Charan Singh vs Kundan Singh

This is a reference under S. 7, Hyderabad High Court Act in a second appeal preferred by the defendants against the judgment and decree of the First Judge, City Civil Court, dated 29th Isfandar, 1358F., whereby he affirmed the judgment of the Honorary Judge of the said Court, who had decreed the suit for damages amounting to Rs. 200/-.

To appreciate the controversy which we are called upon to resolve, it would be appropriate to give a brief narrative of the material facts. On 29th Ardibhist, 1352F., the plaintiff-respondent, Kundan Singh, instituted a suit against Dhun Singh, Charan Singh, Sital Singh and Mohan Singh, the appellants before us, for damages on the allegation that the latter had without any legal justification cut down and taken certain fruit bearing trees which were growing on Survey No. 2 known as Pochamma Guddum situate in Alijahpur, Bhagat Taluk. This piece of land, the plaintiff claimed to belong to him by virtue of a patta granted to him by one Anatamma, who was the holder of the jagir in which the disputed plot was situated.

The appellants in their reply did not specifically deny the imputed act of cutting the said trees. They, however, resisted the suit on the pleas of estoppel, res judicata, limitation and on the allegation that they were the owners of the piece of land on which the trees had grown.

In substantiation of his claim, the respondent produced 18 exhibits as documentary evidence and examined seven witnesses. On behalf of the appellant 4 witnesses and 9 exhibits were produced in rebuttal. After the close of the evidence, the case was posted to 28th Khurdad 1355F. for arguments. On that date, the appellants put in an application praying the Court to make a local inspection to which the trial Court acceded and after inspecting the disputed plot fixed 20th Amardad 1355F., for arguments. This date was adjourned on the request of the parties that there was some talk of compromise between them. Subsequent to this, two dates were however wasted on some irrelevant matter and the Court ultimately fixed 21st Aban 1355F., for final arguments. The hearing on the arguments had to be postponed as Charan Singh, appellant 1 filed an application requesting the Court to record the award as an adjustment under S. 409, Hyderabad Civil P. C. and pass a decree in terms of the award. Notice of this was given to the other side who appeared and denied the award.

The trial Judge relying on the case of - Rohini Kanta Bhattacharjya Vs. Rajani Kanta Bhattacharjya and Others, ), dismissed the application on the preliminary ground that it cannot be enforced either as a compromise or an agreement or adjustment under S. 409, Hyderabad Civil P. C., inasmuch as it is not consented to by the parties and has been made during the pendency of the suit on a reference to arbitration without intervention of Court.

Having refused to enforce the award as a compromise or adjustment, the trial Judge heard the advocates for the parties, on 19th and 20th Dai, 1356F., and 10th Bhaman 1356F., and decreed the suit holding that the respondent had succeeded in establishing his title and the cutting of the trees by the defendants.

The defendants took the matter in appeal. Two points were urged on their behalf before the lower appellate Court, firstly, that the trial Court had erred in refusing to pass a decree in terms of the award and, secondly, that on the evidence as it stood on the record, the suit ought to have been dismissed. The learned appellate Judge negatived the first plea practically on the reasoning adopted by the trial Court and on the second contention after a careful scrutiny of the evidence placed on the record, he concurred with the conclusion of facts arrived at by the first Court.

Dissatisfied with this judgment and decree, the defendants filed the present appeal. The appeal initially came up for hearing before a Single Bench of this Court, which referred the same to the Division Bench having regard to the importance of the question of law involved.

Before the Division Bench, the learned advocate for the appellant brought to the notice of the Court for the first time the Full Bench case of -- ''Mohd. Ikramuddin Khan v. Mohmood Hussain Khan'', 17 Deccan LR 617 (B), wherein there are observations to the effect that where in a suit parties refer their case to arbitration without the order of the Court and an award is made, a decree can be passed by the Court in terms of the award under S. 409, Hyderabad Civil P. C. The Division Bench felt that there was a conflict between the view as expressed in the Full Bench case and those expressed in -- ''Mathuram v. Ramchanderlal'', 1352 Nazair Hyderabad 338 (C); Therefore, in order to resolve the conflict the following two questions were formulated and the entire case has been referred to the Full Bench :

(a) Where in a pending suit the parties to the suit refer the matters in difference between them to arbitration, without the order of the Court and an award is made, can a decree in terms of the award be passed by the Court under S. 409, Hyderabad C. P. C. corresponding to O. 23, R. 3 where one of the parties does not accept the award; and

(b) In cases where any of the parties does not accept the award, can the Court direct the parties to adduce evidence to prove the agreement and award.

It is to be highly regretted that when the appeal was argued before the Single and the Division Bench, the advocate for the respondent was not industrious enough to lay his hand on the case of -- Chottay Ram v. Gangu Bai'', 19 Deccan I R 83 (D), a decision of the now defunct Judicial Committee of Hyderabad. In that case, the majority view as expressed by Baijanath and Zulqadar (sic), JJ., was that such an award would have no legal efficacy whatsoever in deciding the dispute between the parties.

On the other hand, the minority view expressed by Akbar Yar Jung J., was that such an award can be enforced not only under S. 409 but also under the provisions of Ss. 559 and 560, Hyderabad Civil P. C., which correspond to paras 20 and 21, Sch. 2, Indian C. P. C. It would thus appear that this Court was of the same view which was held by the Nagpur, Calcutta and Rangoon High Courts. The case of 17 Deccan LR 617 (B), is distinguishable on the ground that in that case, the parties to the litigation had consented to the award in terms thereof. In that case, the trial Court instead of following the procedure laid down in S. 409, Hyderabad C. P. C. delivered judgment on the merits of the case using the award as a piece of documentary evidence. In view of these facts, the Full Bench decided that there was nothing in Chap. 40, Hyderabad C. P. C. corresponding to Sch. II, Indian C. P. C. to preclude the parties to use the award as an adjustment or compromise with mutual consent and to ask for a decree under S. 409.

Chapter 40, Hyderabad C. P. C. (Sch. II, Indian C. P. C.) contained provision for three classes of arbitration :

where in a pending suit the parties thereto agree to refer the matter to arbitration through Court.

where in pursuance of an agreement to refer, the parties move the Court to refer the matters in dispute to arbitration, and

where there is a private reference and award and the parties or any of them applies to the Court for filing the award.

There were provisions in all these three classes of arbitration for the Court inquiring into the validity and passing suitable orders, either passing a decree in terms of it or setting it aside or remitting it for reconsideration. None of these provisions had any application where in a pending action, the parties referred their dispute to the decision of the arbitrator not through Court but privately and there was an award passed on such reference. In the absence of an express provision in the Code as to how such an award was to be dealt with, the question frequently came up for determination whether it could be regarded as a compromise under O. 23, R. 3, Indian C. P. C., even when one of the parties refused to accept the same; and on that point there was a sharp difference of opinion among the several High Courts.

That it could be recorded as an adjustment of the suit under O. 23, R. 3 notwithstanding that one of the parties refused to accept it, was the view taken by a Full Bench of the Madras High Court in - Penmetcha Subbaraju Vs. Penmetcha Venkatramaraju, of the Bombay High Court in -- Chanbasappa Gurushantappa Hiremath Vs. Baslingayya Gokurnaya Hiremath, , and of the Allahabad High Court in - Gajendra Singh Vs. Durga Kumari

The contrary view that such an award could not be given effect to as a compromise or adjustment under O. 23, R. 3 was maintained by the Calcutta High Court in a number of cases: Vide -- ''Dekari Tea Co. Ltd. v. India General Steam Navigation Co. Ltd.'', AIR 1921 Cal 238 (H); -- Amar Chand Chamaria Vs. Banwari Lall Rakshit and Others, ; Guimoni Dasi Vs. Tarini Charan Porel, -- Rohini Kanta Bhattacharjya Vs. Rajani Kanta Bhattacharjya and Others, and -- Mahammad Mia Pandit and Others Vs. Osman Ali and Others, by the Lahore High Court in -- ''Hari Pershad v. Mt. Soogni Devi'', AIR 1921 Lah 232 (L); AIR 1930 860 (Lahore) and - AIR 1936 374 (Lahore) by the Patna High Court in - Bhimraj Kanai Lal (Firm) and others Vs. Munia Sethani by Full Benches of Rangoon and Nagpur High Courts in -- ''Maung Hlay v. U. Ge'', AIR 1939 Rang 300 (FB) (P) and AIR 1939 186 (Nagpur) respectively.

It would thus be apparent that the view propounded by the Judicial Committee in 19 Deccan LR 83 (D) was not a solitary view opposed to a consensus of opinion in other High Courts. The Full Bench cases of Nagpur and Rangoon High Courts which were decided long alter the decision of the Chotelal''s case (D)'' follow the same line of reasoning which was adopted by the majority of the Judges composing the Hyderabad Judicial Committee. It was for this reason that the learned Judges who decided 1352 Nazair Hyderabad 338 (C), and -- ''Gulab Chand v. Syed Gulam Dastagir'', 34 Deccan LR 239 (ft) preferred to follow the Full Bench decision of the Nagpur High Court.

The divergence of opinion is mainly due to the interpretation and the meaning put upon S. 89, Indian C. P. C., corresponding to S. 539, Hyderabad C. P. C., by the various. High Courts. One view is that Sch. II read in the light of S. 89 was not exhaustive of the modes in which the matter in difference between the parties can be referred to arbitration. The other view with equal emphasis on the same section lays down that the intention of the Legislature in enacting S. 89 was to make the provisions contained in Sch. II exhaustive.

This Court has fallen in line with the latter view and does not see any special reason to depart from that view.

The learned advocate for the appellants has not been able to satisfy us that the view taken by the erstwhile Judicial Committee of Hyderabad and by this Court in two cases referred to above which find support from the Nagpur, Calcutta and Rangoon decisions was so palpably wrong and mistaken as to induce us to reopen the question. The only argument advanced was that we should adopt the'' majority view of the Indian High Courts. We would have canvassed the comparative merits of the controversy but we find that Sch. II, Indian C. P. C. and Chap. 40 of the Hyderabad Code have lost their statutory status by being replaced by the Indian Arbitration Act of 1940, the 47th section of which Act, for all future practical purposes, removes the difficulty.

In these circumstances, the practical importance of the reference to the Full Bench has largely disappeared. Though there are decisions of other High Courts taking a different view, we feel that upon the principle of stare decisis it would serve no useful purpose to reopen the question. On these premises, we would record our answer by saying that an award made during the pendency of a suit between the parties as a result of arbitration out of Court would not constitute an adjustment or compromise within the meaning of S. 409 or for the matter of that under O. 23, R. 3, Indian C. P. C. In view of the answer formulated by us to question (a), the second question need not be answered.

The appeal has not been argued before us on merits. We have for ourselves gone into the evidence and we are satisfied that the conclusion of facts arrived at by the Courts below are sound and call for no interference on our part.

The result is that the appeal fails and is hereby dismissed with costs.