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1924 Supreme(Mad) 674

IN THE HIGH COURT OF MARAS
Devadoss
T.S. Subba Rao
Versus
Appadurai Aiyar
Decided On : 30 October, 1924

A reference to arbitration is valid only if all parties interested agree, and a reference without the consent of all parties takes away the foundation of the Court's jurisdiction, rendering the award absolutely void.

Headnote:

Reference to Arbitration - Validity of Reference - Civil Procedure Code, Schedule 2 - Section 1 - All parties interested should agree before the Court could make a valid reference to an arbitrator. A reference without the consent of all the parties to the arbitration takes away the foundation of the Court's jurisdiction. The award is absolutely void if the reference is made without the consent of all the parties. The award in the previous suit is no bar to the present suit.

Fact of the Case:

The plaintiff sues for possession of the plaint property as the usufructuary mortgagee from the 3rd defendant. The suit was dismissed on the ground that a previous suit resulted in an award by an arbitrator, which was claimed to bar the present suit.

Finding of the Court:

The award in the previous suit is not a bar to the present suit as the reference to arbitration was made without the consent of all the parties, rendering the award absolutely void.

Issues: Validity of the reference to arbitration, whether the award in the previous suit bars the present suit.

Ratio Decidendi: A reference to arbitration is valid only if all parties interested agree, and a reference without the consent of all parties takes away the foundation of the Court's jurisdiction, rendering the award absolutely void.

Final Decision: The decrees of the lower Courts are set aside, and the suit is remanded for trial to the District Munsif's Court for disposal according to law. The plaintiff is not entitled to the costs of the proceedings.

JUDGMENT

Devadoss, J.

1. The plaintiff sues for possession of the plaint property alleging that he is the usufructuary mortgagee from the 3rd defendant. Defendants 1 and 2 claim the property as theirs. Both the Courts have dismissed the plaintiffs suit on the ground that in a previous suit O.S. No. 89 of 1916 the plaintiff sued for similar reliefs: and a reference was made to arbitration in that suit and an award was made by the arbitrator, and therefore the present suit is barred by reason of that award. The contention of Mr. Venkatrama Aiyar for the appellant is that the award was passed on a reference by the Court without jurisdiction inasmuch as all the persons interested in the suit did not join in the submission, and therefore the award does not stand in the way of his obtaining relief in this suit. The facts appear to be; the plaintiff sued for possession of the property against defendants 2 and 3 in Suit No. 89 of 1916 who are defendants 1 and 2 herein and his mortgagor was the 4th defendant. Defendants 2 and 3 claimed title from the 1st defendant, and reference was made to arbitration by the plaintiff and defendants 1 to 3. 4th defendant remained ex parte and did not join the reference. An award was made by the arbitrator, but before the award could be made a decree of Court, the plaintiff withdrew the suit with liberty to bring a fresh suit. The District Munsif allowed him to withdraw the suit and gave him leave to bring a fresh suit. If the award is a valid award, no doubt it would be a bar to the present suit. The question is whether a reference to which all the persons interested are not parties is a valid reference. Section 1 of Schedule 2 of the Civil Procedure Code is in these terms : "Where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may, at any time before judgment is pronounced, apply to the Court for an order of reference." The section requires that all the parties interested should agree before the Court could make a valid reference to an arbitrator. The contention for the respondent is that the persons against whom relief is claimed are the only necessary parties and that pro forma parties may or may not be parties to the reference. It also urged that the 4th defendant in this case who was ex parte was not interested in the suit inasmuch as the suit was only for possession of the property, and the 4th defendant being the mortgagor no relief was claimed against him by the plaintiff in the suit.

2. One of the main issues in the case was whether the properties belonged to the 4th defendant, or whether they belonged to the 1st defendant. It follows therefore that the 4th defendant was interested in the decision of the suit. If the plaintiff failed in making out title in the 4th defendant, 4th defendant being a party to the suit, any decision against the plaintiff would be res judicita between the defendants 2 and 3 and the 4th defendant, for the defendants 2 and 3 set up a title by purchase from the 1st defendant and the plaintiff sets up a title as mortgagee from the 4th defendant. There was therefore a conflict of interest between the 4th defendant and the defendants 1 to 3. It cannot be said that the 4th defendant was not a party interested in the suit. I do not think that the words "parties interested in the suit" should be restricted only to those persons against whom relief is claimed. A person against whom no relief is claimed may be interested in the result of the suit, inasmuch as his liability to the plaintiff may ultimately arise by reason of any decision that may be given in that suit. So far as the facts in O.S. No. 89 of 1916 are concerned there can be no hesitation in holding that the 4th defendant was vitally interested in the result of the plaintiffs suit, and therefore I consider that the contention of the respondents vakil that the 4th defendant having been ex parte and the plaintiff having undertaken to prove t







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