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Amar Chand Chamaria Vs. Banwari Lall Rakshit and ors. - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported inAIR1922Cal404,69Ind.Cas.808
AppellantAmar Chand Chamaria
RespondentBanwari Lall Rakshit and ors.
Cases ReferredManilal Motilal v. Gopaldas Rowji
Excerpt:
arbitration pending suit without intervention of court - informal award, if can be enforced as adjustment--civil procedure code (act v of 1908), section 89, order xxiii, rule 3. - .....last mentioned, because in that case the court went bask upon the previous decision that order xxiii rule 3 could not in such a case as this be employed. the court held the previous decision to the effect to be erroneous, holding that, on ordinary principles of the law of contract, the award was an adjustment and came within the meaning of order xxiii, rule 3. it was considered further that, under that order, either by directing an issue or otherwise, as might be neceesary, the validity of a disputed award might be gone into and the award enforced, if valid. it was further held that this might be done, if necessary, in a separate suit. i desire to adhere to my opinion in the dekari tea co.'s case 61 ind. cas. 919 : 25 c.w.n. 127 and say that, in my judgment, the judgment of mr......
Judgment:

Rankin, J.

1. This is an application on behalf of the plaintiffs in the Suit No. 820 of 1920 to have filed of record in this suit a certain award dated the 1st day of August 1921.

2. There are three defendants who are sued by name as carrying on a certain kind of business at No. 27, Darpanarain Tagore Street in Calcutta.

3. The applicants' case is that there was an informal agreement of reference t6 arbitration of all the disputes in this suit made between the parties in or about Jane 1921. He says also that the arbitrators have made their award, which would appear to be dated 1st August 1921.

4. The original drafting of the notice of motion would lead one to suppose that the provisions of Order XXII, Rule 3 of the Civil Procedure Code were not in the mind of the draftsman. However that may be, learned Counsel for the applicant rests his case entirely upon Order XXIII, Rule 3. He asks me to record the award as being an adjustment by lawful agreement or compromise within the meaning of that rule. Now, I have already decided in the case reported as Dekari Tea Co. ltd. v. Assam Bengal Railway Coy. 61 Ind. Cas. 919 : 25 C.W.N. 127, that in such a case the award cannot be enforced under Order XXIII, Rule 3, and I purpose in this case to follow that decision, among other reasons, for the reason that I believe it to be right. In that cess I expressed the opinion that the decision of Macleod, J, in Shavaksha Dinsha Davar v. Tyab Haji Ayub 37 Ind. Cas. 140 : 40 B. 386 : 18 Bom L.R. 659 was correct in so far as he construed the Code and in particular Section 89 of the Code, as preventing any attempt to admit any informal arbitrations or awards under the provisions of Order XXIII, Rule 3.

5. In the case sited, however, the learned Judge tame to a further conclusion, namely, that the rules under the Second Schedule (rr. 20 and 21) of the Code, could be applied in such a case. So far as that matter is concerned, I did not agree with that view at that time, and the learned Judge, now Chief Justice of Bombay, has in a recent case Manilal Motilal v. Gokaldas Rowji 59 Ind. Cas. 685 45 B. 245 : 22 Bom. L.R. 1048 some to the conclusion that these rules of the Second Schedule cannot be employed for that purpose.

6. It appears fairly certain that they relate solely to a case where the reference to arbitration is not a reference in the course of a suit.

7. Mr. Chatterjee very properly relies on the authority of the case last mentioned, because in that case the Court went bask upon the previous decision that Order XXIII Rule 3 could not in such a case as this be employed. The Court held the previous decision to the effect to be erroneous, holding that, on ordinary principles of the law of contract, the award was an adjustment and came within the meaning of Order XXIII, Rule 3. It was considered further that, under that Order, either by directing an issue or otherwise, as might be neceesary, the validity of a disputed award might be gone into and the award enforced, if valid. It was further held that this might be done, if necessary, in a separate suit. I desire to adhere to my opinion in the Dekari Tea Co.'s case 61 Ind. Cas. 919 : 25 C.W.N. 127 and say that, in my judgment, the judgment of Mr. Justice Kajiji in Manilal Motilal v. Gokaldas Rowji 59 Ind. Cas. 685 45 B. 245 : 22 Bom. L.R. 1048 is in substance right. Apart altogether from the terms of Section 89 of the Civil Procedure Code, with regard to which the Appeal Courts in the Bombay case seems to have felt great difficulty, it is, I think, impossible to look at the scheme of the Code for dealing with arbitrations in the course of suits without seeing that the Legislature intended to make sure that, as said by the Privy Council in a case Ghulam Khan v. Muhammad Hassan 29 C.167 at p. 182 : 6 C.W.N. 226 : 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.)1 frequently referred to on this subject, 'where parties to a litigation desire to refer to arbitration any matter in difference between them in a suit, in that case all proceedings from first to last are under the supervision of the Court.' It is quite true this was said of what is now the Second Schedule. But it is difficult to see what point there is in the Second Schedule saying or meaning that arbitration mast be done in a particular way if, according to some other law or principle, it may still be done in another way. In any Base the logical gap, if there be any, is stopped up by Section 89. Without adverting any further to the terms of Section 89, I desire to point out that if a submission to arbitration of matters in difference in a suit is to take plate, there is no provision for it other than the provisions in the Second Schedule. All parties interested must consent, and their consent must be evidenced in a certain way. The Court from She first is to limit the time within which the award is to be made, and it has certain powers of interference after the award is made. It may in certain cases correct an award, or set aside an award. It may set aside the proceedings before award in certain cases and recall the matter into Court. It may also remit the matter to the arbitrators in certain cases. That is the scheme of the Code applicable to cases where parties to a suit desire arbitration. It is now-said that by virtue of Order XXIII, Rule 3, which does not specially deal with arbitrations or awards at all, it is open to the parties to put aside all these careful provisions and to have an award behind the back of the Court and without the order of the Court. There may always be questions for litigation as to the validity of an award. Under Order XXIII. Rule 3, everything is at large at Common Law. There is no power on the part of the Court to prevent submission as between tome partie where all the parties interested are not agreed. There is no power to prevent or control delay; no power to remit such an award; no power to correct such an award. The only issue to be tried is, is it a valid award? If valid, decree must follow; if not, the whole thing comes to an end and the suit mast proceed. That never was the intension of the Civil Procedure Code; and indeed it ruins the whole scheme. I do not rely merely on the words of Section 89. It seems to me if the Code is looked into as a scheme for dealing with a difficult and highly important matter, viz,, arbitrations in the course of litigation--it intends these to be under the strict conditions and stipulations of the Second Schedule and under the supervision of the Court. The Indian Arbitration Act does not apply to arbitrations in the course of litigation. There are decisions of this Court in which arbitrators, acting under the Indian Arbitration Act without leave from the Court after the matter has been put in suit, have been held to be doing that which is wrong and outside their power. Apart from this general principle, which may be quite inapplicable and as a matter of interpretation of the Code, I cannot agree that a submission, neither under the Second Schedule nor under the Indian Arbitration Act, may be enforced in the suit under the general law of contract. Even if an award comes fairly within the notion of 'adjustment by consent,' it is a very special kind of adjustment by consent, and, if Section 89 requires this specks to comply with the Second Schedule, the general language of Order XXIII, Rule 3, is out down thereby as regards that species. Informal and uncontrolled arbitrations between parties to a suit, leading up to litigation upon the bare issue as to whether there in fast a valid adjustment, are the very things from which the Second Schedule was meant to deliver litigants. The contention of the applicant here is not one to which any Court can lightly commit itself, knowing, as every Court ought to infer, that the careful provisions of the Code in the Second Schedule are no mare than was thought absolutely necessary for the protection of ignorant litigants in many of the Courts in India. My opinion is, although there was prior to 1908 some authority in Bombay to the contrary, that under the Code, arbitration in suits is a specific subject matter, and that where the Code means to deal with arbitrations and. awards, it Bays so.

8. On this I observe that Mr. Justice Fawcett in the case already cited says: Manilal Motilal v. Gopaldas Rowji 59 Ind. Cas. 685 45 B. 245 : 22 Bom. L.R. 1048. 'No doubt the words 'other law for the time being in force are inappropriate for covering a provision of the Code itself, such as Order XXIII, Rule 3. But the Legislature in enacting Section 89 probably had not that particular rule...in their mind, and had no intention of affecting it one way or the other.'

9. That seems to me to take a point which tells against; the applicability of Order XXIII, Rule 3. I should put it that when the Legislature in Section 89 says: 'all references to arbitration, whether by order in suit or otherwise, and all proceedings thereunder,' it probably had not in mind anything so remote in character as adjustments or settlements of suits. In any case, it dealt with a specific subject matter in a specific way and other principles are only to be applied to other things.

10. In my opinion this motion being brought under Order XXLII, Rule 3, is bad.

11. Mr. Ghose for the defendant has taken other points, firstly, the point that in this case only one of the three defendants signed the submission, and that; there are matters dealt; with by the award which do not arise in this suit. There is a case also on the part of the defendant of misconduct against the arbitrators. As regards none of these matters do I say anything. I dismiss the application with costs.


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