Patna High Court
Rameshwar Lal vs Mangi Lal on 10 March, 1964
Equivalent citations: AIR1964PAT374, AIR 1964 PATNA 374
Author: N.L. Untwalia
Bench: N.L. Untwalia
ORDER N.L. Untwalia, J.
1. This is an application in revision by the plaintiff directed against the order of the appellate Court, directing the recording of a compromise under Order 23, Rule 3 of the Code of Civil Procedure in the suit on the basis of an award accepted by the parties to it.
2. The short facts are that the plaintiff petitioner filed the suit against the defendant opposite party for realisation of arrears of rent and electric charges and for his eviction. It appears that another suit for similar reliefs was filed by the petitioner against another tenant named Banarsi Lal Agarwal. The parties agreed to have their disputes decided and settled by an arbitrator by an agreement dated the 1st December, 1962 (Ext. A).
In pursuance of this agreement, the arbitrator looked into the cases of the parties and their evidence and gave his award (Ext. 1) dated the 4th December 1962. All the three parties, viz., the petitioner, the opposite party and Banarsi Lal Agarwal, signed this award in token of their acceptance of it below the following endorsement which occurs in the copy of the award Ext. E "Hamlog is faisle ko manzur karte hain;" that is to say '"we accept this decision." The opposite party 'filed an application before the learned Munsif under Order 23, Rule 3, for recording the compromise, as evidenced by the award which was accepted by the parties. The learned Munsif rejected the application on the ground that in view of the proviso to Section 47 of the Arbitration Act, the award could not be considered as a compromise or adjustment of the dispute in the suit between the parties, as tile petitioner was not consenting in Court to its being so considered.
I may state here that the case of the petitioner that he was made to sign the award after being intoxicated by administering bhang has concurrently been rejected by both the Courts below, and the finding could not be attacked in revision. The lower appellate Court, however, in regard to the question of law has taken a view different from the one taken by the first Court and has held that the award, after its acceptance by the parties, could be treated as a compromise between them and it could be recorded under the provisions of Order 23, Rule 3 of the Code. Hence, the petitioner has come up in revision to this Court.
3. In the Full Bench decision of the Madras High Court in Abdul Rahman v. Md. Siddiq AIR 1953 Mad 781, Venkatarama Ayyar, J., has pointed out that:
"Under the proviso to Section 47, an arbitration award obtained otherwise than in proceedings taken in accordance with the Act cannot without more be recognised as a compromise or adjustment of the suit; that no decree can be passed thereon under the provision of Order 23, Rule 3; and that the decision in Arumuga Mudaliar v. Balasubramania Mudaliar, AIR 1945 Mad 294, should be overruled. But if, after an award is made, the parties thereto agree to accept it, that will be a compromise and a decree based thereon could be passed under Order 23, Rule 3."
In the earlier portion of the judgment, the learned Judge has referred to various decisions of the Calcutta High Court taking a similar view and has also explained the reason which led to the introduction of the proviso to Section 47 by the legislature and why the decision of the Madras High Court in the case of Arumuga. Mudaliar, AIR 1945 Mad 294 was being overruled. With the greatest respect, I am in full agreement with the view expressed by the learned Judge in the decision aforesaid.
If an award is not obtained in accordance with the provisions of the Arbitration Act, 1940, and if the procedure prescribed therein is not followed for getting a decree passed on the basis of such an award, it is obvious that no decree can be passed upon its basis, merely because the parties had agreed to get their disputes settled through arbitration of an arbitrator and to abide by his award. In the instant case, there was no reference by the Court, and hence the award obtained was not a valid award, and no decree could be passed upon the basis of such an award, treating it as an award. But there is nothing in the language of the proviso to Section 47 of the Arbitration Act to indicate that the parties cannot adopt the award as a compromise between them and cannot enforce it as such, if the other party backs out from the compromise.
4. Reliance was placed on behalf of the petitioner upon a decision of a Single Judge in Zeauddin y. Abdur Rafique, AIR 1952 Pat 66 and upon two Bench decisions of this Court, viz., Raghu-
nandan Rai v. Sukhlal Rai, AIR 1952 Pat 258 and Sri Thakur Sitaramji Maharaj v. Ramnath Singh, 1961 BLJR 383 : (AIR 1961 Pat 448). With great respect to the learned Single Judge, who decided the case of Zeauddin, AIR 1952 Pat 66, 1 find myself unable to agree to the view expressed therein that the consent within the meaning of the proviso to Section 47 of the Arbitration Act means consent to the Court and cannot mean consent outside the Court. Had it been a matter of simply differing from the view of law expressed in that decision, I would not have ventured to differ from it, sitting singly, but I find from the facts of that case that it is not clear as to whether the plaintiff's assertion that after the making of the award it had been accepted by each of the defendants was accepted by the Courts below, or whether a finding to that effect was clearly arrived at by either of the Courts below. In the subsequent portion of the judgment, the learned Judge has not referred to any such finding, nor has he considered the significance of the acceptance of the award by the parties.
In the view of law expressed in the Full Bench decision of the Madras High Court, referred to above, I am inclined to distinguish the Single Judge decision of this Court in AIR 1952 Pat 66 on facts. The two Bench decisions of this Court, referred to on behalf of the petitioner, are clearly distinguishable. In neither of them a fact is to be found of giving consent by the parties to the award at any point of time after the making of the award. In such a situation, it is obvious, in view of the provision of law contained in the proviso to Section 47 of the Arbitration Act, that the award could not be made the basis of the decree of the Court, either as an award or as a compromise between the parties.
On behalf of the opposite party, reliance was placed upon another Bench decision of this Court in Sh. Mohd. Abdur Razaque v. Sk. Abdul Majid, 1957 BLJR 14: (AIR 1957 Pat 656). The facts of that case are not in pari materia to those of the case in hand, yet the principle decided therein docs lend support to the view I have expressed above upon the authority of the decision of the Full Bench of the Madras High Court. It has been said in this case that "Order 23, Rule 3 of the Code of Civil Procedure provides that where it is proved to the satisfaction of the Court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, the Court shall order such agreement or compromise to be recorded, and shall pass a decree in accordance therewith so far as it relates to the suit. According to this provision, if it is proved that the parties agreed to certain terms with respect to any point in suit, though they may have done so before an arbitrator appointed without the intervention of the Court in a pending suit, the agreement could be recorded as an adjustment apart from the award."
I find no distinction in principle between a case of treating certain terms with respect to any point in suit agreed upon between the parties before an arbitrator appointed without the intervention of the Court in a pending suit, as a compromise or adjustment within the meaning of Order 23, Rule 3 of the Code and a case where, after the making of the award, the whole of it has been accepted and agreed to by the parties being treated as a compromise or adjustment between the parties in the suit.
5. In the result, I hold that the view taken by the learned Additional Subordinate Judge is cor rect. The application must fail and is dismissed;
but, on the facts and in the circumstances of the case, I would make no order as to costs.