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Jirijanath Roy Chowdhury and ors. Vs. Kanai Lal Mitra and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in43Ind.Cas.169
AppellantJirijanath Roy Chowdhury and ors.
RespondentKanai Lal Mitra and ors.
Cases ReferredSee Raja Har Narain Singh v. Chaudarain Bhagwant Kuar
Excerpt:
civil procedure code (act v of 1908), schedule ii, para 1, clause (1) - arbitration--reference by some of the parties to suit, validity of--award, whether valid against parties referring--appeal--objection taken in appeal, maintainability of--jurisdiction. - .....the statute is there and the judges were bound to take judicial notice of it.' see raja har narain singh v. chaudarain bhagwant kuar 18 i.a. 55 : 13 a. 300 : 6 sar. p.c.j. 14 : 15 ind. jur. 283 : 7 ind. dec. (n.s.) 189.7. having regard to the fact that the objection relates to the jurisdiction of the court to make the reference, and that the reference is altogether invalid, we are constrained to give effect to it. the decree of the court below upon the award based upon the invalid reference is accordingly set aside, and the case sent back to that court for trial. but the whole costs of the litigation subsequent to the submission of the award have been thrown away by reason of the omission of the plaintiffs to take the objection in the court below. in these circumstances the.....
Judgment:

N.R. Chatterjea, J.

1. This appeal arises out of a suit for accounts brought by the plaintiffs against the defendant No. 1, who was a gomasta of the plaintiffs, and the other defendants (defendants Nos. 2 to 7) who as sureties of the defendant No. 1 had executed a security bond. The suit was originally filed in the Munsif's Court on the 10th May 1912, being valued at Rs. 900. Subsequently the valuation was raised to Rs. 6,438 and the plaint was taken back from that Court and filed in the Court of the Subordinate Judge on the 16th June 1913.

2. Only the defendants Nos. 2 and 3 appeared and filed a written statement in the suit and on the 30th June 1914 an application was made for referring the matter in dispute to the arbitration of one Amrita Lal Hazra. The Court accordingly referred the matter to the arbitrator, and the latter submitted his award on the 17th August 1914, by which he held that the defendants were liable for Rs. 753-9-6 only. The plaintiffs took objections to the award on various grounds, the main ground being that the arbitrator gave the plaintiff's man to understand that after making his own enquiries the latter would be given an opportunity of proving his case, but that he gave his award without giving the plaintiffs such opportunity.w The defendant No. 1, however, denied this in his affidavit, and the Court below overruled the objection holding that the plaintiffs were not misled by the arbitrator, and there being no ground for setting aside the award gave judgment in conformity with it, and the suit was accordingly decreed for Rs. 753-9-6 against the defendants.

3. Upon these facts there is no appeal against the decree based upon the award, but it is contended before us that all the defendants not having joined in the reference to arbitration, the arbitration is wholly invalid. It appears that some of the defendants viz., defendants Nos. 4 to 7, did not appear in the suit at all and the petition to the Court below to refer the case to arbitration was not signed by them or by any Pleader on their behalf. Now Clause 1, paragraph 1, of the Second Schedule of the Civil Procedure Code provides that 'where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may at any time before judgment is pronounced apply to the Court for an order of reference.' It is essentially necessary therefore that all the parties interested must agree before any reference can be made. It is true that the defendants Nos. 4 to 7 did not appear in the suit, but the seventh issue in the case was 'did the other defendants (Nos. 2 to 7) at any time act as am-mukhtears or agents and as such were liable to the plaintiffs', and the decision of the arbitrator was that although they did not act as am-mukhtears and could not, therefore, be held liable as such, they had executed the security bond and were liable as sureties. The arbitrator accordingly made an award against all the defendants for Rs. 753 9-6 and the Court below has made a decree for that sum against all the defendants. It cannot, therefore, be said that the defendants Nos. 4 to 7 are not 'persons interested' in the suit.

4. There has been considerable divergence of opinion upon the question whether an award under such circumstances is invalid only as regards those who did not join in the reference, or is invalid even against those who joined in it. The former view was taken in the earlier decisions of this Court, but in Parsidh Narain Singh v. Ghanshyam, Narain Singh 9 C.W.N. 873 it was held (without reference to the earlier cases) that the award was invalid in its entirety. In a later case, Lal Mohan Pal v. Surya Kumar Das 11 C.W.N. 1152, again the earlier view was taken, though one of the learned Judges was a party to the decision in Parsidh Narain's case 9 C.W.N. 873.

5. In the Allahabad High Court judicial opinion on the point has varied considerably from time to time. In the most recent case, however, in our Court, Dooly Chand v. Mamuji Musaji 41 Ind. Cas. 259 : 25 C.L.J. 339 : 21 C.W.N. 387, the learned Judges were of opinion that the decision in the case of Parsidh Narain Singh v. Ghanshyam, Narain Singh 9 C.W.N. 873 was correct. The learned Chief Justice held that 'if all the parties interested do not agree, then the Court has no jurisdiction to make the order of reference, and the order of reference is invalid not only against those who have not agreed but also against those who have agreed.' Mookerjee, J., referred to the decisions on the point and held that 'the entire foundation of the jurisdiction is removed as soon as it is established that the parties had failed to comply with the fundamental requirement of the Statute embodied in the first paragraph of the Second Schedule of the Civil Procedure Code.' Having regard to the terms of the section, which lays down that 'all the parties interested' must agree in the reference, and to what was said by the Judicial Committee in Ghulam Khan v. Muhammad Hassan 29 C. 167 : 6 C.W.N. 626 : 29 I.A. 51 : 12 M.L J. 77 : 4 Bom. L.R. 161 : 8 Sar. P.C.J. 154 : 25 P.R. 1902 (P.C.), viz., that 'the agreement to refer and the application to the Court founded upon it must have the concurrence of all parties concerned,' we agree with the view taken by the learned Chief Justice and Mookeerjee, J.

6. In the present case the objection is taken not by the defendants Nos. 4 to 7 but by the plaintiffs. But had the objection been taken even by the defendants Nos. 2 and 3, we would have had to give effect to it having regard to Dooly Chand's case 41 Ind. Cas. 259, and we do not see how we can refuse to entertain the objection because it is raised by the plaintiffs. The objection was not taken in the Court below, nor taken specifically in the grounds of appeal to this Court, probably because the case of Dooly Chand v. Mamuji Musaji 41 Ind. Cas. 259 had not then teen decided, the only ground taken on the point being that the award was illegal and unenforceable. But au objection to the validity of an award made in contravention of the provisions of the last paragraph of Section 521 of the old Civil Procedure Code (Act XIV of 1682) was allowed, though raised for the first time before the Privy Council, Lord Morris observing, 'This objection was apparently not brought to the notice either of the Subordinate Judge or of the High Court. But the Statute is there and the Judges were bound to take judicial notice of it.' See Raja Har Narain Singh v. Chaudarain Bhagwant Kuar 18 I.A. 55 : 13 A. 300 : 6 Sar. P.C.J. 14 : 15 Ind. Jur. 283 : 7 Ind. Dec. (N.S.) 189.

7. Having regard to the fact that the objection relates to the jurisdiction of the Court to make the reference, and that the reference is altogether invalid, we are constrained to give effect to it. The decree of the Court below upon the award based upon the invalid reference is accordingly set aside, and the case sent back to that Court for trial. But the whole costs of the litigation subsequent to the submission of the award have been thrown away by reason of the omission of the plaintiffs to take the objection in the Court below. In these circumstances the plaintiffs-appellants must pay the costs of the respondents of this appeal and the costs in respect of Pleader's fee incurred by them in the lower Court. All other costs in the Court below will abide the result.

8. The records will be sent down without delay and we rust the Court below will take up the case as early as possible.

Walmsley, J.

9. I agree.


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