1. This is an appeal by the first defendant in a suit for recovery of possession of land on establishment of title by purchase. The case for the plaintiff is that the property belonged to second defendant who conveyed it to her on the 29th September 1916 pursuant to an agreement made eight days earlier. The case for the first defendant is that the claim is unfounded, inasmuch as he had become entitled to the property by virtue of an award made on the 24th September 1916 in an arbitration proceeding between himself and his brother, the second defendant. The Court of first instance held that the plaintiff had acquired no valid title by her purchase from the second defendant and dismissed the suit as against the first defendant. The Court, however, made a decree for Rs. 175 against the second defendant who, it was found, had obtained that sum from the plaintiff as consideration for the conveyance. Upon appeal, the Subordinate Judge has held that the title to the property was vested in the first two defendants, and that the plaintiff had consequently acquired a good title to one-half share of the property. On this basis a decree has been made in favour of the plaintiffs for one half share of the property and also for mesne profits.
2. On the present appeal, the first defendant has contended that the conveyance executed by the second defendant in favour of the plaintiffs could not transfer a good title to the property inasmuch as the vendor had no title thereto. We are of opinion that this contention is well-founded.
3. It appears that on the 9th September 1916, the first two defendants made a reference to arbitration in respect of this property. On the 24th September 1916 the arbitrator made his award whereby this property was declared to be the property of the first defendant alone. One he 29th September 1916, that is, after the award had been made; the second defendant conveyed the property to the plaintiff on the basis of the alleged agreement made eight days earlier. The first defendant thereafter applied to the Court to make a decree in accordance with the award. That proceeding was instituted only against the second defendant who was a party to the arbitration proceedings. The consequence was that a decree was made on the 16th December 1916. On these facts it has been urged that, as this decree was made long after the conveyance, the title of the plaintiff was not affected thereby. In our opinion this view is manifestly erroneous.
4. The effect of the award of the arbitrator, was to vest the title to the property in the first defendant. From that date the second defendant could not set up a claim to that property. The consequence was that on the date when the second defendant purported to transfer interest in the property to the plaintiff he had no interest to convey. The effect of an award was considered by the Judicial Committee in the case of Muhammad Newaz Khan v. Alam Khan 18 C. 414 : 18 I.A. 73 : 15 Ind. Jur. 284 : 6 Sar. P.C.J. 26 : 70 P.R. (1891) : 9 Ind. Dec. (N.S.) 270 (P.C.) In that case A and B had referred certain matter in difference between them to X. X made his award in favour of A. A made an application under Section 525 of the Code of 1882 to file the award and it was dismissed. B then brought a suit to recover the property which had formed the subject-matter of arbitration. A set up the award in answer to the claim. The Judicial Committee held that the award was valid and was binding upon B; and that, although the application under Section 525 was refused, that merely left the award to have its ordinary legal validity. It could not be successfully contended that an award was not valid because the party in whose favour it was had never applied to have it filed in Court. The refusal to file an award or of an application made to do so would not have the effect that the award could never be relied upon in any suit relating to the subject-matter dealt with by it. The Judicial Committee then examined the grounds upon which the validity of the award was sought to be impeached and found them to be unsustainable, with the consequence that the plaintiff, who had asked for recovery of the property in contravention of the title created by the award, failed. It was pointed out by this Court in the case of Bhajuhan Saha Banikya v. Behary Lal Basak 33 C. 881 : 4 C.L.J. 162 that this decision of the Judicial Committee dearly shows that, if an award is valid, it is operative, even though neither party has sought to enforce it by a regular suit or by the summary procedure. This conclusion 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. The award is in fact a final adjudication by 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 binding. The position consequently is that on the 24th September 1916, the title of the second defendant, if any, to the property in suit was extinguished' and under the award the property vested finally in the first defendant. The result follows that the plaintiff did not acquire any title to the property by her conveyance taken from the second defendant. In the present suit, no grounds have been made out to establish the invalidity of the award. We hold accordingly that the plaintiff has failed to make out her alleged title to the property.
5. The result is that this appeal is allowed, the decree of the Court of Appeal below set aside and that of the Court of first instance restored with costs both here and in the lower Appellate Court.