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1986 DIGILAW 272 (RAJ)

Gulam Abbas v. New Ganesh Finance Co.

1986-04-15

I.S.ISRANI

body1986
JUDGMENT 1. - This is an execution appeal under Section 47 read with Section 96 CPC against the order of learned Addl. District Judge, Ajmer, dated 19-2-1973 in Civil Misc. Application No. 18/68 (98/70). 2. Briefly, the facts of this case are that M/s New Ganesh Finance Company, Beawar decree-holder filed an application under Order 21, Rule 50(2) CPC requesting that permission be granted for executing decree against the appellant judgment debtor personally on the ground that a decree for Rs. 49,254/- with pendente lite and future interest and costs, was passed on 23-1-1967 in Civil Suit No. 21/63 against the firm M/s Zakir Hussain Ghulam Abbas, Zakir Hussain and Ghulam Abbas were the partners of the said firm. The decree was put for execution in Ajmer and was transferred to Udaipur Court. The respondent Company M/s Zakir Hussain Ghulam Abbas entered into hire purchase agreement with M/s New Ganesh Finance Company, Beawar. When the disputes arose between the parties as per the agreement of hire-purchase, the same were referred to the Arbitrator, who passed an award dated 6-7-1968 against Firm M/s Zakir Hussain Gulam Abbas for an amount of Rs. 49,254/-. The award was made rule of the court by judgment and decree dated 3-1-1967 by the court of learned Senior Civil Judge, Ajmer. This decree was sought to be executed personally for recovery of the above amount against the appellant Gulam Abbas in the capacity of partner of the said Firm. Learned District Judge, Udaipur vide its judgment dated 13-11-1967 held that the decree was executable against the appellant personally also. The appellant filed an appeal against this order in this Court, which was allowed vide judgment dated 30-4-1968 and a direction was given in the same that fresh proceedings be filed under Order 21, Rule 50(2) CPC. The appellant shall have right to raise objections against the personal execution of the decree against him and it shall not be so executed unless leave was granted by the executing court for the same. On filing of fresh application, the appellant disputed that no hire purchase agreement which contained the arbitration clause had been executed by him and that Zakir Hussain had no authority to execute such an agreement for arbitration. It was, therefore, contended that when very existence of the agreement was disputed before the Arbitrator the Arbitrator had no jurisdiction to decide the dispute referred to him. It was, therefore, contended that when very existence of the agreement was disputed before the Arbitrator the Arbitrator had no jurisdiction to decide the dispute referred to him. Hence the proceedings before the Arbitrator and the award were wholly without jurisdiction and absolute nullity. Therefore, no execution can be filed on the basis of such award personally against the appellant. It was also contended that the learned lower court has erred in holding that the appellant was the partner of Firm M/s Zakir Husain Gulam Abbas and had wrongly placed reliance on documents Ex. Nos. 1 to 5. It was further contended that the judgments Ex. 6 to Ex. 9 were also wrongly relied upon. It was also contended that the Firm M/s Zakir Hussain Gulam Abbas never came into existence and remained only in papers and that the appellant was never a partner of the said firm. It was urged that it must be proved that the firm carried on business and the partners had agreed to share the profits. It was, therefore, urged on the basis of above objections that the appellant was not personally liable for execution of the decree and, therefore, the order of learned Additional District Judge, Ajmer be set aside. 3. 1 have heard the arguments of learned Counsel for the appellant, Shri R.M. Lodha and have also gone through the record and the documents on file. None has appeared on behalf of the respondents. 4. Coming to the objection, the contention that the Firm M/s Zakir Hussain Gulam Abbas never came into existence and no business was done by the said firm and that the appellant was not a partner of the said firm and that he never executed hire-purchase agreement, does not hold ground in view of the documents filed by the decree-holder-Applicant. (Ex. 1) is an application signed by Zakir Hussain & Gulam Abbas both, which is addressed to the Jaipur Bank Ltd., Udaipur for opening of the account in the name of Firm Zakir Hussain Gulam Abbas. Ex. P 2 is the certified copy of partnership deed of Firm M/s Zakir Hussain Gulam Abbas, which is also signed by both the partners including Gulam Abbas. Ex. P 3 is the certified copy of the agreement for hire purchase executed between M/s New Ganesh Finance Company and M/s Zakir Hussain Gulam Abbas, which bears the signature of the appellant also, Ex. Ex. P 3 is the certified copy of the agreement for hire purchase executed between M/s New Ganesh Finance Company and M/s Zakir Hussain Gulam Abbas, which bears the signature of the appellant also, Ex. 4 is also an agreement between the same parties rectifying and conforming the previous agreement. This bears the signature of the appellant also. Ex. 6 is letter addressed by the appellant to M/s New Ganesh Finance Company authorising his brother Zakir Hussain to execute certain documents in favour of the said company. 5. From all the aforesaid documents, it is evident that the appellant has signed as a partner of Firm M/s Zakir Hussain Gulam Abbas in the applications given to the Bank and also the hire purchase agreements executed between Zakir Hussain, Gulam Abbas and M/s New Ganesh Finance Company. The learned executing court has rightly relied on the documents Ex. 6 to Ex. 9. Therefore, I am of the opinion that the firm M/s Zakir Hussain Gulam Abbas was in existence and appellant Ghulam Abbas was also a partner of the said firm and had executed hire purchase agreement between the parties. 6. Learned Counsel for the appellant has vehemently argued that even if all these arguments referred to above are rejected, Zakir Husain had no legal right for arbitration without the consent of the appellant. He has also urged that the reference referring the dispute to the Arbitrator was not signed by the appellant and the same has not been deliberately produced in the executing court, which also clearly proves the contention of the appellant that he was not a party to the reference of dispute made for arbitration. It has been urged that since the appellant did not refer any dispute to the appellant (sic. Arbitrator), therefore, he was not personally bound by any* At the most it is only the Firm M/s Zakir Hussain Gulam Abbas, which can be held to be liable for executing the award which can be held to be liable for executing the award which was subsequently made the rule of the court also. It is further urged that this objection was also raised before the Arbitrator by Zakir Hussain that since Gulam Abbas had not signed the reference, therefore the Arbitrator had no jurisdiction to proceed with the proceedings for arbitration. It is further urged that this objection was also raised before the Arbitrator by Zakir Hussain that since Gulam Abbas had not signed the reference, therefore the Arbitrator had no jurisdiction to proceed with the proceedings for arbitration. Such objection could not have been decided by the Arbitrator himself and should have been referred to the court for deciding the same. It has been urged that the learned executing court has erred in holding that such objections could have been raised in the proceedings taken before the court after the award or under Section 33 of the Arbitration Act and these objections can not now be taken in the execution proceedings and the executing court will not decide such objections. It has been urged by the learned Counsel that since the appellant had not signed the reference of dispute made to the arbitrators, therefore, the Arbitrator had no jurisdiction to give the award and decree passed on the basis of such an award was ab initio void as nullity in the eye of law. My attention has been drawn to the matter of Kiran Singh and Ors. v. Chiman Paswan AIR 1954 SC 304 , in which their Lordships of the Supreme Court have held that "it is a fundamental principle that a decree passed by a court without jurisdiction is a nullity and its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject matter of the action, strikes at the very authority of the court to pass any decree, and such a defect cannot be cured even by consent of parties". In the matter of Mandalsa Devi and Ors. v. M. Ram Narain Pvt. Ltd and Ors. AIR 1965 SC 718 their Lordships of the Supreme Court held that the respondent can defend the application on the ground that the decree sought to be executed against him is a nullity. 7. In the matter of Mandalsa Devi and Ors. v. M. Ram Narain Pvt. Ltd and Ors. AIR 1965 SC 718 their Lordships of the Supreme Court held that the respondent can defend the application on the ground that the decree sought to be executed against him is a nullity. 7. It is, therefore, clear that the appellant was within his right to have challenged the decree passed on the basis of award, in which no reference for arbitration of any dispute was made by the appellant and therefore, the Arbitrator had no jurisdiction what so ever to decide the dispute and such award was nullity in the eye of law. In the matter of Waverly Jute Mills v. Raymour and Co. AIR 1963 SC 90 , their Lordships of the Supreme Court have held that "an agreement for arbitration is the very foundation on which the jurisdiction of the arbitrators to act rests and where that is not in existence, at the time when they enter on their duties, the proceedings must be held to be wholly without jurisdiction. And this defect is not cured by the appearance of the parties in those proceedings, even if that is without protest, because it is well settled that consent cannot confer jurisdiction. In this connection, reference may be made to Section 19 Indian Partnership Act, in which it is laid down that an absence of usage or custom to the contrary, the implied authority of a partner does not empower him to submit a dispute relating to the business of the firm to the arbitration. The letter of submission on the part of the Company was not. sufficient submission to the arbitration. There must be submission on behalf of all the parties to arbitration and in this case it must be shown that there was submission by the appellant Gulam Abbas or by any other person duly authorised in his behalf to make such submission for arbitration. Since the appellant did not sign the application for reference of dispute to the arbitration, therefore, the award given in such proceedings by the Arbitrator is without jurisdiction and the decree passed on the basis of such award is nullity in the eye of law, so far as the appellant personally is concerned. 8. Since the appellant did not sign the application for reference of dispute to the arbitration, therefore, the award given in such proceedings by the Arbitrator is without jurisdiction and the decree passed on the basis of such award is nullity in the eye of law, so far as the appellant personally is concerned. 8. I, therefore, hold that the appellant had a right to raise this objection even in the execution proceedings and in view of the above position of law the appellant is not personally liable for execution of the decree. The order of the executing court under appeal is, therefore, set-aside. The appellant will get the costs of proceedings in the executing court as well as this Court from the respondents. 9. The appeal is allowed as indicated above.Appeal allowed. *******