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PATNA HIGH COURT
V.Ramaswami and Raj Kishore Prasad JJ.
Basant Lal
Versus
Surendra Prasad
Letter Patent Appeal No. 24 of 1954 ;
Decided On : NOVEMBER 16, 1956
ARBITRATION - Application under Section 33 of the Arbitration Act, 1940 - Maintainability - Whether an application under Section 33 of the Act, if presented on grounds other than those mentioned in Section 30 of the Act, challenging the existence or validity of an arbitration agreement, is governed by Article 158 of the First Schedule of the Indian Limitation Act, 1908 - Whether an application under Section 33 of the Act, on the ground of non-existence or invalidity of the arbitration agreement or the reference, is governed by Article 158 of the Limitation Act - Whether the judgment and decree passed under Section 17 of the Act, in the circumstances of the case, bind the appellant.
Fact of the Case:
The appellant, Basant Lal, and respondents 1 and 2, Surendra Prasad and Laliteshwar Prasad Sinha, purported to have executed an arbitration agreement, on 17th February 1945, for referring their differences, with respect to certain lands, to the arbitration of Pandit Girindra Mohan Mishra, respondent No. 3, without intervention of the Court. The arbitrator respondent 3, gave an award on 2nd June 1947, in favour of respondent 1. On the application of respondent 1, under Sec.14 (2) of the Act, made on 6th December 1947, the arbitrator filed the award in Court on 15th December 1947. The appellant, therefore, on 12th September 1950, filed an application, under Sec.33 of the Act, for a declaration that the alleged arbitration agreement was invalid, forged and fabricated, and, consequently the decree under execution had been fraudulently obtained against him. He, therefore, prayed that the decree based on the award be set aside.
Finding of the Court:
1. The words "or is otherwise invalid" in clause (c), of Sec.30 of the Act, do not embrace an objection, which challenges the existence, or validity, of an arbitration agreement. 2. An application, under Sec.33 of the Act, if presented on grounds other than those mentioned in Sec.30 of the Act, challenging, the existence, or validity, of an arbitration agreement, is not governed by Article 158 of the First Schedule of the Indian Limitation Act, 1908. 3. An application under Sec.33 of the Act, on the ground of non-existence or invalidity of the arbitration agreement or the reference, is not governed by Article 158 of the Limitation Act. 4. The judgment and decree passed under Section 17 of the Act, in the circumstances of the case, do not bind the appellant.
Issues: 1. Whether the words "or is otherwise invalid" in clause (c), of Sec.30 of the Act, embrace an objection, which challenges the existence, or validity, of an arbitration agreement ? 2. Whether an application, under Sec.33 of the Act, if presented on grounds other than those mentioned in Sec.30 of the Act, challenging, the existence, or validity, of an arbitration agreement, is governed by Article 158 of the First Schedule of the Indian Limitation Act, 1908 ? 3. Whether an application under Sec.33 of the Act, on the ground of non-existence or invalidity of the arbitration agreement or the reference, is governed by Article 158 of the Limitation Act ? 4. Whether the judgment and decree passed under Section 17 of the Act, in the circumstances of the case, bind the appellant ?
Ratio Decidendi: 1. The words "or is otherwise invalid" in clause (c), of Sec.30 of the Act, should not be read ejusdem generis, with the other cases mentioned in Clauses (a) and (b) or, in the preceding words in Clause (c) of Sec.30. They should be restricted to cases where an award is on one Or more of the grounds mentioned in Sec.30, or on grounds other than those specifically mentioned in Clauses (a), (b) and (c) of Sec.30, relating to the invalidity of the award. 2. An application under Sec.33 of the Act, on the ground of non-existence or invalidity of the arbitration agreement or the reference, is not governed by Article 158 of the Limitation Act. 3. The judgment and decree passed under Section 17 of the Act, in the circumstances of the case, do not bind the appellant.
Final Decision: Appeal allowed. The judgment and decree passed under Section 17 of the Act, in the circumstances of the case, do not bind the appellant.
Raj Kishore Prasad, J.
1. The sole question for determination, in this Letters Patent Appeal, against the judgment of Mr., Justice Ratikant Ghoudhary is Can an application, under Sec.33 of the Arbitration Act (Act X of 1940), by a person alleged to be a party to an arbitration agreement, for declaration of its non-existence, on the ground that it was fabricated, and, he was no party to it, after the award on its. oasis, was merged into the judgment and-decree of the Court, passed under Sec.17 of the Act, be maintained ?
2. In order to answer this question, it is necessary, at first, to decide some preliminary, but basic, questions, on the determination of which alone would depend the correct answer to the principal question posed by me.
3. These questions, which precede the main question and, which emerge from the discussions at the bar, are:
1. Do the words "or is otherwise invalid" in clause (c), of Sec.30 of the Act, embrace an objection, which challenges the existence, or validity, of an arbitration agreement ?
2. Is an application, under Sec.33 of the Act, if presented on grounds other than those mentioned in Sec.30 of the Act, challenging, the existence, or validity, of an arbitration agreement, governed by Article 158 of the First Schedule of the Indian Limitation Act, 1908 ?
3. If Article 158, Limitation Act, does not apply, which Article of the Limitation Act, then would apply to such an application ?
4. Can a person, who is alleged to be a party to the arbitration agreement, but who is not in fact a party to it, maintain an application ? and,
5. If the arbitration agreement is found to be non-existent, and the objector to be no party to it, do the ex parte award based on such a reference, and, the judgment and decree, passed on the basis of such an award, under Section 17 of the Act, bind him ?
4. The questions, formulated by me, are quite simple, and can be answered merely by a proper interpretation and construction of Sections 30 and 33 of the Act; but, it has been greatly complicated by the divergence of judicial opinions, and, conflicting views, of the different High Courts, and, by a mass of decisions, which have consequently clustered round these sections. In the present case, therefore, the simplest way, in my opinion, to decide the questions at issue is to try to construe correctly Sec.33 of the Act under which this case has arisen. But before I do so, I would like to mention the circumstances in which the points have arisen.
5. The appellant, Basant Lal, and, respondents 1 and 2, Surendra Prasad and Laliteshwar Prasad Sinha, purported to have executed an arbitration agreement, on 17th February 1945, for referring their differences, with respect to certain lands, to the arbitration of Pandit Girindra Mohan Mishra, respondent No. 3, without intervention of the Court. The arbitrator respondent 3, gave an award on 2nd June 1947, in favour of respondent 1. On the application of respondent 1, under Sec.14 (2) of the Act, made on 6th December 1947, the arbitrator filed the award in Court on 15th December 1947.
6. Notices, as required by Sec.14 (2), of the filing of the award, are alleged to have been served on the appellant and respondent 2. None of them, that is, the appellant and respondent 2, having appeared, and no objection to the award having been made, the Court, on 4th September 1948, pronounced judgment in terms of the award, under Sec.17 of the award, On which a decree followed, which was prepared on 20th December 1948.
7. The decree awarded cost to respondent 1 against the appellant. Its execution was, therefore, sought by respondent 1, by the arrest and detention in the civil prison of the judgment-debtor-appellant.
8. The notice under Order 21, Rule 37, Code of Civil Procedure, was served on the appellant on 25th July 1950. Thereafter, the appellant, so runs his case, started making an enquiry into the matter, and, learnt on 10th August 1950, that respondent i had committed fraud in procuring a
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