v. Prag Narain I.L.R. (1922) A. 523. Reliance has been placed on the decision of the Privy Council in Sadiq Husain v. Nazir Begam (1911) L.R. 38 LA. 181 : I.L.R. 33 A. 743 : 21 M.L.J. 1151 (P.C.). If the facts in that case are carefully considered, it would appear that the agreement of the parties to refer the matter of settling and allocating the shares, etc., to two arbitrators was the razinamah petition filed in Court on which a decree was passed. This itself amounts to the Court having filed the agreement. Then, one of the arbitrators declined to act. It was held that the Court should have appointed another arbitrator under Section 510 of the old Civil Procedure Code (Act XIV of 1882). That was not strictly a case of an application for the filing of the agreement in Court after one of the arbitrators had refused to act. This decision of the Privy Council does not really help the appellant's contention in the present case. There remains the decision in Bala Pattabhirama Chetti v. Seetharama Chetti I.L.R. (1894) M. 498. It turned mainly on the construction of the words 'so far as they are consistent with any agreement so filed' occurring in Section 524 of the old Civil Procedure Code (corresponding to para. 19 of the 2nd Schedule of the present Code). According to the view taken in that case, Section 524 should be read as if it contained the words 'in the absence of anything in the agreement to the contrary,' but a different view has been taken in the matter of construing a similar agreement with reference to para. 19 of the 2nd Schedule in the later decision of this High Court in Ramayya v. Bapayya : (1926)51MLJ440 .

30. As regards the construction of the agreement (Ex. I) reliance has been placed on the decision of the Privy Council in Pestonjee Nusserwanjee v. Manockjee & Co. (1868) 12 M.I.A. 112. In that case, their Lordships had to deal with the jurisdiction of the Court under Section 326 of the old Code (Act VIII of 1859) to direct an agreement of parties to arbitration to be made a rule of Court. It was held that no party to the agreement can revoke the submission to such arbitration, unless for good cause. In construing that agreement, their Lordships have remarked, that the submission to the arbitration must be deemed to be under and subject to the sections contained in the Code relative to the subject, unless the provisions of the Code were expressly excepted by the parties to the agreement. (Vide p. 130.) The view taken in Bala Pattabhirama Chetti v. Seetharama Chetti I.L.R. (1894) M. 498 is in accordance with this principle. Section 326 referred to in the judgment of the Privy Council corresponds to paras. 17 and 19 of the 2nd Schedule to the present Code. Adopting the rule of construction of the agreement as laid down by the Privy Council, the parties to Ex. I should be deemed to have agreed to abide by the provisions of paras. 17 and 19, inasmuch as there is no express provision in the agreement indicating that these provisions were excepted by the parties. Taking this agreement to be subject to the provisions of para. 19, the Court can exercise the power of appointing a fresh arbitrator in the place of the deceased arbitrator under para. 5, only after the order of reference has been made under para. 17. There is no provision in para. 17 empowering the Court to make such an appointment before the agreement is made a rule of Court and an order of reference is actually made. Thus it is clear, that even on the construction of the agreement in this case, in the aforesaid manner, the Court cannot fill up the vacancy, by appointing a substitute, before ordering the agreement to be filed.

31. The next question is, whether under para. 17 the Court can order the agreement to be filed, in spite of the death of one of the three arbitrators named therein, and make an order of reference to the two surviving arbitrators alone. Would this be in accordance with what is laid down in Clause (4) of para. 17? The words in this clause 'and shall make an order of reference to the arbitrator appointed in accordance with the provisions of the agreement or, if there is no such provision and the parties cannot agree, the Court may appoint an arbitrator' indicate to my mind, that when the agreement is to refer the matter to a named arbitrator, or named arbitrators, the Court shall make an order of reference to such arbitrator or arbitrators, but where the agreement has not named the arbitrators, it should be taken that there is no such provision in the agreement as to limit the appointment to a specified person or persons, in which case the Court itself may appoint an arbitrator or arbitrators, if the parties cannot agree as. to the personnel, and then make an order of reference. That this is so would be clearer from the corresponding clause in Section 523 of the previous Code, viz., 'and shall make an order of reference thereon, and may also nominate the arbitrator when he is not named therein and the parties cannot agree as to the nomination.'

32. The position in the present case, in view of the terms of Ex. I, comes to this. The Court cannot make an order of reference to two out of the three named arbitrators in Ex. I, for such an order would not be in accordance with the provisions of the agreement (within the meaning of Clause (4) of para. 17). Nor has the Court power to appoint a fresh arbitrator in the place of the deceased man, unless an order of reference has been made under para. 17. When the Court is thus unable to order the agreement to be filed and make an order of reference under Clause (4) of para. 17, the application made under this paragraph has to be dismissed.

33. The preponderance of authority is in favour of the contention put forward by the respondent. I have to state with due respect that the view expressed in the two decisions of the Allahabad High Court relied on by the appellant is one I am unable to accept as the provisions of paras. 17, 18 and 19 of the 2nd Schedule have to be strictly complied with.

34. For these reasons, I agree with my learned brother, in dismissing the C.M.A. and the C.R.P. As to costs, 1 agree with the order made by him.


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