DEKA J.: The petitioner instituted a suit on 2-8-50 in the Court of the Subordinate Judge, L. A. D. at Gauhati for recovery of a sum of Rs. 4,185/87- on the basis of two promissory notes executed by the defendant-opposite party in his favour and the defendant pleaded liability only to the extent of Rs. 600/- stating inter alia that the promissory note for Rs. 600/- was executed on an adjustment of accounts between the parties, they having carried on a joint business between themselves. On 19-9-1951, both the parties filed a joint petition in the Court of the Subordinate Judge praying that the matter might be referred to arbitration of three members, one to be nominated by each of the parties and the third to be nominated by the Court and accordingly, two persons, Ganga Narayan Dev Sarma and Chakrapani Das were nominated by the two contending parties and the Subordinate Judge nominated Mr. Iswar Chandra Medhi as the third arbitrator in terms of the petition filed by the parties and the date for submission of the award was fixed for 20-11-1951 which was subsequently extended upto 29-2-52. On 24th February, Ganga Narayan Sarma wrote to Iswar Chandra Medhi that there was no proper sitting of the arbitrators and he pleaded inability to file any award. Chakrapani Das wrote another report to Iswar Chandra Medhi expressing an opinion that the suit should be decreed for Rs. 6007- with Rs. 517- as costs and Iswar Chandra Medhi accepted the report of Chakrapani Das and filed his report to the Court on 7-3-1952 concurring with the view expressed by Chakrapani Das in his report and he forwarded the two reports submitted by his colleagues. The plaintiff filed an objection to the validity of the award and the learned Subordinate Judge by his order dated 2-1-53 set aside the award and directed that the suit should proceed in the Court as usual. Against that order, an appeal was taken to the Court of the District Judge, L. A. D. who by his order dated 6-5-1954 upheld the order of the learned Subordinate Judge setting aside the award but directed that 'the suit be remitted" to the same set of arbitrators for reconsideration.
Against that order, an appeal was taken to the Court of the District Judge, L. A. D. who by his order dated 6-5-1954 upheld the order of the learned Subordinate Judge setting aside the award but directed that 'the suit be remitted" to the same set of arbitrators for reconsideration. The plaintiff being dissatisfied with this order moved this Court for setting aside the order of the District Judge on two grounds- (1) that the award being set aside as void there was no scope for remitting the matter to the arbitrators for reconsideration inasmuch as there was nothing to remit under S. 16, Arbitration Act and (2); that the award not being submitted within the time limited by the Court, there was no scope for referring the matter once again to the same set of arbitrators. (2) The learned Subordinate Judge interfered with the award on the ground of misconduct of the arbitrators as well as on the ground of irregularity, inasmuch as there was no joint consultation among the arbitrators as was the intention of the Court as well as of the parties The learned District Judge, however, did not consider that there was any misconduct on the part of the arbitrators but held that the arbitrators did not act strictly in pursuance of the Court's order and there being admittedly no joint consultation amongst the parties with a view to come to the final decision, there was no valid award and he set aside the same as, in his opinion, the final act of arbitration was not done by all the three arbitrators, but the third arbitrator, Mr. Iswar Chandra Medhi who mis-described himself as an umpire and misconceived his position in law. Under these circumstances, the only point for consideration is whether the reference of the matter back to the three arbitrators for arbitration once again is valid and could be upheld or this Court should interfere in its exercise of powers under S. 115, Civil P. C. (3) Mr. D. N. Medhi, appearing for the opposite party contended that as there was no 'case decided' as contemplated under S. 115, Civil P. C. but this was only an interlocutory order, this Court should not interfere and he relied on some rulings in support of this contention.
D. N. Medhi, appearing for the opposite party contended that as there was no 'case decided' as contemplated under S. 115, Civil P. C. but this was only an interlocutory order, this Court should not interfere and he relied on some rulings in support of this contention. But in ; view of the fact that most of the High Courts in India have given a wider meaning to the expression "case decided", we do not think that there is much substance in this contention and in our opinion, if the order is in excess of the jurisdiction of the Court or otherwise comes within the ambit of S. 115, Civil P. C., this Court can interfere. This contention of the opposite party is therefore overruled. (4) On consideration of the facts involved, we find that the learned Judge was correct in holding that the award as submitted by the three arbitrators was invalid and not in pursuance of the Court's order. We have now to consider whether the order setting aside the award came under the operation of S. 30, Arbitration Act or under S, 16 of the Act which allows remittance of the award under certain circumstances. Section 16 provides three conditions on which to remit the award or any order referred to Arbitration for reconsideration, and these are- "(a) where the award has left undetermined any of the matters referred to arbitration, or where it determines any matter not referred to arbitration and such matter cannot be separated without affecting the determination of the matter referred; or (b)i where the award is so indefinite as to be incapable of execution; or (c) where an objection to the legality of the award is apparent upon the face of it." (5) Mr.
Goswami's contention on behalf of the petitioner is that the award being held to be invalid, there was no scope for remitting the award to the same set of arbitrators and in support of this contention, he relies on the decision of the Judicial Committee reported in - 'Shree Meenakshi Mills Ltd. v. Patel Bros.', AIR 1944 PC 76 lA) where their Lordships expressed their opinion in the following words when an award was found to be invalid: "The section (section 16) specifies three sorts of defect which may necessitate reconsideration of an award, and empowers the Court to remit the defective award in the cases specified (and in no others) to the arbitrator or umpire, and to fix the time within which the arbitrator or umpire is to submit his decision to the Court. When what purports to be the decision of arbitrators is a nullity, there is no power to remit it." (6) Mr. Goswami puts much reliance on the last sentence which says that when what purports to be the decision of arbitrators is a nullity, there is no power to remit it and contends that it being held by the Court below that there was no valid award or in other words, the award was a nullity, the lower appellate court had no jurisdiction to remit it back for reconsideration. Mr. Goswami further relied on - 'Jai Dayal Pearey Lai v. Chunni Lal Parsotam Dass', AIR 1951 All 359 (B) and - 'Kuppuswami Chetty v. B. V. Anantharamier', AIR 1948 Mad 40 (C) in support of the view canvassed by him and to show that a revision petition is not incompetent, but in view of the pronouncement of the Privy Council, we need not go into any discussion of these cases the principles being well laid. It could have been as well argued for the petitioner that the setting aside of the award in this case came under S. 30, Arbitration Act and the order of the learned Subordinate Judge to proceed with the suit was passed because he considered the award to be hit by this section (and not S. 16) but the learned District Judge failed to appreciate the situation and misconceived the remedy. (7) Mr.
(7) Mr. Medhi for the opposite party contends that there was, as a matter of fact, a valid award though it was in three parts and submitted by each of the arbitrators separately. That contention has not found favour with any of the courts below nor can we accept that contention as sound. It is obvious that the third arbitrator misconceived his position as found by the learned District Judge and apart from the irregularities and inconsistencies in the report, the arbitrators were obviously wrong in acting in the manner they did. The report or the award was therefore invalid in the eye of law. When an award has been improperly procured or is otherwise invalid it may be set aside under S. 30 of the Act and here the setting aside of the award came under cl. (c) of that section and not under S. 16(1) (c) - which applies only when the objection to the legality of the award is apparent upon the face of it, as for instance, when it is based on a legal principle which is clearly and definitely wrong. Section 19 of the! Act, however, provides that where an award has become void under sub-s. (3) of S. 16, or has been set aside, presumably under S. 30, the Court may, by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred. Before the Arbitration Act, 1940 came into force, the provisions relating to arbitration were contained in Sch. II, Civil P. C. and S. 19 of the present Act represents paragraph 15(2) of the said Schedule which provided that on an award being set aside or when it was considered to be void, the Court should make an order supersiding the arbitration and the suit should proceed in the Court in the usual way. By S. 19 of the Act, an. option has been given to Court either to supersede the reference or keep it alive and give the party a fresh chance of having the dispute or the difference adjudicated by arbitration. Mr. Goswami contends that this idea of keeping the reference alive relates to cases where there is an existing agreement between the parties to have the dispute or the difference adjudicated by arbitration.
Mr. Goswami contends that this idea of keeping the reference alive relates to cases where there is an existing agreement between the parties to have the dispute or the difference adjudicated by arbitration. In this case, the reference to arbitration proceeded only out of a suit for money on two promissory notes and there was no previous agreement between the parties to have the matter decided by arbitration and therefore, the Court was not competent to refer the matter to arbitration again even under S. 19. .There seems to be some force in this argument when we consider the wordings of S. 19 - and in my opinion, having in view the observation of the Privy Council in AIR 1944 P. C. 76 (A), the proper course should be to proceed with the suit in its usual way after the award has been declared to be void as a nullity - and remitting the matter to arbitration would be improper. It appears that the attention of the learned District Judge was not drawn to the provisions of these sections and S. 16 might have been the only provision placed before him. The learned District Judge in our opinion, obviously failed to appreciate the legal position and exceeded his jurisdiction in remitting the matter once again to the arbitrators in spite of his setting aside the award under the conditions as disclosed in his order. We, therefore, direct that the order of the learned' District Judge be set aside and that of the learned Subordinate Judge be restored. The Rule is therefore made absolute but we make no order as to costs. RAM LABHAYA C. J. (Actg.): (8) The award was set aside and the reference superseded by the learned Subordinate Judge. The learned District Judge agreed to the setting aside of the award but directed that the suit be remitted to be arbitrators for reconsideration. The plaintiff appealed to this Court. The correctness of the direction that the suit be remitted to the arbitrator for reconsideration is assailed.
The learned District Judge agreed to the setting aside of the award but directed that the suit be remitted to be arbitrators for reconsideration. The plaintiff appealed to this Court. The correctness of the direction that the suit be remitted to the arbitrator for reconsideration is assailed. (9) The learned subordinate judge found that the award was invalid as (1) reasonable opportunity had not been given to the plaintiff to produce accounts, (2) all the arbitrators were not present when the award was given, (3) the brother of one of the arbitrators had joint business with the defendant at the time the parties agreed to refer the dispute to arbitration and (4) the accounts of a third party were taken into consideration improperly. (10) The learned District Judge also came to the conclusion that the award was invalid but only on one of the 4 grounds which were relied on by the learned Subordinate Judge. In his view the award was made by one of the arbitrators only. The reference was to a board of three arbitrators and though one of the three arbitrators was loosely described as an umpire, joint consideration of the matter was contemplated. As all the three arbitrator never sat together or jointly deliberated, the award was invalid. He remarked that the award was made under a misapprehension of the legal position and that there was no misconduct in point of fact. This in his view justified remission of the dispute back to the arbitrators for reconsideration. (11) The Courts below are agreed that the award was invalid. That view is unquestionably correct and there is no dispute about it at this stage. The only question is whether the dispute could be referred to the arbitrators for a fresh decision. (12) An award can be set aside under S. 30, Arbitration Act. If it is not liable to be set aside under S. 30, it may be remitted to the arbitrators for reconsideration for one of the reasons specified in S. 16 of the Act. The remission of the award under S. 16(1) even for apparent illegalities on the face of the award is possible only when the award as a whole is valid and is not hit by the provisions contained in S. 30. Once it is set aside under S. 30, there is no award to be remitted to the arbitrators for reconsideration.
The remission of the award under S. 16(1) even for apparent illegalities on the face of the award is possible only when the award as a whole is valid and is not hit by the provisions contained in S. 30. Once it is set aside under S. 30, there is no award to be remitted to the arbitrators for reconsideration. As held by their Lordships of the Privy Council in AIR 1944 P. C. 76 (A) it is an award which suffers from defects specified in S. 16(1) that may be remitted to the arbitrators under that section for reconsideration. When the decision of the arbitrators is a nullity as in this case, no question of remission of the award arises. Section 16(1) therefore is not applicable and the award cannot be remitted to the arbitrators for reconsideration. The learned District Judge was obviously aware of this position. He has not remitted the award to the arbitrators for reconsideration. He has agreed to the setting aside of the award. But he did not uphold the direction superseding the reference given by the learned Subordinate Judge. He kept the reference alive and directed the arbitrators to give a fresh decision. He had the jurisdiction to do so under S. 19 of the Act, though he has made no reference to it in his order. This section does vest the Court with the discretion to deep alive the reference. The Court is not bound to supersede it. The corresponding provision in the Civil P. C. was contained in S. 15(2) of Sch. II to the Civil P. C. Under that section it was obligatory on the Court to supersede the arbitration when setting aside the award. But that (section (15(2)) was limited in its application to references made through the intervention of the Court. Section 19 which replaces it is of wider application. It covers references made with or without the intervention of the Court. An agreement of reference made between parties without the intervention of the Court may be made when the dispute has arisen or even before actual differences have arisen. A reference in such circumstances may not lose its force or validity even if an award is set aside.
It covers references made with or without the intervention of the Court. An agreement of reference made between parties without the intervention of the Court may be made when the dispute has arisen or even before actual differences have arisen. A reference in such circumstances may not lose its force or validity even if an award is set aside. It may also be expedient and in the interest of justice for the Court to keep the reference alive in such cases in the exercise of discretion which S. 19 confers on the Court. Where the reference is through the Court the arbitrators become functus officio after they have given the award, unless the agreement of reference provides to the contrary. If the award is later set aside, the reference should also be superseded, as the arbitrators have become functus officio. In this case there is an additional reason for adopting that course. Two of the arbitrators considering the matter separately have expressed their opinions & it is not desirable that they should be asked to settle the dispute afresh. The plaintiff could with reason urge that they have prejudged the issue. In these circumstances the direction superseding the reference gu'en by the learned Subordinate Judge was appropriate. (13) The learned counsel for the defendant has urged that this revision is not competent. He argues that the order of the learned judge does not fall within the ambit of the expression 'case decided' which occurs in S. 115, Civil P. C. There has been a great divergence of judicial opinion of the significance and import of this expression. I am personally inclined to the view expressed in the Pull Bench decision reported in - 'Bibi Gurdevi v. Mohammad Bakhsh', AIR 1943 Lah 65 (D). According to that decision even orders which are interlocutory may be covered by the expression 'case decided'. The word 'case' it was held by the Full Bench, was wide enough to include the decision on any substantial question in controversy between the parties affecting their rights even though such order is passed in the course "of the trial of the suit. No effort has been made so far to define the word 'case'. It is of much wider connotation than the expression 'suit' or even the branch of a suit.
No effort has been made so far to define the word 'case'. It is of much wider connotation than the expression 'suit' or even the branch of a suit. In this view of the matter any order passed in the course of the trial which disposes a substantial question in controversy affecting rights, may very well be regarded as a case decided. Besides, High Courts now have larger powers of interference with orders passed in the course of a trial under Art. 227 of the Constitution in suitable cases even where interference under S. 115, Civil P. C., is not justifiable, strictly speaking. In these circumstances the petition may not be dismissed on the ground that it is incompetent. The learned District Judge has not given any reasons for keeping the reference alive. The discretion vested in him has apparently been exercised in a materially irregular manner. I therefore agree to the order proposed by my learned brother. Rule made absolute