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1969 DIGILAW 396 (ALL)

Abhumanyu Pande v. Raja Ram Singh

1969-12-04

R.L.GULATI, R.S.PATHAK

body1969
JUDGMENT R.S. Pathak, J. - This is a revision application by one Abhimanyu Pandey against an order of the learned Third Addl. Civil Judge, Varanasi dismissing his application u/s 14 of the Indian Arbitration Act, 1940. 2. The Applicant applied u/s 14 of the Arbitration Act alleging that an arbitration award had been made between the parties and praying that the arbitrators be called upon to file the award and that a decree be made in terms of the award. A number of issues were framed by the learned Third Addl. Civil Judge, one of them related to the question whether the court had jurisdiction to try the suit. He took the view that the dispute between the parties was one in respect of which a suit in a civil court was precluded by Section 331 of the UP ZA and LR Act, being a suit which properly lay before a revenue court. Holding that he had no jurisdiction, he made an order "dismissing the suit". 3. At the outset, a preliminary objection has been raised by learned Counsel for the Respondents. It is urged that the impugned order is in law a decree and therefore, subject to appeal. It is said that while it is not one of the appealable orders u/s 39 of the Arbitration Act it is an order disposing of a suit and attributable to the power of the court Under Order VII, Rule 11(d) of the Code of Civil Procedure. It is urged that the order is one rejecting a plaint and therefore, a decree within the definition set out in Section 2(2) of the Code. Accordingly, learned Counsel submits, an appeal lies u/s 96 of the Code. The contention proceeds principally upon the basis that the application u/s 14 of the Arbitration Act is a plaint and that the proceeding is a suit and we are referred to Rule 5 of Ch. XXXI of the Rules of Court which provides: A case in which an award is filed u/s 14 (2) shall be numbered and registered as a suit.... It is pointed out that the practice adopted by the courts below in giving effect to Rule 5 of Ch. XXXI is to adopt the procedure applicable to suits. 4. XXXI of the Rules of Court which provides: A case in which an award is filed u/s 14 (2) shall be numbered and registered as a suit.... It is pointed out that the practice adopted by the courts below in giving effect to Rule 5 of Ch. XXXI is to adopt the procedure applicable to suits. 4. Section 14 of the Arbitration Act entitles a party to apply to the court for calling upon the arbitrators to file the award made by them and requires the court thereupon to give notice to the parties of the filing of the award. Section 15 of the Act empowers the court to make an order modifying or correcting the award. And Section 16 empowers the court to remand the award from time to time to the arbitrators for reconsideration. u/s 17 the Court, in a case where the award is not remitted or any of the matters referred to arbitration are not sent down for reconsideration or the award is not set aside, is empowered to pronounce judgment according to the award and upon the judgment to pronounce a decree follows. 5. Now, there can be no dispute that when a proceeding initiated u/s 14 proceeds to the stage where the court pronounces judgment according to the award, it must be followed by a decree. The question in this case, however, refers to an earlier point of time. Here, the application was made u/s 14 and upon objection taken by the Respondents the question arose whether the court had jurisdiction to entertain the application. The court found that it had no jurisdiction to do so. When it gave that decision it exercised a jurisdiction inherent in every court and judicial tribunal. A court or judicial tribunal, it is well settled, has inherent jurisdiction to decide whether it has or has not jurisdiction to entertain a cause. We are clear in our mind that the order made by the court in this case is not an order u/s 17 but an order made in the exercise of its inherent jurisdiction. 6. Learned Counsel for the Respondent has placed considerable reliance upon Rule 5 of Ch. XXXI of the Rules of Court. All that Rule 5 says is that a case in which the award is filed u/s 14(2) of the Arbitration Act shall be numbered and registered as a suit. 6. Learned Counsel for the Respondent has placed considerable reliance upon Rule 5 of Ch. XXXI of the Rules of Court. All that Rule 5 says is that a case in which the award is filed u/s 14(2) of the Arbitration Act shall be numbered and registered as a suit. The rule merely requires the court to number the case and register it as a suit. It does not give the case the status in law of a suit. It is now settled law that a suit is initiated by the presentation of a plaint. There is nothing in the rules contained in Ch. XXXI to indicate that the application u/s 14 must be considered for all purposes as a plaint. The practice followed by the courts below cannot clothe the proceeding with a status which the law has not conferred upon it. Further the rules in Ch. XXXI themselves demonstrate that by its nature the case contemplated by Rule 5 is not a suit. If it had been a suit, the CPC would have applied automatically to the application u/s 14 on the footing that in law it was a plaint. On the contrary, we find that express provision has been made in the rules u/Ch. XXXI for the procedure to be followed upon an application u/s 14. There are rules which provide for the issue of notice, the payment of process fee and so on and it cannot be disputed that those rules would have been wholly unnecessary if the application u/s 14 was in law a plaint. In Satish Chandra Bose v. Paliram Agrawala AIR 1921 Pat 161 a somewhat similar provision was considered by a Bench of the Patna High Court. It was held that the provision in para. 17 (1) of the Second Schedule to the Code of Civil Procedure, as it existed before its repeal by the Indian Arbitration Act, 1940, requiring that the application had to be numbered and registered as a suit did not mean that the application gave rise to a suit. In Nawab Usmanali Khan Vs. 17 (1) of the Second Schedule to the Code of Civil Procedure, as it existed before its repeal by the Indian Arbitration Act, 1940, requiring that the application had to be numbered and registered as a suit did not mean that the application gave rise to a suit. In Nawab Usmanali Khan Vs. Sagarmal, AIR 1965 SC 1798 the Supreme Court observed: Now, a proceeding u/s 14 read with Section 17 of the Indian Arbitration Act, 1940 for the passing of a judgment and decree on an award does not commence with a plaint or a petition in the nature of a plaint and cannot be regarded as a suit and the parties to whom the notice of the filing of the award is given u/s 14(2) cannot be regarded as "sued in any Court otherwise competent to try the suit".... The Supreme Court repelled the contention that Section 141 of the CPC could be called in aid. It pointed out: Section 141 makes applicable to other proceedings only those provisions of the Code which deal with procedure and not those which deal with substantive rights. It also rejected the contention that Section 41 (a) of the Indian Arbitration Act would carry the matter any further. It observed: By that section, the provisions of the Code of Civil Procedure, 1908 are made applicable to all proceedings before the Court under the Act--Empowered by its own language. Section 86(1) applies to suits only and Section 141 of the CPC dots not attract the provisions of Section 86(1) to proceedings other than suits. Accordingly, by the conjoint application of Section 41(a) of the Indian Arbitration Act and Sections 86(1) and 141 of the Code of Civil Procedure, the provisions of Section 86(1) are not attracted to a proceeding u/s 14 of the Indian Arbitration Act, 1940. We do not think that after the observations of the Supreme Court in Usman Ali Khan's case (supra) there can be any dispute that a proceeding u/s 14 of the Indian Arbitration Act, 1940 is not in the nature of a suit. 7. We may also refer to the provision in Section 17 that an appeal against a decree in terms of the award will not lie except on the ground that it is in excess of, or not otherwise in accordance with, the award. It is an appeal on extremely limited grounds. 7. We may also refer to the provision in Section 17 that an appeal against a decree in terms of the award will not lie except on the ground that it is in excess of, or not otherwise in accordance with, the award. It is an appeal on extremely limited grounds. It would be anomalous to hold that although the decree passed in terms of the award, upon completing the entire process of adjudication contemplated Under Sections 15 to 17, can be challenged in appeal on very limited grounds, a full fledged appeal can be maintained u/s 96 of the CPC against an order made at a much earlier stage of the proceeding when the court rejects the application on the ground that it is without jurisdiction. 8. In our opinion, the application u/s 14 of the Indian Arbitration Act, 1940 filed by the Applicant cannot be considered to be a suit and therefore, the order dismissing it made by the learned Third Addl. Civil Judge cannot be considered to be a decree. 9. No appeal lies either u/s 39 of the Indian Arbitration Act or u/s 96 of the Code of Civil Procedure. In AIR 1945 117 (Nagpur) it was held that if the court fails to exercise its jurisdiction by dismissing an application u/s 14 on the ground that the application itself was not tenable a revision application would be competent. Learned Counsel for the Respondent relies on Bansi Dhar Vs. Rameshwar and Others, AIR 1952 All 562 , but in that case all that this Court held was that an appeal lies when an application for restoration of an application made under the Indian Arbitration Act is dismissed for default. Nowhere in that case did this Court hold that an application u/s 14 of the Indian-Arbitration Act was in the nature of a plaint and the proceeding upon it must be treated as a suit. 10. In our judgment, there is no force in the preliminary objection and it is overruled. 11. We may now turn to the merits of the case. Whether a Court will have jurisdiction to entertain an application u/s 14 of the Indian Arbitration Act must be determined by examining the subject matter of the reference to arbitration. 10. In our judgment, there is no force in the preliminary objection and it is overruled. 11. We may now turn to the merits of the case. Whether a Court will have jurisdiction to entertain an application u/s 14 of the Indian Arbitration Act must be determined by examining the subject matter of the reference to arbitration. That is so because Section 2(c) of the Act defines "Court" to mean "a Civil Court having jurisdiction to decide the question forming the subject matter of the reference if the same had been the subject matter of a suit." The court below should have enquired into the question whether the subject matter of the reference could have been the subject matter of a suit before it. What the court below did was to assume that the dispute between the parties which had been referred to arbitration was a dispute in respect of title to tenancy land. If regard be bad to the arbitration agreement, which contains the terms of reference, it will be clear that the parties referred to the pendency of Suit No. 405 of 1964 in the court of the Munsif Haveli, Varanasi and expressed the desire that the dispute in that suit should be disposed of by arbitration. The terms of the arbitration agreement are not very clear, but that appears to us to be so from the general substance of the arbitration agreement. It was for the court below then to ascertain the nature of the dispute in that suit and to determine whether it was a "Court" within the meaning of Section 2(c) of the Indian Arbitration Act and therefore, had jurisdiction to entertain the application u/s 14 made before it. That the court below has failed to do. 12. In the circumstances we set aside the order of the court below and remand the case to that court for further consideration of the matter. It will be open to the court to record further evidence. In the circumstances, there is no order as to costs.