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1945 Supreme(Mad) 492

IN THE HIGH COURT OF MADRAS
Alfred Henry Lionel Leach, CJ.
Moolchand Jothajee
Versus
Rashid Jamshed Sons and Co., by its Proprietor, S.R. Ahestani
Decided On : 18.12.1945

The main legal point established in the judgment is that under the Indian Arbitration Act, 1940, the filing of a suit for a decision upon the existence, effect, or validity of an arbitration agreement or award is barred by Sections 31 and 32.

Headnote:

Indian Arbitration Act - Enforcement of Arbitration Award - Sections 14, 15, 16, 17, 31, 32 - The court discussed the relevant sections of the Indian Arbitration Act, 1940, and emphasized the provisions of Sections 31 and 32, which bar the filing of a suit for a decision upon the existence, effect, or validity of an arbitration agreement or award.

Fact of the Case:

The appellants entered into a contract with the respondents for the sale of camphor. The respondents failed to take delivery of the goods, and the appellants sold the camphor at a lower price. The appellants referred the dispute to arbitration and obtained an award for damages. However, they did not file the award in court and later filed a suit seeking a decree in the terms of the award.

Finding of the Court:

The court found that the suit does not lie as per the provisions of the Indian Arbitration Act, 1940, specifically Sections 31 and 32, which bar the filing of a suit for a decision upon the existence, effect, or validity of an arbitration agreement or award.

Issues: The main issue was whether the appellants had the right to institute a suit to enforce the arbitration award under the Indian Arbitration Act, 1940.

Ratio Decidendi: The court's decision was based on the interpretation of Sections 31 and 32 of the Indian Arbitration Act, 1940, which clearly bar the filing of a suit for a decision upon the existence, effect, or validity of an arbitration agreement or award.

Final Decision: The appeal was dismissed with costs, affirming the lower court's decision that the suit does not lie under the Indian Arbitration Act, 1940.

JUDGMENT

Alfred Henry Lionel Leach, CJ.

1. While the Indian Arbitration Act, 1889, was in force a party to an arbitration award was entitled to enforce it by way of suit. The % question in this appeal is whether he has the same right now that the Indian Arbitration Act, 1940, is in force.

2. The appellants entered into a contract with the respondents to sell to them a certain quantity of camphor. The respondents failed to take delivery of the goods in accordance with the terms agreed upon and consequently the appellants sold the camphor. The price realised was less than that which the respondents had contracted to pay and they failed to pay the difference. The contract provided that disputes in relation to it should be referred to the arbitration of the Madras Kirana Merchants Association. The appellants referred the dispute to arbitration, in accordance with the agreement and the arbitrators found that they were entitled to receive from the respondents by way of damages the sum of Rs. 1,605-6-0. The appellant did not, however, ask the arbitrators to file the award in Court. They took no action until they filed in the City Civil Court the suit out of which this appeal arises. The award was delivered on the 17th September, 1940 and the suit was filed on the 2nd May, 1941. The appellants averred that the award had become " final, conclusive and binding on the parties " and asked for a. derree in the terms thereof. The respondents denied that there had been a valid reference to arbitration and consequently they averred that there was no proper award. They further pleaded that the award was vitiated by the misconduct of the arbitrators and had been improperly procured. The appellants contended that it was not open to the respondents to maintain these pleas. They said that as the respondents had neglected to cause the award to be filed in Court they (the appellants) became automatically entitled to a decree in the terms of the award on the expiration of the three months allowed for its filing. The Principal Judge of the City Civil Court who tried the suit found for the appellants but his decision was overruled by Somayya, J., on appeal AIR1945Mad371 . Consequently the learned Judge dismissed the suit. This appeal is from his judgment.

3. It is an elementary principle of law that where a remedy has existed by way of suit, the remedy continues to exist, unless it is taken away by statute, either expressly or by necessary implication. The appellants say that the Indian Arbitration Act., 1940, has not taken away their right to institute a suit to enforce the award and that the learned Judge misinterpreted the provisions of the Act. Therefore it is incumbent upon us to examine the relevant sections of the statute.

4. Section 14(1) says 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) says that the arbitrators shall, at the request of a party, cause the award to be filed in Court and, when this is done, the Court shall give notice of its filing to the parties. Sections 15 and 16 empower the Court to modify the award or to remit it to the arbitrators for further consideration. Section 17 states that when the Court sees no cause to remit the award for reconsideration, it shall, after the time for making an application to set it aside has expired, or when such an application has been made and refused, proceed to pronounce judgment according to the award and upon the judgment so pronounced a decree shall follow. No appeal lies from the decree except on the ground that it is in excess of, or not otherwise in accordance with, the award.

5. Section 15 of the old Act provided that an award, on being filed in Court, should be enforceable as if it were a decree of the Court. Now it is made a decree of the Court when judgment has been pronounced in accordance with the terms of the award. Section 17 of the new Act brings the statute in accordance with the provisions














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