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1962 Supreme(AP) 100

Andhra Pradesh High Court
Judges : CHANDRASEKHARA SASTRI, UMAMAHESWARAM
Seth Pamandas Sugharam (died) by Hardevi - Appellant
Versus
T.S.Manikyam Pillai - Respondent
Decided On : 06-27-62

The court emphasized that the defense that a suit is not maintainable is not founded on the plea that there is an award which bars the suit, and that the plea of property division by consent of parties is not precluded by anything contained in the Arbitration Act.

Headnote:

Arbitration Act - Award - Suit Dismissal

Fact of the Case:

The defendant had not taken steps to have an award filed and gone through the formalities as per the Arbitration Act. The court held that the suit was erroneously dismissed based on the award, which had not been filed into court or resulted in a decree.

Finding of the Court:

The court set aside the lower court's decree, allowed the appeal, and remanded the suit for a decision on other issues. The appellant was entitled to a refund of the court-fee paid on the memorandum of appeal.

Issues: The main issue was the dismissal of the suit based on an award that had not been filed into court or resulted in a decree.

Ratio Decidendi: The court held that where an award made in arbitration out of court is accepted by the parties and acted upon voluntarily, and a suit is thereafter sought to be filed by one of the parties ignoring the acts done in pursuance of the acceptance of the award, the defense that the suit is not maintainable is not founded on the plea that there is an award which bars the suit. The court also emphasized that the plea of property division by consent of parties is not precluded by anything contained in the Arbitration Act.

Final Decision: The court found in favor of the plaintiff, set aside the lower court's decree, allowed the appeal, and remanded the suit for a decision on other issues.

( 1 ) IN Sugnaram v. Nagappa, ILR (1959) Andh Pra 850 : (AIR 1960 Andh Pra 59) (FB) it has been held at p. 860 (of ILR Andh Pra) ; (at p. 64 of AIR) that if a defendant has not taken steps to have an award filed and gone through the formalities enjoined by the specific provisions of the Arbitration Act, it is not open to him to set up the award as a bar to an action that may be brought against him. Following the above decision, we hold that the learned Subordinate Judge of Kurnool erred in dismissing the suit on the basis of the award which has not been filed into-Court and in respect of which a decree had not been passed. The decision of the Supreme Court in Kashinathasa v. Narasingasa, AIR 1961 SC 1077 has no application to the facts of the case. The learned Judges did not express any final opinion as to whether the view taken by the Madras High Court in Suryanarayana Reddy v, Ven-kata Reddy, AIR 1948 Madras 436 and Raja-manickam Pillai v. Swaminatha Pillai, AIR 1952 Mad 24 or the view taken by the Full Bench of the Andhra Pradesh High Court in ILR 1959 Andh Pra 850 : (AIR 1960 Andh Pra 59) (FE) was correct. Shah, J. , observed in the following tems: "it may be sufficient to observe that where an award made in arbitration out of Court is accepted by the parties and it is acted upon voluntarily and a suit is thereafter sought to be filed by one of the parties ignoring the acts done in pursuance of the acceptance of the award, the defence that the suit is not maintainable is not founded on the plea that there is an award which bars the suit but that the parties have by mutual agreement settled the dispute, and that the agreement and the subsequent actings of the parties are binding. By setting up a defence in the present case that there has been a division of the property and the parties have entered into possession of the properties allotted, defendant No. r is not seeking to obtain a decision upon the existence, effect or validity of an award. He is merely seeking to set up a plea that the property was divided by consent of parties. Such a plea is in our judgment not precluded by anything contained in the Arbitration Act. " On the facts of the case, the award has not been acted upon and the Supreme Court decision has consequently no application. We are bound by the decision of the Full Bench of our High Court in ILR (1959) Andh Pra 850 : (AIR 1960 Andh Pra 59) (FB) and we follow that decision in preference to the two decisions of Madras High Court viz. , AIR 1948 Mad 436 and AIR 1952 Mad 24, relied on by the Subordinate Judge. We consequently find issue No. 1 in favour of plaintiff.

( 2 ) WE set aside the decree of the Court be low and allow the appeal and remand the suit for a decision of the other issues. The costs will abide the result. The appellant will be entitled to a refund of the court-fee paid on the memo randum of appeal.

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