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1956 Supreme(Pat) 151

PATNA HIGH COURT
Choudhary and K.Dayal JJ.
Mohammad Abdur Razaque
Versus
Abdul Majid
Appeal From Original Order No. 312 of 1951 ;
Decided On : NOVEMBER 15, 1956

An agreement between the parties entered into before an arbitrator appointed without the intervention of the Court in a pending suit can be recorded as an adjustment apart from the award.

Headnote:

ARBITRATION - Award - Recording of award as compromise or adjustment of suit - Consent of all parties interested necessary - Agreement between parties before arbitrator can be recorded as adjustment apart from award.

Fact of the Case:

In a money suit, an award was made on reference by agreement between the parties but without the intervention of the Court. One of the parties objected to the recording of the award as a compromise or adjustment of the suit. The other party contended that the agreement entered into between the parties with respect to a certain sum of money before the arbitrator could itself be recorded as an adjustment of the suit to that extent.

Finding of the Court:

The court held that the award could not be recorded as a compromise or adjustment of the suit as the consent of all the parties interested was not obtained. However, the court held that the agreement entered into between the parties before the arbitrator could be recorded as an adjustment of the suit apart from the award.

Issues: Whether an award made without the intervention of the Court can be recorded as a compromise or adjustment of a suit.

Ratio Decidendi: Under the proviso to Section 47 of the Indian Arbitration Act, 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. An agreement between the parties entered into before an arbitrator appointed without the intervention of the Court in a pending suit can be recorded as an adjustment apart from the award.

Final Decision: The appeal was dismissed with costs to the contesting respondent.

Judgment

Choudhary, J.

1. This appeal is by defendant No. 2. The facts leading to the presentation of the appeal stated shortly, are these. There is a sugar mill fn Siwan known as Indian Sugar Works, Siwan. A title suit, being title suit No. 33 of 1943, was filed by three plaintiffs, named Abdul Mazid, Mohammad Hadi and Lutf Ahmad, against Abdul Razak for dissolution of partnership and rendition of accounts with respect to the said mill. Lutf Ahmad, plaintiff No. 3 of that suit, was appointed receiver and he leased out the mill to one Nasir Ahmad at Rs. 2,10,100 rental per season,

A money suit, No. 28 of 1948, out of which the present appeal arises was thereafter filed by four plaintiffs, namely, the Indian Sugar Works, Lutf Ahmad, Abdul Mazid & Mohammad Hadi, against Nasir Ahmad, the lessee, and Abdul Razak alleged to be the manager of the Indian Sugar Works, for recovery of the lease rent and certain other amounts totalling Rs. 2,89,944-10-6. The two defendants filed two separate written statements. The Plea of defendant No. 2, so far as is relevant for the purpose of the present appeal was that Abdul Mazid, plaintiff No. 3 of this suit and plaintiff No. 1 of the above title suit, had no interest in the mill.

The plea of defendant No. 1, the lessee, substantially was that the entire amount of rental under claim, had been paid off and there was no due left with him. The hearing of the money suit, by an order of the Court, was stayed till the disposal of the title suit. On the 21st of September, 1949, the said title suit was decided. It was held that Lutf Ahmad, plaintiff No. 3 of that suit, and Abdul Razak, the defendant of that suit, were the only partners in the mill. Thereafter, en compromise to which Abdul Mazid, plaintiff No. 1 of that suit and plaintiff No. 3 of the money suit, was not a party a final decree was prepared on the 21st of November, 1949.

Abdul Mazid, therefore, preferred an appeal to this Court which was numbered as First Appeal No. 5 of 1950. Before this, however, on the 18th of November, 1949, a compromise petition was filed in the money suit in which all the parties except Abdul Mazid, joined and it was prayed that a decree may be passed in terms of the compromise inasmuch as Abdul Mazid who had not joined in the compromise, had no interest according to the decision of the said title suit. Since, however, the above appeal against the decree in the title suit was pending in this Court no final order was passed on tins compromise petition. On the 27th of August, 1950, all the parties Including Abdul Mazid agreed to nave their dispute settled by Dr. Syed Mahmud who was then a Minister of Revenue and Transport at Patna. Accordingly, their dispute was referred, without the intervention of the Court, to the arbitration of the said Dr. Syed Mahmud by all the parties concerned. One of the terms of the agreement of reference to arbitration was that the first appeal No. 5 of 1950, which was pending in this Court, was to be withdrawn by Abdul Mazid, the appellant of that case. Accordingly, on the 22nd of September, 1950, he withdrew the above appeal. Thereafter, the arbitration proceeding proceeded.

One of the questions in dispute which had to be decided by the arbitrator was question No. 4 given in the award, Exhibit 2. This question was as to who were entitled to withdraw the sum of Rs. 47,000 which was in deposit with the Government Treasury in connection with the above money suit, No. 28 of 1948, in the Court of the Second Subordinate Judge, Chapra. We are concerned in the present appeal with the award on this point only. It appears that before the arbitrator the parties agreed that Abdui Mazid was entitled to withdraw a sum of Rs. 33,309-9-7 and Abdul Razak and others were entitled to withdraw Rs. 13,690-6-5. The arbitrator, therefore, gave his award on this agreement on this point to the following effect: "I award that out of the sum of Rs. 47,000 which is in deposit with the Government Treasury in connection





















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