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Tallapragada Suryanaraina Row Vs. Tallapragada Sarabaya - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in9Ind.Cas.173
AppellantTallapragada Suryanaraina Row
RespondentTallapragada Sarabaya
Cases ReferredGhulam Khan v. Muhammad Hassan
Excerpt:
civil procedure code (act xiv of 1882), sections 510, 520, 521, 532 and 523 - agreement to refer to arbitration--consent of arbitrators not taken--refusal of some arbitrators to act--appointment by court of new arbitrators--award passed by old and new arbitrators--decree in accordance with award--invalid award--appeal. - .....matters have reached the stage of judgment according to the award.3. the question came before the privy council in ghulam khan v. muhamad hassan 29 c. 167 : 29 i.a. 51. in that case their lordships observed: those words (the words in section 522 limiting the right of appeal) appear to be perfectly clear. their lordships would be doing violence to the plain language and the obvious intention of the code, if they were to hold that an appeal lies from a decree pronounced under section 522, except in so far as the decree may be in excess of, or not in accordance with, the award. the principle of finality which finds expression in the code is quite in accordance with the tendency of modern decisions in this country. the time has long gone by since the courts of this country showed any.....
Judgment:

Arnold White, C.J.

1. The question referred to us appears to assume that an award made in the circumstances stated in the question would not be a valid award. In the course of the argument the question was raised whether, under the provisions of the Code of Civil Procedure, an award made in the circumstances stated would not be valid notwithstanding the refusal of two of the arbitrators nominated by the parties to act, and the fact that the Court had appointed arbitrators in the place of those who had refused to act without the parties desiring' (see Section 507 of the Code of Civil Procedure of 1882) that the nomination of fresh arbitrators should be made by the Court. As to this I am not prepared to dissent from the view taken by this Court in Pugardin v. Moidin 6 M. 414 and Bala Pattabirama Chetti v. Seetharama Chetti 17 M. 498 and by the Allahabad High Court in Fayaz-ud-din v. Amir-ud-din 6 A.L.J. 351 : 1 Ind. Cas and in Bepin Behary Chowdry v. Annoda Prosad Mullick 18 C. 324. In his judgment in the Allahabad case, Stanley, C.J., refers to the statement of the law in Russel on Arbitration, (see Edition 9, page 92) that the acceptance of the office by an arbitrator seems necessary to perfect the appointment. But the question of course is, not whether the original appointment of arbitrators who refuse to act was good, but whether an award given in the circumstances stated in the question is a good award. I share the doubts expressed by Banerji, J., in the Allahabad case, but, as I have said, I am not prepared to dissent from the cases to which I have referred. Accordingly, I deal with the case on the footing that the award was bad.

2. The general right of appeal which would otherwise exist from a decree given in pursuance of an award is expressly cut down by Section 522, which provides that no appeal shall lie from a decree following a judgment under that section except in so far as it is in excess of, or not in accordance with, the award. There is thus a double limitation--a limitation as to the ground of appeal and a limitation as to the extent of the scope of the appeal where an appeal lies. Even when the decree is in excess of the award, there is only an appeal, against so much of the decree as is in excess of the award. The intention of the Legislature seems to be clear that where there is a reference to arbitration and an award, if the Court sees no cause to remit the award, and there is no application to set aside the award, or an application to set aside the award has been refused, that the validity of the award cannot be impugned. The grounds on which an award may be remitted are set out in Section 520. It seems clear that under this section an alleged defect in the tribunal which gave the award is no ground for remitting it. It also seems clear that this is no ground for setting aside the award under Section 521. As I read the provisions of the old Code, it Seems to me that if there was no appeal under Section 522 on the ground that there was no award in law, there were no means of impugning an award (except where there is an application to file an award under Section 526) on the ground that the award was bad in law. This being so, one would be disposed, if possible, to construe Section 522 so as to supply these means. This, in effect, in the numerous decisions to which we have been referred, is what the Courts in this country have done. They Have held that award in Section 522 means a good award; but the very object of Section 522 seems to have been to prevent that question being raised when matters have reached the stage of judgment according to the award.

3. The question came before the Privy Council in Ghulam Khan v. Muhamad Hassan 29 C. 167 : 29 I.A. 51. In that case their Lordships observed: Those words (the words in Section 522 limiting the right of appeal) appear to be perfectly clear. Their Lordships would be doing violence to the plain language and the obvious intention of the Code, if they were to hold that an appeal lies from a decree pronounced under Section 522, except in so far as the decree may be in excess of, or not in accordance with, the award. The principle of finality which finds expression in the Code is quite in accordance with the tendency of modern decisions in this country. The time has long gone by since the Courts of this country showed any disposition to sit as a Court of appeal on awards in respect of matters of fact or in respect of matters of law. In the earlier Privy-Council case, Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar 13 A. 300 : 18 I.A. 55, the award was made after the period allowed by the Court had expired. The Privy Council held that an appeal lay from a decree in pursuance of the award. Section 521 expressly provides that no award shall be valid unless made within the period allowed by the Court. In that case the tribunal which made the award was functus officio when the award was made and the award was invalid by the express enactment of the legislature. That seems to me to be a different case from the present where the award is sought to be impugned by way of appeal from a decree given under Section 522 on the ground that certain of the arbitrators were appointed by an order which the Court had no jurisdiction to make. In any case, we are governed by the later decision. In Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar 13 A. 300 : 18 I.A. 55 the Privy Council no doubt express their entire approval of the judgment of the Allahabad High Court in Chuha Mal v. Hari Ram 8 A. 548 and in that judgment the Allahabad Judges made the general observation that as the award was invalid the decree was not a decree in accordance with an award from which no appeal lies. But it seems to me the observation by the Allahabad Judges and the approval of their judgment by the Privy Council must be read with reference to the facts of the case in the Allahabad High Court, and not as a pronouncement that in all cases where an award is bad in law there is a right of appeal notwithstanding the express limitation on the right of appeal contained in Section 522.

4. The numerous authorities are collected and discussed in the order of reference. I do not propose to go through them. With all respect to the learned Judges who have taken the view which is suggested by Krishnaswami Aiyar, J., as the right view in the order of reference, in my opinion, the question is governed by the decision of the Privy Council in Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 51, and I do not think we could hold that there is a right of appeal in the circumstances related in the order of reference without doing violence to the express language of Section 522.

5. I think the case Kanakku Nagalinga Naik v. Nagalinga Naik 32 M. 510 : 6 M.L.T. 176 : 4 Ind. Cas. 871 : 19 M.L.J. 480 was rightly decided and I would answer the question, which has been referred, in the negative.

6. It is satisfactory to note that the difficulties which have given rise to this order of reference have been removed by the new Code.

Krishnaswami Aiyar, J.

7. I have had the advantage of reading the judgment of the learned Chief Justice. I entirely agree with him that no reason has been shown for reconsidering the decision in Pugardin v. Moidin 6 M. 414 followed in Bala Pattabirama Chetti v. Seetharama Chetti 17 M. 498 and Bepin Behary Chowdhury v. Annoda Prosad Mullick 18 C. 324. Section 507, which speaks of the arbitrator refusing to accept the arbitration and requires the Court to nominate a fresh arbitrator only when the parties desire that this nomination shall be made by the Court, contrasted with Section 510, which enables the Court in its discretion, when the arbitrator named by the parties dies or refuses or neglects or becomes incapable to act, either to appoint a new arbitrator or to make an order superseding the arbitration, leaves no room for doubt as to the correctness of the decision in Pugardin v. Moidin 6 M. 414. It follows upon the facts stated in my referring judgment that the award in this case was invalid, not having been made by the tribunal constituted in accordance with the agreement of the parties.

8. The question, however, remains whether a decree having been made in accordance with the award, an appeal, lies from the decree except in so far as it is in excess of, or not in accordance with, the award. In my order of reference, I overlooked the fact that Section 522 had no application to a case where the award was remitted for re-consideration and it became void on the refusal of the arbitrators to re-consider it. A decree passed in accordance with an award which has so become void is not a decree under Section 522 and the limitation contained in it of the right of appeal has no application. But the difficulty remains with reference to a decree passed in accordance with an award invalid under the last clause of Section 521 by reason of its not having been made within the time allowed by law. In such a case there could be no application to set aside the award, as it could not fall within clauses a, b, or c, of Section 521. It can hardly be contended that Section 522 Clause 1 deals only with cases to which Section 520 and clauses a, b and c of Section 521 in terms apply. If it be so limited, the cases of no submission, of no award in law and of awards bad for any irregularity in, this reference, would lie outside Section 522 and the decrees passed in accordance with the award in such cases would he appealable without reference to the limitation contained in the last clause of Section 522. If no application has, as a matter of fact, been made to set aside the award as in Raja Har Narain Singh v. Chaudrain Bhagwant Kuar 13 A. 300 : 18 I.A. 55, whether the case be one in which there is scope for such an application or not, or if the Court has refused an application to set aside the award, Section 522 seems to be applicable. It would, no doubt, be an unmeaning formality for the Court to wait until the period prescribed by Article 158 of the Limitation Act has expired as provided by the second Clause of Section 522, if no application would lie under Section 521. This is perhaps a strong argument in favour of the view that the case of an invalid award under the last clause of Section 521 is not intended to be dealt with by Section 522. I feel bound to hold that the decision of the Privy Council in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar 13 A. 300 : 18 I.A. 55, is unaffected by the later decision of the same tribunal in Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 51. I think it unnecessary to repeat the reasons far this conclusion which I have already given in the order of reference. I may add, however, that the judgment of the Privy Council in Hansraj v. Sundar Lal and Hansraj v. Duarka Das 35 C. 648 : 10 Bom. L.R. 581 : 12 C.W.N. 585 : 7 C.L.J. 520 : 138 P.L.R. 1908 : 18 M.L.J. 266 : 99 P.W.R. 1908 : 14 Bur. L.R. 146 : 80 P.R. 1908, contains no word of disapproval of doubt with reference to the decision in Raja Har Narain Singh v. Chaudhrain Bhagwant Kuar 13 A. 300 : 18 I.A. 55, treated as perfectly good law in the judgment of the Chief Court of the Punjab in the case of Hansraj v. Ganga Ram 88 P.R. 1902 : 119 P.L.R. 1902 from which the appeal came to the Privy Council. Whatever difficulty there may be in reconciling the decision of the Privy Council in Raja Har Narain Singh v. Chaudrain Rhagwant Kuar 13 A. 300 : 18 I.A. 55 with their Lordships' view as to the meaning of the last clause of Section 522, there appears to be no doubt as to their interpretation of that class as applied to cases of arbitration in pending suits. It appears to be their Lordships' conclusion that, if the first two clauses of Section 522 are complied with, the decree passed in accordance with the award is final except as provided in the last clause. It is perhaps a matter for regret that in their exposition of the law in Ghulam Khan v. Muhummed Hassan 29 C. 167 : 29 I.A. 51, there is no word dealing with the practically unanimous decisions of the Indian High Courts See Husananna v. Linganna 18 M. 423; Amrit Ram v. Dasrat Ram 17 A. 21; Kali Prosanno Ghose v. Rajani Kant Chatterjee 25 C. 141; Mahomed Wahid-ud-Din v. Hakiman 25 C. 757 and Nandaram Daluram v. Newchand Jadavchand 17 B. 357 which held that there was a right of appeal though the decree was in accordance with the award, if there was no submission or there was no award in fact or in law. I am, however, satisfied that the ratio decidendi of their Lordships in Ghulam Khan v. Muhammad Hassan 29 C. 167 : 29 I.A. 51 in cases of awards in pending suits, was that the language of the clause of Section 522 limited the right of appeal. As regards the other cases of application to file a submission under Section 523, or to file an award under Section 525, the judgment of the Privy Council is clear that the order filing the agreement or the award or refusing to file it is a decree and appealable under -section 540 without reference to anything in Section 522. If after such filing of the agreement or award and in the first case after the award is delivered, no objection is allowed under Section 520 or 521 and a decree is made in pursuance of the award. It would seem to follow that the last clause of Section 522 applies as a matter of course. It is unnecessary to consider other difficulties under Sections 525 and 526 as to whether it would be competent to the Court to entertain objections not mentioned in Section 520 or 521. All that we are now required to decide is whether after the decree in accordance with the award, an appeal may be entertained except in so far as the decree is in excess of, or not in accordance with, the award. I agree, though with some hesitation, in the conclusion arrived at by the learned Chief Justice.

Ayling, J.

9. I concur in the view taken by the learned Chief Justice, and in the answer proposed by him.


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