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1998 DIGILAW 65 (ORI)

KAIBALYA NAIK v. NISHAMANI PATNAIK

1998-02-11

R.K.DASH

body1998
JUDGMENT R.K. Dash, J. - This is plaintiff's appeal against the judgment and decree of the learned Subordinate Judge, Bhanjanagar [presently designated as Civil Judge, (Senior Division)] passed in Title Mortgage Suit No. 2 of 1983 whereby the suit has been held to be not maintainable being hit by Section 32 of the Arbitration Act (hereinafter referred to as 'the Act'). The suit filed by the plaintiff was one for damages for Rs. 25,000/-. The case as set out in the plaint is that the plaintiff had purchased the trees standing on the suit land from Bhikari Jena and others, the original owners, but all of a sudden he noticed that the defendant was making preparation to cut and remove the trees. So, the approached the Civil Court by filing Title Suit No. 11 of 1980 seeking permanent injunction restraining the defendant from entering upon the suit land and interfering with his peaceful possession. The said suit was ultimately dismissed whereupon the plaintiff preferred appeal before the Subordinate Judge which also proved futile. He then preferred Second Appeal Bearing No. 117 of 1982 before this Court and obtained an interim injunction against the defendant not to remove the trees standing on the suit land. While the aforesaid appeal was pending adjudication, the defendant requested for compromise and suggested the names of Panchas who would arbitrate and settle up the matter. It was agreed upon that both parties would abide by the decision of Panchas. Accordingly, the Panchas heard both the parties and made an award dated 20-7-1982. The said award was announced orally and copy thereof was sent to each of the parties on the next day. As per the term of the award, defendant would pay a sum of Rs. 25,000/- to the plaintiff within one month whereafter the latter would give up his claim over the trees standing on the suit land, and withdraw the Second Appeal. The defendant however, failed to make payment as a consequence, the plaintiff filed the present suit for realisation of awarded amount of Rs. 25,000/-. 2. The defendant filed written statement and traversed the allegation made in the plaint. Besides, he further pleaded that the Civil Court has no jurisdiction to try the suit and is not authorised to pass a decree based on award. 25,000/-. 2. The defendant filed written statement and traversed the allegation made in the plaint. Besides, he further pleaded that the Civil Court has no jurisdiction to try the suit and is not authorised to pass a decree based on award. The defendant also filed separate petition urging that the suit is not entertainable by the Civil Court as envisaged in Section 32 of the Act. The same being objected to by the plaintiff, learned Trial Court upon hearing the parties and by referring to paragraphs 4 and 5 of the plaint wherein the plaintiff admitted of there being an arbitration award in respect of the very same dispute come to hold the suit to be not maintainable being hit by Section 32 of the Act and consequently dismissed the suit. 3. Mr. N.C. Pati, learned Counsel for the plaintiff-appellant in course of argument has raised two-fold contentions : (i) It is the settled law that the reference of present or future dispute for arbitration under the Act is preceded by written agreement between the parties. So, where an award is passed on oral submission, it is not a valid award in the eye of law and therefore, does not bar a suit. So far the present case is concerned, even accepting the averments made in paragraph 4 of the plaint regarding passing off award by the Arbitrators as true, but since there was no written agreement between the parties for making reference of the dispute to the Arbitrators, the award so made is not valid under law. In support of such submission, Mr. Pati relies upon a decision of the Madhya Pradesh High Court reported in Baratilal Baijnath v. Mst. Bindabai w/o Brijlal ( AIR 1963 MP 122 ). (ii) Mr. Pati further urges that even accepting the award to be valid and binding on the parties, yet the suit will lie to enforce the claim based on the said award. 4. It would appear from the averments made in the plaint that apprehending that the defendant might cut away the trees from the suit land the plaintiff approached the Civil Court and filed the suit for permanent injunction. While the said suit was pending in Second Appeal, defendant it is said, gave proposal for settlement of the dispute and suggested the names of the Arbitrators. While the said suit was pending in Second Appeal, defendant it is said, gave proposal for settlement of the dispute and suggested the names of the Arbitrators. Admittedly, there was no agreement between the parties to refer their dispute/difference for arbitration. It was only an oral submission. The gentry who acted as Arbitrators however, after hearing the parties made award making the defendant liable to pay a sum of Rs. 25,000/- to the plaintiff. The question therefore, arises whether the award so made is legal, valid and has binding effect on the parties as there was no written agreement between them to refer the dispute to arbitration. Similar question like the present one came up for consideration before the Madhya Pradesh High Court in Baratilal (supra), where the court in paragraph 9 of the judgment held : "Section 2 of the Act defines an arbitration agreement to mean "a written agreement to submit present or future differences to arbitration". Obviously, therefore, a reference to the Arbitrators would satisfy the requirements of the Act only if it is in writing. The award which the Arbitrators gave under Section 14 of the Act is the one which follows such a reference. The words 'award' and 'arbitration agreement' used in Sections 30, 32, 33 and 34 refer to the words as defined in Section 2 of the Act. Accordingly, it follows that the bar in Section 32 to suits contesting arbitration agreement or award operates only when the agreement is in writing as required by Section 2 of the Act. That section does not operate as bar to a suit in the case of an award following an oral reference, as such an award is not in accordance with the provisions of the Act." The aforesaid decision applies in full force to the facts of the present case. In that view of the matter, I would hold that the award made by the Arbitrators on oral submission by the parties cannot be termed as 'award' and therefore, Section 32 of the Act is not attracted. 5. In view of my finding in the preceding paragraph the next contention of Mr. Pati regarding enforceability of the award of the Arbitrators in the Civil Court becomes academic. A similar question came for consideration before a Division Bench of this Court in Paramananda Panigrahi and another v. Tilottama Panigrahi and after her Rukmini Panigrahi (Vol. 5. In view of my finding in the preceding paragraph the next contention of Mr. Pati regarding enforceability of the award of the Arbitrators in the Civil Court becomes academic. A similar question came for consideration before a Division Bench of this Court in Paramananda Panigrahi and another v. Tilottama Panigrahi and after her Rukmini Panigrahi (Vol. 20 (1954) CLT 304), where their Lordships relying upon a decision of the Calcutta High Court in Munshilalla v. Modi Brothers (51 Cal. WN 563), came to hold that a suit to enforce claim arising under an award is entertainable and what is prohibited is a suit to obtain the decision about the validity or effect of an award. Reference of Parmananda (supra) was made in a latter decision in the case of Dharma Gouda v. Ganapati Gouda and others (AIR 1964 Orissa 21). Distinguishing the facts of the said case and making a detailed study on the question involved, the learned Single Judge concluded that a suit to enforce an award is not maintainable being barred by Section 32 of the Act. In support of this view, his Lordship relied upon a number of decisions of various High Courts. The Madras High Court in the case of Moolchand v. Rushid Jamshed & Sons (AIR 1946 Madras 346), observed that the suit which raised the question with regard to existence and validity of the award was expressly barred under Section 32. Similar view was expressed by the High Courts of Patna, Bombay, Madhya Pradesh and Punjab. The Bombay High Court in the case of Narbada Bai v. Natvarlal Chunilal ( AIR 1953 Bom. 386 ), held that the expression "effect of the award" in Section 32 is wide enough to cover a suit to enforce an award. It further held that although the party may not in terms ask for a decision of the Court to give effect to the award the fact that he ask the court to enforce the award must result in the Court giving a decision upon its effect and therefore, such a suit was not maintainable. To the same effect is also the view of Madhya Pradesh High Court in the case reported in Shyam Singh Jaswant Singh v. Prahalad Singh Tikaram ( AIR 1962 MP 66 ). To the same effect is also the view of Madhya Pradesh High Court in the case reported in Shyam Singh Jaswant Singh v. Prahalad Singh Tikaram ( AIR 1962 MP 66 ). In that case the court held that "whatever the pleadings may be if the suit is one in essence to enforce an award duly given by the Arbitrators dealing with the very dispute which is the subject-matter of the suit or to get rid of it, the suit is not competent." 6. True it is, facts in Paramananda (supra), are somewhat different from that of Dharama Gouda, (supra). But since the plaintiff urged that she was entitled to separate residence under Hindu Law as well as under an award question of maintainability of the suit was raised that the suit was hit by Section 32 of the Act. It is in this circumstance, their Lordships relying upon the Calcutta High Court decision in Munshilalla, (supra), held that the suit to enforce a claim arising under an award was entertainable. The Calcutta High Court in the aforesaid case observed in clear terms that the suit upon an award in the sense of a suit to enforce the award does not come within the mischief which is sought to be removed or remedied by Sections 32 and 33 of the Act. Decision of the Division Bench in Paramananda (supra), being earlier in point of time has binding effect unless and until the same is overruled by the Apex Court or by a larger Bench of this court. 7. In the case in hand, I do not like to delve into the question as to whether the suit would like to enforce an award, since I have held earlier that the award so made by the Arbitrators is not valid in the eye of law. I would, therefore, conclude that the present suit is maintainable. Resultantly the appeal is allowed and the impugned judgment and decree passed by the Trial Court are set aside and the suit is remanded with a direction that the learned Court below will hear and dispose of the same on merit in accordance with law as expeditiously as possible preferably by end of July, 1995. In the circumstances there shall be no order as to cost. Appeal allowed. *-*-*-*-*