Chinta Money Aditya v. Haladhur Maiti — 1905 DIGILAW 138 (CAL)

JUDGMENT Stephen J. 1. This appeal arises out of an application made by the Plaintiff (the first party) under sec. 525 of the CPC to have an award made without the intervention of the Court, filed. Opposition was made by the Defendant (second party) on the ground chiefly of the misconduct and corruption of the arbitrators, but it was also alleged that the authority of the arbitrators had been withdrawn before their decision was come to. The Subordinate Judge of Midnapore to whom the application was made, disallowed the objection and directed the award to be filed, and that a decree should follow. The Defendant, second party, being dissatisfied with this decision appealed to the District Judge, who held that no appeal lay, relying on the decision of the Privy Council in Ghulam Khan v. Muhammad Hussan 6 C.W.N. 226: s.c.I.L.R. 29 cal. 167; L.R. 29 IndAp 51 (1901). The question before us is whether this was a correct decision. The opening paragraphs of the judgment of their Lordships in the case referred to in terms constitute a general statement of the law deciding questions raised by various conflicting decisions in the Courts of this country. It is laid down that no appeal lies from a decree pronounced under sec. 522, that is in a suit in which the matter in dispute has been referred to arbitration, except in so far as the decree may be in excess of, or not in accordance with the award: that is there is no appeal as to the validity of the award on any ground whatever. This procedure is to be applied as nearly as possible to such cases as the present, where the arbitration takes place and the award is made without the intervention of the Court; an application under sec. 525 is described as a suit, ensuing proceedings may be--in this case they were--litigious, and the final order of the Court is a decree. 2. The argument of the Appellant is that this decision does not prevent him from appealing on the ground that there never was any arbitration, and that what purports to be an award is in fact no award at all. The force of this argument depends chiefly on two cases in this Court. In Kali Prosanna Ghose v. Rajani Kanta Chatterjee ILR 25 Cal. 141 (1897). The force of this argument depends chiefly on two cases in this Court. In Kali Prosanna Ghose v. Rajani Kanta Chatterjee ILR 25 Cal. 141 (1897). it was held that where a Subordinate Judge refused to set aside an award under sec. 521 there was an appeal from his decree on the ground that owing to the position of one of the arbitrators in relation to one of the parties, there had been no valid award. This decision was followed in Mahomed Wahiuddin v. Hakiman ILR 25 Cal. 757 (1898) where the main point to be decided was whether the Court could entertain an objection to the filing of an award on the ground that there had been no legal reference to arbitration. It was argued that it could not be within the power of the Court acting under sec. 525 to consider such a matter, because no appeal lay from its decision. To this it was held to be a valid answer that such an appeal would in fact lie. 3. The law as laid down by this Court before the decision in the Privy Council was therefore that the question of award or no award was one for the Court acting under sec. 525; and that an appeal lay from the Court's decision on the point. Has this law been altered by that decision ? 4. We are not now concerned with such a case as Ponnusami v. Mandi ILR 27 Mad. 255 (1903)., where it was held that a refusal under sec. 525 to file an award is a decree and appealable, a view which is in accordance with Mahomed Wahiuddin v. Hukiman ILR 25 Cal. 757 (1898) which has been followed by this Court in the case of Abdul Taker v. Azmut Bibi 2 C.L.J. 80(1905). and which seems to me to be based on a sounder reading of the judgment in the Privy Council than that adopted in Kartic Ram v. Babu Lal ILR 26 all (1903), where it was held that such a refusal was not a decree and therefore not appealable. Where the Court refuses under sec. 626 to file the award, the law relating to proceedings under sec. 522 is not applicable because the validity of the reference, for example, may be in question in one case but cannot be in the other. Where the Court refuses under sec. 626 to file the award, the law relating to proceedings under sec. 522 is not applicable because the validity of the reference, for example, may be in question in one case but cannot be in the other. What we have to consider is the case in which the award has been allowed and the decree has been made. And I can only read the judgment of the Privy Council as meaning that in such a case an order under sec. 526 is to be treated like a decree under sec. 522, that is that no appeal lies from it except in so far as it is excess of or not in accordance with the decree. The distinction between the case in which the Court has ordered the award to be filed and that in which it has refused to do so, is that in the former the Court has shown itself satisfied with the regularity of the submission to arbitration, in the latter it does not. Consequently in the former the proceedings are brought into line, so to speak, with proceedings under sec. 522 where the submission takes place under the authority of the Court and it therefore becomes possible to apply the provisions of sec. 522, but in the latter case this stage is never arrived at. A decree under sec. 526 has thus a wider scope than one under sec. 522; because it may decide, as it does in this case, on the legality of the award apart from matters mentioned in secs. 520 and 521. But this seems to me to have been borne in mind in the decision in Ghulam Khan v. Muhammad Hussan 6 C.N. 226: s.c.I.L.R. 29 Cal. 167; L.R. 29 IndAp 51 (1901). and therefore to be no ground for supposing that no appeal lies. 6. 520 and 521. But this seems to me to have been borne in mind in the decision in Ghulam Khan v. Muhammad Hussan 6 C.N. 226: s.c.I.L.R. 29 Cal. 167; L.R. 29 IndAp 51 (1901). and therefore to be no ground for supposing that no appeal lies. 6. The foregoing view is not in accordance with an opinion expressed by a Divisional Bench of this Court (Maclean, C.J., and Geidt, J.) in an unreported case [Original Appeal No. 169 of 1901 Since reported, Nadiar Chaned v. Gobind Chander, 2 C.L.J. 61 (1903)] where an appeal was brought against the decree of a Subordinate Judge ordering that an award made in a private arbitration should be filed and a decree passed in accordance with it, and the judgment contains the following passage :--" A preliminary point was taken that appeal did not lie in this case. " In the view we take of the case, it is unnecessary to decide the point, but as at present advised the inclination of my opinion is that an appeal does lie, having regard to the passage in Ghulam Khan v. Muhammad Hussan (1) to which I have referred. The case was in fact decided against the Appellant on the merits and it appears that the present point was not argued out : at all events it certainly was not decided. On the other hand, in the case of Debendra Nath Chatterjee v. Sarbaman-gola Debi 8 C.W.N. 910 (1904) the Court certainly seems to consider that the decision in Ghulam Khan v. Muhammad Hussan 6 C.W.N. 226 : s.c.I.L.R. 29 Cal. 167; L.R. 29 IndAp 51 (1901). left it open to the Appellant before them to raise the question of whether there was a valid award or not, the point to be decided being whether the award was made in time, but they also held that the decision in the Privy Council did prevent the question of the misconduct of the arbitrator being raised before them and this could not have been raised for any purpose except to show that there was no legal award. We may therefore conclude that the question of the full effect of the decision in question was not raised before them. 7. We may therefore conclude that the question of the full effect of the decision in question was not raised before them. 7. The general result of the decision of the Privy Council seems to me to be that in so far as the decision in Mahomed Wahiuddin v. Hakiman ILR 25 Cal. 757, 773 (1898) allowed an appeal from a decree of the Court under sec. 526, it must be taken to be overruled : that no appeal lies from such a decree except on the non-accordance between the decree and the award : and that the District Judge in this case had no jurisdiction to entertain the question whether or not there had been a legal award. 8. The appeal is therefore dismissed with costs. Mookerjee, J. 9. I agree with my learned brother that this appeal cannot succeed. The facts of this litigation so far as they are necessary for the decision of the question of law raised before us, lie in a narrow compass. The Appellant and the Respondent referred certain matters in dispute between them to arbitration without the intervention of a Court. The arbitrators published their award in July 1903, and immediately after the Plaintiff, Respondent applied to the Subordinate Judge at Midnapur, within whose jurisdiction the subject-matter of the arbitration was situated, that the award be filed in Court under sec. 525 of the Civil Procedure Code. The application was numbered and registered as a suit and the usual notice was issued upon the present Appellant requiring him to show cause why the award should not be filed. Cause was shown on the grounds that there had been a valid revocation of the reference to arbitration, that the arbitrators had been guilty of judicial misconduct, that one of them had been guilty of corruption and that the award had left undetermined some of the matters referred to arbitration and had deter- mined others not so referred. The learned Subordinate Judge held upon the evidence that the grounds alleged had not been established and ordered the award to be filed. The learned Subordinate Judge held upon the evidence that the grounds alleged had not been established and ordered the award to be filed. A decree was thereupon drawn up in the following terms: " It is ordered that the award in suit be filed; a statement of the decisions of the arbitrators contained in their award is given on the next page" and then follows a schedule showing in one column every item of the subject-matter in dispute and in another column the corresponding decision of the arbitrators. The Defendant appealed against this decree to the District Judge and sought to question the validity of the award before him on the grounds which had been unsuccessfully urged in the Court of first instance. The learned District Judge has dismissed the appeal, because in his opinion no appeal lies from the decree made in accordance with the award. The Defendant has appealed to this Court and on his behalf the decision of the learned Judge has been assailed on the ground that the appeal was competent and should have been heard on the merits. In my opinion this contention cannot be successfully maintained and must be overruled. 10. Sec. 525 of the CPC deals with reference to arbitration made without the intervention of a Court of Justice and provides for applications to file private awards. Such application is to be numbered and registered as a suit between the applicant as Plaintiff and the other parties as Defendants, and notice is to be given to the parties to the arbitration other than the applicant requiring them to show cause within a time specified why the award should not be filed. Sec. 526 then provides that if no ground such as is mentioned, or referred to in sec. 520 or sec. 521, be shown against the award, the Court shall order it to be filed, and such award shall then take effect as an award made under the provisions of Chap. XXXVII of the Code. As pointed out by Edge, C.J., in delivering the judgment of the Full Bench in the Allahabad High Court in Amrit Ram v. Dasrat Ram ILR 17 All. 21 (1894)., this section does not confine the grounds which might be shown to the filing of the award to the precise grounds mentioned or referred to in sec. As pointed out by Edge, C.J., in delivering the judgment of the Full Bench in the Allahabad High Court in Amrit Ram v. Dasrat Ram ILR 17 All. 21 (1894)., this section does not confine the grounds which might be shown to the filing of the award to the precise grounds mentioned or referred to in sec. 520 or 521, for as is obvious from the use of the words " such as is mentioned " the legislature intended that the grounds which might be shown should be those mentioned or referred to or grounds ejusdem generis with those mentioned or referred to in secs. 520 and 521. Upon an adjudication as to the validity of the grounds urged against the award, one of two courses is open to the Court, namely, it may either refuse to file the award or order it to be filed. In the latter event, the award takes effect as an award made under the provisions of Chap. XXXVII of the Code. In other words reading sec. 526 with sec. 522 the provisions of which are, as observed by Mr. Justice Banerjee in Mahomed Wahiuddin v. Hakiman ILR 25 Cal. 757,773 (1898)., and by Edge, C.J., in Ummi Fazl v. Rohimunnissa ILR 13 All. 366 (1890)., by implication made applicable to cases under the former section, the Court must proceed to give judgment according to the award and upon the judgment so given a decree shall follow, from which decree no appeal shall lie except in so far as the decree is in excess of or not in accordance with the award. To put the matter in another way the effect of the last clause of sec. 526 is to attach the same finality to decrees made in accordance with private awards ordered to be filed under that section, as is attached by sec. 522 to decrees made in accordance with awards by arbitrators appointed through the intervention of the Court. Now as regards the finality to be attached to decrees of this latter description the question has been authoritatively settled by the decision of the Judicial Committee in Ghulam Jilani v. Muhammed Hussan 6 C.W.N. 226 : s.c.I.L.R. 29 Cal. 522 to decrees made in accordance with awards by arbitrators appointed through the intervention of the Court. Now as regards the finality to be attached to decrees of this latter description the question has been authoritatively settled by the decision of the Judicial Committee in Ghulam Jilani v. Muhammed Hussan 6 C.W.N. 226 : s.c.I.L.R. 29 Cal. 167; L.R. 29 IndAp 51 (1901)., where their Lordships poiuted out that the object of the CPC is to secure the finality of an award and that consequently when an award has been duly made on a reference in a suit and the Court has refused to set it aside or correct or modify it, the Court must pass a decree thereon and such decree is not appealable except in so far as it may be in excess of or not in accordance with the award. The learned Counsel for the Appellant however placed considerable reliance upon the decision of this Court in the case of Kali Prosanna Ghose v. Rajani Kanta Chatterjee ILR 25 Cal. 141 (1897)., which was treated as containing an accurate statement of the law in the Full Bench case of Mahomed Wahiuddin v. Hakiman ILR 25 Cal. 757 at 763 (1898), and which is an authority for the proposition that an appeal will lie against a decree given in accordance with an award under sec. 522 of the Code, when the award upon which the decree is based is not a valid and legal award. After a careful examination of the grounds upon which the decisions just referred to were based, as also the judgment of their Lordships of the Judicial Committee, I am of opinion that these cases in so far as they decided that a decree made in accordance with an award may be challenged by way of appeal on the ground that there is no valid and legal award, have been overruled by the Judicial Committee and can no longer be treated as regards this particular proposition as authorities binding on this Court. Indeed, as appears from the report, the case of Kali Prosanna v. Rajani Kanta ILR 25 Cal. 141 (1897). was relied upon by Sir W. Rattigan who argued before the Judicial Committee in support of the view that an appeal lies as of right from a decree which has been made on a void award. Indeed, as appears from the report, the case of Kali Prosanna v. Rajani Kanta ILR 25 Cal. 141 (1897). was relied upon by Sir W. Rattigan who argued before the Judicial Committee in support of the view that an appeal lies as of right from a decree which has been made on a void award. This contention was negatived by their Lordships although no express reference was made to the cases which had been relied upon in support of this position. The view I take of the effect of the decision of the Judicial Committee is supported to some extent, by the case of Debendra Hath. v. Sarbamingola 8 C.W.N. 916 (1904)., Hara Nund v. Dyal Chand Mis. Ap. No. 235 of 1901, Hill and Brett, JJ., 19th May 1902 (unreported). and Walji v. Ebji 6 B.L.R. 132 (1904)., though instances are not wanting where it has been completely overlooked. See for example, Hafizullah v. Rahmatullah All. W.N. 159 (1903).. It has been argued, however, by the learned Counsel for the Appellant that although an appeal may not lie against a decree which has been made on a void and illegal award under sec. 522 of the Civil Procedure Code, the same doctrine does not apply to a case under sec 526, and in support of this proposition he relies upon the following passage from the judgment of the Judicial Committee in Gulam Jilani v. Muhammad Hussan 6 C.W.N. 226 : s.c I.L.R 29 Cal. 167; L.R. 29 IndAp 51, (58) (1901:--" In cases falling under Heads II and III (that is, cases under secs. 523 and 525) the provisions relating to cases under head I (that is, cases under sec. 506) 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 I 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 proceeding up to that point. In cases falling under Head I 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 proceeding up to that point. In cases falling under Heads II and III, proceeding 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 shown 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." Upon the strength of this passage it is argued that if the order made on the application under sec. 525 is a decree, it is appealable under sec. 540 of the Code. I am unable to accede to this broad contention which appears to me to overlook the important fact that a decree under the Code may or may not be appealable, as is shown by sec. 522, which expressly bars an appeal against a decree made in accordance with an award. It follows consequently that an order on an application under sec. 525, though a decree, may not be appealable by reason of the limitation imposed by sec. 522. To take one illustration : if the application under sec. 525 is rejected, and the Court refuses to file the award, the order of refusal would be a decree, because it would be the formal expression of the adjudication upon the right claimed, and, would be open to appeal, because it would not be a decree in accordance with the award within the meaning of sec. 522. This view is supported by a decision of the Full Bench of the Madras High Court in the case of Ponnusami v. Mandi ILR 27 Mad. 255 (1903)., with which I entirely agree and also by the decision of this Court in the case of Abdul Taker v. Azmut Bibi 2 C.L.J. 80 (1905). I am not unmindful of the decision of the High Court of Allahabad in the case of kartic Ram v. Babu Lal ILR 26 All. 255 (1903)., with which I entirely agree and also by the decision of this Court in the case of Abdul Taker v. Azmut Bibi 2 C.L.J. 80 (1905). I am not unmindful of the decision of the High Court of Allahabad in the case of kartic Ram v. Babu Lal ILR 26 All. 205 (1903)., where the observations of the Judicial Committee are explained away as an obiter dictum on what appears to me to be insufficient grounds. The learned Judges suggested that what their Lordships said was intended to apply to cases where an order has been made directing an award to be filed and not to cases where the application is rejected. I regret I am entirely unable to accept this interpretation which would have the obvious effect of giving a right of appeal against the order directing the award to be filed, although such right of appeal is barred by sec. 522 so far as the decree drawn up pursuant to that order is concerned.; to my mind this would be contrary to the scheme and policy of the Code. I must hold accordingly in concurrence with the learned Judges of this Court and of the Madras High Court and dissenting from the view of the learned Judges of the Allahabad High Court that an order of refusal to file an award under sec. 526 is a decree against which an appeal lies. I must further hold that in the converse case, namely, in which the application to file the award is successful and a decree is drawn up in accordance with the award, no appeal lies against such decree. This was also the view taken of the effect of the provisions of the Code of 1859, see Vishun v. Ravji ILR 3 Bom. 18 (1878), where it was held that a decree passed by a Civil Court in accordance with an award of arbitrators made without the intervention of a Court of Justice under sec. 327 of Act VIII of 1859, was not subject to appeal. I should add that the view I take is perhaps not quite reconcilable with the observations of the learned Judges in the case of Nadiar Chand v. Gobind Chander 2 C.L.J. 61 (1903). where reference was made in support of the view that an appeal lies against a decree made in accordance with an award under sec. I should add that the view I take is perhaps not quite reconcilable with the observations of the learned Judges in the case of Nadiar Chand v. Gobind Chander 2 C.L.J. 61 (1903). where reference was made in support of the view that an appeal lies against a decree made in accordance with an award under sec. 526, to the passage from the judgment of the Judicial Committee which I have already quoted but although it may be conceded that an order upon the application to file an award has the force of a decree, the effect of sec. 522 in barring an appeal against such a decree was not considered and the point was expressly left undecided. I may further point out that the first of the two grounds upon which the validity of the award was challenged in that case, namely, first, that the deed of reference to arbitration was a forgery, and, secondly, that there had been judicial misconduct on the part of the arbitrators, might bring the case within the scope of the doctrine affirmed by a Full Bench of the Madras High Court in the case of Husananna v. Linganna ILR 18 Mad. 423 (1895), that an appeal lies against a decree passed upon an award under sec. 526 of the Civil Procedure Code, when the cause shown against the filing of the award has denied the submission to arbitration and the genuineness of the award. The distinction pointed out by Mr. Justice Subramania Ayyar between an objection to an award on the ground of judicial misconduct of the arbitrators, and, an objection on the ground that there was in fact no submission to arbitration at all, is not one of mere form but substance, because in the latter case an element essential to the foundation of the jurisdiction of the Court is wanting., and it may be suggested with considerable force that this distinction is recognized by the Judicial Committee in the passage I have already quoted, where it is pointed out that in the case of an application to enforce a private award questions may arise as to the regularity of the proceedings before the matter is brought into Court, that is, of proceeding relating to the reference to arbitration. It is not necessary however to pursue this line of enquiry further for in the case now before me the validity of the award is not challenged on either of the two grounds mentioned in Husananna v. Linganna ILR 18 Mad. 423 (1895), and no question therefore arises as to how far that case upon which reliance was placed on behalf of the Appellant before the Judicial Committee in Ghulam Jilani v. Muhammad Hussan 6 C.W.N. 226: s.c.I.L.R. 29 Cal. 167; L.R. 29 IndAp 51 (55) (1901)., has been by implication affected by the decision of their Lordships. The learned Counsel for the Appellant also referred in support of his argument to the case of Abdul Taker v. Azmut Bibi 2 C.L.J. 80 (1905)., which however on careful examination appears to me to be distinguishable and does not advance his contention. In that case an application was made under sec. 525 to file a private award, objections were taken and allowed and the Court refused to file the award; upon appeal to the Subordinate Judge he held that the grounds urged against the validity of the award could not be supported and made a decree in accordance with the award. The matter was then brought on appeal to this Court and two questions arose for decision, namely, first, whether an appeal lay to the Subordinate Judge against the order of the Munsif refusing to file the award, and, secondly, whether an appeal lay to this Court against the decree of the Subordinate Judge made in accordance with the award. Both these questions were answered in the affirmative and I think rightly, the first, because an order refusing to file an award is a decree as is pointed out in Ponnusami v. Mandi (4), and, second, because the bar provided by sec. 522 is applicable only when a decree has been made in accordance with the award by the Court of first instance and not when a similar decree has been made by a Court of Appeal in reversal of the order of the first Court setting aside the award, as is pointed out in Shyama Charan v. Prolhad Durwan (16). The rules deducible from this case are manifestly of no avail to the Appellant. The rules deducible from this case are manifestly of no avail to the Appellant. The result, therefore, is that the view taken by the District Judge that the appeal preferred to him was incompetent, must be upheld, and this appeal dismissed with costs.