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1949 Supreme(Pat) 21

PATNA HIGH COURT
Imam and V.Ramaswami JJ.
Ramchander Singh
Versus
Munshi Mian
Appeal From Appellate Decree No. 470 of 1947 ;
Decided On : MAY 05, 1949

The judgment established the principle that questions regarding the existence and validity of an arbitration award should be decided as per the provisions of the Arbitration Act and not through a regular suit.

Headnote:

Arbitration - Jurisdiction of Small Cause Court - Sec.102, Civil P. C - Sec.14, 15, 16, 17, 31, 32, Arbitration Act - Sec.30, Specific Relief Act

Fact of the Case:

The plaintiff alleged advancing money to the defendants based on an unregistered ijara and claimed recovery based on an award. The defendants alleged no reference to arbitration, fraudulent award, and illegal consideration. The lower court dismissed the suit, but the appellate court pronounced a decree in favor of the plaintiff. A preliminary objection was raised regarding the jurisdiction of the Small Cause Court.

Finding of the Court:

The court held that the suit was not excepted by Article 15 or Article 24, and the Small Cause Court had jurisdiction to try it. The court treated the second appeal as an application in revision under Sec.115, Civil P. C. The main argument was that the lower court had no jurisdiction to entertain the suit under Sec.32, Arbitration Act.

Issues: Jurisdiction of Small Cause Court, Validity of the award, Enforceability of the award, Existence and validity of the arbitration agreement

Ratio Decidendi: The court found that the suit raised questions about the existence and validity of the award, which was prohibited by Sec.32, Arbitration Act. The court referred to previous decisions supporting this interpretation.

Final Decision: The court set aside the decree of the lower appellate court, stating that the Munsif had no jurisdiction to entertain the suit. The applicants were entitled to their costs.

Judgment

Ramaswami, J.

1. In the suit which is the subject of this appeal the plaintiff alleged that he had advanced RS. 230 to the defendants on the basis of an unregistered ijara, that he obtained possession of the land mortgaged but on a subsequent date the defendants looted the paddy crops which he had grown. The parties referred the matter to arbitrators who made an award. The plaintiff claimed that according to the award he was entitled to recover a sum of Rs. 280 with interest from the defendants. The ground of defence was that there was no reference to arbitration and no award was made by the alleged arbitrators. The defendants alleged that the award-even if made was fraudulent and collusive and in any case could not be enforced since there was an agreement to stifle prosecution and the consideration was illegal. The learned Munsif accepted the defence case and dismissed the suit. But in appeal the learned Subordinate Judge held that there was no agreement to stifle prosecution and the plaintiff was entitled to enforce the award. The learned Subordinate Judge accordingly pronounced decree in favour of the plaintiff.

2. On behalf of the respondent, a preliminary objection was raised that this suit was of the nature cognizable by Small Cause Court and no second appeal was competent under Sec.102, Civil P. C, Learned advocate made reference to Mizaji Lal V/s. Partab Kunwar; 42 ALL 169: (A. I. R.(6) 1919 ALL. 12, in which the plaintiff had sued to recover money due under the terms of a private award. The suit was tried by a Munsif having Small Cause Court jurisdiction and a decree was passed in favour of the plaintiff. The defendants appealed in revision to the High Court under Sec.25 upon the ground that the suit was not one cognizable by Small Cause Court. Lindsay J. held that Article 24 of the second schedule was not applicable and a suit to recover money payable by the terms of the private award was not a suit which was excepted from the jurisdiction of Small Cause Court. For the appellants reliance was placed upon Kunja, Behary V/s. Gosto Behary, 22 C. W. N. 66: (A. I. R. (5) 1918 cal. 899), in which the learned Judges considered that a suit to enforce an award was in essence a suit for specific performance of a contract and was excluded from cognisance of a Small Cause Court under Article 15. But the other High Courts have held that a suit to enforce an award, namely, for recovery of money payable under an award was nob a suit for specific performance of a contract and hence was cognizable by a Small Cause Court (Mt. Erachshaw V/s. Dinbai, 45 Bom 318: (A. I R. (8) 1921 Bom. 399), Mg. Ni V/s. Mg. Aung Ba, 4 Rang. 227 : (A.I.R. (13) 1926 Rang. 198) and Simson V/s. McMaster, 13 Mad. 344), In my opinion, the correct rule is stated in this catena of authorities. The Calcutta decision may, however, be explained on the special facts of that case. For, in that case the learned Judges had held in the alternative that the suit must fail upon the ground that the award which the plaintiff sought to enforce could not be enforced as a whole in a Small Cause Court as it involved the partition of immovable properties. In the present case, I am of opinion that the suit instituted by the plaintiff is not excepted by Article 15 or Article 24; that the Small Cause Court had jurisdiction to try it; that in consequence a second appeal to this Court is not competent.

3. At the request of the appellants we proceeded to treat second appeal as an application in revision under Sec.115, Civil P. C.

4. The main argument addressed on their behalf was that under Sec.32, Arbitration Act, the learned Munsif had no jurisdiction to entertain the suit.

5. Sec.14 (1), Arbitration Act, states that when the arbitrators have made their award, they shall sign it and give notice of the fact in writing to the parties. Sub-section (2) requires that the arbitrators shall, at the request of a party cause the award to be filed in Court, and when this is done, the












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