PATNA HIGH COURT
V.Ramaswami and Kanhaiya Singh JJ.
Mst.Habiba Khatoon
Versus
Nawab Lal
Appeal From Appellate Decree No. 103 of 1956 ;
Decided On : DECEMBER 02, 1960
ARBITRATION ACT, 1940 - SEC. 32 - AWARD NOT FILED IN COURT UNDER SEC. 14 AND NO DECREE GRANTED UNDER SEC. 17 - CANNOT BE RELIED UPON AS A DEFENCE.
Fact of the Case:
The defendant relied on an arbitration award (Ext. C) dated 7th April, 1948, in support of his defense, though the award was not filed in court under Sec.14 of the Arbitration Act and no decree was granted in terms of the award under the provisions of Sec.17 of the same Act.
Finding of the Court:
The court held that the defendant cannot rely on the award as a defense since it was not filed in court under Sec.14 of the Arbitration Act and no decree was granted in terms of the award under Sec.17 of the Act.
Issues: Whether the defendant is entitled to rely upon an award of arbitrators (Ext. C) dated the 7th April, 1948, in support of his defence though the award was not filed in court under Sec.14 of the Arbitration Act and no decree was granted in terms of the award under the provisions of Sec.17 of the same Act.
Ratio Decidendi: The court relied on the Full Bench decision of this Court in Seonarain Lal V/s. Prabhu Chand, AIR 1958 Pat 252 and an earlier Division Bench decision of this Court in Lachhuman Singh V/s. Makar Singh, ILR 32 Pat 604: (AIR 1954 Pat 27), which held that the only way to challenge the validity or otherwise of an award is by filing the award in Court under the Act and taking a decision upon it in terms of the award, and, therefore, the matter could not be agitated even by way of defence in proceeding other than a proceeding envisaged by the Act itself.
Final Decision: The court dismissed the second appeal with costs.
1. The question of law arising in this case is whether the defendant is entitled to rely upon an award of arbitrators (Ext. C) dated the 7th April, 1948, in support of his defence though the award was not filed in court under Sec.14 of the Arbitration Act and no decree was granted in terms of the award under the provisions of Sec.17 of the same Act. It was argued on behalf of the defendant-appellant that the lower appellate Court was erroneous in holding that the award cannot be taken into evidence, nor can it be set up by the defendant in support of his own case.
In support of this argument learned Counsel relied upon a decision of a Division Bench of this High Court in Government of India V/s. Jamunadhar Rungta, AIR 1960 Pat 19, consisting of Rai and S. C. Prasad, JJ. holding that the existence of an arbitration agreement or award may be set up as a bar in defence to a suit based on the original cause of action arising out of rights and titles which formed the subject matter of such an agreement or award The learned Judges constituting the Division Bench proceeded upon the view that Sec.32 of the Arbitration Act only barred a suit involving a decision upon the existence, effect or validity of an arbitration agreement or award, but the section did not preclude the defendant from putting forward in defence an award which had been fully performed by him but which had not been tiled under Section 14 of the Arbitration Act and according to which a judgment was not pronounced or a decree given under Sec.17 of the Act. In our opinion the decision of this case is not authoritative because it is contrary to the decision of the Full Bench of this Court in Seonarain Lal V/s. Prabhu Chand, AIR 1958 Pat 252 and also to an earlier Division Bench decision of this Court in Lachhuman Singh V/s. Makar Singh, ILR 32 Pat 604: (AIR 1954 Pat 27).
In the Full Bench decision, Sinha, J., who pronounced the opinion of the Full Bench, rejected the argument advanced by Mr. B, C. De in that case that though a suit may be held to be barred except in accordance with the provisions of the Act, a defence was not barred, and, therefore, a person could refer to an award by way of defence. This argument was rejected by the Full Bench on the ground that the only way to challenge the validity or otherwise of an award was by filing the award in Court under the Act and taking a decision upon it in terms of the award, and, therefore, the matter could not be agitated even by way of defence in proceeding other than a proceeding envisaged by the Act itself. At page 257 of the report, Sinha, J. states as follows : "It was argued by Mr. B. C. De, for the appellant, that, though a suit might be held to be barred except in accordance with the provisions of this Act, a defence is not barred, and, therefore, a person-can refer to an award by way of defence, but Sec. 49-o£ the Registration Act will be a bar to the receiving of such an award in Court. The argument, in effect, was that, if a Court of law has to consider the award, even though it be by way of defence, it cannot be said that an award, without being made a rule of the Court under Sec.17 of the Act, cannot be said to be of no effect and value. Sec. 49 of the Registration Act says that : No document required by Sec.17 or by any provision of the Transfer of Property Act, 1882, to be registered shall
x x x x
(c) be received as evidence of any transaction affecting such property or conferring such, power, unless it has been registered.
In my judgment, there is no substance in this contention as well. If the only way to challenge the validity or otherwise of an award is by filing the award in Court under the Act and taking a decision upon it in terms of the award, then the matter cannot be agitated even by way of defence in a proceeding other than a proceeding envisaged by the Act itself. In ILR 32 Pat 604 : (AIR 1954 Pat 27), the same view was taken and it was held : If the plaintiff-respondents could not brin
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