2001 Supreme(MP) 943
IN THE HIGH COURT OF MADHYA PRADESH
S.P. Khare, J.
Maharaj Singh - Appellant
Vs.
Ramratan - Respondent
Second Appeal No. 1279 of 1999 (J)
Decided On : 25-06-2001
For the Appellant : Ravish Agarwal
For the Respondent: A.K. Chakravarti
Headnote:(1) Arbitration Act, 1940--S. 2 (a) -- 'arbitration agreement -- must be written --'panch faisla' without written arbitration agreement cannot be said to be an award under' the Act,
(2) Arbitration Act, 1940 -- Ss. 32 and 2(a) -- Civil P.C., 1908--O. 6 R. 17 -- amended plaint questioning in existence and validity of arbitration agreement -- S. 32 attracted.
(3) Arbitration Act, 1940 -- S. 32 -- party to arbitration agreement -- cannot file suit on same cause of action by ignoring award or impeaching its validity.
(4) Civil P.C., 1908 -- S. 100 -- substantial question of law in second appeal -- cannot arise in vacuo -- must emerge from pleadings, evidence and finding" recorded by Courts below.
(5) Arbitration Act. 1940 -- S. 30 -- award -- is conclusive upon merits of controversy -- possesses all elements of vitality even though not enforced formally -- may be relied upon in litigation between parties relating to same subject matter.
(6) Arbitration Act. 1940 -- S. 32 -- on civil suit lies to give effect to punch faisla.
This is defendant's second appeal under section 100, CPC. Arguments on the question of admission heard.
There is a concurrent finding of fact of the trial Court and the first appellate Court that the house in dispute and the land bearing Khasra No. 43 on which it is standing belong to plaintiff Ramratan as these were allotted to his father in the family partition and defendant Maharaj Singh occupied the house three years prior to the institution of the suit in the year 1985 with the permission of the plaintiff. On these findings the suit for possession has been decreed.
In this second appeal it has been argued on behalf of the appellant that the substantial question of law which arises for decision is whether the suit was barred under section 32 of the Arbitration Act, 1940 in view of the 'Panch Faisla' dated 25.9.1973 (Ex.D-1). This question was the subject matter of Issue No.1 before the trial Court. The finding on this issue is that this 'Panch Faisla' has not been proved. It has also been observed by the trial Court that it is unstamped, unregistered and it was not made a rule of the Court. The first appellate Court affirming these findings has further held that this 'Panch Faisla' does not bear the signature of the plaintiff.
In the written statement, there is no plea that there was any 'arbitration agreement' between the parties and in pursuance of that agreement, the dispute was referred to the arbitrators. No such arbitration agreement was produced before the trial Court. Therefore, there was neither any pleading nor any proof regarding the arbitration agreement between the parties. According to section 2(a) an 'arbitration agreement' means a written agreement. It is well settled that an arbitration agreement must be in writing. A 'Panch Faisla' without a written arbitration agreement between the parties cannot be said to be an award under the Arbitration Act, 1940. It is the arbitration agreement between the parties which confers jurisdiction on the arbitrators to decide the dispute between the parties. It is through the arbitration agreement that the parties choose to abide by the decision of the arbitrators, a forum of their own choice, displacing the jurisdiction of the Courts established by law. Thus, a written arbitration agreement is a sine qua non for the arbitration proceedings under the Arbitration Act, 1940. It has been held by the Supreme Court in U.P. Rajkiya Nirman Nigam Ltd. v. Indure Pvt. Ltd. (AIR 1996 SC 1373) that section 2(a) of the Arbitration Act, 1940 envisages a written agreement for arbitration and that written agreement to submit the existing or furture differences to arbitration is a condition precedent and therefore, the reference to the arbitrators was clearly illegal. In Chander Nath Ojha v. Suresh Jhalani (1999) 8 SCC 628 it has been observed that the requirement of law is that arbitration agreement should be in writing. That is also the view taken by the Supreme Court in K.K. Modi v. K.N. Modi (1998) 3 SCC 573.
The substantial question of law in a second appeal cannot arise in vacuo. It must emerge from the pleadings, the evidence and the findings recorded by the Courts below. In the present case there was absolutely no pleading in the written statement that there was a written arbitration agreement between the parties and in pursuance of that agreement, the dispute was referred to the panchas. It appears that an attempt was made to get the dispute settled through the intervention of certain persons but there was no arbitration or 'award' under the Arbitration Act, 1940. Both the Courts have held that this 'Panch Faisla' was not accepted by the parties and therefore, it is not a case of compromise or settlement between the parties to the dispute.
Reliance has been placed on Shyamsingh v. Prahaladsingh 1961 JLJ 715 = 1961 MPLJ 745. In that case it was found that there was an arbitration agreement between the parties. By an amendment in the plaint, the award in question was challenged