JUDGMENT Ghose and Pratt, JJ. - This appeal arises out of an application made u/s 525 of the CPC praying that an award, made by certain persons described as arbitrators, be filed in Court. The Court below has dismissed the application and hence this appeal by the Plaintiff. 2. The facts of the case are briefly these : One Mr. Stevens, the predecessor in title of the Defendant, the Maharajah of Durbhanga, executed a lease in favour of the Plaintiff on the 1st of December 1834, in respect of a plot of 10 bighas and odd cottahs of land, for 15 years, the lease expiring on the 31st October 1899, it being stipulated, among other matters, as follows: "The said lessee shall be entitled and shall have full right during the period of the lease to build upon the land demised any one or more building or buildings of masonry work or otherwise or to plant trees, &c, in the whole or any portion thereof according to the option of the said lessee and to use the same or to let the same on hire for his own profit just as the said lessee might consider just and proper. At the expiration of the period of the lease in the event of a now lease not being given, the said lessor shall be at liberty to resume direct possession of the land demised and to take over all the buildings then standing thereon at a valuation arrived at by three arbitrators, one of whom is to be appointed by the lessor, the second by the lessee and the third by the first two arbitrators so appointed as before. In case either party neglect to appoint an arbitrator, the other party can, after one month's notice in writing, appoint all three arbitrators and the party neglecting to appoint shall have no right to raise any objection to the arbitrators so appointed as aforesaid. The decision of the arbitrators as to the matter of valuation shall be accepted as final by both the parties." 3.
The decision of the arbitrators as to the matter of valuation shall be accepted as final by both the parties." 3. The Plaintiff subsequently ejected a building upon the land in question and in the year 1899, before the term of the lease actually expired, there was considerable correspondence between the parties as to whether the lease of the land in question should be renewed and also as to the appointment of arbitrators for the purpose of valuing the building. 4. The Plaintiff's case is that there was no renewal of the lease; that the Defendant did not appoint an arbitrator such as was contemplated by the terms of the lease of the 1st December 1884 and that he had therefore to appoint all the three arbitrators and that the said arbitrators on the 11th January 1900 made an award determining the sum of Rs. 29,986-12-6, as the value of the house and the out buildings and as payable to the Plaintiff by the Defendant. And it is this award which the Plaintiff sought to be filed in the Court below. The Defendant, however, pleaded that he having offered to renew the lease of the land to the Plaintiff, the latter was not entitled to demand the nomination of an arbitrator for the valuation of the building standing thereupon; that though at one time he, the Defendant, nominated an arbitrator, it was simply to meet any difficulty that might be raised with reference to the construction of the terms of the lease of the 1st December 1884 ; that the award, which was sought to be filed, was invalid, illegal and void ; and that the arbitrators appointed by the Plaintiff had no authority to make an award in the matter. 5.
5. The Subordinate Judge has held that the Defendant by his letter of the 29th July 1899 had expressed his willingness to grant a fresh lease of the land to the Plaintiff on the expiration of the term of the lease of the 1st December 1884 and that, therefore, it could not be said that the lessor did not give to the lessee a new lease as contemplated by the terms of the lease of the 1st December 1884; and hence the contingency under which the matter of the valuation of the building might be referred to arbitration did not properly arise; and indeed, the reference to arbitration was premature. That officer at the same time, however, is of opinion that the arbitrator appointed by the Defendant was not a duly authorized or an independent and impartial arbitrator and that the Defendant having neglected to appoint such an arbitrator, the Plaintiff was entitled to appoint all the three arbitrators and that such appointment would have been good if the reference to arbitration had not been premature he has also expressed the opinion that there was no misconduct on the part of the arbitrators appointed by the Plaintiff and there was nothing to vitiate the award made by them. In the result, however, the Subordinate Judge being of opinion that the reference to arbitration was premature and not in accordance with the conditions of the lease, the award could not be filed in Court and he has accordingly dismissed the suit. 6. It will be observed that though the Defendant, by his letter of the 29th July 1899, expressed his willingness to grant to the Plaintiff a fresh lease of the land, neither the rate of rent, nor the period for which the Defendant was prepared to grant such fresh lease, was mentioned; and the Plaintiff by his letter of the 31st July 1899, which was in reply to that of the 29th July, distinctly indicated that he was not prepared to take a renewal of the lease of the land in question and insisted upon the matter of the valuation of the buildings standing thereupon being referred to arbitration.
And though, later on, the Plaintiff expressed his willingness to take the land and the house standing thereupon at a monthly rent, nothing came out of it; and indeed, the subsequent correspondence between the parties was directed to the appointment of arbitrators for the purpose of valuing the buildings. It is quite clear, therefore, that the parties were not agreed as to the renewal of the lease of the land ; and the question here arises whether the parties having not come to an agreement as to the grant of a fresh lease and the Defendant having simply offered to grant such a lease, there was such a compliance on the Defendant's part with the conditions of the lease of the 1st December 1884 as precludes the Plaintiff from insisting upon the matter of the valuation of the buildings being referred to arbitration. The particular passage in the lease which bears upon this question is as follows: "At the expiration of the period of the lease in the event of a new lease not being given, the said lessor shall be at liberty to resume direct possession of the land demised and to take over all the buildings then standing thereon at a valuation arrived at by three arbitrators, &c., &c." The Subordinate Judge in holding, as he does, that the offer on the part of the Defendant to renew the lease was a sufficient compliance with the terms of the lease just referred to, refers to an earlier passage in the same document, which has already been quoted, wherein the word "give" occurs. And the Subordinate Judge argues that the word "give" therein used was not meant in the sense of give and take and that therefore the expression, "a now lease not being given," as used in the second part of the document, could only have a reference to the action of the lessor and not to anything on the part of the lessee. We arc, however, unable to accept this view as correct. The earlier passage, which the Subordinate Judge relies upon, refers to the rental and the terms and conditions settled between the parties and states that it being agreed that the lessor should give to the lessee a lease of the lands upon such rental, terms and conditions, the lease is granted.
The earlier passage, which the Subordinate Judge relies upon, refers to the rental and the terms and conditions settled between the parties and states that it being agreed that the lessor should give to the lessee a lease of the lands upon such rental, terms and conditions, the lease is granted. We fail to see how this passage can show what the intention of the parties was as to the granting of a new lease as expressed in the latter part of the document. It seems to us that inasmuch as a new lease could not be given unless the parties were agreed as to the terms and conditions thereof, the mere offer on the part of the lessor to grant a now lease and this without any terms being mentioned, could not operate as the giving of such a lease, within the meaning of the document in question. The Subordinate Judge, we observe, further states that the liability of the lessor to pay the price of the buildings was contingent on the refusal to grant a fresh lease and not on the lessee's refusal to take such lease; and that indeed, the Defendant was not bound to make any offer. We do not understand what the Subordinate Judge means by saying that the Defendant was not bound to make any offer. But leaving this aside, let us suppose that the lessor offered to grant a fresh lease to the Plaintiff on the most exorbitant terms, which the lessee could not possibly accept: would that be a true and bond-fide, compliance with the conditions of the lease? We think not. The Subordinate Judge, however, remarks that there is nothing to show that the lessor refused to grant a fresh lease on fair and reasonable terms and therefore, there was no ground for a reference to r arbitration. We have already referred to the fact that in his letter of the 29th July 1899, the Defendant did not mention any terms or conditions and indeed the parties from the very beginning did not indicate any intention of any fresh lease being settled upon reasonable terms. That being so, we are unable to agree with the view which the Subordinate Judge has expressed.
That being so, we are unable to agree with the view which the Subordinate Judge has expressed. We hold that there was no sufficient compliance on the part of the Defendant with the terms of the lease of the 1st December 1884, relating to the grant of a fresh lease and that it follows from this, that if the lessor, without granting a fresh lease, chose to take possession of ;he land, the lessee was entitled to insist upon the valuation of the buildings standing thereupon being determined by three persons to be nominated as provided in the lease. 7. But the real difficulty, which arises in this case, is whether the reference to the three persons nominated by the Plaintiff for the purpose of fixing the value of the building, was a reference to arbitration and whether the award made by them was such as could be filed in Court, as contemplated by Section 525 of the Code of Civil Procedure. 8. We shall discuss this matter presently ; but before we do so, we may perhaps say that we agree in the conclusion arrived at by the Court below, that the arbitrator appointed by the Defendant was not a duly authorized arbitrator and that having regard to the facts disclosed in the various correspondence on the subject between the parties, the Plaintiff was justified in appointing all the three persons and that there is nothing, so far as we can see at present, to vitiate the determination made by those persons. 9. Addressing ourselves then to the question which we have already indicated, it will be observed on a reference to Chapter XXVII of the Code, which deals with reference to arbitration, that Section 525 and the following sections which refer to arbitration without the intervention of a Court of Justice, have to be read with and by the light of the preceding sections in the same Chapter, which refers to arbitration through the intervention of Court, so far as they may be applicable. And when Section 525 Buys that:--"when any matter has been referred to arbitration without the intervention of a Court of Justice and an award has been made thereon," it must be understood in the same sense as a reference to arbitration as contemplated by Section 506 of the Code.
And when Section 525 Buys that:--"when any matter has been referred to arbitration without the intervention of a Court of Justice and an award has been made thereon," it must be understood in the same sense as a reference to arbitration as contemplated by Section 506 of the Code. That section runs as follow:--"If all the parties to a suit desire that any matter in difference between them in the suit be referred to arbitration, they may, at any time before judgment is pronounced, apply in person or by their respective pleaders specially authorized in writing in this behalf, to the Court for an order of reference," and so on. The question here arises whether there was any matter "in difference" between the parties which could be referred to arbitration; and this question has to be answered by the terms of the lease of the 1st December 1884. It was therein contemplated that in the event of a new lease not being given, the lessor would be at liberty to take direct possession of the land and take over all the buildings at a valuation arrived at by three arbitrators. At that time, there was and there could be, no difference between the parties concerned for no building had then been erected on the land ; and we are unable to find upon the correspondence which took place between the parties, that there was any difference between them as regards the true price of the buildings. The Plaintiff no doubt insisted that the matter of the price should be determined by arbitrators, while the Defendant averred that the matter could not go to arbitration by reason of his having offered to give a fresh lease to the Plaintiff, but that in order to meet any difficulty that might arise as regards the construction to be put upon the terms of the lease, he would appoint the person nominated by him. 10. In the case of Collins v. Collins (1858) 26 Beav.
10. In the case of Collins v. Collins (1858) 26 Beav. 306, where the parties entered into a contract to purchase a brewery and plant at a price to be fixed by arbitrators who were to choose an umpire before entering upon the valuation and the arbitrators could not agree on an umpire and the question was raised whether the Court had authority under 17 and 18 Victoria, c. 125, to appoint an umpire for such a purpose:--it was field that the Court had no authority to appoint an umpire for the said purpose. The Master of the Rolls in the course of his judgment made the following observations: "It becomes necessary, therefore, to consider what an arbitration is. Now I fully concur in the observations, that fixing the price of a property may be 'arbitration.' But I do not think that in f this particular case the fixing of the price of the property is an arbitration in the proper some of the term. An arbitration is a reference to the decision of one or more persons, either with or without an umpire, of some matter or matters in difference between the parties. It is very true that in one sense, it must be implied that although there is no existing difference still that a difference may arise between the parties; yet I think the distinction between an existing difference and one which may arise is a material one and one which has been properly relied upon in the case." Later on he observed:--"It may well be, that the decision of a particular valuer appointed might fix the price and might be equally satisfactory to both ; so that it can hardly be said that there is a difference between them. Undoubtedly, as a general rule the seller wants to get the highest price for his property and the purchaser wishes to give the lowest and in that sense it may be said that an unexpected difference between the parties is to be implied in every case, but unless a difference has actually arisen, it does not appear to mo to be an arbitration." And then he approvingly referred to the case of Leeds v. Burrows (1810) 12 East 1 where the true distinction between an arbitration in the proper sense of the term and an appraisement or valuation of a property, was drawn.
The principle underlying this case is of equally applicable here. 11. In re Carus-Wilson and Greene (1886) L.R. 18 Q.B.D. 7, whore one of the conditions to the sale of a piece of land was that the purchaser should pay for the timber on the land at a valuation and it was provided, for the purpose of such valuation, that each party should appoint a valuer and the valuers thus appointed should, before they proceeded to act, appoint by writing an umpire and that the two valuers, or, if they disagreed, their umpire, should make the valuation and where the two valuers appointed being unable to agree, the umpire made the valuation, it was held that such valuation was not in the nature of an award or an arbitration. Lord Esher, M.R., in delivering judgment, observed as follows:--"The question here is, whether the umpire was merely a valuer substituted for the valuers originally appointed by the parties in a certain event or an arbitrator. If it appears from the terms of the agreement by which a matter is submitted to a person's decision, that the w intention of the parties was that he should hold an enquiry in the nature of a judicial enquiry and hear the respective cases of the parties and decide upon evidence laid before him, then the case is one of arbitration. The intention in such cases is that there shall be a judicial enquiry worked out in a judicial manner. On the other hand, there are cases in which a person is appointed to ascertain some matter for the purpose of preventing differences from arising, not of settling them when they have arisen and where the case is not one of arbitration, but of a mere valuation." Later on he observed:--"I think that this case was clearly not one of arbitration and that it falls within the class of cases where a person is appointed to determine a certain matter, such as the price of goods, not for the purpose of settling a dispute which has arisen, but of preventing any dispute" and so on. 12. Lindley, L.J., while agreeing in the same view, observed:--"A valuer may be in one sense called an arbitrator, but not in the legal sense of the term. In the ordinary cases of arbitration there is a dispute which is referred.
12. Lindley, L.J., while agreeing in the same view, observed:--"A valuer may be in one sense called an arbitrator, but not in the legal sense of the term. In the ordinary cases of arbitration there is a dispute which is referred. The object of the valuation on the other hand is to avoid disputes" and so on. This case has been followed in our Court in the case of Chooney Money Dassee v. Ram Kinkur Dutt (1900) ILR 28 Calc. 155. There, the suit was for an injunction and damages for encroachment upon the property of which the Plaintiff (a Hindu widow) was a life-tenant and an order was made by consent that the Defendant was to purchase the Plaintiff's interest in the said property and pay her the price to be settled by certain referees nominated by the parties the price of the property was ascertained and reported upon by the referees to the Court and judgment was given by Ameer Ali, J., in favour of the Plaintiff according to the said valuation treating it as an award. But it was held by the Appellate Court that the referees were, in effect, rather valuators, than arbitrators and no judgment therefore could properly be given u/s 522 of the CPC in terms of their award. Maclean, C.J., in delivering the judgment of t the Court, observed as follows: It may well he that it was intended, in making that order (i.e., the order of reference to the referees) to make one u/s 506, but obviously it cannot properly be regarded as one under that section, for what the so-called arbitrators and umpire were to decide was not any matter in difference between the parties in the suit, but merely to settle the price of the Plaintiff's share and interest in the disputed property. They were in effect rather valuators than arbitrators see In re Cams-Wilson and Greene (1886) L.R. 18 Q.B.D. 7 and if the reference were not properly a reference u/s 506, it is reasonably clear that no order could properly be made u/s 522, the section under which the learned Judge purported to act. 13.
They were in effect rather valuators than arbitrators see In re Cams-Wilson and Greene (1886) L.R. 18 Q.B.D. 7 and if the reference were not properly a reference u/s 506, it is reasonably clear that no order could properly be made u/s 522, the section under which the learned Judge purported to act. 13. In the present case, though the reference was not through the intervention of the Court but a private reference, yet the same reason and principle would equally apply, for the question we have here to determine is whether there was "any matter in difference" between the parties, which could be and was referred to arbitration and whether the valuation, as made by the three persons appointed by the Plaintiff, was an award within the meaning of Section 525 of the Code. And it seems to us that this question must be answered in the negative. If, then, there was no award, it is obvious that the determination of the value of the buildings as made by the three persons appointed by the Plaintiff could not be filed in Court in accordance with the provisions of that section, nor can a decree be made as provided by Section 526 of the Code. 14. In this view of the matter, we are unable to give the Plaintiff any relief in this case. He has evidently misconceived his remedy. But what may be the remedy that he is entitled to seek, is not for us to say on this occasion. In the result, we think this appeal must be dismissed, but in the circumstances each party will bear his own costs.