LAWS(MAD)-1979-8-53

ANNAMALAI CHETTIAR Vs. EGAPPA CHETTIAR

Decided On August 20, 1979
ANNAMALAI CHETTIAR Appellant
V/S
Egappa Chettiar Respondents

JUDGEMENT

(1.) The defendant, who succeeded in the trial Court and lost before the lower appellate Court, is the appellant in this Second Appeal which raises an interesting and important question with reference to the maintainability of the suit instituted by the respondent herein for the recovery of a sum of Rs. 8,520/ -. being the principal and interest due as per an award dated 26.2.1968, which has not been a rule of the court under which the defendant is bound to pay a sum of Rs. 6,000/ -. to the plaintiff with interest at 12 per cent per annum. The plaintiff, defendant and the three others who are not parties to this litigation are divided brothers and the family owned estates in Malasia besides other movable and immovable properties and a family business of the name -PL.M.Firm. The appellant herein disposed of a portion of the estate belonging to the firm; but had retained the amounts with him. In addition to the aforesaid items, the family owned other immovable properties, assets, bank deposits etc., both outside India and at Koppannapatti village and Cuddalore in India. In order to secure a fair and just division of the assets and in order to expedite the same, all the five brothers along with their mother voluntarily executed a muchalikka dated 10.1.1968 by which, seven panchayatdars were appointed and the parties agreed to abide by the decision of the Panchayatdars. On 26.2.1968, an Award was passed by the Panchayatdars which, among other items, fixed the realisation of the sale proceeds of the estate in Muar at Rs. 30,000/ -. and the share of the plaintiff therein was fixed at Rs. 6,000/ -. and the defendant was directed to pay the abovesaid sum of Rs. 6,000/ -. to the plaintiff within one month from 26.2.1968. According to the case of the plaintiff, the defendant also agreed to abide by the abovesaid direction and accordingly, the plaintiff claimed that he is entitled to get the amount of Rs. 6,000/ -. with interest at 12% per annum from 26.2.1968. In order to realise this amount, the plaintiff issued a notice on 12.9.1970, which was received by the defendant on 16.9.1970, but the amount was not paid and hence, the suit was instituted for recovery of this amount. The defendant was served with summons in the suit; but he chose to remain ex parte and did not put forth any defence to the claim made in the suit. The plaintiff was examined as P.W. 1 and he filed Exs. A -1 to A -3. The learned Subordinate Judge, Pudukkottai felt a doubt whether the suit on the original side lies for enforcing an Award under the Arbitration Act of 1940 or it has to be filed as an Original Petition for having the award filed into Court under S. 14 of the Arbitration Act and passing a decree thereon. On this question, the learned Subordinate Judge concluded that the suit as framed is not maintainable and dismissed the same. Aggrieved by that, the plaintiff preferred an Appeal in A.S. No. 519 of 1971, District Court, Tiruchi. In that appeal, notice to the appellant was dispensed with and the appeal was allowed on 17.7.1972. Thereafter, the defendant, coming to know of the ex parte disposal of the Appeal, filed an application in I.A. No. 768 of 1973 for re -hearing the appeal. On 19.10.1973, that application was allowed on terms and the defendant was directed to deposit the suit amount and costs on or before 6.11.1973 and in compliance with the said direction, the suit amount and costs were deposited on 5.11.1973 and the appeal was therefore re -heard as A.S. No. 167 of 1974 by the learned District Judge, Pudukkottai. The learned District Judge held that the bar contained in S. 32 of the Arbitration Act cannot apply to suits based on an agreement entered into subsequent to the award and therefore, the suit was perfectly maintainable. In this view, the Judgement and decree of the learned Subordinate Judge were set aside and the suit was decreed as prayed for with costs throughout.

(2.) In this Second Appeal, the Learned Counsel for the appellant raised two contentions. The first is that S. 32 of the Arbitration Act would be a bar to the maintainability of the suit and therefore, the suit ought not to have been entertained. Secondly, it was contended by the Learned Counsel for the appellant that in as much as the award dated 26.2.1968 also purports to create an interest in the immovable property, it is registrable and in the absence of registration, the agreement on the basis of which the suit is laid cannot be looked into and therefore, the suit should be dismissed. On the contrary, the Learned Counsel for the respondent contends that the relief sought for in the suit does not turn upon the existence, effect or validity of the arbitration agreement or award and that the suit is laid only on the basis of the later acceptance by the defendant of the liability under the award and therefore, the suit will not be hit at by S. 32 of the Arbitration Act. In addition, he also contends that there is no question of registration with reference to the enforceability of the money portion of the claim accepted by the defendant and sought to be enforced in the suit, though the agreement contained other terms with reference to the immovable property as well.

(3.) In order to appreciate the true basis on which the suit has been laid, it becomes necessary to refer to the allegations in the plaint. In paragraph 7 of the plaint, after referring to the realisation of a sum of Rs. 30,000/ -. and claiming that the plaintiff is entitled to a sum of Rs. 6,000/ -. it is specifically stated that the defendant had accepted his liability and had also agreed to pay the same and that this acceptance and agreement by the defendant is evidenced on the award. Again in paragraph 12 of the plaint, which refers to the cause of action for the suit, it refers to an agreement dated 26.2.1968 by which the defendant had agreed to pay the sum of Rs. 6,000/ -. to the plaintiff. A perusal of the allegation in paragraphs 7 and 12 of the plaint indicates that it is not on the basis of the award that the plaintiff has laid the suit. This is also made clear from the notice Ex. A -2, dated 12.9.1970 issued by the plaintiff before the institution of the suit to the defendant and which has been acknowledged by the defendant under Ex. A -3 dated 16.9.1970. In that notice, the plaintiff has categorically alleged that the defendant, in acceptance of the terms of the award, had paid some of his brothers, but had not paid the plaintiff only. There has been no reply whatever to this notice by the defendant. It must also be mentioned that it Ex. A -1 the award, dated 26.2.1968, (sic) panchayatdars have affixed their signatures. Thereafter, the plaintiff, the defendant an we others have also subscribed their signatures staying that they are willing to act according to the decision of the panchayatdars. The recitals in the plaint referred to above taken along with the notice Ex. A -2 when considered in the light of the acceptance of the liability as embodied in Ex. A -(sic) would indicate that the claim that is sought to be enforced in the suit is not on the basis of the award itself, but only on the agreement entered into between the plaintiff and the defendant. It is in this connection that the Learned Counsel for the respondent invited my attention to the decision reported in Tha. Duraiswami Naidu v/s. Kristapp(sic) Naidu : 1958 1 M.L.J. 324 =, 71 L.W. 130. That was a suit for specific performance a contract of sale entered into by the defendant and for possession of the property. The agreement was sought to be proved by the filing of the arbitration agreement as well as a decision or award by some of the arbitrators and the endorsement made on the decision by the plaintiff and the defendant. The question that arose was whether the suit was barred by S. 32 of the Arbitration Act. Dealing (sic) this objection, Subrahmanyam, J. held thus :