Bapulal vs Nathulal

V.R. Newaskar, J.—This revision petition raises the question regarding validity of a reference to arbitration and the decree based on the award given in pursuance of it when all the parties to the suit did not join in the reference.

The facts giving rise to this petition are as follows. Plaintiffs Nathulal, Ratanlal, Ramnarain and Kanhaiyalal filed this suit for permanent injunction and damages in respect of an agricultural holding which the defendants Bapulal, Madandas, Hastimal and Bhavralal were alleged to have threatened to tres-pass upon.

The plaint itself mentioned below the names of the plaintiffs that Mr. Joshi represented them in the suit. The plaint was signed and verified by all the four plaintiffs and counter-signed by Mr. Madhavchand Joshi. But the Vakalatnama of Mr. Joshi was signed by only two of them namely Ratanlal and Ramnarain. It appears that when the plaint was presented on 9-8-1957 it was signed by only two of the plaintiffs Ratanlal and Ramnarain and the lines meant for the other two plaintiffs were left blank. However the office report dated 14-8-1957, on scrutiny, raised objection that the plaint and the Vakalatnama bore signatures of only two out of four plaintiffs. When the report was brought to the notice of Mr. Joshi, an application was submitted on behalf of the plaintiffs on 20-8-1957 that on the date the plaint was presented two of the plaintiffs had gone out and could not sign the plaint and that therefore they may be allowed to put their signatures upon the plaint. These two plaintiffs were kept present in Court which permitted this and the plaint was signed and verified by them. However Vakalatnama remained as before with two blank lines for the signature of the absent plaintiffs Kanhaiyalal and Nathulal. While the suit was pending an agreement was entered into for reference of the dispute in suit to the arbitration of Mr. Madanlalji Sodani. This agreement of reference bore the signature of Mr. Joshi for all the plaintiffs and particularly for plaintiffs Ratanlal and Kanhaiyalal. The agreement was also signed by plaintiffs Nathulal and Ramnarain. On behalf of the defendants it was signed by Mr. Jamnalal Jain. It may be mentioned here that the Vakalatnama of Mr. Jamnalal Jain contained power to remain present and conduct the suit on behalf of the defendants while that of Mr. Joshi contained amongst other things specific power to appoint arbitrators.

The arbitrator gave his award on 20-9-58. Below the award both Nathulal and Ramnarayan signed giving their assent to the award and accepting notice of it. Neither the defendants nor the counsel for them was present then. Plaintiffs Nos. 2 and 4 i.e., Ratanlal and Kanhaiyalal were also absent Objections were submitted to this award, on its submission in Court, on behalf of the defendants assailing it on the grounds that the arbitrator was interested in the plaintiffs and had misconducted himself and the proceeding by not giving due opportunity to the defendants. The Court over-ruled these objections and passed a decree in terms of the award by its judgment dated 27-1-1959.

Appeal was preferred by the defendant Bapulal alone purporting to be one u/s 39 of the Arbitration Act and therein he assailed the validity of the reference as well as the award on various grounds. The question regarding maintainability of the appeal was raised. The lower appellate Court relying upon the decision reported in Sheoramprasad Ram Narayanlal Bania Vs. Gopalprasad Parmeshwardayal Shukla and Others, held the appeal to be competent. The appellate Court however dismissed the same on merits holding that the reference was not invalid nor had the arbitrator mis-conducted himself and the proceedings.

This is a revision petition against the decision by Bapulal.

On behalf of the petitioner Mr. V. T. Sharma contended that the award and the decree based thereon are without jurisdiction since the reference itself was invalid on the ground that the agreement of reference had been signed only by two of the plaintiffs and one of the defendants and not by the rest.

Since the validity of the award is challenged in this revision petition solely on the ground that the reference itself was had it will be material to refer to the provision contained in Section 21 of the Arbitration Act which deals with the matter since we are concerned with a reference made in a pending suit. That section provides :-

Where in any suit all the parties interested agree that any matter in-difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference.

It is thus clear from this provision that a reference in a suit is competent only if all the parties interested agree, that being the very foundation of Court's jurisdiction to make an order of reference, vide 29 Indian Appeals 51 Ghulam aJnani Vs. Muhammad Hassan. On such agreement an application has to be submitted by them in writing to the Court for an order of reference.

Now in the present case the application for reference is signed, on plaintiffs'' side by two out of four plaintiffs namely Nathulal and Ramnarain although the application purports to be on behalf of all. The application is further signed by Mr. Joshi who purported to represent the plaintiffs and particularly these who had not put their signature on the application namely Ratanlal and Kanhaiyalal. On behalf of the defendants the application is signed by defendant No 1 Bapulal and Mr. Jamnalal Jain who has filed his power on behalf of all the four defendants. Now the Vakalatnama of Mr. Joshi filed along with the plaint bore the signature of only two out of four plaintiffs namely those of Ratanlal and Ramnarain. The plaint too was signed initially by these two plaintiffs. But later the signature of the remaining two namely Nathulal and Kanhaiyalal were secured on the plaint but by oversight the Vakalatnama remained as it was without the signatures of Nathulal and Kanhaiyalal.

Now provisions of Order 3 Rule 4 (1), C. P. Code provide that no pleader shall act for any person in any Court, unless he has been appointed for the purpose by such person by a document in writing signed by such person or by his recognised agent or by some person duly authorised by or under a power-of attorney to make such appointment. It is thus clear that, in the absence of a signature of the person purporting to appoint him upon the Vakalatnama the person appointed cannot "act" on his behalf. It may be that the initial defect in the matter of signature can be cured in case the Court is moved for the purpose and the signatures of the parties who had not initially signed are obtained later. But in the present case the Vakalatnama of Mr. Joshi remained unsigned by Kanhaiyalal and Nathulal. He was therefore incompetent to act for both of them although he could properly act for Ratanlal and Ramnarain in the matter of making a reference. This would be so mere particularly since as held by the Full Bench in AIR 1947 17 (Nagpur) , an advocate has inherent power to act for his client, unless such power is specifically counter-maided. Moreover : M. Joshi's Vakalatnama contained a specific power to make a reference to arbitrator. It therefore follows that Mr. Joshi was justified in making a reference on behalf of Ratanlal but not on behalf of Kanhaiyalal. Mr. Joshi's signature on the application for reference can avail only so far as Ratanlal is concerned. The reference would therefore be good so far as Ratanlal, Nathulal and Ramnarain are concerned.

Next question to be considered is, will the reference be necessarily had in the absence of Kanhaiyalal's signature upon the application. This would be so in case Kanhaiyalal was not a party agreeing or even if he be a party agreeing his signature upon the application is indispensable.

As regards the first question it is a question of fact. In the objections raised on behalf of the defendants for the invalidity of the award, this ground regarding invalidity of the award is not raised. The only grounds raised were that the arbitrator Shri Madanlal Sodani had not given them proper information regarding the date of hearing nor had he given due opportunity to them for adducing evidence and that Shri Sodani was a clerk of Mr. Joshi and was consequently interested in the plaintiff Thus in the absence of any ground the question that Mr. Kanhaiyalal was not a party agreeing could not have been allowed to be raised at the stage of appeal as it involved a question of fact, nor can it be allowed in this petition for revision.

The next question is. is the signature of Kanhaiyalal indispensable to make it a valid reference. This question was considered by the Privy Council in a case reported in 43 Indian Appeals I Thakur Umed Vs. R. B. Seth. It was held in that case that where a person was a consenting party to the reference the mere fact that he did not sign the application for reference to arbitration would not be enough to render the reference invalid. Their Lordships observed-

In the first place the second Schedule to the Code of Civil Procedure, which provides, by Section 1, that, where the parties to a suit have agreed that the matter in difference shall be referred to arbitration they may apply in writing to the Court for as Order of Reference, does not require that the writing should of necessity be signed.

Section 1 of second Schedule to CPC is identical in terms to Section 21 of the Arbitration Act.

This decision of the Privy Council is followed in Madho Prasad and Others Vs. Kanhaiya Lal and Another, . The decision on S. Marahmat Husain Vs. Oudh Commercial Bank Ltd. and Others, , appears to be based on the same decision.

It is therefore plain that absence of signature of Kanhaiyalal is not fatal provided he was a person agreeing. The point regarding his not being a party, agreeing cannot be permitted to be raised as already held. Therefore it follows that the award cannot be held invalid on the ground that there was no proper reference by all the parties ranged as plaintiffs.

This takes us to the parties ranged as defendants. So far as that question is concerned the reference is signed by Bapulal and the defendants'' counsel Shri Jamnalal Jain who was appointed under the Vakalatnama to appear and conduct the case. As indicated earlier from the decision of this Court in AIR 1947 17 (Nagpur) , an advocate has inherent power to act and can consequently make a reference to arbitration unless his power is specifically counter-manded. It is not clear whether Mr. Jamnalal Jain is an Advocate or a Pleader, but even if the latter the words "Har Prakar se Pairavi" as used in Mr. Jamnalal's Vakalatnama clearly includes power to act, vide ILR (1954) 4 Raj 721 (725) Ash Karan Vs. Santok Chand.

Thus the reference cannot be held bad due to absence of signature of the rest of the defendants and consequently the award cannot be held to be a nullity on that ground.

It is thus clear that the order of the Courts below refusing to treat the award as null and void for absence of a valid reference does not involve any error of jurisdiction.

The petition is therefore dismissed with costs.