HARAKH RAM JANI Vs. LAKSHMI RAM JANI

JUDGEMENT

(1.) The parties to this litigation are members of the same family. In 1911 a dispute arose and it was decided to submit all matters in controversy to arbitration out of Court. On the 21st of April 1913 the arbitrator made his award. The history of what occurred in the interval between these two years is fully stated in the judgment of this Court in Hari Kunwar v. Lakhmi Ram Jani 35 Ind. Cas. 833 : 38 A. 380 : 14 A.L.J. 481, and we shall have to refer to that decision later on Within six months of the award being made, two of the plaintiffs applied to the Subordinate Judge, under Paragraph 20 of the second Schedule of the Code of Civil Procedure, to have the award filed. The Court took appropriate action under that paragraph and issued notice to the other side. They appeared and objected but their objections were overruled and the Court passed an order under Paragraph 21 of the Schedule for filing the award and ordered a decree to be prepared in accordance with its terms. From that order the defendants appealed and raised in their appeal substantially the same objections which they had taken in the Court below and which are taken again here. We will refer to them later. This Court, on appeal in the case already mentioned, held that the lower Court should not have ordered the award to be filed. It appears that after the award was made the parties obtained possession of the property involved according to the terms of the award. After the decision of this Court the plaintiffs filed the suit out of which this appeal arises for a declaration that the award of the 21st of April 1913 was a good and valid award and one which bound all the parties, and asked to be maintained in their possession. They did this, because the defendants had taken steps to recover possession of property of which the plaintiffs bad taken possession under the award. The defendants-appellants here raised two main contentions. One was that, under the law as amended by Act V of 1908, the suit was not maintainable because the decision of this Court in Hari Kunwar v. Lakhmi Ram Jani 35 Ind. Cas. 833 : 38 A. 380 : 14 A.L.J. 481, operated as res judicata; and, secondly, that on the merits, there was misconduct on the part of the arbitrator such as would vitiate the award, and that there were other defeats also in the submission to arbitration. The Trial Court, after hearing evidence, has decreed the suit and the defendants some here in appeal. The same two grounds again are pressed but the only misconduct on the part of the arbitrator that has now been pressed is, that he omitted to determine at least one of the questions submitted to him for decision.

(2.) As regards the plea of res judicata the argument is as follows. Section 89 of the new Code of Civil Procedure introduces a new legal position, and by that section it is enacted that the Procedure to be adopted in all arbitration proceedings is that laid down in the paragraphs contained in the second Schedule of the Act, unless otherwise provided for by special legislation. It is urged that the result of this amendment was to overrule all the older cases, such as Kunji Lal v. Durga Prashad 6 Ind. Cas. 127 : 32 A. 484 : 7 A.L.J. 425, in which it had been held that an order under Section 525 of the old Code, refusing to file an award did not operate as res judicita in a subsequent suit to enforce the award. It is said that now the only course open to a party who has obtained an award in his favour, and who wishes to avail himself of it, is to make an application within six months of its date under the terms of paragraph 20 of the second Schedule of the Code, if he does not do so, then, the argument is, that the award becomes mere waste paper and is ineffectual for any purpose either by way of attack or of defence. Similarly, or rather, a fortiori, it is argued that if a Court acting under paragraph 21 refuses to make an award a rule of Court that decision is final, and the finality of that decision is emphasised by the fact that a new paragraph has been introduced in Clause (f) of Sub-section (1) of Section 104 of the new Code. It seams to us that this contention is not well-founded. The framers of the new Act took all the sections in the old Act which referred to arbitration out of the body of the Code and re enacted them in very mach the same language as before in the Second Schedule. Some changes in language were made, but only, apparently, with the object of getting rid of the conflict which existed in the various Courts in India in the interpretation of the old sections. Having done this, it seems to us, it was necessary for the framers of the new Act to an act some such section as Section 89 in the body of the Act, to show that the Procedure to be adopted in arbitration proceedings was to be found in the second Schedule and that the rules in that Schedule would govern all such proceedings unless otherwise provided for by some special Act. We do not think that this 89th section made any new substantial innovation of law. It left matters practically as they were before.

(3.) When we turn to Paragraphs 14 and 15 of the Schedule, it is not very easy to follow the language used. Thus, in paragraph 15, it is said "an award remitted under Paragraph 14 becomes void on failure of the arbitrator or umpire to reconsider it." From this it would seem that an award which contained a flaw in it, inasmuch as the award had left undetermined any of the matters referred to arbitration, referred to in Paragraph 14, was not in itself void, but that it only became void if, after it had been remitted to the arbitrator or umpire, he had refused or failed to amend it. Be that as it may, these sections are found in that part of the Schedule which refers to the Procedure to be adopted in arbitration made in pending suits. The rules which govern arbitrations, made out of Court are to be found in Paragraphs 20 and 21. In Paragraph 20 the words are that "any person interested in the award may apply to any Court having jurisdiction," It does not say that the "person interested" shall or must apply. It doss not say that if he does not apply under that paragraph, then the award ceases to have any effect. If this had been the intention of the Legislature, as argued, we think it would have been very easy for it to have used suitable words. Now, where such an application has been filed under Paragraph 20, the Court after issuing notice as laid down in that section can pass only one of two orders. If it is satisfied that the matter has been referred to arbitration and that an award has been made thereon and where no ground, such as is mentioned or referred to in paragraph 14 or paragraph 15, is proved, the Court shall order the award to be filed, "If, on the other hand, it finds that, for reasons mentioned in paragraphs 14 and 15, there is a flaw in the award, it cannot remit it, according to (he rulings of this Court, and unlike the English Act of 1889,but must confine itself to dismissing the application. An appeal can be made from such an order specifically under Section 104(1)(f) of the present Code. It is argued that this implies that the Code meant to give finality to a decision under Paragraph 21, and that the arguments which appeared to have found favour with the Judges of this Court, in Kuni Lal v. Durga Prasad 6 Ind. Cas. 127 : 32 A. 484 : 7 A.L.J. 425, and which they seemed inclined to adopt, hut were prevented from adopting by reason of the cursus curise of this Court, applied with great force. In our opinion, however, the object of enacting Clause (f) was to remove the conflict of opinion which prevailed in the various High Courts in India as to whether an appeal lay under the old Section 525. Incidentally, also, it cleared upon other matter that was open formerly to debate, namely, whether an order under Section 525 was not really a decree and appealable as such. It is made quite clear that an order under the corresponding section, that is Paragraph 21, is not a decree but is an order from which an appeal has been allowed. In opinion, the amendments made in the new Act have in no way affected the law as it stood and, therefore, on this part of the case we think the appeal fails. We may note that, just as the lower Court could only pass one of two possible orders as stated above, so this Court in appeal could only decide whether the lower Court was right in passing the order which it made. It had no wider jurisdiction. The only point which it could, and which, in fact, it did, decide was that the proper order for that Court to have made, was to reject the application, and to that extent, and to that extent only, is the decision authoritative and binding.