THAKKAR VITHALBHAI HARGOVIND Vs. KACHHIA JAGJIVAN MOTILAL DECD

JUDGEMENT

(1.) THE present Letters Patent Appeal is filed by the defendants against the decision and judgment of our learned brother Bakshi. J who was pleased to dismiss Second Appeal No. 1581 of 1960 which was also filed by the defendants. THE suit out of which the present appeal arises was filed by the plaintiffs for dissolution of partnership and for taking accounts. One of the defences taken in the suit was that the subject matter of the suit was referred to arbitration and that the arbitrator had made an award and that therefore the suit was not maintainable THE question raised in Second Appeal was whether it was open to the defendants to plead the existence of an award as a bar to the maintainability of a suit. His Lordship Bakshi J. was pleased to hold that under the scheme of the Arbitration Act an award or an arbitration award could be treated as effective only if a decree was obtained on the award in accordance with the arbitration. THE view taken was that an award which was not made a rule of the Court could not validly be set up by the defendants as a bar to the plaintiffs suit on the original cause of action. It was held that the defendants could not validly plead the maintainability of the suit. It is the correctness of this view which is challenged before us in the present Letters Patent Appeal. We might mention that this was the only point decided by our learned brother in the Second Appeal. It was held in the Second Appeal that in the present case the defendants had not taken the plea of accord and satisfaction of the award. It was also held that the defendants had not pleaded a subsequent agreement between the parties to abide by the award. THE appeal therefore was disposed of on this ground which we have mentioned above.

(2.) IN order to appreciate the real contentions between the parties it is necessary to state a few facts. The original plaintiffs filled a suit being Regular Civil Suit No. 26 of 1957 in the Court of the Civil Judge Junior Division at Padra. The suit broadly speaking was for dissolution of the partnership and for taking accounts. The plaintiffs and the defendants started business in partnership in S.Y. 2000. It was registered under the name of Messrs Ishwarbhai and Vithaldas and Co. It was continued till S.Y. 2011 when it ceased to work. The learned Civil Judge Junior Division Padra held that the plaintiffs bad proved that the arbitrator bad acted illegally and that the arbitrator did not follow the provisions of the Arbitration Act in giving the award. He held that the suit was tenable despite the award of the arbitrator. He held that the plaintiff was entitled to take accounts and he passed a decree as mentioned in his judgment.

(3.) IT is necessary to observe at this stage that although the learned Assistant Judge had dealt with the contention that the award was liable to be set aside as it was filed after four months and although it was argued before the learned Assistant Judge that the award was invalid as being beyond the terms of the reference the decision of our learned brother Bakshi J. is given only on the ground that it was not open to the defendant that to set up an award as a bar to the maintainability of the suit. We might also mention that although the contention as it appears to have been taken and dealt with in the Second Appeal was taken in the form as to whether the existence of an award can be pleaded as a bar to the maintainability of the suit in the Letters Patent Appeal before us this contention is developed and in this Letters Patent Appeal before U8 many questions are raised but we might mention that although the questions which are raised before us appear to be many they are not new questions or even different questions from the one which were raised in the Second Appeal. These questions only raise different aspects of the same question which was argued in the Second Appeal and we will be dealing with the same question which was raised in the Second Appeal although it is possible that different solutions may be offered to the same question. The questions which are agitated before us are raised in the form as to whether a suit of the plaintiff who has been a party to an arbitration agreement and who has pushed his arbitration proceeding to an award can after the award is made get rid of it by filing a suit on the same cause of action by ignoring the award or impeaching its validity. Another form in which the same question is agitated before us is whether when the parties have referred a dispute between them to an arbitrator and the arbitrator has given his award relating to the dispute it is open to any party to file a suit in respect of the same subject matter. Another aspect of the self same question which is raised before us is whether it would be open to the defendants to raise a plea that the plaintiffs suit raises question about the existence effect or validity of an arbitration agreement or award. The subsidiary question which will require our consideration is as to whether when the defendants raise a plea that the suit of the plaintiff raises question about the existence effect or validity of an arbitration agreement or award whether the defendant is presenting a question for decision upon the existence effect or validity of an arbitration agreement or award. Another question is whether the defendants plea that the suit is not maintainable is not a plea equivalent to the one that the plaintiffs suit is barred under secs. 32 and 33 of the Arbitration Act. Another question which arises is whether after the arbitrator has made and pronounced his award the original cause of action merges in the award. These different aspects of the question will necessitate a consideration of the question as to what is the effect of an award given by the arbitrator which is not made a rule of the Court whether it effective or whether it is a scrap of paper or a dead letter. Another question which we will have to consider will be whether a person who has allowed an arbitration proceeding to culminate into an award can bring d suit in respect of the subject matter which is covered by the award. These are really and truly the several aspects of the one question which was considered by our learned brother Bakshi J. in the Second Appeal.