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1946 DIGILAW 2 (SC)

CHHAB BA LAL v. KALLU LAL

1946-01-21

LORD GODDARD, LORD THANKERTON, SIR JOHN BEAUMONT

body1946
Judgement Appeal (No. 29 of 1944), by special leave, from a decree of the High Court (September 8, 1939), which set aside a decree of the Subordinate Judge of Cawnpore (November 3, 1933), passed in a partition suit and sent the case back to the Subordinate Judge with directions to re-admit it under its original number and to decide it in accordance with law. The following facts are taken from the judgment of the Judicial Committee. The question for decision in this appeal was whether a reference to arbitration made in this suit, and an award made thereon, were valid, as the Subordinate Judge held, or invalid, as the High Court held in appeal. The question arose in the following circumstances. The plaintiff (appellant) brought this suit for division of the property of a Hindu family governed by the Mitakshara. The plaintiff was the son of one Mukta Prasad, and the first three adult defendants (first three respondents), Kallu Lal, Sohan Lal and Sewak Lal were the sons of the only brother of Mukta Prasad, whilst the fourth and fifth defendants (respondents Nos. 4 and 5), Ram Lal and Jainarain, were the minor sons of Kallu Lal. The plaintiff alleged that the family had separated in status but that the property had not been divided, and he claimed partition of the property and that a half share be allotted to him. In their written statement, the adult defendants alleged that the family was still joint, but the claim for partition was not disputed. In the suit, Sohan Lal was appointed guardian ad litem of the minor defendants, and as such he adopted the written statement of the adult defendants. On September 1, 1933, an application was made to the Subordinate Judge by Kallu Lal, Sewak Lal and the plaintiff stating that the parties had appointed Shri Swami Ramanandji, who was the Guru of the parties, a referee for the decision of all the facts in dispute in the suit and also for the decision in respect of the costs of the suit, and they asked that the Swami might be appointed a referee under s. 20 of the Indian Evidence Act. On September 2, 1933, Sohan Lal appeared before the learned Subordinate Judge and verified that application, and the learned judge made the following note " This application was verified to-day by Sohan Lal, defendant, " on being identified by Babu Munna Lal, Vakil, after hearing " and understanding the same." On October 4/ 1933, the learned judge made an order that, according to the application of the parties, Shri Swami Ramanandji was appointed a referee under s. 20 of the Evidence Act for deciding this case and directed him, after deciding the case, to present himself in court or send in writing his statement in respect thereof. On October 7, 1933, the referee made his report dividing the family property into two parts, allotting one part to the plaintiff and the other to the defendants. Objections to the report on behalf of the minors were lodged on October 17, 1933, the two principal objections being, first, that the guardian of the minors did not purport to act as a guardian entering into the agreement for reference, and that as no previous sanction of the court had been obtained the agreement was not binding on the minors, and secondly, that the alleged agreement in terms only constituted Swami Ramanandji a referee under s. 20 of the Indian Evidence Act, and that as such he could only make statements and had no authority to make a division of the property. Objections were also filed on behalf of the adult defendants alleging fraud against the Swami, but it was not necessary to consider those objections on this appeal On November 3, 1933, the learned Subordinate Judge, having held that the reference to arbitration and the award were valid, passed a decree in the terms of the award. From that decree an appeal was brought to the High Court of Allahabad (Thorn C.J. and Ganga Nath J.) which, on September 8, 1939, allowed the appeal, set aside the decree of the lower court and sent the case back to the lower court to re-admit it under its original jurisdiction and to decide it in accordance with law. From that decree the present appeal was brought. The Code of Civil Procedure, 1908, Or. From that decree the present appeal was brought. The Code of Civil Procedure, 1908, Or. 32, r. 7, provides " (1.) No next friend or guardian for the suit shall, without " the leave of the Court, expressly recorded in the proceedings, " enter into any agreement or compromise on behalf of a " minor with reference to the suit in which he acts as next " friend or guardian. (2.) Any such agreement or compromise " entered into without the leave of the Court so recorded u shall be voidable against all parties other than the minor.” 1945. Dec. 12. Sir Thomas Strangman K.C., Wattach and Jayakar for the appellant. The first question is whether there was a valid agreement to refer which bound the minors. The main allegation in the petition of objection on behalf of the minors was that Sohan Lal, their guardian ad litem, did not purport to act as a guardian when entering into the agreement to refer, and in any case no previous sanction of the court having been obtained the agreement was not binding. While admittedly, Sohan Lal did not sign the application expressly as guardian and on his own behalf, it is submitted that it must be assumed that he signed in both capacities. The application to refer was properly made on behalf of all the parties to the suit. The provisions of Or. 32, r. 7, of the Civil Procedure Code have no application to the order of the Subordinate Judge appointing the referee. The words " expressly " recorded in the proceedings " are new ; they gave effect to the practice established under the old section of the Code Mullas Code of Civil Procedure, 9th ed., p. 873. The note of the Subordinate Judge .that Sohan Lal had verified the application was a sufficient compliance with Or. 32, r. 7. The minors challenge the validity of the agreement to refer, and say that the award was voidable. It is conceded that Mariam Bibi v. Amna Bibi (I. L. R. [ 1937] A. 317.) laid down that the next friend or guardian ad litem of a minor who is a party to a suit must obtain the leave of the court, expressly recorded in the proceedings, under Or. It is conceded that Mariam Bibi v. Amna Bibi (I. L. R. [ 1937] A. 317.) laid down that the next friend or guardian ad litem of a minor who is a party to a suit must obtain the leave of the court, expressly recorded in the proceedings, under Or. 32, r. 7, for entering ito an agreement of reference to arbitration, and that such leave must be obtained before an application for an order of reference is made. It may be mentioned, however, that by the decision in Mariam Bibi v. Amna Bibi (I. L. R. [ 1937] A. 317.) the High Court overruled Hardeo Sahai v. Gauri Shankar (( 1905) I. L. R. 28 A. 35.) and Lutawan v. Lachya (( 1913) I. L. R. 36 A. 69.) and that in Debir-ud-din v. Amina Bibi (( 1925) A. I. R. (Cal.) 475.) it was held that an agreement to refer to arbitration is not an agreement which is contemplated by Or. 32, r. 7. Further, it is submitted that no appeal lay from the decree of the Subordinate Judge upholding the award. The judge decides the objection to the award, and then there is an appeal only on two grounds—that the decree is not in accordance with the award or goes beyond its terms. The object of the Code of Civil Procedure is to u secure the finality of an award. When it 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 .... that decree is not appealable except " in so far as it may be in excess of or not in accordance with " the award " Ghulam Jilani v. Muhammad Hassan (( 1901) L. R. 29 I. A. 51.) ; s. 16, sub-s. 2, 2nd sched. to Civil Procedure Code. [Lord Thankerton Paras. 15 and 16 of the 2nd sched. to the Code of Civil Procedure deal with objections to the award, and here it is the agreement to refer which is attacked.] Sir Thomas Strongman K.C. conceded that if s. 16 did not apply, and he was wrong on Or. 32, r. 7, the appellant would be in a difficulty. 15 and 16 of the 2nd sched. to the Code of Civil Procedure deal with objections to the award, and here it is the agreement to refer which is attacked.] Sir Thomas Strongman K.C. conceded that if s. 16 did not apply, and he was wrong on Or. 32, r. 7, the appellant would be in a difficulty. Lastly, partition between the plaintiff and the adult defendants would not involve a partition between Kallu Lal and his sons Hari Bakhsh v. Babu Lal (( 1924) L. R. 511. A. 163, 170.) ; the minors had no interest other than in the share that would be allotted to their father. Further, a father is entitled to come to a partition which would bind him and his minor sons unless it was unfair or prejudicial to the interests of the minor sons Balkishen Das v. Ram Narain Sahu (( 1903) L. R. 301. A. 139,149.). Rewcastle K.C. and 5. Hyam for the respondents were not called on. 1946. Jan. 21. The judgment of their Lordships was delivered by SIR JOHN BEAUMONT, who stated the facts set out above and continued Neither the learned Subordinate Judge nor the High Court dealt with the objection that the reference was not justified by s. 20 of the Evidence Act. That section is in these terms " Statements made by persons to " whom a party to a suit has expressly referred for information " in reference to a matter in dispute are admissions." It is obvious that a reference to an outside party to decide matters in dispute in a suit, and the question of costs, is not a reference to that party for information in reference to a matter in dispute, and if the reference is to be regarded as made only under s. 20 it was a bad reference. However, the reference might have been made under the provisions of para. 7 (1.) and (3.) of the 2nd sched. to the Code of Civil Procedure, and their Lordships will treat the reference as so made, as the courts in India seem to have done, and regard the allusion to s. 20 of the Evidence Act as a mistake. The second objection requires more consideration. [His Lordship then referred to the terms of Or. to the Code of Civil Procedure, and their Lordships will treat the reference as so made, as the courts in India seem to have done, and regard the allusion to s. 20 of the Evidence Act as a mistake. The second objection requires more consideration. [His Lordship then referred to the terms of Or. 32, r. 7, of the Code of Civil Procedure, and continued ] The learned Subordinate Judge explained in his judgment disposing of the objections what took place in relation to the application for reference. He said that Sohan Lal in the first instance had not signed the application for a reference, and accordingly the learned judge directed that Sohan Lal should be brought before him the next day. Sohan Lal duly appeared the next day and verified the agreement. The learned judge considered that, since Sohan Lal signed the agreement without qualification, that is, without specifying whether he was acting in his own capacity or as guardian ad litem of the minors, he must be taken to have signed in all capacities in which his signature was required, and their Lordships are disposed to accept that view. The learned judge further considered that by referring the matter to arbitration the court must be taken to have been satisfied that the reference would be for the benefit of the minors. There was, indeed, no reason to doubt this, because the interest of the minors was identical with that of the other defendants, their father and uncles, and there was no reason to suppose that the interest of the minors was likely to be sacrificed. At the same time, it is clear that the terms of or. 32, r. 7, were not complied with. There was no formal application by the guardian ad litem for the leave of the court to his entering into the agreement for reference to arbitration, nor was any such leave formally given, or expressly recorded in the proceedings. The note on the record quoted above does not show that the judge realized that he was dealing with the guardian ad litem of minors. The requirement in Or. 32, r. 7, that the leave of the court be expressly recorded in the proceedings was added in 1908, and Sir Thomas Strangman, for the appellant, says that the addition to the rule merely gave statutory effect to the previous practice. The requirement in Or. 32, r. 7, that the leave of the court be expressly recorded in the proceedings was added in 1908, and Sir Thomas Strangman, for the appellant, says that the addition to the rule merely gave statutory effect to the previous practice. Be that as it may, the rule is imperative and, in their Lordships view, its terms must be strictly complied with. Their Lordships agree with the view of the High Court following on this point a ruling of a Full Bench of the Allahabad High Court in Mariam Bibi v. Amna Bibi (I. L. R. [ 1937] A. 317.), disagreeing with certain other Indian rulings, that Or. 32, r. 7, applies to an agreement to refer matters in dispute to arbitration. Such an agreement, which removes the decision of a matter in dispute from the jurisdiction of the court and refers it to some outside party, is clearly an agreement with reference to the suit, and not only falls within the terms of the rule, but comes within the mischief at which the rule appears to be aimed. The interests of minors might well be sacrificed by an improper reference to arbitration, and it is necessary that their interest be protected by the court. If minors successfully challenge an agreement to refer as not made in compliance with sub-r. 1 of r. 7, it is avoided against all parties under sub-r. 2. Sir Thomas Strangman has taken a second point, namely, that it is too late to challenge the award since no appeal lay from the decree of the Subordinate Judge made in terms of the award. In support of his argument he relies on the provisions of s. 16, sub-s. 2, of the 2nd sch. to the Code of Civil Procedure. The section is one of a group of sections conferring powers on the court in relation to an award made on a reference in a suit. Section 12 gives power to the court to modify the award in certain cases. Section 14 empowers the court to remit the award or any matter referred to arbitration to the reconsideration of the arbitrator in the cases specified. Section 12 gives power to the court to modify the award in certain cases. Section 14 empowers the court to remit the award or any matter referred to arbitration to the reconsideration of the arbitrator in the cases specified. Section 15 provides that no award shall be set aside except on the specific grounds mentioned, or the award " being otherwise invalid." Section 16 provides that where the court sees no cause to remit the award and no application has been made to set aside the award, or the court has refused such application, the court shall, after the time for making such application has expired, proceed to pronounce judgment according to the award. Then sub-s. 2 provides that upon the judgment so pronounced a decree shall follow and no appeal shall lie from such decree except in so far as the decree is in excess of, and not in accordance with, the award. The argument of Sir Thomas Strangman is that under the section the decree of the Subordinate Judge is final, and for this he relied on the case of Mariam Bibi v. Amna Bibi (I. L. R. [ 1937] A. 317.). The ruling of the court in that case that or. 32, r. 7, applies to an agreement to refer to arbitration has already been noted with approval. A further question referred to the Full Bench was " whether an objection to the validity of reference to " arbitration comes within the provisions of s. 15 of the " 2nd sch. to the Code of Civil Procedure/ The learned Chief Justice and Harries J. considered that it did, relying on the words " being otherwise invalid" in s. 15; Iqbal Ahmad J. considered that it did not. On this question their Lordships agree with the view of Sir Iqbal Ahmad. In their opinion all the powers conferred on the court in relation to an award on a reference made in a suit presuppose a valid reference on which an award has been made which may be open to question. If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceeding. By way of contrast the language of s. 21 of the 2nd sch. may be noted. If there is no valid reference, the purported award is a nullity, and can be challenged in any appropriate proceeding. By way of contrast the language of s. 21 of the 2nd sch. may be noted. That section empowers the court to pronounce judgment according to an award made on a reference out of court, and the opening words require the court to be satisfied that the matter has been referred to arbitration. There are no such words in s. 16. In their Lordships view, therefore, an appeal lay to the High Court in this case. For these reasons their Lordships think that the decision of the High Court was right, and they will humbly advise His Majesty that this appeal be dismissed. The appellant must pay the costs of the respondents.