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Janokey Nath Guha Vs. Brojo Lal Guha - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKolkata
Decided On
Judge
Reported in(1906)ILR33Cal757
AppellantJanokey Nath Guha
RespondentBrojo Lal Guha
Cases ReferredGhulam Khan v. Muhammad Hassan
Excerpt:
award - arbitration without the intervention of the court--order directing it to be filed--judgment and decree thereon--appealability of the order--revision--civil procedure code (act xiv of 1882) sections 522, 525, 526 and 622. - .....an award made on a reference to arbitration in a suit. 'were it otherwise, a party who has got an award filed under section 526 would be in a better position than in the case of an award made on a reference in a suit. such order is to be absolutely final, and the party against whom the award is made is deprived of the possible advantages afforded him by sections 518 and 519. a decree under section 522 can only be passed, when certain conditions have been fulfilled : there are no such conditions in section 526. i think, that when an award has been ordered to be filed under section 526, the party, in whose favour it is, must proceed to obtain a judgment and consequent decree under section 522, and if that decree is according to the award, then there is no appeal from it. but until there.....
Judgment:

Francis W. Maclean, K.C.I.E., C.J.

1. The question submitted is 'Does an appeal lie from an order passed under Section 526 of the Code directing the filing of an award made on a submission to arbitration without the intervention of a Court of Justice?

2. The answer depends upon the construction of Sections 526 and 522 of the Code of Civil Procedure.

3. It is clear upon the authorities that prima facie an appeal does lie from such an order: see the Full Bench case in this Court of Mahomed Wahiduddin v. Hakiman (1898) I.L.R. 25 Calc. 757, the Full Bench case in the Madras High Court of Ponnusami Mudali v. Mandi Sundara Mudali (1903) I.L.R. 27 Mad. 255, and the following observations of the Judicial Committee in the case of Ghulam Khan v. Muhammad Hassan (1901) I.L.R, 29 Cale. 167, 183: 'In cases falling under Heads II and III, the provisions relating to cases under Head I are to be observed so far as applicable. But there is this difference, which does not seem to have been always kept in view in the Courts in India. In cases falling under Head I the agreement to refer and the application to the Court founded upon it must have the concurrence of all parties concerned, and the actual reference is the order of the Court. So that no question can arise as to the regularity of the proceedings up to that point. In cases falling under Heads II and III proceedings described as a suit and registered as such must be taken in order to Bring the matter--the agreement to refer or the award as the case may be--under the cognizance of the Court. That is or may be a litigious proceeding--cause may be shown against the application--and it would seem that the order made thereon is a decree within the meaning of that expression, as defined in the Civil Procedure Code.'

4. If a 'decree' within the definition in the Code, it is prima facie appealable. There is no suggestion in that passage of the judgment of the Privy Council that an order under Section 526 is barred under Section 522; and it must be remembered that the Court was dealing with the case of the finality of a decree upon an award under Section 522.

5. It is said that the cases only deal with orders under Section 526 refusing, and not ordering, the filing of the award. But the result of the decision cannot affect the appealability of the order, unless we find, as we sometimes do, in the Code, an express bar against an appeal in a certain class of orders. Is any such express bar to be found in the case of an order directing a filing of the award under Section 526 It is contended that it is to be found in Section 522. But the only decree from which an appeal does not lie under that section is a decree according to the award; any decree in excess of, or not in accordance with, the award, is appealable. How can it be said that an order under Section 526 merely directing an award to be filed is a decree according to the award within the meaning of Section 522? In the present case the only order is that the award be filed. On the face of this order what is there to show whether 'the decree is in excess of, or not in accordance with, the award?' How could such an order be enforced in execution, as contemplated by Section 522? There is nothing in the language of Section 526 to support the contention that an order made under that section is tantamount to a decree under Section 522. The language is directly against such view. The section says: 'and such award shall then take effect as an award made under the provisions of this Chapter.' The section does not say the order shall have the effect of a decree under Section 522, which one would naturally have expected, if the appellant's contention is to prevail. It says nothing as to the effect of the order, but only as to the result of the award. These words mean that, when an order directing the filing of the award has been made, the award shall stand in the same position as if it had been an award made through the intervention of the Court, or perhaps it would be more accurate to say an award made on a reference to arbitration in a suit. 'Were it otherwise, a party who has got an award filed under Section 526 would be in a better position than in the case of an award made on a reference in a suit. Such order is to be absolutely final, and the party against whom the award is made is deprived of the possible advantages afforded him by Sections 518 and 519. A decree under Section 522 can only be passed, when certain conditions have been fulfilled : there are no such conditions in Section 526. I think, that when an award has been ordered to be filed under Section 526, the party, in whose favour it is, must proceed to obtain a judgment and consequent decree under Section 522, and if that decree is according to the award, then there is no appeal from it. But until there is such a decree, how, as I have pointed out, can it be determined whether it is in excess of, or not in accordance with, the award : and what is there to execute? I am unable to accept the view that a mere order under Section 526 is a decree in accordance with the award under Section 522, and the appellant must substantiate this before he can succeed. No doubt the object of the section is to insure finality in these matters. Nothing I have said contravenes this principle.

6. I am glad to find this view is supported by my predecessor, Sir Comer Petheram, and Mr. Justice Ghose in the case of Surjan Raot v. Bhikari Raot (1893) I.L.R. 21 Calc. 213. Sir Comer Petheram says (at page 220) speaking of proceedings under Sections 525 and 526: 'If no such cause is shown against the award, it is to be filed and shall then take effect as an award under the provisions of Chapter XXXVII of the Code, that is to say, it takes effect as an award upon which judgment must be given, and upon which judgment a decree must follow in the suit which was, I think, for reasons which I will presently mention, commenced by the petition to file the award, which petition, by virtue of Section 525, takes the position of the plaint, by which a suit is to be commenced ': whilst Mr. Justice Ghose says at page 229-' Section 526 of the Code provides that when any person interested in a' private' award is desirous of enforcing it, he may apply to the Court of the lowest grade having jurisdiction over the matter to which the award relates, that the award be filed in Court. The application, when presented, shall be numbered and registered as a suit between the applicant as plaintiff and the other parties as defendants; and the Court shall then call upon the opposite party to show cause, why the award should not be filed. Section 526 provides that, if no ground, such as is mentioned in section 520 or 521, be shown against the award, the Court shall order it to be filed; and such award shall then take effect as an award made under the provisions of Chapter XXXVII, i.e. an award made through the intervention of the Court. On turning to section 522, which relates to such an award, we find it laid down that, if the award is accepted, judgment shall be given in accordance therewith, and upon the judgment so given a decree shall follow. When, therefore, section 526 provides that the award shall take effect as a decree, I take it that judgment shall be passed by the Court, and a decree shall follow as in section 522. When such a decree is made, the same limitation as to appeal, as applies to decrees made upon awards through the intervention of the Court, equally applies to it. In this view of the matter the proceedings taken upon the application, which is registered as a suit, may rightly be regarded as proceedings taken in the suit.'

7. In my opinion the question ought to be answered in the affirmative.

8. In the case of Chinta Money Aditya v. Haladhur Maiti (1905) 10 C.W.N. 601, a decree in the terms of the award was drawn up: it was substantially a decree in accordance with Section 522.

9. No useful object can be attained by discussing the question whether, if there were no appeal from the decision of the Munsiff, the present appeal lies as, if no such appeal lies, we could and should interfere under section 622 of the Code of Civil Procedure.

10. In the result the order of the Lower Appellate Court is discharged and that of the Munsiff restored. Each party will pay their own costs in this Court and in that of the Lower-Appellate Court.

Ghose, J.

11. I wish the question referred to the Full Bench was not so limited in terms as it has been put before us, and that the question had reference to the particular case, which gave rise to the Reference. The question as put is this: 'Does an appeal lie from an order passed under Section 526 of the Code directing the filing of an award made on a submission to arbitration without the intervention of a Court of Justice?' It would have been better, if some words to the following effect were added at the end of the question; namely, 'when the objection raised is one such as is mentioned or referred to in Sections 520 or 521 of the Code and when such order is followed up by a formal decree directing the award to be filed.' If, however, I were to answer the question as put, I should say that I agree with the learned Chief Justice in holding that an appeal does lie from a bare order made by the Court 'that the award be filed,' and when he says that 'when an award has been ordered to be filed under Section 526, the party in whose favour it is must proceed to obtain a judgment and consequent decree under Section 522, and if that decree is according to the award, then there is no appeal: from it.'

12. Section 526 of the Code declares that 'if no ground' such, as is mentioned or referred to in Section 520 or Section 521, be shown against the award, the Court shall order it to be filed, and such award shall then take effect as an award made under the provisions of this Chapter.' And on turning back to Section 22, which by implication is made applicable to cases falling under Section 526, we find that it provides that, if the Court when it sees no cause to remit the award or any of the matters referred to arbitration for reconsideration in the manner aforesaid, and if no application is made to set aside the award, or if the Court has refused such application, it shall give judgment in accordance with the award and, upon the judgment so given, a decree shall follow and shall be enforced in the manner provided by the Code for the execution of decrees, and that no appeal shall lie from such decree except in so far as the decree is in excess of or not in accordance with the award. Reading these two sections together, there can be no doubt, I think, that a judgment is to be given by the Court, and upon such judgment a decree shall follow. And that is precisely the view, which I expressed in the case of Surjan Raot v. Bhikari Raot (1893) I.L.R. 21 Calc. 213, which has been quoted by my Lord in his judgment. But then the question is whether the conditions prescribed in these two sections were substantially complied with in this case. We find that, upon the application that was made by the plaintiff under Section 525 of the Code, certain objections were preferred by the defendant--objections falling under Section 520 of the Code--and they were discussed by the Court in the judgment that it pronounced, and the Court, being of opinion that there was no ground made out why the decision of the arbitrators should not be given effect to, ordered that the award be filed in Court. In accordance with this judgment, a formal decree was drawn up. That decree was, however, not in exact accordance with the directions contained in Section 522 of the Code, and it was in the following words: 'It is ordered that the arbitrator's award in this case be filed in Court: the costs of this Court to be borne by the plaintiff and the three defendants in equal shares.' The question here arises whether this decree is substantially a decree as contemplated by Section 526 read with Section 522 of the Code. I am of opinion that it is. What the decree really means is that the plaintiff is entitled to and do recover the reliefs awarded to him by the arbitrator. Beading the decree in this wise, it is obvious that it is capable of execution : and I may add that, in the Mofussil Courts, decrees upon private awards are often made in the form adopted in this case, and no difficulty, so far as I am aware, has ever been experienced in the matter of the execution of such decrees. The Judicial Committee of the Privy Council, in the case of Ghulam Khan v. Muhammad Hassan (1901) I.L.R. 29 Calc. 187, 183, as I read the judgment, treats the cases falling under heads (2) and (3), or rather the awards made in such cases, as of the same finality as awards made through the intervention of the Court, and if that is so, it seems to me that when a decree is made such as is contemplated by Section 526 read with Section 522 of the Code, it becomes a decree of the same finality as a decree made under Section 522. No doubt, in regard to an order, or rather a decree, made under Section 526 there is no specific provision in the Code barring an appeal against it, but still, if Section 522 is by implication applicable to Section 526, the same result must follow in regard to appeals as in the case of a decree made upon an award obtained through the intervention of the Court. An order refusing to file an award is a decree within the meaning of the Code of Civil Procedure, as has been held by the Judicial Committee, and, as such, it is appealable. As I understand, it is appealable not because every decree made under the Code is appealable, but because such a decree is not a decree in accordance with the award, but rather in spite of it, or rather contrary thereto. The two Full Bench cases, one of this Court and the other of the Madras High Court, Mahomed Wahiduddin v. Hakiman (1898) I.L.R. 25 Calc. 757, and Ponnusami Mudali v. Mandi Sundara Mudali (1903) I.L.R. 27 Mad. 255, respectively, do not, as I understand them, lay down anything more than that an order, determining that there was no reference to arbitration, and rejecting the application made under Section 525 of the Code, is a decree within the meaning of Section 2 of the Code, and as such appealable. They hardly help us in determining the question now raised.

13. For these reasons, I should answer the question referred to the Full Bench by saying that a bare order passed by the Court under Section 526 directing the filing of an award is appealable, but that, when a decree has been pronounced by the Court affirming the award, it is not appealable.

14. The Reference before us has been made in a second appeal, and under the Rules of this Court we have to deal with the appeal itself. It seems to me that, if no appeal could be entertained against the decree of the Court of First Instance affirming the award, and there was no question as to the validity of the award itself, the Court of appeal below had no authority in entertaining the appeal and reversing the decree of the first Court. The decree of the Appellate Court is either appealable to this Court, it being a decree as contemplated by Section 684 of the Code, or it is such that we are at liberty to interfere with under the revisional powers conferred on this Court by Section 622 of the Code, The question whether we should interfere with such a decree as a Court of appeal or under our revisional powers is to my mind rather academical, for in either view of the matter I am of opinion that the decree of the Court of appeal below should be set aside and that of the Court of First Instance restored.

Rampini, J.

15. I would answer the question propounded for our decision by the referring Judges by saying that an appeal lies from an order passed under Section 520 of the Code of Civil Procedure refusing to file an award made on a submission to arbitration without the intervention of a Court, but that no appeal lies from an order directing such an award to be filed except in the cases specified in Section 522, i.e. when the decree is in excess of or is not in accordance with the award. I believe such is the effect of the words in the conclusion of Section 526, viz. 'such award shall then take effect as an award made under the provisions of this Chapter'--one of the effects of such an award being that it is final except in the cases above mentioned. It is unnecessary, I think, for me to allude to the mimerous rulings on the subject. They are discussed in great detail in the judgment of Stephen and Mookerjee JJ., in Chinta Money Aditya v. Haladhur Maiti (1905) 10 C.W.N. 601, in which I for the most part agree. I fully concur with these learned Judges in the view they take of the meaning and effect of the decision of their Lordships of the Privy Council in the case of Ghulam Khan v. Muhammad Hassan (1901) I.L.R. 29 Calc. 167. In this case, their Lordships to my mind most significantly observe: '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.

16. In the case out of which this Reference arises, there was, as pointed out by my learned brother Ghose, a formal decree drawn up. It is true that in the judgment it is merely said: 'ordered that the award be filed in Court.' These words were repeated in the formal decree, in which the terms of the award were not set forth. But this is in accordance with the loose practice that prevails in District Courts, and the decree is, in my opinion, to be interpreted as incorporating the terms of the award. Hence I think no appeal lay to the District Judge and he had no jurisdiction to refuse to direct the award to be filed. The question may then arise 'does a second appeal lie to us?' And it has been urged that, as the District Judge has exercised a jurisdiction, which was not vested in him, the appellant's proper remedy was by an application to this Court under Section 622. But it seems unnecessary to deal with this question at any length. If a second appeal lies we should allow the appeal; if no second appeal lies, then we can set aside the order of the Court below under the authority vested in us by Section 622 of the Code of Civil Procedure.

17. I would, therefore, set aside the decree of the District Judge and restore that of the Court of First Instance.

Sale, J.

18. I agree in the answer which the Chief Justice proposes to give in this Reference.

19. In my opinion the observations of the Judicial Committee of the Privy Council in the case of Ghulam Khan v. Muhammad Hassan (1901) I.L.R. 29 Calc. 167, 133 clearly indicate that an order made under Section 526 of the Code to file an award is a decree within the meaning of the definition contained in the Civil Procedure Code, and as such. primd, facie is appealable.

20. If this be the effect of Section 526 upon a true construction of the section, has the right of appeal thus given been restricted or abolished or otherwise affected by any of the sections of the Code either expressly or by necessary implication? It is said that Section 522, if read with Section 526, has the effect of barring the appeal. In my opinion it is a forced and, therefore, erroneous construction of the section, which leads to this conclusion.

21. Section 526 provides that, on certain conditions being fulfilled, the Court shall direct the award to be filed, and the award, when filed, shall take effect as an award made under the provisions of the Code. It is necessary to turn to Section 522 to determine what is the effect given to an award made under the provisions of the Code, or, in other words, made in pursuance of a reference by the Court. The effect prescribed by Section 522 is that it is to be 'enforced in manner provided in this Code for the execution of a decree.' Beading Sections 526 and 522 together, it is clear that the effect to be given to an award, which is ordered to be filed under Section 526 of the Code is, that it is to be enforced in the same way as a decree. The language of Section 526 does not justify anything more of the provisions of Section 522 being imported into Section 526 than is sufficient to explain the effect to be given to an award made under the Code--or in other words--to show how it is to be enforced.

22. If this is the right view of the sections read together it follows that no decree expressly incorporating the terms of the award is required to be drawn up in pursuance of the order to file the award made under Section 526, nor is the clause restricting the right of appeal in the case of a decree made under Section 522 applicable to an order to file an award made under Section 526.

23. This construction of Sections 526 and 522 has long prevailed on the Original Side of the Court, as is shown by the practice in drawing up orders to file awards and the mode in which such orders have been enforced by execution under the provisions of the Code. No decree other than the order to file the award has been drawn up ever since the time the practice was be settled by Mr. Justice 'Wilson, and the terms of the award have been enforced, when necessary, by application on tabular statement, just as if the terms of the award were the terms of a decree of the Court. A similar practice has prevailed since the Indian Arbitration Act came into force in 1899. Section 15 of that Act takes the place of Section 526 of the Code, so far as the Original Side of this Court is concerned, and it provides that the award, when filed, shall be enforced as if it were a decree of the Court.

24. It was the practice of the Court on its Original Side, before the passing of the Arbitration Act, to treat an award, when filed, as if it were a decree of the Court. This practice received legislative sanction by Section 15 of the Act, and the same practice has accordingly been continued and is now in force.

25. A similar practice obtains in the English Courts under the Arbitration Act of 1889 (52 & 53 Vic. c. 49). Under the provisions of that Act no decree is drawn up other than the order to file the award--the award being annexed to the formal order--and the award is enforced by means of an originating summons upon which the applicant obtains an order for leave to enforce the award in the same manner as a judgment or order to the same effect (see Russell on Awards, 8th edition, pp. 342 and 438).

26. This leave is in substance provided by Section 526 of the Code and Section 15 of the Indian Arbitration Act, and no further application for obtaining leave is, therefore, required by the law and practice in force in this country. The order to file the award, which is the subject-matter of the present Reference, would seem to be right in form having regard to the provisions of Section 526. The award may be executed under the provisions of the Code as if it were the terms of a decree made by the Court, and it is unaffected by the clause restricting the right of appeal contained in Section 522 of the Code.

Pratt, J.

27. I agree with Mr. Justice Rampini.


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