GHULAM JILANI v. MUHAMMAD HUSSAN — 1901 DIGILAW 29 (SC)

Judgement Appeal from two decisions of the Chief Court, one by a Full Bench, dated January 30, 1894, and the other by a Division Bench, dated December 10, 1894, on an appeal from a decree of the Subordinate Judge of Montgomery (Oct. 31, 1892), which had been made in accordance with an arbitration .award. The suit was for possession of Chah Faizabad, measuring some 32,000 kanals, or 4000 acres of land. The respondents case was that the Government had agreed to grant to his father a lease of 6000 acres of waste land, 4000 to be granted at once, 2000 after the lessee had cultivated the 4000 acres already given by means of a canal to be constructed by himself and to be brought from the river Sutlej. This lease was granted after his fathers death to the respondent and the appellants father, Mehndi Khan, since deceased. It did not specify the shares of each, but the respondent claimed that the appellants were only entitled to one-fourth. The respondent further alleged that the canal was constructed by Mehndi Khan on terms of an agreement between them for that purpose, and that then he obtained in his exclusive name from Government a lease of the remaining 2000 acres, which was 500 in excess of the fourth share to which he was entitled. He prayed to recover possession of the whole of the 4000 first brought under cultivation, and a three-fourths share of the canal and the wells which had been constructed, and an account. The appellants, Ghulam Jilani being guardian of the minors, pleaded that the suit was not cognizable by the Civil Courts, for the reasons (1.) that the case was for the Revenue Courts ; (2.) that the Government alone as lessor was competent to determine the respective shares of the parties which had not been specified in the lease; (3.) that Mehndi Khan had at a large outlay bought the land for the canal, constructed it, and thereby rendered the lands productive; and (4.) that the respondent was not entitled to any relief until he had recouped the appellant his share in the expenditure. The Subordinate Judge decided on August 20, 1891, that no part of the claim was excluded from the Civil Courts jurisdiction by the revenue law. The Subordinate Judge decided on August 20, 1891, that no part of the claim was excluded from the Civil Courts jurisdiction by the revenue law. He reserved the question whether it was also excluded by reason of the Settlement of shares being matter for the executive. On February 18, 1892, the Subordinate Judge recorded as follows— "As per agreement between the parties, the decision of the whole case is referred to the arbitrators and not any particular point. The arbitrators will be informed that the whole of the evidence has been recorded. They can send for the records of the case whenever they like. For the present, only the points at issue will be sent for their perusal. They will not, however, be bound to give an award on each point. They have to give their award on the whole case. Their award to come on the 2nd of April, 1892" On October 9, 1892, an unanimous award was filed, and the Subordinate Judge, after hearing objections thereto on the part of the appellants, passed a decree in accordance therewith. The decree was to the effect that the suit was cognizable by the Civil Court; that it was not barred by limitation; that the appellants alone were entitled to the 2000 acres subsequently acquired; that the parties were entitled in equal moieties to the 4000 acres. It then proceeded— That the reclamation and improvements of the land by the sinking of wells, the excavation of the canal, and the location of tenants were effected by the personal exertions of the appellants and their father; the whole of the outlay for bringing the land under cultivation was incurred by them. The respondent did not spend any money thereon nor personally take part in it. On the issue regarding the accounts, that no doubt respondent should not get his half of the 4000 acres until he had paid his half of the outlay, but he was entitled to half the profits of the land, and as no satisfactory evidence had been produced as regards the income and expenditure such as would lead to a correct conclusion/the most suitable plan was to set off respondents profits against appellants outlay, except as to the money spent on the canal; and therefore respondent would get his 2000 acres without paying anything for the expenses, and would not be entitled to any profits. The partition was to be into two chucks. As to the canal and irrigation by it, the award states— "We are of opinion that because the land was excavated and opened exclusively by the sacrifice of exertions, labour, and expenses of Muhammad Mehndi Khan and his sons, defendants, therefore it should be considered their property" ; but they allowed respondent the right to irrigate his 2000 acres without payment of any fees. All expenses connected with the canal were to be entirely borne by the appellants. The appellants objections were to the following effect— 1. 1. That the award was bad, having reference to s. 462, Civil Procedure Code, inasmuch as the minor defendants guardian (the first-named appellant) had agreed, without leave of the Court, to refer the case to arbitration. 2. 2. That it was bad with reference to s. 443 of the said Act; Ghulam Jilani was not even a competent guardian for the suit. 3. 3. That there were questions of jurisdiction raised which could not be made over to arbitrators. That the portion of the claim which asked for an account and for mesne profits was within the cognizance of the Revenue Court, and the Subordinate Judge had erroneously held that the Civil Court could decide it. That portions of the award relating to that part of the case were inseparable from the rest of the award, and, therefore, the award was bad altogether. On the appellants appealing from the decree, the Chief Court referred to a Full Bench the question " whether an appeal lies or is prohibited by s. 522 of the Civil Procedure Code "; at the same time the Division Bench intimated that the proper remedy was an application for revision under s. 622, and gave appellants leave to amend their application so as to make it one for revision in case the Court should decide that an appeal did not lie. The Full Bench decided that the appeal did not lie, and the appellants, therefore, without waiving their right to appeal therefrom, applied to the Division Court for revision. The order was refused so far as related to the objections under s. 462 and s. 443. The Full Bench decided that the appeal did not lie, and the appellants, therefore, without waiving their right to appeal therefrom, applied to the Division Court for revision. The order was refused so far as related to the objections under s. 462 and s. 443. But as regards the third objection, the Court held that so much of plaintiffs claim as asked for a share of the profits and for settlement of accounts was distinctly excluded from the cognizance of the Civil Court by s. 77 (clause {k)) of the Punjab Tenancy Act (XVI. of 1887), and that the portion of the award dealing with the accounts between the parties was separable from the remainder of the award. It accordingly dismissed that portion of the respondents claim which asked for an account and for a share of the surplus, on the ground that it was not cognizable by the Civil Court. Sir W. Rattigan, K.C., and C. W. Arathoon, for the appel- lants, contended that there was, in fact, no award. The arbitrators could only derive their jurisdiction from the Court to deal with a suit instituted therein. The Court in this case had jurisdiction over part of the claim, and not over the rest, for the reasons stated in the appellants third objection. Conse quently, the award was a nullity, inasmuch as a portion of the subject dealt with was beyond the jurisdiction of the arbitrators, and could not be separated from the rest of the award. See s. 506 of the Civil Procedure Code, which is the foundation of the arbitrators jurisdiction, and shews that only matters legitimately in difference between the parties in the ?suit can be referred. See also Hutcheson v. Eaton (( 1884) 13 Q. B. D. 861.), where an arbitrators award was in reference to a matter over which he had no jurisdiction under the true construction of the arbitration clause in a contract, and could not therefore be of any avail. An appeal in this case lay as of right from a decree which had been made on a void award. The prohibition in s. 522, on its true construction, relates only to a decree passed on a valid and operative award. An appeal in this case lay as of right from a decree which had been made on a void award. The prohibition in s. 522, on its true construction, relates only to a decree passed on a valid and operative award. The Full Bench ruling in this case that no appeal lay has been disapproved by a subsequent Full Bench ruling in the Punjab record for August, 1901, No. 84 of 1901, p. 281. So also in Ibrahim, Ali v. Mohsin Ali (( 1896) Ind. L. R. 18 Allah. 422), a Full Bench case of the Allahabad Court, it was ruled that even if the decree is not in excess of and is in accordance with the award an appeal will nevertheless lie on the ground that the so-called award is frm one cause or another no award in law. See also Nandram v. Nemchand (( 1892) Ind. L. R. 17 Bomb. 357.) and Saturjit Pertab Bahadoor v. Dulhin Gulab Koer (( 1897) Ind. L. R. 24 Calc. 469.), cases in Bombay and Calcutta, where it was held that, notwithstanding s. 522, an appeal will lie if the award be illegal and void ab initio. To the same effect is Kali Prosanno Ghose v. Rajanikant Chatterjee (( 1897) Ind. L. R. 25 Calc. 142,. 145.) ; and in the Madras case of Husananna v. Ling anna (( 1895) Ind. L. R. 18 Madr. 402.), which was also a Full Bench ruling, it was held that an appeal lies where the cause shewn against making the decree was a denial of submission to the award and the genuineness of the latter. There is thus a consensus of authority in the Indian case law to support the present contention; The case of Maharajah Joymungul Singh v. Molten Ram Marwaree (( 1875) 23 Suth. W. R. 429, 430,) related, on the other hand, to a valid and enforceable award, and ruled that the decree thereon was final under s. 325 of Act VIII. of 1859. With regard to the power of revision given by s. 622, that does not give the same advantages as an appeal. Another objection was that the award was also bad under s. 462, Civil Procedure Code. The guardian here was not appointed by leave of the Court, and was not authorized by the Court to refer to arbitration Kalavati v. Chedi Lal. (( 1895) Ind. Another objection was that the award was also bad under s. 462, Civil Procedure Code. The guardian here was not appointed by leave of the Court, and was not authorized by the Court to refer to arbitration Kalavati v. Chedi Lal. (( 1895) Ind. L. R. 17 Allah. 531) The respondent did not appear. The judgment of their Lordships was delivered by LORD MACNAGHTEN. The object of this appeal is to set aside an award which was made on a reference to arbitration with the view of determining the rights and interests of the parties to this litigation in two Government leases. The appeal is against two decisions of the Chief Court of the Punjab. The one determined that no appeal lay from the decree of the Subordinate Judge made in accordance with the award. The other was passed on revision. It varied the decree, but only in a matter of liitle or no practical importance. The question appears to their Lordships to turn upon the true construction and effect of the provisions of the Code of Civil Procedure relating to arbitration. The decisions of the Indian Courts on those provisions are so conflicting that it may be useful to state generally the conclusions at which their Lordships have arrived on some of the disputed points brought to their attention in the course of the argument. The chapter in the Code of Civil Procedure on Reference to Arbitration (Chapter XXXVIII deals with arbitrations under three heads— 1. 1. Where the parties to a litigation desire to refer to arbitration any matter in difference between them in the suit. In that case all proceedings from first to last are under the supervision of the Court. 2. 2. Where parties without having recourse to litigation agree to refer their differences to arbitration, and it is desired that the agreement of reference should have the sanction of the Court. In that case all further proceedings are under the supervision of the Court. 3. 3. Where the agreement of reference is made and the arbitration itself takes place without the intervention of the Court, and the assistance of the Court is only sought in order to give effect to the award. In that case all further proceedings are under the supervision of the Court. 3. 3. Where the agreement of reference is made and the arbitration itself takes place without the intervention of the Court, and the assistance of the Court is only sought in order to give effect to the award. Full directions are to be found in the Code as to the course of procedure in cases falling under head No. 1, and large powers are given to the Court with the view of making the award in such cases complete, operative, and final. The Court makes an order of reference on the agreement (which must be the agree-. ment of all parties to the suit) being brought before it, and fixes a time for the delivery of the award with power to enlarge the time if necessary. When the award is submitted to the Court the Court may in certain specified cases correct or modify it subject to a right of appeal. In certain specified cases it may remit the matter to the arbitrators or to the umpire, as the case may be. No award is to be set aside except in one of three cases, specified and defined in s. 521. It is to be observed that by the Limitation Act, Sched. II., art. 158, the period of limitation prescribed for an application under the Code to set aside an award is a period of ten days only from the time where the award is submitted to the Court, exclusive of the time requisite for obtaining a copy of the award Limitation Act, s. 12. Then comes s. 522, which provides that, if the Court sees no cause to remit the award, and if no application has been made to set aside the award, or if the Court have refused such application, "the Court shall, after the time for making such application has expired, proceed to give judgment according to the award." It is enacted that "upon the judgment so given a decree shall follow," and shall be enforced in manner provided in the Code for the execution of decrees. At the end of the section there are these important words. "No appeal shall lie from such decree except in so far as the decree is in excess of or not in accordance with the award." Those words appear to be perfectly clear. At the end of the section there are these important words. "No appeal shall lie from such decree except in so far as the decree is in excess of or not in accordance with the award." Those words appear to be perfectly clear. Their Lordships would be doing violence to the plain language and the obvious intention of the Code if they were to hold that an appeal lies from a decree pronounced under s. 522 except in so far as the decree may be in excess of or not in accordance with the award. The principle of finality which finds expression in the Code is quite in accordance with the tendency of modern decisions in this country. The time has long gone by since the Courts of this country shewed any disposition to sit as a Court of Appeal on awards in respect of matters of fact or in respect of matters of law see Adams v. Great North of Scotland Ry. Co. ([ 1890] A. C. 31.) In cases falling under heads 2 and 3, the provisions relating to cases under head 1 are to be observed so far as applicable. But there is this difference, which does not seem to have been always kept in view in the Courts of India. In cases falling under head 1, the agreement to refer and the application to the Court founded upon it must have the concurrence of all parties concerned, and the actual reference is the order of the Court. So that no question can arise as to the regularity of the proceedings up to that point. In cases falling under heads 2 and 3, proceedings described as a suit and registered as such must be taken in order to bring the matter—the agreement to refer or the award, as the case may be—under the cognizance of the Court. That is or may be a litigious proceeding—cause may be shewn against the application—and it would seem that the order made thereon is a decree within the meaning of that expression as defined in the Civil Procedure Code. Now, the agreement of reference in the present case was made in the course of litigation. The respondent, who has not appeared on this appeal, was plaintiff. The appellants were defendants. Now, the agreement of reference in the present case was made in the course of litigation. The respondent, who has not appeared on this appeal, was plaintiff. The appellants were defendants. The plaintiffs case was that his father had been promised by the Government a lease of 4000 acres to be granted at once, and an additional lease of 2000 acres on the completion of a canal intended to irrigate the lands to be leased. According to the plaintiffs story, on his fathers death he admitted the father of the defendants to a one-fourth share in the adventure on the terms of his finding the money required to bring the land into cultivation. The lease of the 4000 acres was granted to the two adventurers. The father of the defendants found the money for the construction of the canal, and got the lease of the additional 2000 acres granted to himself alone. The plaintiff alleged that the profits of the canal had more than covered the expenses of construction, and, inasmuch as under the second lease the defendants were in possession of 500 acres in excess of their proper share, he claimed that the defendants should make over to him their interest in the first lease of 4000 acres as well as a three-fourth share in the canal, and account for profits in excess of their proper share. The defendants case was that it was arranged, in consideration of the defendants father finding all the money, that the plaintiff should be content with 200 acres only. The defendants farther objected that the suit was not competent, and that so much of the claim as asked for a share of profits and a settlement of accounts was excluded from the cognizance of the Civil Court by the Punjab Tenancy Act of 1887, s. 77, clause (k). The issues as settled were twelve in number, including the following " No. 2. Whether the whole or any part of the claim is not cognizable by a Civil Court?" Then the parties went into evidence; but before the case was heard they agreed to refer all matters in dispute to two arbitrators, one named by each party. An order of reference was duly made by the Court. Whether the whole or any part of the claim is not cognizable by a Civil Court?" Then the parties went into evidence; but before the case was heard they agreed to refer all matters in dispute to two arbitrators, one named by each party. An order of reference was duly made by the Court. The arbitrators named by the parties took upon themselves the burden of the reference, and they concurred in an award which on the face of it seems to be a fair and reasonable settlement of the matters in dispute. The award was duly submitted to the Court. Both parties objected to it. The plaintiff raised some minor objections. The defendants objected to the whole award. The Subordinate Judge overruled all objections, and in due course pronounced a decree in accordance with the award. From the decree of the Subordinate Judge the present appellants, the defendants in the suit, appealed to the Chief Court of the Punjab. The Court, sitting as a Full Bench, held that no appeal lay. In that decision their Lordships entirely concur, though it appears from a case which was cited by Sir William Rattigan (1) that a subsequent Full Bench of the same Court has disapproved of the ruling of the Full Bench in the present case. Unfortunately, in dismissing the appeal it was suggested by the Full Bench that, although an appeal would not lie from the decree of the Subordinate Judge, an application might be made in revision under s. 622 of the Code. Accordingly, the appellants were permitted to present an application in revision under that section. The Court heard the case in revision, and altered the decree in a manner which might have been proper if the Court had had jurisdiction to interfere in the matter. The alteration satisfied the appellants even less than the original decree. Their Lordships are inclined to agree with the view of Clark J. (84 P,R. 1901), that in the case of an award revision would be more objectionable than an appeal. If an application in revision were admissible in a case like the present, the finality of any award would be open to question. Their Lordships, however, are of opinion that such an application is incompetent. The Application in revision in the present case was avowedly an application to set aside the award. If an application in revision were admissible in a case like the present, the finality of any award would be open to question. Their Lordships, however, are of opinion that such an application is incompetent. The Application in revision in the present case was avowedly an application to set aside the award. As such it was plainly prohibited by the Limitation Act, of which the Court is bound to take notice though no objection is made by the parties. In the next place, even if the application had been in time, it could not, in their Lordships opinion, be brought under s. 622. The question whether the suit was competent was one of the issues in the suit, and as such referred to the arbitrators. They were not, indeed, bound to give an award on each point. They had to give their award on the whole case. In point of fact, however, they did decide the question. They may have erred in law ; but arbitrators may be judges of law as well as judges of fact, and an error in law certainly does not vitiate an award. The award having been duly made and not having been corrected or modified, and the application to set it aside having been refused, the Subordinate Judge had no option but to pronounce a decree in accordance with it. The Subordinate Judge does not appear to have exercised a jurisdiction not vested in him by law, or to have failed to exercise the jurisdiction so vested, or to have acted in the exercise of his jurisdiction illegally or with material irregularity. He appears to have followed strictly the course prescribed by the Code. Inasmuch as their Lordships hold that the application in revision was incompetent, it would be a work of supererogation to discuss the various objections raised by the appellants in the High Court. It is enough to say that, in their Lordships opinion, there does not appear to have been any substance in any one of them. The logical result of the view which their Lordships have expressed would be to restore the decree of the Subordinate Judge. But, inasmuch as the decree as altered is probably in the form which it would have taken if the award had been corrected or modified, their Lordships think the better course will be simply to dismiss the appeal. The logical result of the view which their Lordships have expressed would be to restore the decree of the Subordinate Judge. But, inasmuch as the decree as altered is probably in the form which it would have taken if the award had been corrected or modified, their Lordships think the better course will be simply to dismiss the appeal. Their Lordships will, therefore, humbly advise His Majesty that the appeal ought to be dismissed.