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1961 DIGILAW 400 (ALL)

Manshoor Ullah v. Bashir Uddin

1961-12-18

S.S.DHAVAN

body1961
JUDGMENT S.S. Dhavan, J. - This is a defendant's second appeal against the concurrent decisions of the courts below decreeing the plaintiff-respondents suit for a declaration that a decree obtained by the defendant from the revenue court on the basis of an arbitration award was without jurisdiction, void and not binding on the plaintiff. The facts are these. The plaintiff Bashir Uddin filed a suit before the revenue court under Section 59 of the U.P. Tenancy Act for a declaration of his title to a plot of land. The plaintiff claimed that he was the tenant of the plot. The defendant Manshoor Ullah contested the suit but it was decreed by the trial court. He went up in appeal before the Commissioner of Rohilkhand Division. While it was pending, the parties referred the dispute to an arbitrator for decision. It is important to note that the reference was made without intervention or knowledge of the court. The arbitrator decided the dispute in favour of the defendant and gave an award that he was entitled to the plot. The defendant filed the award in court under Section 14 of the Arbitration Act and the Commissioner passed a decree in its terms and dismissed the plaintiffs declaratory suit. He overruled the objections of the plaintiff who then went up in appeal before the Board of Revenue. That court held that a second appeal did not lie but heard the case in the exercise of its revisional jurisdiction. The plaintiff repeated his objections against the validity of the award and the decree which was founded on it. He contended that the arbitration having been made without the intervention of the Court, the award was invalid and no decree could have been passed on its basis. The Board rejected this argument and confirmed the award and the decree. The plaintiff did not challenge the correctness or legality of the Board's decision by means of a petition under Article 226 of the Constitution in this court. Instead he filed the present suit and asked for a declaration that the decree passed on the basis of the award was without jurisdiction. The defendant contended that the award was valid and the Revenue court was competent to pass a decree in terms of the award. Instead he filed the present suit and asked for a declaration that the decree passed on the basis of the award was without jurisdiction. The defendant contended that the award was valid and the Revenue court was competent to pass a decree in terms of the award. His defence was rejected and both the courts have held that the decree passed by the Commissioner and confirmed by the Board of Revenue is without jurisdiction. The defendant has now come to this Court in second appeal. 2. After hearing Mr. Mukhtar Ahmad for the defendant-appellant and Mr. J.N. Chatterji for the plaintiff-respondent I am of the opinion that the view taken by the courts below is erroneous. The question before them was not whether the decree based on the award was illegal or erroneous in law but whether it was entirely without jurisdiction. It was conceded by Mr. J.N. Chatterji that the Commissioner had the power to decree the plaintiff's suit or dismiss it. He dismissed it. It is obvious that the decree is not without jurisdiction. 3. The courts below have not appreciated the distinction between jurisdiction and its exercise. By way of illustration, if a Court hears a suit which is beyond its pecuniary or territorial jurisdiction, its decree is vitiated by absence of jurisdiction. But if it decides a suit on the basis of hear say evidence or on considerations which are irrelevant, its decision is illegal and is liable to be set aside by the appellate court, if the statute provides for an appeal. In the present case, the commissioner decided the appeal in favour of the defendant on the basis of an award of an arbitrator to whom the matter had been referred by the parties. Even accepting the plaintiffs argument that the award could not have been enforced because the dispute had been referred to the arbitrator without the intervention of the court, this would not take away the jurisdiction of the Commissioner to pass a decree. The plaintiff's remedy was to have the decree set aside by the Board of Revenue on the ground that the Commissioner had illegally taken the award into consideration. He did go up to the Board which heard his objection on merits but rejected it. The plaintiff's remedy was to have the decree set aside by the Board of Revenue on the ground that the Commissioner had illegally taken the award into consideration. He did go up to the Board which heard his objection on merits but rejected it. The plaintiff had another remedy open to him under Article 226 of the Constitution for having the Board's decision reversed by this Court on the ground that it was vitiated by an error apparent on the face of the record. But he did not avail of it and the decision of the Board has become final. 4. The courts below had no jurisdiction to correct any error of law or procedure of the revenue court but this is precisely what they have done. They have taken the view that the Commissioner had no jurisdiction, where as the plaintiff's case really was that the Commissioner's jurisdiction had been exercised illegally. The Civil court has no jurisdiction to interfere in the revenue courts' illegal or improper exercise of a jurisdiction which undoubtedly exists. 5. Moreover, I do not think that the Commissioner committed any error in giving effect to the award. Sec. 31 (1) of the Arbitration Act provides that subject to the provisions of that Act, an award may be filed in any court having jurisdiction in the matter to which the reference relates. In this case the reference was made while a suit under Section 59 of the U.P. Tenancy Act was pending before the Commissioner in appeal. The award could only be filed in the revenue court which had exclusive jurisdiction to decide that matter. The courts below have taken the view that as the reference to arbitration was made without the intervention of the court the Commissioner had no jurisdiction to pass a decree in terms of the award made by the arbitrator. I find nothing in the Arbitration Act to justify this view. Sec. 21 gives the parties the right to apply in writing to the Court for an order referring a dispute to arbitration, but this section only confers a right on the parties to avail of the help of the Court if they so desire. The right cannot be converted into an obligation. This section was not intended, in my opinion, to bar any reference by the parties themselves without the intervention of the Court. The right cannot be converted into an obligation. This section was not intended, in my opinion, to bar any reference by the parties themselves without the intervention of the Court. Any such restriction would be against the whole policy of the Arbitration Act which is to encourage the disputants to settle their dispute amicably and without the intervention of the Court which however is available if the parties want it. 6. The courts below have relied on a decision of a Division Bench of this Court in Bithal Das Khanna v. Shri Nath Das Khanna, AIR 1949 Allahabad 360 : 1947 ALJ 594. The principle laid down in that case has no application to the facts of the one before me. There no dispute was pending before any court or tribunal. The parties were two brothers who wanted an amicable partition of their ancestral zamindari property, and referred the matter to an arbitrator who gave an award. One of the brothers filed the award in the Civil Court, but the other brother raised an objection that the court had no jurisdiction to pass a decree in terms of the award as the matter related to zamindari property which was within the exclusive jurisdiction of the revenue court. The matter ultimately came to the High Court which held that the Civil Court had jurisdiction. The Court distinguished between a case where a dispute between the parties is already pending in a Court and one where no such dispute exists. Their Lordships held that in the latter case the parties have a right to refer any matter to arbitration but the power to enforce the award vests in the civil court alone. They overruled the view of the courts below that the jurisdiction to enforce the award depended upon the subject-matter of the dispute. I respectfully agree, and may add a reason in support of the principle enunciated by the Bench. The right to enforce an award passed by an arbitrator on an agreed reference between the parties is a civil right which can be granted only by the Civil Court. As pointed out by the Division Bench, the Revenue Court has no jurisdiction to enforce such a right. But the position is quite different where a dispute is actually pending before the Revenue Court. As pointed out by the Division Bench, the Revenue Court has no jurisdiction to enforce such a right. But the position is quite different where a dispute is actually pending before the Revenue Court. In such a case, that court alone has the jurisdiction under Section 31 of the Arbitration Act to enforce an award made on a reference to arbitration with or without the intervention of the court. 7. There is another, and equally fatal, objection to the decree passed by the courts below. Under Sec. 31(2) of the Arbitration Act all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the court in which the award under the agreement has been, or may be, filed, and by no other court. Under Section 32, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way effected otherwise than as provided in this Act. Sec. 33 provides that any party to an arbitration agreement or any person claiming under him desiring to challenge the existence or validity of an arbitration agreement or an award or to have the effect of either determined shall apply to the court and the court shall decide the question on affidavits; provided that where the court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery and particulars as it may do in a suit. The combined effect of these provisions is to bar the jurisdiction of the Civil Courts to entertain any suit challenging the legality of an award or disputing its effect or existence. The remedy of the party aggrieved by an award is to apply to the very court which has enforced it and have it set aside. 8. Mr. Chatterji tried to argue that the defendant obtained the consent of the plaintiff to the arbitration by fraud or undue influence. This contention is completely negatived by the record. The remedy of the party aggrieved by an award is to apply to the very court which has enforced it and have it set aside. 8. Mr. Chatterji tried to argue that the defendant obtained the consent of the plaintiff to the arbitration by fraud or undue influence. This contention is completely negatived by the record. There is an order by the trial court that the parties state before it that no evidence would he led and that the question would be decided as purely one of law. I have also perused the plaint which contains no allegation that the defendant obtained the plaintiffs consent by undue influence of fraud. 9. I am, therefore, of the opinion that the view taken by the Courts below is incorrect and the decree passed in favour of the plaintiff without jurisdiction. This appeal is allowed and the plaintiffs suit dismissed. In the peculiar circumstances of this case, I would direct the parties to bear their own costs throughout.