Partap Mal v. Sejmal — 1951 DIGILAW 51 (MP)

ORDER : 1. This is a petition in revision by the defendants in the suit to revise an order of the District Judge, Shajapur remitting an award for findings by the arbitrators on certain issues left undetermined by them. The suit out of which this revision petition arises was filed by the plaintiffs on 14-7-1947 in the Court of the District Judge Shajapur for the cancellation of the sale-deed and for the consequential reliefs of the possession of a house dealt with by the sale-deed and the delivery of the sale deed to the plaintiffs. On 17-10-49 the parties to the suit applied to the Court for an order of reference under S. 454, Gwalior Civil P. C. Samvat 1966 referring to arbitration certain matters in difference between them in the suit. The order of reference was made on 17-10 1949 and the arbitrators were asked to make the award before 29-2-1950. The arbitrators were unable to complete the award before 29-2-1950. On 2-3-1950, the defendants asked the Court to revoke the order of reference as the arbitrators had failed to give their award before the period specified in the order of reference. The Court, however, enlarged the period for making the award which was ultimately given on 16-3-1950. While the arbitration proceedings were pending and before the making of the award the Gwalior Civil P. C. was repealed by Act No. 70 of 1949. By this Act, the Indian Civil P. C. as it was in force in the Indian Union on 22-1-1950 was adapted mutatis mutandis with effect from 22-1-1950. After the award was filed, the defendants lodged objections for setting aside the award. These objections were disallowed by the Court; it, however, considered that the award had left undetermined some matters referred to arbitrators and, therefore, remitted the award to the re-consideration of the arbitrators under para 14 of the repealed Sch. II, Indian Civil P. C. 2. In this revision petition, the main objection of the applicants is that after the repeal of the Gwalior Civil P. C. and the application of the Indian Civil P. C. in Madhya Bharat, the arbitrators had no jurisdiction to continue with the arbitration proceedings and make an award, and the Court also had no jurisdiction to pass any decree on the award. Learned counsel for the applicants argued that the provisions relating to arbitration which were formerly contained in Sch. II, Indian Civil P. C. were repealed in 1940 by S. 49, Indian Arbitration Act, 1940; that on 22-1-50, the Indian Civil P. C. did not contain any provisions relating to arbitration and that, therefore, when the Indian Civil P. C. was adapted in Madhya Bharat by Act No. 70 of 1949 repealing the Gwalior Civil P. C, there remained no provision of law under which an order of reference could be made to arbitrators or the arbitrators could proceed with pending arbitration or the Court could pass a decree on the award. It was said that as from 22-1-1950 the arbitrators in the suit ceased to have any jurisdiction to continue with the arbitration and the Court also lost its jurisdiction to pass a decree on the award, the Court should have withdrawn the proceedings from the arbitrators and proceeded to decide the suit in accordance with the ordinary procedure in the Code. 3. Mr. Sahasrabudhe who appeared on behalf of the non applicants conceded that if during the pendency of the arbitration proceedings, the arbitrators lost the jurisdiction to make an award and the Court also ceased to have jurisdiction to make a decree in accordance with the award, the arbitration proceeding so far held in the suit are a nullity and must be set aside and the suit must be tried and decided by the Court. He, however, submitted, that the Second Schedule to the Indian Civil P. C. was never repealed and that on 22-1-50 the Schedule was in force in India along with the other provisions of the Code. The argument is, that although S. 49, Indian. Arbitration Act, 1940 repealed the Second Schedule to the Civil P. C. 1908, yet the effect of this section and S. 48, Arbitration Act, is not to repeal in toto the Schedule but only to restrict its applicability to references pending at the commencement of the Arbitration Act. Learned counsel for the non - Applicants sought to argue that the provisions relating to arbitration contained in the Second Schedule could not be applied to pending references unless the Schedule was kept in force. Learned counsel for the non - Applicants sought to argue that the provisions relating to arbitration contained in the Second Schedule could not be applied to pending references unless the Schedule was kept in force. It was, therefore, maintained that on 22-1-50 the Second Schedule containing the provisions relating to arbitration was a part of the Code of Civil Procedure 1908 and that, therefore, in the present suit the arbitrators and the Court had the necessary jurisdiction after 22-1-50 under that Schedule. 4. In my opinion, the contention raised by the learned counsel for the applicants is well founded and must be accepted. The statutory law of arbitration in the area of Madhya Bharat comprising the former Gwalior State was embodied in Chap. 35, Gwalior Civil P. C. Samvat 1966. The provisions of this Chapter were analogous to those contained in Sch. 2, Civil P. C, 1908. The Gwalior Civil P. C. was repealed by S. 4 of Act No. 70 of 1949 which came into force on 22-1-50. Section 3 of this Act made applicable in Madhya Bharat the Code of Civil Procedure 1908 as it was in force in India on 22-1-50. There was no provision in Act No. 70 of 1949 saving any of the provisions of the Gwalior Civil P. C. I have no doubt in my mind that on 22-1-50 the Civil P. C. 1908 as it was in force in India, did not contain any law or procedure relating to arbitration. The Sch. II to the Code, as it originally stood, embodied the law of arbitration. But it was repealed in 1940 by S. 49, Indian Arbitration Act. Section 48, Arbitration Act, no doubt, provides that the Act shall not apply to any reference pending at the commencement of the Act, to which the law in force immediately before the commencement of the Act shall notwithstanding any repeal effected by the Act, continue to apply. But I am unable to accept the contention of the learned counsel for the non - Applicants that the effect of Ss. 48 and 49, Arbitration Act is to keep Sch II to the Civil P. C, 1908 in force and to restrict its applicability to pending references It must be remembered that the Arbitration Act of 1940 was enacted to consolidate and amend the law relating to arbitration. 48 and 49, Arbitration Act is to keep Sch II to the Civil P. C, 1908 in force and to restrict its applicability to pending references It must be remembered that the Arbitration Act of 1940 was enacted to consolidate and amend the law relating to arbitration. This is clear from the preamble of the Act and S. 47 of the Act which says that subject to the provisions of S. 46 and of any other Act for the time being in force, arbitration proceedings will be governed by the Arbitration Act. Section 49 of the Act repealed Sch. II to the Civil P. C. 1908 without any qualification. When, therefore, S. 48 exempts from the operation of the act all references made before the Arbitration Act came into force and further says that the law which was in force immediately before the commencement of the Act shall, notwithstanding, their repeal continue to apply to any pending references, the effect is to incorporate by implication in the Arbitration Act itself the provisions of Sch. II to Civil P. C. 1908 and to apply it to pending references. If after the coming into force of the Arbitration Act 1940, any pending reference was disposed of in accordance with the provisions contained in Sch. II it was not because Sch. II was not repealed but kept in force but because the provisions of the repealed Schedule were made applicable to pending references by virtue of S. 48, Arbitration Act which is an Act consolidating and amending the law relating to arbitration. There is, therefore, no substance in the contention put forward on behalf of the non - Applicants that by Act No 70 of 1949 the Indian Civil P. C. was adapted in the Madhya Bharat together with Sch. II as it stood before the enactment of the Arbitration Act, 1940. In my judgment, after 22 1 50 with the adaptation of the Indian Code of Civil Procedure 1908 and until very recently when the Indian Arbitration Act was extended to Madhya Bharat on 1-4-51, there was no Law of Arbitration in the area of Madhya Bharat comprising the former Gwalior State. 5. In my judgment, after 22 1 50 with the adaptation of the Indian Code of Civil Procedure 1908 and until very recently when the Indian Arbitration Act was extended to Madhya Bharat on 1-4-51, there was no Law of Arbitration in the area of Madhya Bharat comprising the former Gwalior State. 5. An examination of the provisions of Chap 35, Gwalior Civil P. C. leaves no room for controversy that with the repeal of the Gwalior C. P. Code and in the absence of any other law relating to arbitration, the Court has no power to make an order of reference to arbitration or to pass a decree on an award and likewise the arbitrators have no power to continue any arbitration proceedings. Chapter 35, Gwalior Civil P. C. dealt with arbitrations under three heads : (1) firstly, where in a suit all the parties interested agreed to refer to arbitration any matter in difference between them in the suit and all proceedings from first to last were under the supervision of the Code. (2) Secondly, where parties without having recourse to litigation agreed to refer their differences to arbitration and it was desired that the agreement of reference should have the sanction of the Court, the parties applied to the Court to have the agreement filed and an order of reference made and all further proceedings after making of the order of reference were made under the supervision of the Court; (3) thirdly, where the agreement of reference was made and the arbitration took place without the intervention of the Court and the assistance of the Court was only sought to give effect to the award, chapter 35, Gwalior Civil P. C. contained clear and distinct provisions defining the powers of the arbitrators and regulating the procedure in respect of each type of arbitration. The jurisdiction in respect of each kind of arbitration was to be exercised through the machinery provided in chap. 35, Gwalior Civil P. C. It was after this prescribed procedure had been followed and the Court saw no cause to remit an award for re consideration to the arbitrators or to set aside the award, that the Court proceeded to pronounce a judgment on the basis of the award and to make a decree accordingly. Ordinarily, the Court, before whom the suit is filed, is required to try and decide itself the suit. Ordinarily, the Court, before whom the suit is filed, is required to try and decide itself the suit. Unless the suit is withdrawn the Court cannot refuse to decide the suit. The judgment and decree in the suit are made after the case has been heard in accordance with the prescribed procedure. Chapter 35, Gwalior Civil P. C. enabled the parties to substitute a domestic tribunal for the ordinary Court to settle matters in difference between them in a speedy and inexpensive way and to make effective the decision of the domestic tribunal by asking the Court to make a decree founded upon the decision of the domestic tribunal The power of the parties to withdraw the dispute from the ordinary Courts and to substitute a domestic tribunal, the powers of the arbitrators to make an award and the power of the Court to make a decree founded upon the award were defined by the rules contained in chap. 35. In arbitration proceedings under this chapter, the Court retained a controlling jurisdiction over the arbitrators and the domestic tribunals, and the jurisdiction to pass a decree on the basis of the award. The Court had no jurisdiction to pass a decree on an award except in accordance with the provisions of Chap. 35. It follows, therefore, that if the law investing the Court with the jurisdiction to make a decree on the basis of an award and investing the arbitrators with the jurisdiction to make an award is repealed during the pendency of any arbitration proceedings and the arbitrators and the Court cease to have such jurisdiction, the arbitration proceedings cannot be continued and the case must be tried and decided by the Court in the ordinary manner. It is not enough that the Court had jurisdiction to make an order of reference to arbitration and to pass a decree on the basis of the award at the time the parties applied to the Court for arbitration. It is essential that the arbitrations and the Court must possess the jurisdiction at the time of making the award and of passing the decree thereon. Therefore, if the Court and arbitrators lose this jurisdiction during the pendency of any arbitration proceedings they cannot be continued. 6. In the present case the arbitrators and the Court ceased to have after 22-1-50 the jurisdiction in relation to arbitration proceedings conferred on them by chap. Therefore, if the Court and arbitrators lose this jurisdiction during the pendency of any arbitration proceedings they cannot be continued. 6. In the present case the arbitrators and the Court ceased to have after 22-1-50 the jurisdiction in relation to arbitration proceedings conferred on them by chap. 35, Gwalior Civil P. C. All proceedings, therefore, held after 22-1-50 leading upto the making of the award and its remission by the Court are void. The plaintiff's suit must now be tried in accordance with the ordinary procedure, unless the parties desire to make a fresh reference to arbitration in accordance with the Indian Arbitration Act 1940 which has now been extended to Madhya Bharat. 7. For the above reasons, the order dated 17-1-50 of the District Judge, Shajapur remitting the award to the arbitrators for re-consideration is set aside and the trial Court is directed to try and decide itself the suit in accordance with law. Parties shall bear their own costs of this revision petition.