1962 Supreme(All) 3
IN THE HIGH COURT OF ALLAHABAD
V. Bhargava and M. Lal, JJ.
RAM BABU - Appellant
Versus
LAKSHMI NARAIN - Respondents
Special Appeal 19 Of 1952
Decided On : 01/04/1962
HARI SVARUP, J.Swarup, K.C.SAXENA, P.N.BAKSHI
Headnote:
ARBITRATION - DECREE - APPEAL - SECOND APPEAL - WHETHER LIES FROM A DECREE PASSED UNDER SECTION 17 OF THE ARBITRATION ACT - REFERENCE TO REFEREE - WHETHER BINDING ON THE PARTIES - JURISDICTION OF THE COURT - WHETHER AFFECTED BY THE STATEMENT OF THE REFEREE.
Fact of the Case:
The appellant, a minor, filed a suit through his father as next friend, which was dismissed. He filed an appeal, which was pending. During the pendency of the appeal, an agreement for reference of certain disputes to an arbitrator was executed, including the dispute that was the subject matter of the appeal. The appellant and others filed an application to postpone the hearing of the appeal until the delivery of the award. The application was granted. The arbitrator gave his award, and the respondent moved an application under Section 14 of the Arbitration Act for a decree based on the award. The appellant objected, arguing that the reference to the arbitrator was incorrect and invalid. The court appointed a referee to decide the objection, and the referee gave a statement that there was no misconduct or material irregularity that could vitiate the award. The court passed a decree in terms of the award, but it did not bind the appellant. The appellant filed a second appeal, which was allowed by the single judge.
Finding of the Court:
The court held that a second appeal lay to the High Court from a decree passed under Section 17 of the Arbitration Act, as the decree was subject to the right of appeal under Part VII of the Code of Civil Procedure. However, the right of appeal was limited to the grounds mentioned in Section 17, namely, that the decree was in excess of or not otherwise in accordance with the award. The court also held that the statement of the referee was binding on the appellant, as it was made pursuant to an agreement between the parties and did not affect the jurisdiction of the court.
Issues: 1. Whether a second appeal lies from a decree passed under Section 17 of the Arbitration Act? 2. Whether the statement of the referee was binding on the appellant?
Ratio Decidendi: 1. A decree passed under Section 17 of the Arbitration Act is subject to the right of appeal under Part VII of the Code of Civil Procedure, but the right of appeal is limited to the grounds mentioned in Section 17, namely, that the decree is in excess of or not otherwise in accordance with the award. 2. The statement of the referee was binding on the appellant, as it was made pursuant to an agreement between the parties and did not affect the jurisdiction of the court.
Final Decision: The appeal was dismissed with costs.
( 1 ) THIS special appeal has arisen in the following circumstances. The appellant, a minor, had brought a suit through his father as next friend which was numbered as Suit No. 297 of 1942. That suit was contested by the respondent, Lakshmi Narain, and was ultimately dismissed on the 31st of August, 1943. Against this decision a first appeal was filed by the Appellant which was numbered as Appeal No. 292 of 1943 and was pending in the Court of the District Judge. It was later transferred to the Court of the Civil Judge. Subsequently, while this appeal was still pending, an agreement for reference of certain disputes to an arbitrator was executed on the 10th of July, 1944. To that agreement there were various parties including the appellant, his father, his grandfather, the respondent and some other persons. The reference to the arbitrator was in respect of a number of disputes including the dispute which was the subject-matter of Appeal No. 292 of 1943. After this reference had been made, an application was presented on the 7th of August, 1944, jointly by the appellant, respondents and others praying to the Civil Judge to postpone the hearing of the appeal until the delivery of the award in the arbitration. That application was granted and the hearing of the appeal was postponed. The arbitrator gave his award on the 16th of August, 1944, and following that award Lakshmi Narain respondent moved an application under Section 14 of the Arbitration Act praying that a decree be passed on the basis of the award. This application was contested, inter alia by Ram Babu, appellant, on the ground that the reference to the arbitrator was incorrect and invalid on two grounds. One ground was that the dispute, which was already the subject-matter of the appeal in the Court of the Civil Judge, could not have been referred to the arbitrator without the intervention of the Court. The second ground was that Ram Babu was a minor and there could have been no reference of the dispute without the permission of the Court. On the 30th of May, 1945, while this objection was pending, an application was moved on behalf of the appellant, saying that the appointment of a referee to decide this objection would be beneficial in the interest of the minor, and requesting the Court for necessary sanction for appointment of a referee in the case. This application was allowed and, thereupon, on that very date, i. e. the 30th of May, 1945, counsel for all the parties including counsel for Ram Babu appellant made a joint statement before the Court appointing one B. Mathura Prasad Kacker vakil as a gawah hazri giving him power to make a statement after making an inquiry or without an inquiry, the inquiry being either confidential or open, and stating that the statement made by b. Mathura Prasad Kacker Vakil would be binding on all the parties. The Court, thereupon, made an order to the effect that the parties had stated that B. Mathura prasad Kacker be appointed as a referee and the prayer of the parties for appointment of B. Mathura Prasad Kacker as a referee was allowed. Mr. Kacker was appointed as a referee and his fee was fixed. The referee was asked to submit his report by the 12th of July, 1945 which was later on extended. The referee, however, gave his statement on the 22nd of September, 1945, to the effect that there was no misconduct or material irregularity which could vitiate the award and the objections were futile. Even after this statement, the Court proceeded to hold that the award was not binding on Ram babu appellant but was binding on all other parties to the arbitration agreement. Consequently, the Court passed a decree in terms of the award with the modification that no decree was passed against Ram Babu appellant and a direction was made that the Appeal No. 292 of 1943 would proceed on merits. Two appeals were filed against this decree-one by Lakshmi Narain respondent and the other by the grandfather of the appellant. Both these appe