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SUPREME COURT OF INDIA
K. SUBBA RAO, J.C. SHAH AND R.S. BACHAWAT, JJ.
Nawab Usmanali Khan, Appellant
Versus
Sagar Mal Respondent.
Civil Appeals Nos. 568 and 767 of 1963.
26th February 1965
Advocates appeared
Mr. G. S. Pathak, Senior Advocate, (Mr. B. Dutta, Advocate and M/s. J. B. Dadachanji, O. C. Mathur and Ravinder Narain, Advocates of M/s. J. B. Dadachanji and Co. with him), for Appellant; M/s. B. R. L. Iyengar, S. K. Mehta and K. L. Mehta. Advocates, for Respondent.
Where an award states that the existing documents relating to debts obtained on lands would remain as before, and they would remain as securities till payment of the debts and the debtor would have no right to transfer them, the award requires no registration. It did not create or of its own force declare any interest in any immovable property.
(2) Civil P. C., 1908 - Ss. 86 (1) & 87-B – Arbitration Act - Ss. 14 & 17 - proceedings for filing of award -are not' suit' contained in sections 86 (1) and 87 – B. C. P. C.
(3) Words & phrases-suit-meaning of.
A proceeding under section 14 read with section 17 of the Arbitration Act for the passing of the judgment and decree on award cannot be regarded as suit and the parties to whom the notice of filing of the award is given cannot be regarded 'sued in any Court otherwise competent to try the suit' within the meaning of section 86(1) read with section 87 B of the Code of Civil Procedure. Institution of such proceedings against the Rulers of the former Indian States is not barred by those sections. [Para 8]
(4) Civil P. C., 1908 - S. 60(1)(g) - Constitution of India - Arts. 291 & 363 - privy purse payable to former Ruler of Indian States-is a political pension cannot be attached.
(5) Constitution of India - Arts. 291 & 363-privy purse granted to Rules of former Indian States-nature of the grant.
On the coming into force of the Constitution, the guarantee for the payment of periodical sum as privy purse is continued by Article 291 but its essential political character is preserved by Article 363. The obligations, under this guarantee cannot be enforced in a Municipal Court. The Privy purse is strictly a political pension within the meaning of section 60 (1) (g) and is protected from execution under that provision. It cannot be said to be a debt or other property over which or the proceeds of which the debtor has disposing power within section 60 (1), C. P C. The amount of the privy purse is not liable to attachment or sale in execution of a decree against the ex-ruler. AIR 1931 PC 160, 17 IA 181 relied on. 1962 JLJ 298 REVERSED. [Para 12]
(6) Act of State - covenants entered into by former Rulers of Indian States-are Acts of State-violation of turns-no action lies Municipal Court.
The covenant entered into by the Rulers of Madhya Bharat States was a treaty entered into by the Rulers of independent States by which they gave up their sovereignty over their respective territories and vested it in the new United State of Madhya Bharat. The covenant was an Act of State, and any violation of its terms cannot form the subject of any action in any Municipal Court. [Para 12]
Judgment
BACHAWAT. J.: The appellant is the Ruler of the former Indian State of Jaora. He had money dealings with the respondent. By an agreement dated February 23, 1957, the appellant and the respondent agreed to refer their disputes regarding those dealings to the arbitration of Lala Durgashankar. On the Same date, the arbitrator trade an award. By this award the arbitrator found that a sum of Rs. 1.60,000 was due to the respondent from the appellant, and directed that this sum would be payable in eight quarterly instalments, the first four instalments to be of Rs. 21,000 each and the next four instalments to be of Rs. 19,000 each, the amount of interest would be payable in another quarterly instalment, the respondent would have a first charge on the sums receivable by the appellant from the Government of India as privy purse, and would be entitled to realise those sums under a letter of authority issued by the appellant and if the Government would raise any objection to the payment the respondent would have the right to realise the dues from the personal property of the appellant Some of the items of the loans in respect of which the award was made were secured on lands and ornaments. The award therefore provided:
" The documents relating to debts obtained on lands and ornaments shall remain as before all the payment of the debts and they shall also remain as securities all then, and the Nawab saheb shall have no right to transfer the land." The award was signed by the arbitrator and also by the appellant and the respondent.
2. On the same day, the arbitrator filed the award in the Court of the District Judge, Ratlam. Notice of the filing of the award under S. 14 of the Indian Arbitration Act, 1940 was duly served on the parties. On March 9, 1957, an agent of the appellant filed a written submission accepting the award and requesting the Court to pass a decree in terms of the award. But the same day, an application was made by another agent of appellant intimating that steps would be taken for setting aside award. The Court fixed March 23, 1957 for filing the objection. The time was subsequently extended up to April 2, 1957. On that day, an application was filed on behalf of the appellant praying for setting aside the award. But on April 5, 1957, an application was filed on behalf of the appellant withdrawing the objections and asking the Court to pass a decree in terms of the award, subject to the modification that the amount of the award would be payable in quarterly instalments of Rs. 13,000 each. This application was signed by the respondent in taken of his consent to the modification of the amount of the instalments. On April 30, 1957, the arbitrator filed the relevant papers. On the same day, an agent of the appellant filed an application praying for setting aside the compromise and the award. The case was fixed for hearing in June 19, 1957. On that date, the Court received by registered post an application from the appellant withdrawing the objections and praying for in order in accordance with the compromise application filed on April 5, 1957. In the circumstances, on June 19, 1957, the Court recorded the compromise and passed a decree in terms of the award as modified by the compromise. The appellant filed in the Madhya Pradesh High Court Appeal No. 81 of 1957 under S. 39 of the Indian Arbitration Act, 1940 against the Order dated June 19, 1957 treating it as an Order refusing to set aside the award. The appellant also filed Appeal No. 82 of 1957 under Order 43(1) (m) of the Code of Civil Procedure against the Order dated June 19, 1957 recording the compromise.
3. In the meantime, the respondent stated Execution Case No. 5 of 1957 and on September 9, 1957 obtained an ex parte Order for transfer of the decree to the Court of the District Judge, Delhi. On November 1, 1957, the Central Government gave a certificate under S. 86 (3) read with S. 87-B of the Code of Civil Procedure, 1908 consenting to the execution of the de
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