VEDAVALLI AMMAL Vs. CRAGHAVAOHARI

JUDGEMENT

(1.) This is an application to set aside an award under Section 14 of the Indian Arbitration Act, on the ground that the arbitration was incompetent for want of jurisdiction and also that there was no dispute such as would have furnished the basis for an award.

(2.) The 1 respondent was the lessee of some land a portion of which he sub-leased to the 2nd respondent. The 2nd respondent erected superstructures upon the leasehold property under the terms of the lease, For so doing, he borrowed money from the 1 respondent and mortgaged his own leasehold interest to him although the mortgage deed was taken in his mother's name. All this seems to have taken place about the year 1912. On the 23id of July, 1928, the 2nd respondent lessee agreed to transfer or sell his leasehold interest to the present petitioner. The 1 respondent apparently wanted to prevent the petitioner from acquiring the leasehold right and with that object, wrote on the 28 of July to the petitioner's lawyer, that the petitioner's contract to buy would not avail as the 1 respondent's mother had under the mortgage a right of pre emption in the leased property. This was denied on the part both of the petitioner and of the 2nd respondent, though the latter seems to have been at first dallying with the allegation of preemption by the 1 respondent. Finding the allegation of right to pre-empt useless, the 1 respondent on the 30 of July wrote to the 2nd respondent alleging that the lease had been forfeited by non-payment of rent for more than twelve months and calling upon him, in accordance with a clause in the lease-deed, to appoint an arbitrator to value the structures. The 2nd respondent wrote to say that the nonpayment of rent had not been willful but that it was more or less tolerated by the lesson himself who wanted that the rent should be paid along with the interest on the mortgage money. The 1st respondent thereupon purported to appoint an arbitrator on the footing that the lease had been forfeited and invited the 2nd respondent to appoint another arbitrator in his turn. To this invitation the 2nd respondent replied on the 9 of August that no occasion had arisen for any reference whatever, but the 1 respondent was adamant. He proceeded to appoint one Kuppuswami Mudaliar, surveyor and draftsman, as the sole arbitrator, purporting to act under Section 9 (6) of the Arbitration Act. This gentleman on the 24 of October called upon all the parties now before the Court to appear before him on the 28 of that month to make any representations they wanted with regard to the market value. Neither the present petitioner nor the 2nd respondent appeared and athereupon Kuppuswami Mudaliar purported to make an award assessing the lessee's superstructures and trees at Es 1,650 and ordering the present petitioner and the 2nd respondent to transfer their interests in the leasehold property to the 1 respondent on receipt of that amount. It is this award which has been filed by the 1st respondent in Court and is sought to be set aside.

(3.) The first objection taken to this application is that it is incompetent because it is founded upon the allegation that the arbitrator had no jurisdiction whatever. The petitioner's allegation is that the arbitration clause in the lease would come into force only on the determination of the lease. That is found to be correct by reference to the lease-deed. The petitioner says that the lease had not determined and that, therefore, the arbitration was incompetent. If that is so, undoubtedly the arbitrator was acting without any jurisdiction. The point taken for the 1st respondent is that an objection of that character of wait of jurisdiction must be taken only by a separate suit and not by way of a notice of motion like the present. The only authority cited for that is the decision in Matulal Dalmia V/s. Ramkissen Das Madam Gopal 69 Ind. Cas. 568 : 47 C. 806. It was not decided there that an objection to jurisdiction should not be decided under Section 14 of the Arbitration Act. All that happened was that the Court in that case thought that the objection to the award had better be tried by a separate suit. But there is the highest authority for saying that an objection to jurisdiction may be taken by way of motion, although that may not be the only remedy; see the decision of the Privy Council in Sasoon and Co. V/s. Ramdutt Ramkissen Das 70 Ind. Cas. 777 : 50 C. 1 : A.I.R. 1922 P.C. 374 : 37 C.L.J. 336 : 44 M.L.J. 758 : 27 C.W.N. 660; (1923) M.W.N. 372 : 18 L.W. 537 : 49 I. A 366 (P.C.) where it was held that an award objected to on the ground of want of jurisdiction in the arbitrator could be vacated by way of application under Section 14 of the Act to set aside the award although that was not the only remedy open to the aggrieved party. To the same effect is the decision of our own Court in Arunachela Iyah V/s. Louis Dreyfus and Co. 107 Ind. Cas. 793 : 27 L.W. 267 : 39 M.L.T. 563 A.I.R. 1928 Mad. 167; (1928) M.W.N. 132. I, therefore, must overrule the preliminary objection that this application does not lie.