Ramayya and Another vs Venkatachellamma and Another

Mack, J.—The appellants are the plaintiffs, who sued the two defendants on 25-6-1948 for a permanent injunction restraining them from

opening a doorway into an alleged private lane belonging to them and for a mandatory injunction directing the removal of a wall which encroached

on their site. This appeal arises out of a reference to arbitration outside court subsequent to the filing of the suit, which degenerated into a

regrettable fiasco as between the arbitrators themselves, three of them giving the He direct to the fourth arbitrator one S. Rattiah. The learned

District Munsif accepted the evidence of three arbitrators examined for the plaintiffs as P. Ws. 1, 2 and 3 that there was an award in writing signed

by all the four arbitrators and decreed the suit in accordance with a copy kept by P. W. 1 The finding on their evidence was that Rattiah

suppressed the signed award. The learned Subordinate Judge in appeal preferred to believe Rattiah and remanded the suit for fresh disposal.

The relevant facts briefly are these. The suit was preceded by the usual preliminary canter in the Magistrate''s Court. The first defendant who is a

woman one Venkatachellamma bought a site next to the plaintiff''s house and started building. The 2nd defendant is said to be some relation of hers

but said to be looking after her affairs. When they were obstructed by the plaintiffs, they filed M. C. No. 7 of 1948 in the Magistrate''s Court and

got an ''ex parte'' order u/s 144, Cri. P. C. On 18-6-1948, plaintiffs retaliated by filing M. C. No. 9 of 1948 for cancellation of this order and

followed it up with the suit O. S. No. 362 of 1948. On 17-7-1948, both parties referred their dispute to the arbitration of four persons by a signed

reference Ex. A. 1. It is common ground that on 5-8-1948 the four arbitrators took measurements. According to three of them P. Ws. 1 to 3, they

were all in agreement as to the terms of the award, which was written in Rattiah''s house and the parties who were waiting outside were orally

informed. The award was left with Rattiah for further action. Then on 10/8/1948 the defendants issued a notice Ex. B. 1 to the arbitrators not to

proceed with the enquiry. On 16-8-1948 the three arbitrators P. Ws. 1 to 3 appeared in the Criminal Court and filed a memo there Ex. A. 6

embodying the terms of their award, alleging that the original signed by all the four arbitrators had been left with Hattiah.

The terms of the award were, ''inter alia'', that the do or way into the lane was to be closed, but the wall alleged to be an encroachment was to be

permitted to remain and the defendants were to pay Rs. 100 to the plaintiffs by way of compensation. The criminal proceedings were withdrawn

and O. P. No. 52 of 1948 was filed in the suit by the plaintiffs for a decree in terms of the award on 5-10-1948. This was countered by an

application by the defendants to set aside the alleged award. The only witnesses examined were the four arbitrators, three ranging themselves on

one side and swearing that they had signed an award, which was left with Rattiah, who stoutly swore to the contrary that the measurements which

were begun could not be completed because the parties themselves started disputes which nearly led to their beating each other, He was prepared

to swear that he and the other arbitrators went and reported the matter to one Anne Sanjivayya, who advised the execution of a document

choosing him as a fifth arbitrator but that this was not done. According to P. W. 1, each party deposited Rs. 500. According to Rattiah, R. W. 1,

Rs. 900 of this deposit is with him and Rs. 100 is still due from the defendants. It would appear that plaintiffs chose two of the arbitrators and

defendants two, a rather unsatisfactory arrangement, but in the present case we have three of the arbitrators including one chosen by the

defendants, all sticking together and swearing to all four of them signing an award in agreement with each other and entrusting the award to Rattiah.

The learned District Munsif, who heard the arbitrators, accepted the sworn testimony of three of them as against Rattiah. The learned Subordinate

Judge took the view that there was absolutely no motive for Rattiah to take sides, admitted as he was to be a very respectable man and he

considered him at least as good and respectable, if not better than the other three arbitrators. He concluded his comparative estimate of

respectability of the arbitrators in paragraph 52 of his judgment by the following sentence.

I opine that he is a much better man than respondents 3 to 5.

One of the numerous grounds on which the learned Subordinate Judge set aside the award was that there was no proper selection of arbitrators,

there being some evidence that two of them P. Ws. 1 and 2 were not well disposed to the defendants He however overlooked the fact that the

third arbitrator selected by the defendants supported them in the witness box. The parties were not examined. The non-examination of Anne

Sanjivayya has been stressed on behalf of the appellants as a defect in the case of the defendants as it left Rattiah''s testimony alone and

uncorroborated, whereas if as he deposed all the arbitrators went to Anne Sanjivayya when they could not agree, this man would have given

evidence of Teat value to demolish the case of the plaintiffs that there was in fact a written award signed by all the arbitrators. The learned

Subordinate Judge was of the view that the plaintiffs could as well have cited him to show that he was not approached at all. It is difficult to see

how they could do this, anticipating the evidence given by Rattiah.

I have found great difficulty in following and appreciating the numerous grounds given in several brief paragraphs by the Subordinate judge for

rejecting the evidence of three of the arbitrators P. Ws. 1 to 3. One was that the award, if written, should have been served on the parties then and

there. Another was the failure to purchase the requisite stamp then and there on the afternoon of 5-8-1948 and so on. It is regrettable that the four

arbitrators to whom the parties by a signed reference entrusted their dispute for resolution who are seemingly respectable persons should give each

other the lie direct in this way. The reasons given by the Subordinate Judge for reversing the finding of the District Munsif, who had the great

advantage of hearing all the arbitrators in the witness box are so unconvincing, that in fairness to the arbitrators themselves the rejection in toto of

the evidence of three of the arbitrators, P. Ws. 1 to 3 should not, I think be permitted to stand. It is often difficult and embarrassing for a court to

resolve so strong and direct a conflict in oral testimony between seemingly respectable persons The view to which I am inclined is that there was,

as P. Ws. 1 to 3, have deposed, an agreement as between them and Rattiah as regards the award which should be passed and that it was in fact

reduced to writing and signed at any rate by P. Ws. 1 to 3 before they left the award with Rattiah. It is probable that Rattiah was influenced to

change his mind) it may be after a conversation with Anne Sanjivayya, who has avoided the witness box, and that he did not in fact sign the award

at all. I find it extremely difficult to believe that P. Ws. 1 to 3 would have gone to the length of swearing falsely that they all signed an agreed award

which was left with Rattiah in whose custody the deposit money was also kept for formal notice to the parties and for further action.

The far more important point of law that remains is whether such an ""award"" can be made the basis of a court decree without the consent of

parties.

Prima facie it would appear that Section 47 of the Arbitration Act governs such references to arbitration by parties in a pending suit without

reference to or knowledge of the court. Under the proviso to Section 47, an award otherwise obtained, that is, not under the specific previsions of

the Act, may, with the consent of all parties interested, be taken into consideration as a compromise or adjustment of a suit by any Court before

which the suit is pending. Chapter II of the Act provides for arbitration without the intervention of court; Chapter III, for arbitration with the

intervention of court where there Is no suit pending; and Chapter IV for arbitration in suits through the court. The Act does not provide for

arbitration in pending suits except through Court; and, according to the proviso to Section 47, an award on the footing of such arbitration may only

form the basis of a decree by consent.

A different view was taken by Leach C. .T. and Lakshmana Rao J. in -- V.S.A. Arumuga Mudaliar Vs. V.S.P. Balasubramania Mudaliar and

Others, . In that case there was a reference in a pending suit to a single arbitrator who passed a signed award to which objection was taken. It was

held that the Arbitration Act of 1940 did not change the law as laid down in -- Penmetcha Subbaraju Vs. Penmetcha Venkatramaraju, by a Full

Bench of our High Court that an award in a private arbitration in a pending suit can be treated as an agreement for compromise and form the basis

of a decree under Order 23, Rule 3, C.P.C. although the parties did not accept it. The correctness of this Bench decision has been doubted by

single Judges of this Court and my attention has been drawn to a reference to a Pull Bench by Venkatarama Aiyar J. in --'' Abdul Rahman Sahib

Vs. Muhammad Siddig and Another, . That reference was made in view also of some Bench decisions outside Madras where a different view was

taken. It may also be said the correctness of this decision was doubted by Happell and Govinda-rajachari JJ. in -- ''C. M. A. No. 623 of 1946

(Mad.) (D)'' in a reference to a Full Bench which however did not specifically determine the point for reasons which need not be gone into.

I have carefully considered the bearing of the decision in -- V.S.A. Arumuga Mudaliar Vs. V.S.P. Balasubramania Mudaliar and Others, '', on

the present case which can, I think, be readily differentiated, as there is here no original award produced signed by all the arbitrators as in that

Bench decision and also in -- Penmetcha Subbaraju Vs. Penmetcha Venkatramaraju, ''. When in a private arbitration in a pending suit without the

knowledge of the court arbitrators begin to differ from each other, give each other the lie, if not begin to quarrel with each other, another dispute is

in consequence created and the only course is for a court to ignore the arbitration and decide the suit on its merits.

For these reasons, I dismiss this appeal with a direction to the District Munsif to give this long pending suit as expeditious a disposal as possible.

I would further direct the parties to bear their own costs both in the appeal in the lower appellate Court and also in this civil miscellaneous appeal

irrespective of the result of the suit.

No leave.