HIGH COURT OF ANDHRA PRADESH
SUBBA RAO,BHIMASANKARAM, JJ.
Veeraswamy Chetty
Versus
Varadiah Chetty
A. A. No. 552 of 1953 against order of Sub. J., Nellore
Decided On : 09-11-1955
ARBITRATION - APPEAL - MAINTAINABILITY - ORDER REFUSING TO SET ASIDE AWARD - DECREE IN TERMS OF AWARD - COMPOSITE ORDER - APPEALABILITY - CIVIL PROCEDURE CODE (V OF 1908), SEC. 104 (1) (F), SCH. II, PARA. 21 - ARBITRATION ACT (X OF 1940), SECS. 14, 16, 17, 39 (1) (VI).
Fact of the Case:
The appellant and the first respondent carried on business jointly in six concerns. Disputes arose in regard to the settlement of accounts, and both parties referred the disputes to five named arbitrators. The arbitrators made an award, and the first respondent filed the award in Court along with a petition under section 14 of the Indian Arbitration Act for passing a decree in terms of the award. The appellant filed objections to the award and prayed for setting aside the award. The learned Subordinate Judge rejected all the objections raised by the appellant except one, and remitted the award to the arbitrators under section 16 of the Arbitration Act for settling the accounts in respect of the Vijaya Tobacco Company. The learned Judge also confirmed the award of the arbitrators creating a charge for a sum of Rs. 10,000 on the two houses of the appellant. After the award was remitted to the arbitrators, they settled the accounts in regard to the Vijaya Tobacco Company and held that the appellant was liable to pay in addition to the sum of Rs. 10,000 already fixed by them in regard for other business another sum of Rs. 1,294-7-6. The appellant filed objections to that portion of the award also. The learned Judge rejected the objections and passed an order making a decree in terms of the award. The appeal was filed against that order.
Finding of the Court:
The Court held that the order dated 20th July, 1953. is a composite order refusing to set aside the award and also making a decree in terms of the award. The appellant filed a Civil Miscellaneous Appeal against that order in so far it rejected his objections to the validity of the order. The Court also held that the learned Judge was wrong in remitting the award to the arbitrators for settling the accounts in respect of the Vijaya Tobacco Company. The Court further held that the award was not registered, and therefore, that part of the award creating a charge was inadmissible in evidence and therefore no decree could be made on the basis of that award. The Court also held that the arbitrators omitted to take into consideration the Rs. 11/2 lakhs worth of tobacco stock in settling the accounts between the parties.
Issues: 1. Whether an appeal lies against a decree passed in terms of an award? 2. Whether the learned Judge was wrong in remitting the award to the arbitrators for settling the accounts in respect of the Vijaya Tobacco Company? 3. Whether the award was not registered, and therefore, that part of the award creating a charge was inadmissible in evidence and therefore no decree could be made on the basis of that award? 4. Whether the arbitrators omitted to take into consideration the Rs. 11/2 lakhs worth of tobacco stock in settling the accounts between the parties?
Ratio Decidendi: 1. An appeal lies against an order refusing to set aside an award, but not against a decree passed in terms of the award. 2. The learned Judge was wrong in remitting the award to the arbitrators for settling the accounts in respect of the Vijaya Tobacco Company. 3. The award was registered, and therefore, that part of the award creating a charge was admissible in evidence and a decree could be made on the basis of that award. 4. The arbitrators did not omit to take into consideration the Rs. 11/2 lakhs worth of tobacco stock in settling the accounts between the parties.
Final Decision: The appeal was dismissed with costs of the first Respondent.
SUBBA RAO, C.J. :- This is an appeal against the order of the Additional Subordinate Judge, Neilore, refusing to set aside an award and passing a decree in terms of the award.
2. The relevant facts may be briefly stated. The appellant Veeraswami Chetty and first respondent carried on business jointly in the six concerns described in the award made by the arbitrators. As disputes arose in regard to the settlement of accounts, both the parties referred the disputes by executing a muchilika dated 26th February, 1950, in favour of five named arbitrators. The arbitrators, after making the necessary inquiries by their award, dated 16th May, 1950, decided that a sum of Rs. 10,000 should be paid by the appellant to Varadiah Chetty, i.e., the first Respondent herein.
They also created a charge for the said amount on the two houses mentioned in the award. The first respondent filed the award award in Court along with a petition under section 14 of the Indian Arbitration Act for passing a decree in terms of the award. The appellant filed objections to the award and prayed for setting aside the award. The appellant contended inter alia that the arbirtators were wrong in not settling the accounts in respect of the Vijaya Tobacco Company. The learned Subordinate Judge rejected all the objections raised by the appellant except the aforesaid one. Accepting that contention, he remitted the award to the arbitrators under section 16 of the Arbitration Act for settling the accounts in respect of .the Vijaya Tobacco Company.
The learned Judge also confirmed the award of the arbitrators creating a charge for a sum of Rs. 10,000 on the two houses of the appellant. After the award was remitted to the arbitrators, they have settled also the accounts in regard to the Vijaya Tobacco Company and held that the appellant was liable to pay in addition to the sum of Rs. 10,000 already fixed by them in regard for other business another sum of Rs. 1,294-7-6. The appellant filed objections to that portion of the award also. The learned Judge rejected the objections and passed an order making a decree in terms of the award. The appeal was filed against that order.
3. Mr. Ramachandra Rao, the learned counsel for the respondents, contends that no appeal lies against a decree passed in terms of an award, whereas Mr. Kotayya argues that the order made by the Court below is really a composite one and that the appeal made by him on the basis of an order refusing to set aside the award is maintainable. To appreciate the arguments, the relevant provisions may be read :
"Section 39 (1) - An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from, original decree of the Court passing the order :-
An order :-
* * * *
(vi) setting, aside or refusing to set aside an award.
Section 17 : Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award; the Court shall, after the time for making an application to set aside the award has expired, or such application having been made after refusing it, proceed to pronounce Judgment according to the award, and upon the judgment so pronounced a decree shall follow, and no appeal shall lie from such decree except on a ground that it is in excess of, or not otherwise in accordance with the award".
Under the said provisions, an appeal does not lie against a decree passed in terms of the award except on the specified grounds mentioned in section 17. But an appeal is provided against an order setting aside or refusing to set aside an award. If the order in question is nothing more than a decree, it cannot be disputed that no appeal lies against a decree, fro it is not suggested that the decree is questioned on the two grounds mentioned in section 17.
The learned counsel for the appellant therefore contends that though the order, dated 20th July. 1953 and the decree following the sa
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