PATNA HIGH COURT
Jha and Ahmad JJ.
Raghunandan Rai
Versus
Sukhlal Rai
A.F.A.O. No. 158 of 1949 ;
Decided On : MAY 14, 1951
ARBITRATION - AWARD - CONSENT OF PARTIES - PROVISO TO SECTION 47 OF THE INDIAN ARBITRATION ACT, 1940 - COURT CANNOT RECORD AWARD UNDER ORDER 23, RULE 3, CODE OF CIVIL PROCEDURE IF OBJECTION IS MADE BY ANY PARTY.
Fact of the Case:
Plaintiff filed a suit and later filed a petition stating that the dispute had been settled out of Court by arbitrators with the consent of both parties and prayed that a decree be passed in terms of the award under Order 23, Rule 3, Code of Civil Procedure. The defendants denied the allegation and contended that the award is illegal and fraudulent and that the Court had no jurisdiction to order the suit to be disposed of in terms of the award without their consent.
Finding of the Court:
The Court held that the trial Court erred in law in the exercise of its jurisdiction in making an order of remand without recording its views to the effect of the proviso of Sec. 47 of the Indian Arbitration Act. The Court further held that the proviso to Sec. 47 of the Indian Arbitration Act, 1940 makes it clear that it is not open to the Court to record any arbitration award under Order 23, Rule 3, Civil Procedure Code if objection to the recording of it is made by any party.
Issues: Whether the Court can record an arbitration award under Order 23, Rule 3, Code of Civil Procedure if objection is made by any party.
Ratio Decidendi: The Court held that the proviso to Sec. 47 of the Indian Arbitration Act, 1940 makes it clear that it is not open to the Court to record any arbitration award under Order 23, Rule 3, Civil Procedure Code if objection to the recording of it is made by any party.
Final Decision: The Court set aside the order of the District Judge and restored the order of the trial Court. The Court also directed the trial Court to proceed to hear the suit.
1. This appeal is directed against an appellate order of Mr. Naqui Imam, District Judge, Muzaffarpur, dated the 20th May, 1949, remanding the case to the Court of first instance for disposal after taking evidence in the case.
2. The plaintiff filed a suit on the 5th of December, 1947, for certain reliefs, and on the 7th of January, 1949, he filed a petition that the dispute had been settled out of Court by arbitrators with the consent of both parties and prayed that a decree be passed in terms of the award under Order 23, Rule 3, Code of Civil Procedure. The defendants denied the allegation of the plaintiff and contended that the award is illegal and fraudulent and that the Court had no jurisdiction to order the suit to be disposed of in terms of the award without their consent. The trial Court, without taking any evidence on the merits of the allegations of the parties, held that, as there was objection by the defendants to the recording of the compromise, it could not be given effect to in law.
There was an appeal by the plaintiff, and the learned District Judge, without expressing any view as to the legality of the order and as to whether the Court had at all any jurisdiction to record the arbitration award as compromise under Order 23, Rule 3 of the Code of Civil Procedure when the same is objected to by one or the other party, sent the case back to the Court below with a direction that the parties be given opportunity to prove whether in fact consent was given by the defendants at the time when the reference was made. He held: "These are facts that have to be determined on evidence. It is only when it knows what the facts are that the Court can go into the legal points that have been raised and see whether they have any substance in the light of the facts of the case as brought out through evidence. It will thus be clear that the evidence must be taken in this case."
Being dissatisfied with this order the defendants have come up in second appeal.
3 This second appeal is from an order of remand. It is, therefore, not maintainable, and it has been conceded on behalf of the appellants that no appeal lies and we have been asked to treat it as a civil revision. The contention of Mr. Prem Lall, for the defendants, is that the order of the learned District Judge is bad in that he has acted illegally and with material irregularity in remanding the case without recording his view on the question of law, and that he has failed to exercise the jurisdiction vested in him in law. There is much substance in the contention of Mr. Prem Lall, and, in our opinion, the order of the learned District Judge cannot be supported.
4. On the plaintiffs own allegation, the leave of the Court before which the suit was pending was not taken to make any reference to punches for the decision of the dispute which was the subject-matter of the suit. At the time when the Court was asked to dispose of the suit in terms of the award the defendants did not consent to the compromise or adjustment of the suit being recorded according to the award. Therefore even if the parties consented to the dispute being settled by arbitration without obtaining the sanction of the Court it had no jurisdiction under the proviso to Sec. 47 of the Indian Arbitration Act, 1940 to dispose of the suit in terms of the award under Order 23, Rule 3, Code of Civil Procedure unless all the parties to the suit consented to the same. The proviso to Sec. 47 reads:
"Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into consideration as a compromise or adjustment of a suit by any Court before which the suit is pending."
Therefore, apart from any authority, it is clear that under this proviso it is not open to the Court to record any arbitration award under Order 23, Rule 3, Civil Procedure Code if objection to the recording of it is made by any party. It was held in BHIMRAJ KANAI LAL FIRM V/s. MUNIA SETHANI, 16 Pat L
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