GUNAVANTIBAI NANIKRAM Vs. OFFICIAL ASSIGNEE HIGH COURT BOMBAY

JUDGEMENT

(1.) THIS is an appeal from an order of the City Civil Court, Bombay, setting aside the award passed by an Arbitrator upon a reference made to him by the parties.

(2.) THE facts as alleged by the respondent are as follows: One Nanikram, who is now dead, and his wife Gunavantibai on behalf of herself and her two sons, Pahlajraj, appellant No. 2, and Pribhdas, appellant No. 3, entered into an agreement on 29th June 1957 for referring a dispute between them concerning the partition of certain moveable and immoveable properties to arbitration by one Rughnath on 29th June 1951. The arbitrator made-an award on 5th July 1951 after hearing the parties and considering the evidence adduced by them. This award was filed in the City Civil Court immediately thereafter. On 8-10-1951, Nanikram filed a petition in that Court, which was No. 95 of 1951 for setting aside the award on various grounds. His counsel, however, withdrew that petition sometime thereafter with the result that the Court passed a decree in terms of the award. Upon an application made to him by the Official' Assignee the decree passed in terms of the award was set aside by Mr. Honavnr, the then principal Judge of the City Civil Court, on the ground that at the date of the withdrawal or the application No. 95 of 1951. Nanikram had been adjudicated an insolvent. After the decree was set aside the learned Judge enquired into that application made by Nanikram. It may be mentioned that on the adjudication of Nanikram as an insolvent, the Official Assignee was substituted in his place and that is how he came to make an application for selling aside the decree. Mr. Honavar, eventually, set aside the award on the ground that there was no real dispute between the parties, that the award was collusive and that the reference itself was made for perpetrating a fraud on the creditors of Nanikram. An appeal was preferred from the decision of Mr. Honavar which was heard by Chagla, C. J. , and Dixit. J. , who by their judgment dated 22-7-1955 set aside the decision of Mr. Honavar and remanded the matter to the City Civil Court with certain directions. Thereafter the Official Assignee amended the original application made by Nanikrarn and the application as amended was enquired into by Mr. Divan, a Judge of the City Civil Court.

(3.) DEALING with the question of the validity of the reference, the learned Judge observed that if there is a joint family and there is an agreement to refer disputes to arbitration to which dispute the father on the one hand and the mother representing herself and the minor sons on the other are parties, such a reference is not a valid reference at all. He relied upon an unreported decision of Mr. Justice M. V. Desai in suit No. 2176 of 1948 decided on 28-9-1948, Chinubhai Madhavlal v. Udyan Girjaprasad, in support of this conclusion. In that case an application for stay of proceedings in a suit was made under Section 34 of the Arbitration Act, upon the ground that there was an agreement between the parties to refer the dispute to arbitration. There also the dispute was between the father on the one hand and his sons and wife on the other and related to the partition of the family property. The sons were minors and the reference to arbitration was signed on their behalf by their mother. The learned Judge referred to a number of decisions on the point and came to the conclusion that in circumstances like these the reference is not competent at all because where a mother is also a party to the agreement in her individual capacity she cannot at the same time act as a guardian of her two minor children, In the course of his judgment the learned Judge observed: