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1946 Supreme(SC) 3
PRIVY COUNCIL [ON APPEAL FROM THEEAST INDIES]
LORD THANKERTON, LORD GODDARD AND SIR JOHN BEAUMONT.
CHHAB BA LAL - Appellant
Versus
KALLU LAL - Respondents
On Appeal from the High Court at Allahabad.
Decided On : January 21, 1946.
Solicitors for appellant:Hy. S. L. Polak & Co. Solicitors for respondents: Barrow, Rogers & Nevill.
Order 32, Rule 7 of the CPC applies to arbitration references; the court's leave for a guardian to enter such an agreement must be expressly recorded to bind minors. If the underlying reference is invalid, the resulting award is a nullity and the decree is appealable.
Headnote:(A) Code of Civil Procedure, 1908 - Order 32, Rule 7 - Agreement to refer to arbitration - Leave of Court - Requirement that leave be "expressly recorded" is imperative and must be strictly complied with - An agreement to refer matters in dispute to arbitration removes the decision from the jurisdiction of the court and falls within the scope of Order 32, Rule 7, as the interests of minors could be sacrificed by an improper reference - Such an agreement, if not made in compliance with the rule, is voidable against all parties other than the minor.
(B) Code of Civil Procedure, 1908 - 2nd Schedule, Section 16, sub-section 2 - Appealability of decree based on award - While a decree passed under this section is generally not appealable except where it is in excess of or not in accordance with the award, this presupposes a valid reference - If there is no valid reference, the purported award is a nullity and can be challenged in any appropriate proceeding, including an appeal to the High Court.
(C) Indian Evidence Act - Section 20 - Reference for information - A reference to an outside party to decide matters in dispute and costs is not a reference for information under this section; a reference made solely under this provision to divide property is invalid.
Facts of the case:
In a suit for partition of family property, the parties agreed to refer the dispute to a referee. The guardian ad litem of the minor defendants verified the application for reference. The court appointed the referee, who subsequently divided the property. Objections were raised on behalf of the minors, contending that the guardian had not obtained the necessary leave of the court to enter the agreement and that the statutory provision under which the referee was appointed did not authorize the division of property.
Findings of Court:
The court found that the reference under the Evidence Act was improper as that section only pertains to obtaining information. Regarding the minors, the court held that the mandatory requirements of Order 32, Rule 7 of the Code of Civil Procedure were not met because the leave of the court was not expressly recorded in the proceedings. Consequently, the agreement to refer was voidable against the minors.
Issues: Whether an agreement to refer a suit to arbitration falls within the scope of Order 32, Rule 7 of the Code of Civil Procedure; whether the leave of the court must be expressly recorded for such an agreement to bind minors; and whether a decree based on an award is appealable if the original reference was invalid.
Ratio Decidendi: The court reasoned that an agreement to refer to arbitration removes the matter from the court's jurisdiction, thus falling within the mischief Order 32, Rule 7 aims to prevent. The requirement for leave to be "expressly recorded" is imperative. Furthermore, while Section 16, sub-section 2 of the 2nd Schedule generally limits appeals from decrees based on awards, this limitation presupposes a valid reference. If the reference is invalid, the award is a nullity and the decree is appealable.
Result: Appeal dismissed.
Legal Category Hierarchy
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family law
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hindu law
- partition
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hindu law
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practice and procedure
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civil procedure
- minors and guardians
- arbitration
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evidence
- admissions
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civil procedure
Judgement
Appeal (No. 29 of 1944), by special leave, from a decree of the High Court (September 8, 1939), which set aside a decree of the Subordinate Judge of Cawnpore (November 3, 1933), passed in a partition suit and sent the case back to the Subordinate Judge with directions to re-admit it under its original number and to decide it in accordance with law.
The following facts are taken from the judgment of the Judicial Committee. The question for decision in this appeal was whether a reference to arbitration made in this suit, and an award made thereon, were valid, as the Subordinate Judge held, or invalid, as the High Court held in appeal. The question arose in the following circumstances. The plaintiff (appellant) brought this suit for division of the property of a Hindu family governed by the Mitakshara. The plaintiff was the son of one Mukta Prasad, and the first three adult defendants (first three respondents), Kallu Lal, Sohan Lal and Sewak Lal were the sons of the only brother of Mukta Prasad, whilst the fourth and fifth defendants (respondents Nos. 4 and 5), Ram Lal and Jainarain, were the minor sons of Kallu Lal. The plaintiff alleged that the family had separated in status but that the property had not been divided, and he claimed partition of the property and that a half share be allotted to him. In their written statement, the adult defendants alleged that the family was still joint, but the claim for partition was not disputed. In the suit, Sohan Lal was appointed guardian ad litem of the minor defendants, and as such he adopted the written statement of the adult defendants.
On September 1, 1933, an application was made to the Subordinate Judge by Kallu Lal, Sewak Lal and the plaintiff stating that the parties had appointed Shri Swami Ramanandji, who was the Guru of the parties, a referee for the decision of all the facts in dispute in the suit and also for the decision in respect of the costs of the suit, and they asked that the Swami might be appointed a referee under s. 20 of the Indian Evidence Act. On September 2, 1933, Sohan Lal appeared before the learned Subordinate Judge and verified that application, and the learned judge made the following note " This application was verified to-day by Sohan Lal, defendant, " on being identified by Babu Munna Lal, Vakil, after hearing " and understanding the same."
On October 4/ 1933, the learned judge made an order that, according to the application of the parties, Shri Swami Ramanandji was appointed a referee under s. 20 of the Evidence Act for deciding this case and directed him, after deciding the case, to present himself in court or send in writing his statement in respect thereof. On October 7, 1933, the referee made his report dividing the family property into two parts, allotting one part to the plaintiff and the other to the defendants. Objections to the report on behalf of the minors were lodged on October 17, 1933, the two principal objections being, first, that the guardian of the minors did not purport to act as a guardian entering into the agreement for reference, and that as no previous sanction of the court had been obtained the agreement was not binding on the minors, and secondly, that the alleged agreement in terms only constituted Swami Ramanandji a referee under s. 20 of the Indian Evidence Act, and that as such he could only make statements and had no authority to make a division of the property. Objections were also filed on behalf of the adult defendants alleging fraud against the Swami, but it was not necessary to consider those objections on this appeal On November 3, 1933, the learned Subordinate Judge, having held that the reference to arbitration and the award were valid, passed a decree in the terms of the award.
From that decree an appeal was brought to the High Court of Allahabad (Thorn C.J. and Ganga Nath J.) which, on September 8, 1939, allowed the appeal, set aside the decree of the lower court and sent the case back to the lower cou
