1. These two appeals arise from two suits. Kali Charan, the appellant, was plaintiff in one suit, and Mani Mohon, the respondent, in the other, and each made the other defendant. The dispute was about a strip of land, between their two houses. Kali Charan alleged that the dispute had been referred to Arbitrators and decided in his favour, and he asked to have a decree drawn up in accordance with the award. Mani Mohon asserted that there had not been any valid reference to arbitration, and claimed a declaration of his title to the strip of land. He also sought for a declaration of his right of way over an adjoining strip of land.
2. The Trial Court found in favour of Kali Charan, overruling all Mani Mohon's objections to the reference, and holding with regard to the alleged right of way that such user as had been proved was of a permissive nature.
3. Mani Mohon appealed and the learned Subordinate Judge endorsed the Munsif's findings about the right of way, but held that the Arbitrators' award could not be made the basis of a decree. On this view he ordered that the cases should be remanded for trial on the merits, and it is against this order of remand in each suit that the appeals are directed.
4. There is only one point for consideration so far as the award is concerned, and it is this. The parties drew up a reference to Arbitrators and affixed an eight annas stamp. One of the three Arbitrators named in the reference declined to act, and another person was by written agreement appointed in his place. This document did not bear a stamp, and the argument that found favour with the lower Appellate Court was that the absence of a stamp on the later document rendered the whole of the arbitrator's proceedings void and their award invalid. The fact that the Munsif took action under Section 35(a) of the Stamp Act (II of 1899) in his opinion made no difference.
5. It is urged on behalf of Kali Charan that the learned Judge's view is erroneous. It was suggested that the reference might possibly be treated as coming within Clause (c) of Section 35, but that argument is not tenable; for it cannot be said that the agreement was effected by correspondence consisting of two or more letters. More emphasis is laid upon the argument that before the Munsif received the reference in evidence he acted under Section 35(a), and that, consequently, the admission cannot again be called in question (section 36). To this argument the answer is that it was the Arbitrators who received the reference in evidence or acted upon it, and that it was only they who could levy the duty and a penalty under Section 35(a).
6. It appears to me that the proceedings before the Arbitrators and the proceedings in Court must be kept distinct. So far as the Arbitrators are concerned they might have proceeded under Section 35(a) had the defect been brought to their notice: they did not do so, and when once they had taken up their enquiry on the basis of the reference, the admission of the reference by them could no longer be called in question before them (section 36), and Mani Mohon could not have urged before them that they had no authority to make the award.
7. Then came the suit on the award, and then I think it was open to Mani Mohon to challenge the jurisdiction of the Arbitrators on the ground that there was no valid reference; and it became the duty of the Court to investigate the assertion, and the Court was entitled on ascertaining the true facts to proceed under Section 35(a).
8. The question has been discussed recently in the case of Runglal Kalooram v. Kedar Nath Kesriwal 77 Ind. Cas. 845 : 27 C.W.N. 513 and the view taken by the learned Judges was very much in accordance with what I have said above. The earlier decisions that were cited before us hardly afford any help.
9. I have dealt with the question on the footing that a second stamp was necessary on the document by which the parties agreed to a different Arbitrator: but I feel considerable doubt about that. It is not necessary, however, for one to deal further with that question because in the view I take the Munsif's procedure removed any defect that there may have been in the reference.
10. My conclusion is that the First Court was right and the Appellate Court was wrong. I, therefore, set aside the orders of remand, and direct that the decrees of the First Court be restored with costs in all Courts. The hearing-fee in this Court is assessed at one gold mohur in each case.
11. The cross-appeals are concluded by the findings of fact and are dismissed without any order as to costs.
12. I am of the same opinion. As an additional reason for the view that we have adopted, I may refer to the article of the Indian Stamp Act which makes it obligatory that a reference to arbitration should be stamped It is conceded that the stamp required on a document embodying a reference to arbitration is eight annas under Art. V, Clause (c) of Schedule I of the Indian Stamp Act (II of 1899). That Article says that an agreement or a memorandum of an agreement should be stamped with a particular stamp, and in Clause (c) it says that where there is no provision otherwise made it must be stamped with a stamp of eight annas. It has also been held that a document authorising an arbitration should be stamped as such, that is, with a stamp of eight annas. It is, therefore, clear that a document which purports to be an agreement to refer a dispute between parties to arbitration should be stamped. That document, in my opinion, is the original document under which the parties agree that the matters in difference between them should be referred to the arbitration of certain persons. Any subsequent variation in the names of the Arbitrators will not be a reference to arbitration but would, in my opinion, be only a substitution of the name of an Arbitrator in place of another or if I may say so, the document asking for the substitution may be called a letter of nomination or appointment for which the Stamp Act does not provide for any stamp. See Ganga Ram Kushaba v. Narayan Babaji 19 B. 32 : 10 Ind. Dec. (N. s.) 22. In this view of the matter, I think that the letter to which exception has been taken by the Court of Appeal below was not one which required any stamp duty. I agree in the order that the appeals should be allowed with costs.