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R. Krishnasami Naidu Vs. Pavayee and ors. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtChennai High Court
Decided On
Reported in(1982)2MLJ47
AppellantR. Krishnasami Naidu
RespondentPavayee and ors.
Cases ReferredSatisk Kumar v. Surinder Kumar
Excerpt:
- - it is well-settled that as a general rule, all claims which are the subject-matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award......persons had acted as arbitrators and given an award under exhibit b-2 and in terms of the award, the wall shown as bd has to be treated as a common wall by both parties and the first respondent is entitled to insert beams, rafters, etc., in the said wall and that both parties should execute a document in terms of the award and exercise rights over the common wall accordingly.3. the trial court accepted the case of the appellant and decreed the suit as prayed for. on appeal, by the first respondent, in a.s. no. 201 of 1976 on the file of the sub-court, salem, the second additional subordinate judge held that the first respondent had title to the disputed portion of land in bcd, but inasmuch as the parties had referred the matter to arbitration and the arbitrator had rendered an.....
Judgment:

S. Natarajan, J.

1. The plaintiff, who succeeded before the trial Court, but lost before the lower appellate Court, is the appellant. Admittedly, the plaintiff is the owner of a house property comprised within the limits of the portion marked as ABDE in the plaint plan. It is also in evidence that the construction faces east and the roof also slopes towards east. In the wall running between B and D, there are no doorways or windows. The first respondent is admittedly the owner of the land situate west of the line DC. The dispute relates to the small triangular portion of land shown as BCD in the plaint plan and marked green. The appellant claimed that he had title; to the property under the sale deed in his favour and he was also in possession and enjoyment of the disputed strip of land. Even so, the first respondent, who is a recent purchaser of the property on the western, side, attempted to encroach upon the strip of land in BCD and put her western wall in such close proximity as to touch the wall along BD. The appellant objected to the proposed construction, but in spite of it, when the appellant was absent from town for a day or two, the first respondent made bold to extend her construction upto the wall along BD. Hence the appellant came forward with the suit, O.S. No. 2283 of 1974 on the file of the trial Court for obtaining the reliefs of declaration of title, injunction and mandatory injunction. Respondents 2 and 3 were impleaded as parties on the ground that they had actively help-' ed the first respondent to put up the unauthorised construction.

2. The first respondent contested the suit and averred that as per her title deeds she was entitled to the disputed portion of land and it was actually the appellant who had committed encroachment and built his wall along BD beyond the limits of his property. The further contention of the first respondent was that both parties had referred the matter to arbitration and as many as thirty-four persons had acted as arbitrators and given an award under Exhibit B-2 and in terms of the award, the wall shown as BD has to be treated as a common wall by both parties and the first respondent is entitled to insert beams, rafters, etc., in the said wall and that both parties should execute a document in terms of the award and exercise rights over the common wall accordingly.

3. The trial Court accepted the case of the appellant and decreed the suit as prayed for. On appeal, by the first respondent, in A.S. No. 201 of 1976 on the file of the Sub-Court, Salem, the Second Additional Subordinate Judge held that the first respondent had title to the disputed portion of land in BCD, but inasmuch as the parties had referred the matter to arbitration and the arbitrator had rendered an award, the appellant was not entitled to go back on the award and file an action on the original cause of action. In that view of the matter, the lower appellate Court allowed the appeal and dismissed the suit filed by the appellant. It is against the said judgment and decree the plaintiff-appellant has preferred this appeal.

4. Since title to the disputed portion of land has been found in the appellant by both the Courts, the only question that falls for consideration in the appeal is whether the lower appellate Court was right in holding that the appellant is bound by the terms of the award, Exhibit B-2, and is estopped from filing the suit for claiming the reliefs of declaration of title, injunction and mandatory injunction.

5. On behalf of the appellant, it was argued that Exhibit B-2 is an unregistered award and as such, the lower appellate Court ought not to have placed reliance on the document. The further contention was that, in any event, the award is of no value since it had not been filed into Court and made a decree of Court under Sections 14 and 17 of the Indian Arbitration Act (hereinafter referred to as the Act). In support of such a contention, the learned Counsel for the appellant cited the following authorities : Mohamed Yousuf Levai Saheb v. Hajee Mohamed Hussain : AIR1964Mad1 , Valliammal v. Saroja : AIR1979Mad151 , and Sardool Singh v. Hari Singh and Ors. I.L.R. (1967) 1 Punj.&Har.; 622. In these cases, the ratio laid down is that an award made on a reference out of Court, but which had not been filed into Court in accordance with the Act and judgment obtained thereon, cannot ordinarily be put up as a defence to an action on the original cause of action.

6. Arguing contra, learned Counsel for the first respondent referred to the decision of the Supreme Court in Satish Kumar v. Surinder Kumar : [1969]2SCR244 , wherein the Court referred to an unreported decision of its in Uttam Singh Dugal and Co. v. Union of India C.A. No. 162 of 1962 dated 11th October, 1962, and affirmed the ratio laid down therein which is to the effect that an award will amount to a final adjudication of a Court of the parties' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, the award will be conclusive upon the merits of the controversy. The relevant passage in the reported decision (4) runs as follows:

The true legal position in regard to the effect of an award is not in disputes. It is well-settled that as a general rule, all claims which are the subject-matter of a reference to arbitration merge in the award which is pronounced in the proceedings before the arbitrator and that after an award has been pronounced, the rights and liabilities of the parties in respect of the said claims can be determined only on the basis of the said award. After an award is pronounced, no action can be started on the original claim which had been the subject-matter of the reference. As has been observed by Mookerjee, J., in the case of Bhajahari Saha Banikya v. Behary Lal Basak ILR(1906) Cal. 881 , 'the award is, in fact, a final adjudication of a Court of the parties' own choice, and until impeached upon sufficient grounds in an appropriate proceeding, an award, which is on the face of it regular, is conclusive upon the merits of the controversy submitted, unless possibly the parties have intended that the award shall not be final and conclusive,...in reality, an award possesses all the elements of vitality, even though it has not been formally enforced, and it may be relied upon in a litigation between the parties relating to the same subject-matter. This conclusion, according to the learned Judge, is based upon the elementary principle that, as between the parties and their privies, an award is entitled to that respect which is due to the judgment of a Court of last resort. Therefore, if the award which has been pronounced between the parties has, in fact or can, in law, be deemed to have dealt with the present dispute, the second reference would be incompetent. This position also has not been and cannot be seriously disputed...

This judgment is binding on us. In our opinion this judgment lays down that the position under the Act is in no way different from what it was before the Act came into force, and that an award has some legal force and is not a mere waste paper. If the award in question is not a mere waste paper but has some legal effect it plainly purports to or affects property within the meaning of Section 17(1)(b) of the Registration Act.

7. Yet another decision cited by the first respondent's counsel in Kedar Nath v. Ambika Prasad : AIR1974All37 . In that case a Division Bench of the Allahabad High Court noticed the view taken in a number of cases to the effect that an award, if it is not made a rule of the Court, has no efficacy and cannot be used as a defence to a suit. The cases mentioned are as follows : Sait Pamandass Sugnaram v. T.S. Manikyam Pillai : AIR1960AP59 ; Kapgal Konda Gireanna v. Kapgal Konda Basappa A.I.R. 1964 Mys. 238; Rambilas Mahto v. Babu Durga Bijai Prasad Singh : AIR1965Pat239 Chandrabhaga Sadasiv v. Bhikackand Hansaji : AIR1959Bom549 and Ram Sahai v. Babulal : AIR1965All217 . Even so, the bench held that 'it is not necessary now for us to express any opinion on the correctness or otherwise of the views taken in these cases, for we are of the view that the matter stands settled by a decision of the Supreme Court in the case of Satish Kumar v. Surinder Kumar : [1969]2SCR244 , Eventually, the Bench rendered judgment as follows : We must, therefore, as a consequence of the pronouncement of the Supreme Court in the case of Satisk Kumar v. Surinder Kumar : [1969]2SCR244 , hold that an arbitration award, even though not made a rule of the Court, can be set up as a defence to a suit, for, to hold otherwise, as has been seen, would be to treat the award as a mere waste paper, which is not the correct view to take.

8. I am in respectful agreement with the view taken in the abovesaid case. In view of the pronouncement of the Supreme Court in Satisk Kumar v. Surinder Kumar : [1969]2SCR244 , the rights of the appellant and the first respondent have to be determined in accordance with the terms of the award, Exhibit B-2, and the technical plea raised by the appellant that since the award has not been registered and filed in Court and made a rule of the Court, the first respondent cannot place reliance on it, cannot be legally countenanced. Consequently, the judgment of the learned Subordinate Judge has to be sustained. The appeal will, therefore, stand dismissed, but the parties will bear their respective costs.


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