High Court Of Madhya Pradesh
K. L. Pandey and A. P. Sen, JJ.
JAYKUMAR JAIN - Appellant
Versus
OM PRAKASH - Respondents
Misc. (First) Appeal 112 Of 1968
Decided On : 10/04/1969
In the case of a composite order, by which a Court refuse to set aside an award and also passes a decree in accordance with its terms, the order refusing to set aside the award and the decree are both appeal-able as the provisions contained in sections 17 and 39 are not mutually exclusive. Therefore, the fact that a decree has been passed does not preclude an appeal against the order refusing to set aside the award. If the order is set aside, the decree which is founded on it would lapse and consequently it cannot operate as a bar to the appeal against the order.
A fortiori the making of two separate orders does not, in our opinion, take away the right of appeal given under section 39 (1) (vi) to a person aggrieved by an order setting aside or refusing to set aside an award ILR 1940 Nag. 386, AIR 1956 Nag. 245 & 1959 JLJ 24 relied on. [Para 5
(2) Arbitration Act, 1940 - S. 17 - appeal under - scope of.
The scope of an appeal under section 17 of the Act is restricted by the terms of the section. If the plaintiffs were to file an appeal against the decree, their attack on the judgment and decree would necessarily be confined to the question whether it was in excess or not in accordance with the award. [Para 6
(3) Contract Act, 1872 - S. 74 - earnest money - nature of - distinction between purchase prices and earnest money.
The essential characteristics of earnest money are well known. Earnest money, although taken as part payment of the consideration, is also a guarantee for the due performance of the contract. AIR 1926 PC 1 relied on. [Para 9
There is a distinction between earnest money and part of the purchase price 6 MPLC 125, 16 MPLC 32, 33 MPLC 482 & 1963 JLJ 238 relied on. AIR 1963 SC 1405 referred to. [Para 9
Whether the deposit was a part of the price or was in reality by way of earnest money depends upon the proper construction of the contract and not as to how the parties may have subsequently chosen to describe it. Their intention had to be gathered from the relevant term in regard to it, and not on their subsequent conduct. [Para 11
(4) Arbitration Act, 1940 - S. 16 - remitting of award - grounds for - award when should not be remitted.
The Court has a general discretion to remit an award for the re-consideration of the arbitrator. This discretion is in general exercisable upon substantially the same grounds as will justify the setting aside of an award. [Para 12
In exercising its discretion as to whether to set aside or remit an award, the Court should have regard to the circumstances of the particular case. Where the arbitrator might be prejudiced against the party applying for remission, the discretion to setting aside should in preference be to remit it. [Para 13
( 1 ) THIS Is an appeal by the plaintiffs from a decision of the IV Additional District judge, Jabalpur, dated 16th February 1968, arising out of proceedings instituted by them under Section 30 of the Arbitration Act, for the setting aside of an award.
( 2 ) THE relevant facts leading to the appeal are these. By an agreement dated 31st march 1965, the plaintiffs had covenanted to purchase from the defendant, his five storeyed building which was under construction at Napier Town, Jabalpur, for a sum of Rs. 1,55,103/- and in pursuance thereof, paid Rs. 10,101/-as part of the price. It stipulated that the defendant was to execute a sale deed within 4 months from the date of agreement, during which he was also to complete the construction work then in progress, e. g. , installation of electricity for pumping of water to the upper floors, affixing of fittings and fixtures, distempering of walls and polishing of floors, etc. The transaction of sale was, however, never completed and disputes arose between the parties, each complaining of the other of breach while signifying his own willingness to fulfil his part of the contract. Eventually, the parties appear to have abandoned the contract, and having done so, referred their dispute to the sole arbitration of one Seth Ramkumar, by their agreement in writing dated 31st July 1965. The reference to arbitration required the arbitrator to determine two questions: firstly, which of the parties had committed a breach of the contract, and, secondly, what were the damages payable to the injured party by the party responsible for the breach.
( 3 ) BY an award dated 30th November 1965, the arbitrator found the plaintiffs to be guilty of the breach complained of and has accordingly directed the forfeiture of the amount of Rs. 10,101/- paid by them, treating the same as earnest money. The arbitrator, however, directed that if the plaintiffs were so inclined, they could still have a conveyance of the property, on payment by them of the balance amount of Rs. 1,45,000/- within 2 months of the date of his award. The plaintiffs apparently did not want any specific performance of the contract and only wanted their money back and, therefore, applied for setting aside of the award under section 30 of the Arbitration Act. The learned Judge has only set aside that part of the award by which the arbitrator had provided for a completion of the sale, upon payment of the balance of the price, on the ground that such a direction was beyond the terms of reference and hence Illegal. As to the rest, he was of the view that the award of the arbitrator holding that the plaintiffs were in breach and, therefore, the amount of Rs. 10,101/-deposited by them was liable to be forfeited, was binding on the parties and could not be set aside for the reason that there were no grounds made out for its being set aside under Section 30 of the arbitration Act. ( 4 ) THE respondent has raised a preliminary objection as regards the maintainability of the appeal. The argument of Shri P. R. Naolekar, learned counsel proceeds on these lines. It is argued that there were two separate orders--one refusing to set aside the award, and the other making it a rule of the Court and, therefore, appeals should have been filed against both the orders. The decisions in shivramprasad v. Gokulprasad Parmeshwardayal, ILR (1958) Madh Pra 570 = (AIR 1959 Madh Pra 102) and Beniprasad Dixit v. Krishna Murari, F. A. No. 121 of 1957, D/- 11-10-1960 (Madh Pra) are said to be distinguishable because they concerned a composite order. It is also urged that the decree not being in conformity with the award, an appeal lay under Section 17 of the Arbitration Act; and, that the order refusing to set aside the award had merged in the decree and since there was no appeal filed against the decree, the appeal against the order refusing to set aside the award under Section 30 was not appealable under Section 39 (1) (vi) of the Act. These contentions are
REFERRED TO : Shivramprasad v. Gokulprasad Parmeshwardayal
Firm Madanlal Roshanlal v. Hukumchand Mills
SupremeToday
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.