Patna High Court
Minalal Mundhra vs Smt. Anchi Devi And Ors. on 24 February, 1964
Equivalent citations: AIR1965PAT66, AIR 1965 PATNA 66
JUDGMENT H. Mahapatra, J.
1. Plaintiff is the appellant. On the 14th of December 1949, plaintiff and defendant No. 1 purchased two portion of plot No. 2783. The plaintiff took the northern side and the defendant the southern. These two blocks have been referred as B and C in the courts below. On account of a dispute about the discharge of rain water from the plaintiff's portion which, before the purchase by the parties, used to be discharged over the southern portion as the slope of plot No. 2783 was from north to south, proceedings under S 147 of the Code of Criminal Procedure were started at the instance of the plaintiff. They were, however, quashed under the orders of the High Court. Thereafter the plaintiff instituted the present suit for a declaration that they had the right to discharge the rain water from their land through the defendants' portion as the natural slope of the land was so constituted. He also asked for an injunction against the defendants restraining them from making any change in the level of their grounds so as to block the flow of the rain water from the plaintiff's land.
While the case was pending in the trial court and a few of the witnesses had been examined on the 6th of February 1960, both the sides made a joint petition asking the Court to refer the dispute to the arbitration of two gentlemen named in that petition, Sri Sitaram Rungta and Sri Biswanath Mundhra. They asked that the entire matter in dispute between the parties should be sent for arbitration of those two persons. The arbitrators took several adjournments from the Court after a reference was made to them, and on the 9th of January 1961 they filed their award, notice of which was given to both the parties. An objection was filed on behalf of the plaintiff against that award. His grievance was that the responsibility for completion of the work in the plaintiff's ground by way of changing the natural slope of the land, as given in the award, was undertaken by the arbitrators, and that the award which was based on an agreement between the parties before the arbitrators did not contain the basis of that agreement involving the change in the municipal drain situate on the northern side of the plaintiff's land.
A rejoinder was filed by the defendants, and on hearing both the parties the court passed an order on the 27th of April 1961 modifying the award to some extent and ordered that the award may be accepted after modification to the effect that the defendants were directed to complete the earth work as proposed in the award before the 15th June 1961 failing which the plaintiff would be entitled to enforce the decree specifically against the defendants. The court decreed the suit against the defendants in terms of the award as modified and directed a decree to be drawn up accordingly. In pursuance thereof a decree was drawn up on the 11th of May 1961 signed by the learned Munsif. Against that an appeal was taken to the District Judge by the plaintiff without any success. The present second appeal is directed against that, and the plaintiff is the appellant.
2. As I have indicated above, the dispute between the parties in the suit was about the right of the plaintiff to discharge the rain water horn his land over the land belonging to the defendants which lies to the south of the plaintiff's land. He claimed that as the natural slope and the defendants were trying to obstruct that flow of rain water by obstructing the natural slope in making constructions on the land and also raising the level of the vacant grounds. The dispute between the parties, therefore, was about plaintiff's right to discharge rain water from his land to the south and over the defendants' land. The defendant denied this right of the plaintiff and raised several pleas in answer to the action against them. This was the subject-matter that was referred, on agreement between the parties, by the court to arbitration by two gentlemen of the town; one of them was the Chairman of the Municipality and the other is said to be a relation of the plaintiff. While the matter was before the arbitrators, as it appears from the award, they (arbitrators) found that the natural slope of the land was such that the rain water from the plaintiff's portion of the land was to be discharged over the defendants' land lying to the south of it, but that course would involve demolition of a part of a costly building already put up by the defendants. They suggested that the level and slope of the plaintiff's vacant land should be changed so as to drain water from it to the north into the municipal drain. Parties agreed to this suggestion and accordingly the award was made.
It further appears from the award that the arbitrators wanted to complete this change in the plaintiff's land at the cost of the defendants before the award was filed in Court, but by the last date, by which the award was to be submitted, they found that some portion of the work was still left undone in that connection. The arbitrators, therefore, stated in their award that they had undertaken, as agreed to by the parties, to complete that work. On that condition they made the award and filed it in Court. It will be necessary to reproduce two paragraphs of the award:
"12. We have, therefore, with the consent of the parties undertaken the responsibility of completing the work ourselves and the defendants have already deposited the estimated cost thereof with us. The work shall be completed by us within a reasonable time before the onset of the next rains."
"14. We, therefore, award on the basis of an agreement arrived at between the parties that the rain water of the complainant's compound- shall be discharged into the municipal drain lying to the north of his holding through the existing drain on the west of plaintiff's holding and necessary changes in the slope of the land to ensure smooth flow would be made at the cost of the defendants.
We sign this award, this the 9th day of January 1961."
The objection to this award, after receiving notice from the Court, was filed on the 16th of March 1961 by the plaintiff. In paragraph 3 thereof he stated:
"3. That under the award in question, the arbitrators themselves have undertaken the responsibility of completing the necessary transformation in the level of the plaintiff's land. The result is that if the arbitrators fail to execute the work, the plaintiff will be left without any remedy as the decree will not be executable either against the defendants or the arbitrators." In paragraph 6 he said:
"6. That moreover the Municipal drain lying to the north of the plaintiff's holding as it now stands, is not sufficient to receive the rain water from the plaintiff's compound. The arbitrators had assured the plaintiff that the level of the Municipal drain should be so made as to effect a smooth drainage of the entire rain water accumulating in the plaintiff's compound. The said fact however does not find place in the award though the same was the basis of the compromise itself.
7. That it is therefore necessary to modify the award suitably so as to safeguard the interests of the plaintiff."
I have said before that a rejoinder to this was filed in regard to the assertion of the plaintiff that the alteration of the northern municipal drain was the basis of the agreement between the parties for change of the natural slope of the plaintiff's land to the north. The defendants stated in their re-joinder as follows;
"6. That the plaintiff: speaks ot certain assurance and the defendant has nothing to do with it. If the plaintiff agreed to rely on the arbitrators on certain subject unconnected with the subject matter of the suit that cannot be subject matter of agitation in this court."
By this the defendants did not deny that there was any such assurance given to the plaintiff before he agreed to the suggestion of the arbitrators about changing the natural slope of his land from south to the north. In his order the learned Munsif, on the plaintiff's objection to the award saidt "I also feel that the award should be modified so as to make the defendant liable to complete the work as proposed before the rainy season sets in. I do not find any reason to set aside the award on other points as it is very reasonable and had the concurrence of both the parties so long as the matter was before the arbitrators."
Finally, he ordered to accept the award after modification "to the effect that the defendant is directed to complete the earth work as proposed in the award before 15-6-61 failing which the plaintiff will be entitled to enforce the decree specifically against the defendants".
3. Learned Counsel for the plaintiff contended that the more serious part of the objection to the award being made a rule of the Court and a decree being passed thereon was that the basis of the compromise, on which the award itself was based, had not been included by the arbitrators in their award. It is clear from the terms of the award that the suggestion about the change of the natural slope of the plaintiff's land came from the arbitrators and the plaintiff agreed to that. His case, however, is that he gave his consent only on the assurance being given to him that there would be necessary alteration in the municipal drain lying to the north of his land. If that assurance was not given to the plaintiff, then he would not have given his consent to the arbitrators' suggestion. Whether this was true or not was to be determined by the learned Munsif If he would have found on evidence that such an assurance was the basis of the plaintiff's consent to the arbitrators' suggestion, exclusion of any reference to that from the award would have raised a serious question for consideration whether the award could be set aside on that ground, or whether the award could be said to be an award on compromise. It has to be noted that the award about the change of the natural slope of the plaintiffs land was not what the arbitrators had decided but it was only on the basis of an agreement between the parties. If the whole of the agreement including the basis of such agreement does not form part of the award, then the award as made cannot be said to be an award on agreement of the parties.
By this, I am not suggesting that the courts below should have found as a fact that the plaintiff's consent given to the arbitrators' suggestion, as mentioned in the award, was, as a matter of fact, due to the assurance given to him either by the arbitrators or by the defendants or by both that there would be alteration in the level and dimension of the municipal drain situate to the north of the plaintiffs land. That would depend upon the evidence that the parties would have adduced before the Munsif. There is no reference in the Munsif's order to this serious objection raised by the plaintiff in paragraph 6 of his objection petition. Learned counsel for the defendant-respondents contended that though that was mentioned in the objection petition, that was not pressed at the time of hearing before the learned Munsif, and that is why he has not made any mention in his final orders. It is difficult for me to accept that position in absence of any affidavit to that effect on the side of the defendants either from the lawyer who conducted the hearing before the Munsif or by the defendant himself or anyone on his behalf who was present at the time of hearing. On the other hand, I find that in grounds Nos. 11, 14, 18, 21 and 28 of the memorandum of appeal in this Court, specific reference to this contention of the plaintiff has been made.
Besides from the report ot the local inspection held by the learned District Judge when the appeal was pending before him it also appears that such an assurance was given by one of the arbitrators who happened to be the Chairman of the municipality when the District Judge made the local inspection. If that objection was not really pressed before the Munsif, it would have been more appropriate for him to mention that but of the two objections only one that was pressed before him was about the responsibility of the arbitrators for completion of the earth work. The other one was not pressed by the plaintiff. From the appellate Court judgment I find that the learned District Judge also referred to this part of the plaintiff's objection against the award in paragraph 6. In view of these circumstances it is difficult for me to accept the position that though this objection about the assurance given to the plaintiff about the alteration of the municipal drain on the north of the plaintiffs land was raised in his petition of objection, he did not press it before the Munsif. Non-consideration of this objection is enough to vitiate the judgment of the learned Munsff. A party, who has raised a contention which is available to him under the law, is entitled to a fair and proper hearing on that and to a finding by the courts of fact on such contention. He had asked for the award to be set aside or modified on more than one ground and before the court of the first instance refused his prayer or partly allowed it, it should have recorded its finding on his objections. For the respondents it was pointed out that in the plaintiff's petition he hadl asked only for modification of the award and not for its cancellation. It is true the words in the prayer portion did not ask for cancellation of the award, but that was the position before the Munsif because in his order he slated at one place; "I do not find any reason to set aside the award. ...." Therefore, there cannot be any doubt that the learned Munsif was considering whether a proper case had been made either for modification or cancellation of the award.
4. Learned counsel for the appellant further contended that the way in which the modification in the award was made by the learned Munsif was not permissible under Section 15 of the Arbitration Act He pointed out that neither the award contained any clerical mistake nor was it imperfect in form nor it contained any obvious error in which case there could be modification or correction of the award under Clauses (b) and (c) of the section. He also urged that it was not the learned Munsif's view that a part of the award was upon a matter not referred to arbitration and such part could be separated from the other part without affecting the decision on the matter referred. The responsibility of completion of the work, as directed in the award was kept for the arbitrators. If that was a part of the award itself, then it was not open to the court under Section 15 to change that responsibility from the shoulders of the arbitrators to the defendants. In that sense learned counsel's contention could be right; but in my view the real award did not include that responsibility. That was only spoken of by the arbitrators in regard to the manner in which the works were to be completed in pursuance of the award. The real award was that there will be change in the natural slope of the plaintiff's land from the south to the north and that it will be done at the cost of the defendants. There has not been any modification in respect of this essential part of the award which, in my view, was the whole award, by the Munsif except that he put a time limit of the 15th of June 1961 for the completion of the work by the defendants after which it was to be done by the plaintiff at the defendants' cost.
The real argument for the appellant appears to me that on account of absence of inclusion of the assurance about the alteration to be effected in the municipal drain on the north in the award, it (the award) did not completely contain the agreement of the parties, and, therefore, it was vitiated. On this point the learned Munsif did not record his finding nor did he at all consider it. The argument that the modification as ordered by the Munsif was not in terms of Section 15 has therefore no substance.
5. Learned counsel next urged that it was not open to the arbitrators to pass an award about changing the natural slope of the plaintiff's land. The matter under reference to them was the subject-matter of the suit itself. The dispute between the parties in the suit was limited to the right of the plaintiff to discharge his rain water over the land of the defendants. This right was disclaimed by the defendants. So what was left under the reference to the arbitration was whether the plaintiff had such right or not. It was not for the arbitrators to make out a third case and give directions in that respect. In support of this contention learned counsel referred to the case of Sherbanubai Jaffer-bhoy v. Hooseinbhoy Abdoolabhoy, AIR 1948 Bom 292. There it was observed that after reference under Section 23 of the Arbitration Act, the Court will continue its supervision over the conduct of the reference. Arbitrators are bound to strictly coin-ply with the terms of reference and make an award in obedience to the order of reference. If any amendment or modification is sought about the matter under reference or in regard to the authority of the arbitrators and their scope of work, that can be effected only by securing an alteration in the reference from the Court. In that case the arbitrators had directed an ex-gratia payment to be made by one party to the other and that was objected to.
The other case relied upon In this respect was Omanhene Kobina Foil v. Chief Obeng Akessee, AIR 1934 PC 185. There the two parties were claiming the boundary of a particular land to be at two different points. The arbitrators made a new boundary line between the two extremes as put forward by the parties. They were to find out by arbitration which of the parties was right in fixing his boundary line. It appears from the report that after the reference was made the parties agreed before the arbitrators that they (arbitrators) without taking any evidence from the parties would decide the matter on hearing the arguments from both the sides. In doing so, the arbitrators laid down a new boundary line. This was objected to by the Court and the Judicial Committee held that there can be no agreement between the parties in regard to the function of the arbitrators or in regard to how they should act and it was not open to the arbitrators to follow such an agreement if the reference order did not sanction that. In that case, the way in which the arbitrators proceeded was in conflict with the order of reference. In my view, neither of the cases is of assistance to the appellant. The agreement on which the arbitrators proceeded in the latter case was not in regard to the subject-matter but in regard to the procedure and so it came under the disapproval of the Judicial Committee, In the present case the award does not make any arbitrary decision about the rights of the parties nor what the award laid down is different from the right claimed by one party or the other. It is clear from the award that the arbitrators recognised the plaintiff's right to discharge his rain water on the south over defendants' land, but they upheld that right subject to certain conditions and that was that the natural slope of the plaintiff's land should be changed at the cost of the defendants to the north. This was by agreement between the two parties. Such a compromise could also be effected in the suit itself before the Court What can be done in a suit in Court can also be done before the arbitrators.
6. Another case was also relied upon by learned counsel Ram Protap Chamaria v. Durga Prasad Chamaria, AIR 1925 PC 293. There a plaint was filed in Court on the 12th of January 1922 in regard to certain disputes between the parties. On the 11th of May 1922 there was an outside reference by those parties and another for arbitration of certain gentlemen in regard to all their disputes some of which were not involved in the suit pending in Court. The parties in the suit made an application in Court stating that they had referred all their disputes to arbitration and an order in regard to reference of points of dispute involved in the suit was made by the Court on the 23rd of May 1922, An award was given by the arbitrators both on the points that were in the suit and also other points. Parties to that arbitration were, as I have already stated, not only parties in the suit but also some other persons. Objection was taken against that award. Ultimately it was ruled by the Court that the award being in excess of the terms of reference and in regard to persons not involved in the suit was not an award in answer to the reference made by the Court. This also will be of no real help to the appellants in his contention that the award as made by tike two arbitrators in the instant case was either outside the scope of reference in regard to the subject-matter or the parries.
7. For the respondents it was seriously challenged that the assurance about the change of the municipal drain on the north which the plaintiff raised in his objection to the award was outside the scope of the reference for arbitration, and as such, it could not have been included in the award itself. Even if it was included, the Court could not pass a d"eree in pursuance thereof. At the most the Court could have passed a decree following the award in regard to the terms of reference and could have appended the award as a whole as an enclosure to the decree which could have been enforced by the parties only as a contract or an agreement. For this, reliance was sought to be placed on the case of Munshi Ram v. Banwari Lal, AIR 1962 SC 903. It is true that the assurance about the change of the municipal drain was not to the hands of the defendants. Plaintiff did not say anywhere that the defendants gave any such assurance. It was the arbitrators' assurance, and it looks that one of the arbitrators' being the Chairman of the municipality might have given such assurance. Whether he actually did give assurance or whether on the basis of that assurance the plaintiff agreed to the arbitrators' suggestion will be a matter for evidence to establish. That assurance involved a third party, namely, the municipality. It was certainly outside the scope of reference to arbitration as made by that Court; but that will not solve the dispute in the present appeal. Whether such an assurance could have been given or not, or whether such an assurance could have formed the subject-matter in the award is irrelevant for the purpose of determining if the plaintiff had agreed to the course adopted by the arbitrators in their award on account of that assurance. We are to see if the award which was based on an agreement of the parties was not vitiated in any way on account of any mistake or misrepresentation relating to such assurance.
8. Learned Advocate General for the respondents also referred me to the case of Raminder Singh v. Mohinder Singh, AIR 1940 Lah 186. There the plaintiff had claimed that he was the real owner of the property in dispute and he asked for a decree for possession against the defendant. The defendant, on the other hand, denied the plaintiff's ownership and pleaded that he was the owner of the land and was entitled to retain his possession. The arbitrators gave an award that the defendant would retain possession over the land on payment of Rs. 15000/- to the plaintiff. This was objected on the ground that this was in excess of and outside the reference. It was urged that either the arbitrator should have decreed the plaintiff's right of possession or that of the defendant The Court held that what the arbitrator had decided amounted to upholding the defendant's right to retain possession denying the plaintiff's such right, but the defendant's that right was burdened with the condition of payment of Rs. 15000/- to the plaintiff. The subject-matter of the reference and the suit was thus held to have been dealt with by the arbitrator and though the relief which was given by him was different from the relief claimed in the suit, yet it was taken to be partly in favour of one party and partly in favour of the other. In that view the award was upheld. In the present case if the award can be sustained on other grounds, the terms of the award could not have been said to be outside the reference or beyond the subject-matter of the suit, particularly in view of the agreement between the parties as alluded to in the award.
9. Learned Advocate General raised another contention that the second appeal was not maintainable. According to him the order of the learned Munsif was for modification or correction of the award and against such an order, an appeal is provided under Section 39(l)(iii) of the Arbitration Act. If that order is taken to be one refusing to set aside an award that will also be covered by sub- Clause (vi). Only one appeal is provided against that kind of order because in Sub-section (2) of Section 39 it is provided that no second appeal shall lie from an order passed in appeal under this section. Alternatively, it was also argued that if the impugned order is taken to be one under Section 17 of the Arbitration Act, there also one appeal was provided for on specific grounds and no second appeal could be entertained. Section 17 says that an appeal cannot He from a decree when the judgment pronounced is according to the award, and that an appeal is permissible against such decree only on the ground that it was in excess of or not otherwise in accordance with the award. Undoubtedly the impugned judgment in the present case on the face of it was not according to the award because the learned Munsif himself stated that he modified the award to certain extent. In that view there will be no application of Section 17. If the provisions of this section are attracted on the basis that, in essence, the decree passed by the Court was not in modification of the real award but was in accordance with the award itself, then it is difficult to see, how a second appeal can be objected to.
No doubt Section 17 speaks of an appeal but does not enjoin upon the absence of the right for a second appeal as the Legislature thought it wisel to provide under Section 39. Under Section 41(a) it is laid down:
Subject to the provisions of this Act and of rules made thereunder:
(a) the provisions of the Code of Civil Procedure, 1908, shall apply to all proceedings before the Court, and to all appeals, under this Act, In that view if, Section 100 of the Code of Civil Procedure is brought into play, the plaintiff can very, well say that as there has been no express prohibition against a second appeal either in the Code of Civil Procedure or in the Arbitration Act or in any other law For the time being in force an appeal shall lie to the High Court from every decree passed in appeal by any Court subordinate to the High Court on the ground stated in that section. The right of an appeal is not a mere matter of procedure but a right of substance and ouster of that right cannot easily be inferred unless there is express provision for it in a particular enactment or such provision can be established by necessary implication on compelling grounds. I am, therefore,, of the view that if the impugned judgment, of the Munsif is taken to be one under Section 17, the plaintiff has the right of a second appeal. Against, this, however, learned Advocate General placed the decision in the case of Gopal Choudhary v. Mt. Sundri, AIR 1955 Pat 377. In paragraph 9 of the report a Bench took the view passingly while dealing with Section 17 that the mention of the word "appeal" indicates that there was no right of a second appeal. The observation in that paragraph is in support of the contention of the learned Advocate General, but that observation was made, if I can say so with great respect, only in a casual and passing manner. The decision of that case rested on the findings given in regard to the merits of the award. The decision did not rest on the observation that no second appeal could lie in that case. A comparison with the provisions under Section 39(2) of the Arbitration Act was not placed before their Lordships in that case. I think a comparison of the provisions of Section 39(2) with that of section 17 will clearly bring out that a second appeal was not prohibited specifically in regard to matters covered by section 17. In any view, even if a second appeal does not He, the present appeal can be treated as one in civil revision. The contentions raised by the plaintiff can well be covered in an application in revision, because they relate to the exercise of jurisdiction with material irregularity and illegality, and in that sense this court will be justified in interfering with such judgment and decree if the party establishes such material irregularity.
10. For the plaintiff it was also contended that the Munsif's order was covered by Section 33 and not by Section 30 of the Arbitration Act. The relevant portions of Section 33 are as follows:
"Any party to an arbitration agreement......desiring to, challenge the existence or validity....of an award...... shall apply to the Court and the Court shall decide the question on affidavits:
Provided that where the Court deems it just and expedient, it may set down the application for hearing on other evidence also, and it may pass such orders for discovery, and particulars as it (SIC) do in a suit."
11. If the impugned judgment was under Section 33, that will not come under Section 39(1) which provides for appeals against orders. In the present case there was not a mere order but a decree passed by the learned Munsif. Either the case would be covered by Section 17 or Section 39(1)(vi) with this distinction that the present appeal is not directed against an order. If a party wishes to come in appeal against an order refusing to set aside an award or an order modifying or correcting an award, before a decree can be passed in pursuance thereto, he can well take recourse to the provision of Section 39; but when the appeal is against a decree passed, we have to go to Section 41 to determine the forum of an appeal. In that view, a second appeal is maintainable, as I have indicated above.
12. For the reasons already given, I am of the view that the judgment of the learned Munsif dated the 27th April 1961 will have to be set aside. The case will be remanded to him for consideration of the objections raised by the plaintiff against the award including that in regard to the basis of his consent given to the terms of the award before the arbitrators. It \vill be open to that Court to consider any objections that may be raised by the defendants against the plaintiff's contention.
13. Accordingly, the present appeal is allowed, the judgments and decrees of the Courts below are set aside and the case is remanded to the Munsif, Chaibassa, for disposal according to law. In the circumstances of the case I would direct that the parties will bear their own costs in this Court.