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1962 Supreme(P&H) 123
PUNJAB & HARYANA HIGH COURT
Tek Chand and H.R.Khanna JJ.
Prem Nath L.Ganesh Dass
Versus
Prem Nath L.Ram Nath
E.F.A. No. 8 of 1961,
Decided On : JULY 16, 1962
Section 21 of the Arbitration Act, which provides for reference to arbitration in suits, does not include execution proceedings.
Headnote:
ARBITRATION - REFERENCE TO ARBITRATION - EXECUTION PROCEEDINGS - SECTION 21 OF THE ARBITRATION ACT - INTERPRETATION - SCOPE - WHETHER REFERENCE TO ARBITRATION IN EXECUTION PROCEEDINGS IS VALID.
Fact of the Case:
During execution proceedings for a money decree, the judgment-debtor applied for adjustment of the decree, claiming to have paid a certain amount to the decree-holder. The parties agreed to refer the dispute to arbitration. The judgment-debtor later challenged the validity of the reference, arguing that it was not permissible during execution proceedings.
Finding of the Court:
The Court held that the reference to arbitration in execution proceedings was not valid. It interpreted Section 21 of the Arbitration Act, which provides for reference to arbitration in suits, as not including execution proceedings. The Court reasoned that the term "suit" in Section 21 should be construed in its narrow sense, referring to the original proceeding in the Court of first instance, and not in a broad sense to include all proceedings before a Civil Court.
Issues: Whether a reference to arbitration in execution proceedings is valid under Section 21 of the Arbitration Act.
Ratio Decidendi: The Court relied on the plain language of Section 21 of the Arbitration Act, which refers to "suits" and not to execution proceedings. It also considered the legislative history of the Act and the fact that, prior to the enactment of the Act, it was well-established that execution proceedings could not be referred to arbitration. The Court further noted that the weight of authority among the High Courts was in favor of the view that Section 21 does not permit reference to arbitration in execution proceedings.
Final Decision: The Court allowed the appeal and set aside the order of the lower court referring the dispute to arbitration. It directed the parties to appear in the trial court for further proceedings.
Tek Chand, J.
1. The facts so far as relevant for purposes of the point arising in this case are that during the course of execution proceedings for the execution of a money decree, the judgment-debtor filed an application under Order 21, Rule 2, for according adjustment of decree to the extent of Rs. 3,400/- which sum, it was maintained by the judgment-debtor, had been paid by him to the decree-holder. Before the executing Court, both the parties agreed that the dispute about the payment of Rs. 3,400/- should be decided by Shri Daulat Ram Tandon, Advocate, acting as the sole arbitrator. This dispute was referred to the sole arbitrator through the intervention of the Court on 21st March, 1960.
On 25th August, 1960, before the award had been made, the judgment-debtor applied to the executing Court for the supersession of the reference alleging that the dispute was not referable to arbitrator during the course of the execution proceedings and consequently the proceedings before the arbitrator were void. Misconduct on the part of the arbitrator was also alleged. The executing Court framed the following issues: (1) Whether the reference to arbitration is void on any ground and is not binding on the judgment-debtor?
(2) Whether the arbitrator is guilty of any misconduct? If so to what effect?
Both these issues were decided by the executing Court against the judgment-debtor. From this order the judgment-debtor preferred execution first appeal to this Court. The matter came up before a learned Single Judge who, in the absence of clear authority of this Court on the question arising under the first issue, thought that the matter should be authoritatively decided by a Bench. The matter has thus been referred to this Bench.
2. Shri Babu Ram Aggarwal, learned counsel for the judgment-debtor-appellant has drawn our attention to the following provisions of the Arbitration Act.
"21. Where in any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference.
47. Subject to the provisions of Section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder: Provided that 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."
It is maintained on behalf of the judgment-debtor that Section 21 contemplates a difference arising between the parties in the case of a pending suit in contradistinction to execution proceedings. According to Mr. Babu Ram Aggarwal, the Court has no jurisdiction to make an order of reference in execution proceedings. He has also maintained that the proviso to Section 47 of the Act cannot be attracted as that stage had not arrived in this case as no award had been made and there was no question of any consent of the interested parties to the award.
3. In our view, this case hinges exclusively on the construction of the language of Section 21 depending upon the meaning of "suit" occurring there. Regardless of the context in which the term has been used, "suit" in its common parlance is a term of wide amplitude. Broadly, a "suit" is a proceeding in a Court of justice for the enforcement of a right denoting a legal proceeding of a civil kind. It is a proceeding in a Court according to the forms of law to enforce the remedy to which a party deems itself entitled. Lord Coke defines a suit to be. "actio nihil aliud est, quam jus persequendi in judicio quod sibi debetur" meaning "an action is nothing else than the right of pursuing in a Court of justice, that which is due to one". Blackstone I simply says that a "suit" or "action" is a legal demand of ones rights. In its generic sens
