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1977 DIGILAW 29 (GUJ)

MALEK BAVAJI AMARKHAN v. BAI SONBAI

1977-03-30

B.K.MEHTA

body1977
B. K. MEHTA, J. ( 1 ) THE petitioners mother Rangbai is one of the three daughters of one Sataji Bhimjikhan; the other two being Hirbai and Ladbai. This Rangbai filed a suit for partition of the estate of her father against the heirs of her aforesaid two sisters. Original defendant No. 1 is the sons son and defendants Nos. 2 to 4 are the sons daughters of the aforesaid Hirbai. Defendant No. 5 is the daughters daughter of Hirbai while defendant No. 6 and 7 are the sons and defendants Nos. 8 and 9 are the daughters of Ladbai. The plaintiff Rangbai died during the pendency of the suit and therefore the present petitioner was brought on the record as her heir and legal representative. Similarly original defendant No. 1 Amirkhan Salimkhan died during the pendency of the suit and his mother Sonbai and his widow Ajubai and his four daughters Manubai Kasubai Ranbai and Rembai and two sons Fatehmohmad and Hanji were brought on the record as respondents Nos. 1 (a) to 1 (h) respectively It should be noted that defendants Nos. 2 to 9 supported the plaintiff in her claim for partition of the estate. It was only defendant No. 1 Amirkhan who contested the suit in his written statement filed in the trial court. After his death his mother Sonbai who is defendant No. 1 (a) supported the plaintiffs claim after she was brought on the record. It was only defendant No. 1 (b) Ajubai the widow of deceased Amirkhan who contested the suit after the demise of Amirkhan. It should be further noted that in the suit there was an application by the original plaintiff for appointment of Receiver for the estate of Sataji. That application was rejected by the trial court with the result that the plaintiff had gone in appeal against that order before the District Court. Before the appeal reached hearing it appears that there was a compromise between the parties and the appeal was withdrawn on that ground and it was stated by the parties that the compromise would be produced in the trial Court for purposes of getting a decree in terms thereof. When the matter was called out before the trial court after withdrawal of the appeal the plaintiff applied for a decree in terms of the award alleged to have been made by the Arbitrator. When the matter was called out before the trial court after withdrawal of the appeal the plaintiff applied for a decree in terms of the award alleged to have been made by the Arbitrator. Original defendant No. 1 (b) Ajubai filed objections to this application of the original plaintiff. The trial court rejected this application of the plaintiff as the award was illegal since it was obtained in a pending suit without the intervention of the Court. The trial court therefore dismissed the application of the plaintiff by its order of July 23 1975 The plaintiff therefore carried the matter in appeal before the District Court at Surendranagar by his Civil Appeal No. 38 of 1975. The District Court agreed with the contention of the plaintiff that the trial court has a power to record the compromise under Order XXIII Rule 3 of the Civil Procedure Code eventhough the award might have been obtained in a pending suit without the intervention of the Court. The learned District Judge however dismissed the appeal of the original plaintiff because in his view Order XXIII Rule 3 of the Civil Procedure Code requires that before a compromise or an adjustment can be accepted in a suit by a Court the same should have been agreed upon and consented to by the parties before the Court. The learned District Judge was also of the view that inasmuch as no permission was granted under Order XXXII Rule 7 of the Civil Procedure Code to Ajubai the widow of Amirkhan for entering into the alleged compromise on behalf of the minors the same was not legal and binding. In that view of the matter therefore the learned District Judge dismissed the appeal of the plaintiff by his order of July 31 1976 It is this order which has been challenged in this revision before me. ( 2 ) IT is settled position of law that where in a suit the parties have referred their difference to the arbitration without an order of the Court and an award is made a decree in terms of the award can be passed by the Court under Order 23 Rule 3 of the Civil Procedure Code (Vide: Chanbasappa Gurusbantappa Hiremath v. Basadingayya Gokurmaya Hiremath (1927) 51 I. L. R. 903 and Modi Narandas Chhaganlal v. Jamnadas Maneklal and Another (1969) 10 Guj. L. R. 21g ). Mr. L. R. 21g ). Mr. Shah learned Advocate for respondents Nos. 1 (b) to 1 (h) does not dispute this proposition of law. Mr. Shah has however tried to support the judgment of the learned District Judge on the ground that under proviso to sec. 47 of the Arbitration Act the Court can accept the compromise only if the consent is given by the parties at the time when the Court is called upon to consider whether the award should be accepted as an adjustment or a compromise. He also supported the view of the learned District Judge that inasmuch as no permission was granted to Ajubai to sign this award as alleged by the plaintiff the agreement if at all there was any is voidable as prescribed under Order 32 Rule 7 (2) of the Civil Precedure Code and since Ajubai avoided the agreement the trial Court was justified in dismissing the application of the petitioner herein who was the original plaintiff ( 3 ) I am afraid that none of the contentions of Mr. Shah can sustain the order of the learned District Judge. It is no doubt true that V. R. Shah J who decided the case of Modi Narandas v. Jamnadas (supra) observed in paragraph 8 in his decision that the language of the proviso to sec. 47 of the Act is very clear and the consent should be given by the parties at the time when the Court is called upon to consider whether the award should be accepted as an adjustment or a compromise. V. R. Shah J however refrained from entering into any detailed discussion of this question because in his opinion it is not necessary to consider the inter- pretation of the language of the proviso to sec. 47 as it did not apply so the facts of that case. Except this observation of the learned Single Judge. I do not think that Mr. Shah can make this preposition good in view of the line of decisions of the Bombay High Court. The jurisdiction to record an adjustment though not agreed to by the other party is not taken away (vide: Ruttonsey Lalji v. Pooribai I. L. R. 7 Bom. 304 and the Coculdas Gulabdass Manufacturing Company v. James Scott (189)) I. L. R. 16 Bom. 202 ). The jurisdiction to record an adjustment though not agreed to by the other party is not taken away (vide: Ruttonsey Lalji v. Pooribai I. L. R. 7 Bom. 304 and the Coculdas Gulabdass Manufacturing Company v. James Scott (189)) I. L. R. 16 Bom. 202 ). This Bombay view is incorporated in Rule 3 of Order 23 of the Civil Procedure Code. Rule 3 provides as under:3 Where it is proved to the satisfaction of the Court that a suit has beep adjusted wholly or in part by any lawful agreement or compromise. or where the defendant satisfies the plaintiff in respect of the whole or any part of the subject matter of the suit the Court shall order such agreement compromise or satisfaction to be recorded and shall pass a decree in accordance therewith so far as it relates to the suit. The rule does not confer any discretion on the Court and when it is established that a suit has been adjusted either wholly or in the part by a compromise it is the duty of the court to record it and pass a decree in accordance therewith save and except in the cases where such recording would result in substantial failure of justice. The Andhra Pradesh High Court has also taken the same view and a Division Bench consisting of S. Obul Reddi and Venkatrama Sastry JJ held in The Andhra Mennonite Self supporting Church Society v. Sundramma and Others A. I. R. 1973 A. P. 19 that the consent under proviso to sec. 47 of Arbitration Act means consent to the reference and also to the award and no further consent to the terms of the award at the time of recording the compromise under Order 23 Rule 3 is necessary. 47 of Arbitration Act means consent to the reference and also to the award and no further consent to the terms of the award at the time of recording the compromise under Order 23 Rule 3 is necessary. The Division Bench speaking through Venkatrama J observed in paragraph 8 as under: now the only question is whether the consent to the award should be regarded as a consent given to the compromise itself or whether there should also be a consent to its terms at the time when the Court takes up for consideration the application under Order 23 Rule 3 C P. C. on this question We are bound by the Full Bench decision of the Madras High Court in Abdul Rahman v. Muhammad Siddiq A. I. R. 1953 Madras 781 (FB) in which it was decided as follows: we are accordingly of opinion that under the Proviso to sec. 47 an arbitra tion award obtained otherwise that in proceedings taken in accordance with the Act cannot without more be recognised as a compromise or adjustment of the suit; that no decree can be passed thereon under the provisions of Order 23 Rule 3; and that the decision in Arumuga Mudaliar v. Balasubramania Mudaliar A. I. R. 1945 Mad. 294 should be overruled. But if after an award is made the parties thereto agree to accept it that will be a compromise and a decree passed thereon could be passed under Order 23 Rule 3. ( 4 ) MR. Shah for the respondents 1 (b) to 1 (h) urged that there is also another hurdle in the way of the petitioner. According to Mr. Shah the award in a pending suit without the intervention of the Court can be recorded as a compromise or adjustment of the suit under Order 23 Rule 3 only if the agreement to refer to the Arbitration by the guardian on behalf of the minor sons is permitted by the Court under Order 32 Rule 7 This view has found favour with the learned District Judge. Order 32 Rule 7 of the Civil Procedure Code provides as under:7 (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. Order 32 Rule 7 of the Civil Procedure Code provides as under:7 (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 shall be voidable against all parties other than the minor. This rule prohibits the next friend or guardian to compromise or adjust the suit without the permission of the Court. The rule therefore prohibits the guardianaditem of the minor or the next friend of minor to compromise or adjust the suit without the permission of the Court. On the plain reading of the rule it does not prohibit the natural guardian of minor to settle the dispute outside the Court by making a reference to Arbitrators or by compromising or adjusting the matter amicably between the parties. A similar view has been taken by Allahabad High Court in Laxshmi Narain v. Ram Babu and Another A. I. R. 1953 Allahabad 9. In any case whether the compromise or the adjustment embodied in the award and consented to by the parties subsequently is in the interest of minor or not can certainly be inquired by the Court while recording the compromise or adjustment. The learned District Judge was therefore not justified in rejecting the compromise or the adjustment of the suit as alleged without holding a formal inquiry as to whether such a compromise or adjustment is in the interest of minors or not because it is under the agreement to refer the dispute to arbitration and an award passed in pursuance thereof which can be said to constitute compromise or adjustment. It is the consent given to the award by the parties subsequent to the pronouncement of the award that constitutes the compromise or adjustment and the Court is under an obligation whenever a compromise or adjustment of a suit is pleaded to inquire into whether the compromise or adjustment is lawful or not whether it is in the interest of minor if it affects the minors and whether the compromise or adjustment is lawful or not and if the Court is satisfied about these three ingredients the Court is under an obligation to record it and to pass a decree accordingly. ( 5 ) IN Misrilal Jalamchand and Another v. Sobhachand Jalamchand and Others A. I. R. 1956 Bom. 569 it is held that the Court has power under Rule 3 where an agreement or compromise is denied to decide whether as a fact the alleged agreement or compromise was made and if it is satisfied that it was made to record it and the trial Court while recording the compromise has to record a finding on the question whether there was or was not any lawful agreement to compromise or adjust the suit. The same view has been taken in Sourendra Nath Mitra and Others v. Tarubala Dasi A. I. R. 1930 PC 158 where the judicial Committee has held that the words of Rule 3 do not in terms appear to confer a discretion on the Court in recording a compromise and passing decree according to it; but without deciding whether discretion is inherent or not even if the discretion is inherent where no injustice of any kind is established and it is established that the suit had been adjusted either wholly or in part by a lawful compromise it is the duty of the Court to record the agreement and pass a decree in accordance therewith. The Supreme Court has also in Munshi Ram v. Benwari Lal A. I. R. 1962 SC 903 held that in a reference without the intervention of the Court the Court has no general jurisdiction over the subject matter as in a reference in a pending suit and if the sub- mission is superseded in the former there is nothing more the Court can do but in the later the Court must proceed with the suit before it and give effect to the compromise in suit according to law. ( 6 ) IN my opinion therefore both the Court below have acted illegally in refusing to inquire into the validity of the compromise and dismissing the application of the plaintiff to pass a decree in accordance with the terms of the compromise as alleged either on the ground that the arbitration was illegal or on the ground that there was no consent to the award before the Court at the time when the Court was considering the compromise or for want of permission under Order 32 Rule 7 of the Civil Procedure Code at the time of reference to arbitration. ( 7 ) THE result is that this revision application is allowed and the orders of both the Courts below are set aside and the matter is remanded back to the trial court to inquire into the compromise or adjustment as alleged by the plaintiff and if the Court is satisfied about the legality of the compromise to record the same and to pass a decree in terms thereof. Rule is made absolute accordingly with costs. .