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Kali Prosanno Ghose Vs. Rajani Kant Chatterjee and anr. - Court Judgment

LegalCrystal Citation
SubjectArbitration
CourtKolkata
Decided On
Judge
Reported in(1898)ILR25Cal141
AppellantKali Prosanno Ghose
RespondentRajani Kant Chatterjee and anr.
Cases ReferredHar Narain Singh v. Chaudhrani Bhagioant Kuar
Excerpt:
appeal - arbitration--validity of award--judgment in accordance with an award--code of civil procedure (act xiv of 1882), sections 521 and 522. - .....application to set aside the award, and decided practically in favour of the plaintiff and made a decree in accordance with the award. the defendants, dissatisfied with the ruling of the subordinate judge, presented, an appeal to the district judge. upon the matter coming before the district judge objection was taken by the plaintiff, the then respondent, that, having regard to the last sentence of section 522 of the code of civil procedure, no appeal lay from the decree of the subordinate judge. those words are these: 'no appeal shall lie from such a decree except in so far as the decree is in excess of, or not in accordance with, the award.' the plaintiff contends that those words mean that inasmuch as in this case the decree is not in excess of, but in accordance with, the award, no.....
Judgment:

Maclean, C.J.

1. In this case there was a litigation between the plaintiff and the defendants. The matter was referred to arbitration. The questions submitted to arbitration were inquired into by the arbitrator, who made his award. The defendants objected to that award, and applied to have it set aside. The matter came before the Subordinate Judge who heard the parties and rejected the application to set aside the award, and decided practically in favour of the plaintiff and made a decree in accordance with the award. The defendants, dissatisfied with the ruling of the Subordinate Judge, presented, an appeal to the District Judge. Upon the matter coming before the District Judge objection was taken by the plaintiff, the then respondent, that, having regard to the last sentence of Section 522 of the Code of Civil Procedure, no appeal lay from the decree of the Subordinate Judge. Those words are these: 'No appeal shall lie from such a decree except in so far as the decree is in excess of, or not in accordance with, the award.' The plaintiff contends that those words mean that inasmuch as in this case the decree is not in excess of, but in accordance with, the award, no appeal can lie. But on the other hand the defendants contend that the award there spoken of must be taken to be an award which has been regularly and properly arrived at by the arbitrator who has been appointed arbitrator; in other words it must be a valid and legal award.

2. In my opinion the contention of the defendants upon this point is sound. The matter has been practically dealt with in various cases. It is sufficient if refer to the case of Joy Prokash Lall v. Shoo Golam Singh (1885) I.L.R. 11 Cal. 37 where it was held that the question under Section 522 of the Code of Civil Procedure whether an appeal will lie against a decree in accordance with the award depends upon whether the award upon which the decree is based is a valid and legal award. There are several other cases which have bfien referred to in the course of the argument, cases not only in this Court, but in the High Courts of Madras and Allahabad, which appear to me consistent with the view laid down in the case which I have just cited. It appears to me that, if one were to hold the contrary view, the result would be rather startling. It is not difficult to conceive eases, in which the award maybe obviously invalid, and where the Judge of First Instance, either through misapprehension of the facts, or of the law, has yet made a decree affirming the award. In these cases is there to be no appeal? I think there ought to be, and I concur in those decisions which lay down that there is In my opinion, therefore, an appeal does lie.

That being so, we have to consider the second point, namely, whether assuming that an appeal lies, the District Judge was correct in his opinion that the award was not valid or binding upon the plaintiff. In my opinion it was not binding upon him, and I base that conclusion upon one fact, and one fact alone, in the case. It is admitted that the arbitrator in this case was the retained pleader of the plaintiff. It is proved that the defendants were not aware of that most important fact until after the proceedings had terminated before the Subordinate Judge. It is equally clear that the fact was not disclosed to the defendants. What then is the position of matters? You have a gentleman appointed as arbitrator who had been admittedly retained as the pleader of the plaintff; you have the fact that there is no disclosure of that fact made by the plaintiff or by the arbitrator himself, to the defendant, and that the defendant goes to arbitration in ignorance of that fact. To my mind that circumstance alone is sufficient to justify the Court in holding that the award is not valid and binding upon the defendant. In cases of arbitration where a person is appointed by two parties to exercise judicial duties there should be uberrima fides on the part of all the parties concerned in relation to his selection and appointment, and every disclosure, which might in the least affect the minds of those who are proposing to submit their dispute to the arbitrament of any particular individual, as regards his selection and fitness for the post, ought to be made, so that each party may have every opportunity of considering whether the reference to arbitration to that particular individual should or should not be made. In my opinion, there was such concealment in this case oaths part of the plaintiff as to vitiate the a Ward, under the provisions of Section 521 of the Code: and holding that view, and that there was a right of appeal, the appeal must be dismissed with costs.

Banerjee, J.

1. I am of the same opinion. The question raised before us is, whether an appeal lay to the Lower Appellate Court. The learned Vakil for the appellant contends that as the decree of the first Court was made in accordance with the award of an arbitrator, an appeal from that decree was barred by Section 522 of the Code of Civil Procedure. That section, no doubt, provides that where judgment is given according to the award pronounced by an arbitrator, ' 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.' But these words have been held in a series of cases in this Court, and in the High Courts of Allahabad and Madras, to refer to a decree made in accordance with a legal and a valid award. See the cases of Dabendra Nath Saw v. Aubhoy Churn Bagchi (1883) I.L.R. 9 Cal. 905; Joy Prokash Lall v. Sheo Golam Singh (1885) I.L.R. 11 Cal. 37: Bindessuri Per shad Singh v. Jankee Pershad Singh (1889) I.L.R. 16 Cal. 482, Luohman Das v. Brij Pal (1884) I.L.R. 6 All 174 and Venkayya v. Venkatappayya (1892) I.L.R. 15 Mad. 348. If it were necessary to refer to any reason in support of a view which is so amply supported by authority, I should say that it would be unreasonable to hold that the Legislature intended to make a decree final on the ground of its being in accordance with an award when the validity of the award itself is called in question. What the Legislature meant to declare to be final was the decree, supposing the award to be unassailable on the ground of illegality or invalidity for any of the reasons referred to in Section 521 of the Code of Civil Procedure, such as corruption or misconduct on the part of the arbitrator, or fraudulent conduct on the part of either party. But though the correctness of the award, and therefore of the decree based upon it, may not be open to question by appeal, it does not follow that the validity of the award, and the decision of the Court touching the objections to the same as contemplated by Section 521 are intended to be matters beyond question by appeal. It is difficult to suppose that a decision upon such grave and important matters was intended to be final when orders upon comparatively less important matters, such as those referred to in Section 518, are made appealable by Section 588, clause 26.

2. It was argued by the learned Vakil for the appellant that the decisions, which I have referred to above, are intended to apply only to cases where an award was a nullity as distinguished from cases in which the award was liable to be set aside upon some one or other of the grounds mentioned in clauses (a), (b) and (c) of Section 521. I am unable to appreciate the force of this argument. If, as was admitted in the argument, and as has been held by the Privy Council in Har Narain Singh v. Chaudhrani Bhagioant Kuar (1891)1.L.R. 13 All 300: L. R. 18 I. A. 55 an award that is made after the expiry of the period allowed by the Court is an invalid award, and a nullity, as provided by the last paragraph of Section 521, it is difficult to see why an award which is made in contravention of an order superseding the arbitration, as contemplated by clause (c) of Section 521, should be regarded as being of a different character, so far as the present question is concerned, or why an award which a party has succeeded in obtaining by fraudulent concealment of facts should be viewed in a different light. Then, as regards the question, whether in the present case the award Was really valid or not, I do not think it necessary to say anything in addition to what has bteen said in the judgment of the learned Chief Justice.

3. The award here, upon the facts found, was clearly invalid under clauses (a) and (b) of Section 521 of the Code of Civil Procedure.

4. For these reasons I think that the award in the case was invalid, and that, therefore, an appeal lay to the Lower Appellate Court.


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