Patna High Court
Bihar State Electricity Board And Anr. vs Kalyanpur Lime And Cement Works on 8 December, 1977
Equivalent citations: 1977(25)BLJR517
JUDGMENT Madan Mohan Prasad, J.
1. This is an application in revision directed against an order of injunction passed against the petitioners as also rejecting an application by the petitioners for amendment of the valuation given by the opposite party.
2. The application arises out of a proceeding under the Indian Arbitration Act, 1940 (hereinafter referred to as 'the Act'). It appears that there was an agreement between the parties for supply of electrical energy to the opposite party which is a company carrying on business of manufacture of lime and cement at its factory at Banjari (hereinafter called 'the company'). Such an agreement was executed in the year 1962. According to the petitioners there was another agreement in the year 1966 superseding the earlier agreement of 1962. The earliest agreement is said to have contained a clause to refer to arbitration disputes arising in regard to any matter arising out of or in connection with the agreement. According to petitioners, in the later agreement of 1966 this clause was omitted. The company, in its application, made out a case that they "had to stop the work of production from time to ' time due to the trippings and low voltage and has suffered damage to the extent of Rs. 14,58 lacs besides excess payment to the extent of Rs. 6,05.562 upto July, 1970, towards maximum demand charges." The amount of damages for the subsequent period were said to be under preparation It is further said "that the trippings aforesaid resulting in the dimunition of supply causing dimunition of voltage and resulting in the stoppage of factory machines and work, was all due to the bad working of the defendant's maintenance staff and improper maintenance of transmission lines and sub-station as well as incapacity and inability to generate sufficient quantity of electrical energy for the requirements of its consumers" It was said again that these were not covered by a clause in the agreement which provides that the Bihar State Electricity Board (hereinafter called 'the Board') would not be responsible for any interruption or dimunition or stoppage of the supply due to lock outs, strikes, breakdown of machinery or plant, flood or other'force ma jure' or other causes beyond the control of the Board. The company also based its claim for arbitration on the provisions of Section 52 of the Indian Electricity Act which provides that all cases of disputes or differences relating to losses or damages arising between the consumer and the licensee will have to be decided by arbitration, which are said to have been incorporated in the agreement of 1962. The company further stated that its effect to get the matter referred to arbitration failed because of the non-compliance by the Board with the conditions of the agreement. Hence an application under Section 20(1) of Act was filed by the company on the aforesaid allegations for an order to file the agreement in court and after the matter to arbitration.
3. In this petition it was further stated that the Board had claimed a sum of Rs. 13,000/-and odd as charges for consumption of electrical energy for the months of September to December, 1970 for which bills had been submitted. Since they had not been paid, the Executive Engineer served a notice upon the Manager of the company to pay the bills within a week failing which the supply line would be disconnected. The company took up the stand that "the amount of damages claimed by the plaintiff against defendant No. 1 upto July, 1970 exceeds the demand of the defendant towards the error bills for September to December, 1970 which should have been decided by arbitrations before any notice for disconnecting the supply under Section 24 of the Indian Electricity Act should have been given." The company, it is stated, has already challenged the revised tariff and the conditions of supply published in a notification of July, 1970, according to which the energy bills were prepared. This was done in Title Suit 915 of 1970 in the court of Subordinate Judge of Sasaram in which the Board was injuncted from realising the increased charges and from disconnecting the power line. In view of these statements the company also prayed in its petition under Section 20(1) of the Act for another relief viz that the defendants be restrained from disconnecting the power supply to the plaintiff's factory or to take any action for enforcing any claim arising out of such supply.
4. On the very date the suit was filed a petition dated 30.8.72 for ad interim injunction was also filed. The learned Subordinate Judge issued notice and in the mean time passed an ad interim order. This order was made absolute by the impugned order. As stated earlier by that very order the learned Subordinate Judge, also disposed of the petition filed by the Board for deciding as a preliminary point the question of valuation being low.
5. The learned Subordinate Judge held that the Board had made out a case for consideration with respect to the question as to whether the agreement of 1962 or the agreement of 1966 applied. He further found that the balance of convenience lay-in favour of the company and that it would be put to irreparable loss in case injunction was refused.
6. With regard to the question of valuation the learned Subordinate Judge held that the claim being for damages of an unascertained amount it was open to the company (the applicant) to fix the valuation at Rs. 5100/- as it had done.
7. On behalf of the petitioners both the decisions on the question of injunction and valuation have been assailed. Counsel for the opposite party, however, has raised a preliminary objection that by one petition the petitioners could not have asked for setting aside two orders. It has also been pointed out in this respect that the prayer portion of the present application in revision ask for setting aside of the order only in so fat as it relates to the matter of injunction. That, therefore, is the first question to be decided.
8. Reading the present application in revision as a whole it is quite clear that the Board has raised its objections in both matters which are covered by the single order which is impugned in the present case. Grounds have also been raised for setting aside the two composite orders. The application is directed as a whole against the order dated the 20th of September, 1972 without any reservations. In the prayer portion also, the first prayer is to set aside the order of the court below. Subsequently, however, it adds "and dismiss the application of the plaintiff for issue of a temporary injunction". There is no prayer in specific words to allow the petitioner's application with regard to the question of valuation. The objection on behalf of the opposite party has been made on this ground.
9. It appears that the matter was not noticed by the stamp reporter of this Court. True, the Rules of this Court provide for separate applications directed against different orders. In the present case, however, both the orders were contained in one. It was, therefore, for the stamp reporter to point out at the very time the application was filed that either the petitioners should pay an additional court fee on the application since it was directed against the two orders or to ask the petitioners to amend the application. That was not done. It appears that the petitioners also did not take steps earlier in this respect. The question, however, arises whether it is a question of substance or a mere technicality. After all, the filing of a separate application or a separate court-fee stamp is merely a matter of procedure and it is well known that procedure shall not be used so as to defeat the ends of justice where it can be interpreted otherwise. In the present case as I have said, in substance the present application is directed against both the orders. I fail to understand as to why the petitioners should make statement of facts and take grounds against the validity of the order of the valuation if they did not intend to challenge the same. Secondly, the question of valuation is important in the circumstances of this case because thereupon will depend the forum of appeal against an order which may be passed under Section 20 of the Act. Another consideration is that the petitioners did raise the point before the court below and have got an adverse order. This; order will stare the petitioners in their face if they are not allowed to raise the matter in this Court. As I have said above, there is nothing to indicate any waiver on the part of the petitioners. The substantial points urged on behalf of the opposite party is that the prayer portion does not contain a specific prayer to that effect. That, in my view, is not material. Reading the application as a whole and reading further the prayer which asks for setting aside the order of that date, it is obvious that if the entire order is set aside, the order with regard to valuation will not remain. A fair and reasonable interpretation of the prayer would, therefore, be that it includes even though not stated specifically, the setting aside of the order relating to valuation. I would accordingly, allow the petitioners to add, as prayed for, specifically the prayer for setting aside the order regarding the question of valuation by way of abundant a caution and to pay additional court fee chargeable on an application, as prayed for.
10. That brings me to the question relating to the validity of the order. I first propose to deal with the order relating to injunction. It has been urged on behalf of the petitioners that the order is bad for different reasons--firstly, that the court below has erred in omitting to consider that the subject matter of the application under Section 20 of the Act was the claim with regard to excess payment and damages on account of the laches of the petitioners in the matter of supply of electricity and not the liability of the company to pay the energy bills which was not disputed in the application, secondly, that the liability to pay the bills not being in dispute the balance of convenience could not be said to be in favour of the company ; thirdly, that the court below has based its decision on a matter which was extraneous, namely, the order of injunction passed in the suit pending in the Sasaram court where the basis of the bills, namely, the increased tariff on the basis of which they were prepared was challenged, and fourthly, that the factory being situated within the jurisdiction of the Court of Sasaram, the learned Subordinate Judge (at Arrah) had no territorial jurisdiction.
11. With regard to the last point of territorial jurisdiction it was pointed out on behalf of the opposite party that the learned Subordinate Judge has stated that this point was not pressed before him, and, therefore, he has not gone into the matter. In view of this statement in the order of the learned Subordinate Judge, counsel for the petitioners did not press this point.
12. To take up the first contention it has to be found out as to what is the dispute between the parties alleged in the application under Section 20 of the Act which is sought to by referred to arbitration. The scope of the arbitration proceeding will naturally depend thereon. Any definite finding on the point, may, even though it should not, affect one of the parties adversely. I do not wish, therefore, to decide the question, for the dispute raised in the application will have to be determined by the court below in order to decide as to what is the matter to be referred to the arbitrators, whether the dispute is within the jurisdiction of the court etc. Besides, it is not necessary for me to determine the point as the present issue can be decided on another ground. I would only wish to point out that it has been strenuously urged before me that the application does not contain any specific statement that the company is not liable to pay the bills in question.
13. That brings me to the next question, namely whether the order was based on extraneous materials. There is no denial of the fact that the learned Subordinate Judge has relied upon the title suit in the court of Sasaram an injunction had been granted and that appears to have influenced him to do so in the present case. The learned Subordinate Judge, however, should have kept in mind the difference between the two suits. In the suit at Sasaram the company has challenged the tariff and the bills were admittedly on the basis of such increased rate, which was said to be illegal. The question, therefore, of the payment under these bills was directly subject matter of that suit. The position in the present case* is different. In this respect further it has been stated by learned Counsel for the petitioner and admitted by this counsel for the other side that the aforesaid order of injunction passed in the suit by the court at Sasaram was vacated by the District Judge in a miscellaneous appeal and the company was directed to pay the arrears and further that they filed civil revision application in this Court against the order of the District Judge which was ultimately withdrawn. In other words since the order of the Subordinate Judge was passed in this case the order of injunction originally granted by the Sasaram court has disappeared. Be that as it may, it was not open to the learned Subordinate Judge to rely on what had happened in another suit between the parties and take that to be a ground for granting order of injunction in the present case. Obviously he acted with material irregularity in exercise of his jurisdiction.
14. Even on the third point, namely, the question of irreparable loss or balance of convenience, in my view, the learned Subordinate Judge has not held correctly. Any injury does not become irreparable loss. The only injury which has been pointed out by the Company is that a large amount of money will have to be withdrawn by them from business and they would lose interest thereon. By no stretch of imagination it can be said to be irreparable injury. Therefore, it cannot be said that the balance of convenience lies in favour of the Company. It would mean that even though electricity had been supplied it was not bound to pay the bills merely because it made a claim for damages against the Board. As, it is seven years have gone by since the amount under the bills became due and they have remained due until this day. In this respect the learned Subordinate Judge has not properly appreciated the scope of the law relating to balance of convenience and irreparable injury and thus approached the present case in an improper manner. True, this question of balance of convenience or irreparable loss prima facie are questions of fact, still if the case is approached in an entirely wrong manner the court can be accused of exercising its jurisdiction with material irregularity.
15. For the reasons aforesaid I am unable to uphold the order passed by the learned Subordinate Judge granting an injunction in favour of the opposite party. This part of the order of the court below must, accordingly, set aside.
16. That brings me to the next question relating to valuation. This is not a point free from difficulty inasmuch as it has been stated at the Bar that the question which I am called upon to decide is one of first impression. The question is what principle of valuation should govern an application under, Section 20 of the Act. In the present case the company had claimed damages of nearly Rs. 14 lacs and excess payment of Rs. 6 lacs and odd but it had valued the suit at Rs. 5,100/- only. The petitioner objected to the valuation and said that the question of valuation had to be determined because upon the valuation depended the forum of appeal. On behalf of the Company it was stated that it did not know what amount would be awarded to it by the arbitrator by way of damages and, therefore, it could put any value of the suit which it did at Rs. 5,100/-. Further it was said that the court of Subordinate Judge has unlimited jurisdiction and the question of valuation, therefore, is immaterial. The learned Subordinate Judge held that there was nothing before him to show that the valuation as given by the plaintiff would materially prejudice the disposal of this case ; that the amount of damages claimed by the plaintiff had yet to be decided and that in suit for damages the plaintiff is entitled to put a tentative valuation. For these reasons the learned Subordinate Judge found the valuation given to be correct.
17. On behalf of the petitioner it has been contended firstly, that the court below has omitted to take into consideration the fact that the application related not only to unliquidated damages but also to a specific amount of Rs. 6 lacs and odd which was said to be an excess payment made. Secondly, that the court has refused to decide the question of valuation on the ground that the plaintiff is entitled to put any value and there it has erred. Thirdly that the question was material because upon the valuation arrived at, would depend the forum of appeal. There is force in these contentions.
18. It is obvious that the learned Subordinate Judge while deciding the question of valuation only took into account the fact that the subject matter of the application was a claim of damages. Although he has stated that the Company claims to have made excess payment to the extent of Rs. 6 lacs and odd, he did not take into consideration the fact that this amount was not claimed by way of damages. It would only be a claim for refund or set off. It is not an unliquidated amount either. Thus the learned Subordinate Judge has erroneously, held that the suit being one for damages it was open to the plaintiff to put any valuation he liked. It follows, therefore, that his refusal to determine the valuation was a refusal to exercise jurisdiction vested in him.
19. It is beyond dispute that the forum of appeal in the present case would be determined upon the valuation of the application under Section 20. Section 39 of the Act is as follows:
39(1) An appeal shall lie from the following orders passed under this Act (and from no orders) to the Court authorised by law to hear appeal from original decrees of the court passing the order:
(i) superseding an arbitration;
(ii) on an award stated in the form of a special case;
(iii) modifying or correcting an award;
(iv) riling or refusing to file an arbitration agreement;
(v) staying or refusing to stay legal proceedings where there is an arbitration agreement;
(vi) setting aside or refusing to set aside an award;
Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court.
(2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall effect or take away any right to appeal (to the Supreme Court).
Obviously, therefore, the court which is entitled to hear appeals from the original decree would be entitled to hear the appeal from the order passed in this case. In order to determine as to which is the court authorised by law to hear appeal reference has to be made to the relevant provisions of the Code of Civil Procedure (hereinafter referred to as 'the Code') and the Bengal, Agra and Assam Civil Courts Act (hereinafter referred to as the 'Civil courts Act'). Before I turn to them it is necessary to state that Section 41 of the Act provides that "subject to the provision 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 and...
It would thus appear that Section 41 makes the provisions of the Code applicable to proceedings before the court and appeals arising therefrom. The question therefore, has to be decided with reference to the Code. Section 96 of the Code which provides for appeal against original decrees lays down that appeal shall lie from every decree passed by any court exercising original jurisdiction the court authorised to hear appeals from the decision of such courts.
Section 21 of the Civil Court Acts provides as follows:
21. Appeals from Subordinate Judges and Munsifs (1) Save as aforesaid, an appeal from a decree or order of a Subordinat Judge shall lie
(a) to the District Judge where the value of the original suit in which or in any proceeding arising out of which the decree or order was made did not exceed five thousand rupees, and
(b) to the High Court in any other case.
(2) Save as aforesaid, an appeal from a decree or order of a Munsif shall lie to the District Judge.
(3) where the function of receiving any appeals which lie to the District Judge under Sub-section (1) or Sub-section (2) has been assigned to an Additional Judge, the appeals may be preferred to the Additional Judge.
(4) The High Court may, with the previous sanction of the State Government, direct, by notification in the Official Gazette, that appeals lying to the District Judge under Sub-section (2) from all or any of the decrees or orders of any Munsif shall be preferred to the court of such Subordinate Judge as may be mentioned in the notification, and the appeals shall thereupon be preferred accordingly.
It is well known that after the recent amendment an original decree passed by a Subordinate Judge up to the value of Rs. 10,000/- is appealable before the District Judge. If however, the valuation of the suits exceeds Rs. 10,000/- the appeal lies before the High Court. For that reason if the valuation of the subject-matter of the dispute in the application under Section 20 of the Act is up to Rs. 10,000/- the appeal, as provided in Section 39 of the Act, would lie before the District Judge, whereas if it exceeds the amount of Rs. 10,000/- it would lie before the High Court. Thus a very important point, namely, the forum of appeal is to depend upon the valuation. The question is whether in such circumstances the Subordinate Judge could refuse to go into the matter. Obviously, he could not and should not have done so.
20. That brings me to the fundamental question involved as to how and in what manner an application under Section 20 of the Act is to be valued. There is no provisions in the Act in that respect. There is no provision also in the suits valuation Act. The question has to be answered in such circumstances. I will, now read the provisions of the section. It is as follows:
20(1) Where any persons have entered into an arbitration agreement before the institution of any suit with respect to the subject-matter of the agreement or any part of it, and where a difference has arisen to which the agreement applies, they or any of them, instead of proceeding under Chapter II, may apply to a Court having jurisdiction in the matter to which the agreement relates, that the agreement be filed in Court.
(2) The application shall be in writing rind shall be numbered and registered as a suit between one or more of the parties interested or claiming to be interested as plaintiff or plaintiffs and the remainder as defendant or defendants, if the application has been presented by all the parties, or, if otherwise, between the applicant as plaintiff and the other parties as defendants.
(3) On such application being made, the Court shall direct notice thereof to be given to all parties to the agreement other than the applicants, requiring them to show cause within the time specified in the notice why the agreement should not be filed.
(4) Where no sufficient cause is shown, the Court shall order the agreement to be filed and shall make an order of reference to the arbitrator appointed by the parties whether in the agreement or otherwise, or where the parties cannot agree upon an arbitrator, to an arbitrator appointed by the Court.
(5) Thereafter the arbitration shall proceed in accordance with, and shall be governed by, the other provisions of this Act so far as they can be made applicable.
The first important point which will have to be borne in mind is that what is filed under this section is an application and the application is made to a Court "having jurisdiction in the matter to which the agreement relates". It must again be kept in mind that jurisdiction means both pecuniary and territorial jurisdiction. Thus an application will lie only before a court which has territorial and pecuniary jurisdiction in respect of the matter to which the agreement relates. Obviously the disputes between the parties must relate to the agreement. In other words if the subject-matter of the dispute is within the pecuniary and territorial jurisdiction of the court then alone the application will lie before such Court. For the purpose of deciding the pecuniary jurisdiction, an application as well as a suit must be properly valued. Therefore, it is the valuation of the subject matter which gives jurisdiction to a court. There are a few other provisions of the act which may be noticed in order to bring home the importance of the question of valuation vis-a-vis the question of jurisdiction. As is well known the Act firstly provides for arbitration without the intervention of court and in such a case when the arbitrators have made their award they may be requested by a party or directed by a court to file the award under Section 14 of the Act and thereupon the court may either modify or correct the award under Section 15 or remit the award to the arbitrator under Section 16 or pronounce judgment under Section 17 and a decree follows the judgment. An application under Section 20 relates to arbitration with intervention of the court where there is no suit pending and in such a case the matter is ultimately referred to arbitration. Chapter IV of the Act provides for arbitration in pending suits. Under Section 21 parties to a suit may agree for reference to arbitration of any matter and such a matter may be referred. The procedure which is to be adopted in respect of all the three kinds of application is the same after a certain stage. Section 31 of the Act provides that subject to the provisions of this Act an award may be filed in any court having jurisdiction in the matter to which the reference relates.
Again one finds that the award can be filed only in court having jurisdiction both territorial and pecuniary in the matter to which the reference relates. Thus the award which has to be filed under Section 14 of the Act is to be filed in such a Court as is mentioned under Section 31 of the Act. I have already noticed Section 20 which provides for the application to be made to the court having jurisdiction, with regard to arbitration in suits obviously the suit must be within the jurisdiction of the court and naturally, therefore, the subject matter of the suit would be within its jurisdiction and the reference to arbitration is made in such a suit but even a suit after the award has been made, it has to be filed in that very court which obviously has jurisdiction. It may also be mentioned here that Section 2(c) of the Act defined court as meaning a Civil Court having jurisdiction to decide the questions forming the subject-matter of the reference if the same had been the subject-matter of a suit, but does not, except for the purpose of arbitration proceedings under Section 21, include a Small Cause Court.
An analysis of all these provisions would show that a Court has got to find out first whether it has jurisdiction to entertain any of these applications either under Section 14(2) or under Section 20 of the Act and, therefore, the court is also bound to decide as to whether it has pecuniary and territorial jurisdiction both
22. An argument may be raised that an application under Section 14(2) or under Section 20 or under Section 21 is after all an application and there is no question of valuing the application as such or in any other manner except as an application. There is a slight distinction which must be kept in mind. The question is not one of valuing the application but the question is one of valuing the subject-matter of dispute for which purpose an arbitration has been made or is asked to be made. The provisions which I have quoted or referred to have do not say that the value of the application would be the basis for determining the question of jurisdiction. The provisions say that the court must have jurisdiction in the matter to which the agreement relates. Therefore, the subject-matter of dispute and the agreement has to be stated in the application for the purpose of determining the question of jurisdiction. The question of valuation of an application arises also with respect to the payment of court fee and for that purpose undoubtedly such an application would be treated as an application and not as a plaint for which there is specific provision in the Court Fee Act. But for the purpose of jurisdiction the application has to state the valuation of the subject-matter in dispute. Even in absence of any specific provisions to that effect in the suits Valuation Act upon the special provision contained in the Arbitration Act itself there cannot be any escape therefrom.
23. The Suits Valuation Act is "an Act to prescribe the mode of valuing certain suits for the purpose of determining the jurisdiction of courts with respect thereto", Section 1 gives the title ; Sections 2 to 6 under part I relate to suits relating to land ; Part II containing Sections 7 to 10 relate to other suits ; Section 8 provides that the valuation for the purpose of jurisdiction would be the same as for the purpose of court fee in certain kinds of suits ; Part III contains supplemental provisions ; in Sections 11 and 12. The Act does not lay down any provision in respect of valuing any application for the purpose of jurisdiction. The absence of any specific provision in the Act, therefore, is of no avail.
24. I have already referred to the definition of "Court" contained in Section 2(c) of the Act. That, in my view, is telling and important. That court alone has jurisdiction under the Act if it has jurisdiction to decide the question forming the subject-matter of the reference if the same had been the subject matter of a suit. Thus if the value of the subject-matter. If it had been a suit, would have been such as to be within the jurisdiction of the court then alone it will be the court having jurisdiction. Now how will the court determine whether it has jurisdiction over the subject-matter of reference. The test provided by the Legislature is that the court should consider the proceeding to be a suit and find out whether it has jurisdiction in the matter. How will the court do this ? Obviously, by finding out the value of the subject matter of the reference as if it were the subject-matter of a suit. It will also be noticed that Sub-section (2) of Section 20 provides that the application shall be numbered and registered as a suit. Therefore, for the purpose of jurisdiction in my view the test applying to suits will apply to such applications under the Arbitration Act. In other words it will be open to the court to adopt the principles stated in the provisions of the Suits Valuation Act for the purpose of finding out the jurisdiction. There can be no other test. If subject-matter of reference is to be treated as a subject matter of a suit then the principles of valuation relating to a subject-matter of a suit have to be applied in valuing the subject-matter of a reference. I may illustrate the point. Suppose the dispute between the parties is with regard to payment of certain money, obviously, then the principle governing the valuation of a suit for money will be applicable, if the dispute relates to land, obviously the valuation with regard to suits relating to land will apply. There is no need to multiply illustration. What I have said, to my mind, logically follows from the provisions of the arbitration Act itself.
25. I will do well now to refer to other matters which show that the procedure applicable to suits may be applied to the proceeding in court relating to arbitration matter. I have referred earlier to Sub-section (2) of Section 20 of the Act which says that the application shall be in writing, and numbered and registered as a suit. Rule 2(e) of the Rules framed under the Act says that applications under Section 14(2) and Section 20(1) of the Act are to be treated as regular suits and other applications are to be treated as miscellaneous judicial case applications. Rule 3 says that all applications are to be treated as plaints. Further even at the cost of repetition it must be pointed out that after judgment is pronounced under Section 17 it is followed by a decree and this procedure is applicable not only to applications under Section 14 (2) but also to applications under Sections 20 and 21 in view of the provisions contained in Section 20(5) and Section 25 of the Act. In other words the provisions relating to pronouncement of judgment and its being followed by a decree applies to all the three kinds of applications mentioned above. The point that need be emphasised is that a decree follows the award, in other words that it results in a decree of a court. All the provisions aforesaid clearly point out the fact that such applications are to be disposed of in accordance with the procedure laid down, in the Code as far as they are applicable and obviously the procedure would relate to suits.
26. I will now refer to some decisions where the question of application of some provisions of the Code arose. The question as to whether Order 9 Rule 13 of the Code applies to arbitration proceeding arose in the case of Mahabir Prasad Bhagat v. Balkishun Das A.I.R. 1922 Patna 376. In that case there was an arbitration without intervention of court and the application was made under Section 14(2) of the Act. A Division Bench of this Court held that the decree passed on the award was a decree within the meaning of Section 14(2) of the Act and the provisions of Order 9 Rule 43 applied to it. The learned Judge further held that the provisions of the Code apply so far as may be, to proceedings under Schedule II of the Code of 1908, in other words proceeding relating to arbitration in court. It may be mentioned here that prior to the Indian Arbitration Act, the rules relating to such proceedings were contained in Schedule II of the old Code of Civil Procedure. The learned Judges stated as follows:
It seems clear than that when an application is made it is to be treated as and becomes a suit and that the decree upon the judgment which is pronounced according to the award becomes a decree under Section 2 of the Code of Civil Procedure.
The question arose again in the case of Rosan Lal Marwari v. Firm of Bridhi Chand Sri Lal A.I.R. 1924 Patna 603, That was also a case prior to the coming into existence of the Arbitration Act and a question there also had arisen as to whether Order 9 Rule 13 applies to such proceeding. That was a case of arbitration with intervention of court (now contained in Section 21 of the Act). In this case the question whether Order 9 Rule 13 applies was not answered and it appears that it was presumed that it did apply. In a later case, Rajeshwar Prasad Singh v. Ambika Prasad Singh A.I.R. 1956 Patna, which again was in respect of an application under Section 21 of the Act, the question of application or Order 9 Rule 13 arose. The learned Judges in this case relied on the decision in A.I.R. 1924 Patna 603 (supra) but they also held that a decree passed on an award is not an exparte decree under Order 9 Rule 13. The decision in Mahabir Pd. (supra) was distinguished on the ground that that was a case without intervention of court whereas the case before the learned Judges was with intervention of a Court. In this case also it was held that a decree passed under Section 17 of the Act cannot be treated as an exparte decree. It may, however, be noted that the procedure prescribed under Section 17 of the Act applies to all the three kinds of application under Sections 14(2), 20 and 21 of the Act.
27. There are some decisions of some other High Courts to which I shall presently refer. In the case of Surajmull Nagarmull v. Golden Fabrics and Products A.I.R. 1969 Cal. 381, a learned Judge of that Court held that Order 9 Rule 13 does not apply. A similar decision was given by Bechawat J. (as he then was) in the case of Ganeshmal Bhawar Lal v. Cotton Mills Ltd. . A similar question was raised in the case of Ram Chander v. Jamna Shankar A.I.R. 1962 Raj. 12, and a learned Single Judge of that court also held that Order 9 Rule 13 is not applicable to a case where a decree has been drawn up under Section 17 of the Act in absence of the defendant. In the case of Amod Kumar Verma v. Hart Frasad Burman , there was an appeal against the refusal to set aside an award of arbitrators in passing a decree on its basis. That is, however, not relevant to the decision of the present case. There is, however, another decision in the case of Selvarayan Samson v. S. Amalorpavanadam A.I.R. 1928 Mad. 969, where the provisions of Order 9 Rule 13 was held to be applicable to proceedings under Section 20 of Schedule II of the Old Code.
28. There are a few other cases where the question of application of other provisions of the Code had arisen. In the case of Govind Narayan Prabhu v. Venkatesh Laxman Kamat A.I.R. 1927 Bom. 259, a question had arisen whether provisions in the Code under Order 38 relating with attachment before judgment would apply to arbitration proceedings. A Division Bench of that court held that the application to enforce an award under Section 20 of the second schedule to the Code when numbered and registered as a suit became a suit for the purpose of Order 38. In the case of Girdhar Lal v. Maruti Shivram A.I.R. 1924 Bom. 389, the question of application of principle of res judicata under Section 11 of the Code had arisen and it was held not to apply. In the case of Govind Narayan (supra) the decision aforesaid in the case of Girdhar Lal (supra) had been referred to but ditinguished. A decision similar to the one in 1921 Bombay 389 (supra) is to be found in Abdul Aziz v. Chandu Sonu A.I.R. 1925 Bom. 418, where similar decision was given. A contrary view was, however, expressed in the case of Gumcharan Sirkar v. Uma Charan Sirkar 26 Calcutta Weekly Notes 940. I have referred to this decisions merely to show that the question of application of different provisions of the Code to proceedings in court relating to arbitration matters had arisen from time to time and had been answerd differently by different courts. In the case of Sahagir Ahmad and Anr. v. Israil Mian and Ors. Civil Rev. No. 109 of 1977 Disposed of on 26th of Nov. 1977, I had an occasion to consider the question of application of Rules 2, 3 and 8 of Order 9 of the Code to a proceeding in court under Section 14 of the Arbitration act and I hold that that provisions are not applicable for the simple reason that the court has no option but to proceed to act under Section 17 of the Act if it has not acted under Sections 15 and 16 and the presence of the party not being essential, the dismissal of a petition under Section 14(2) for the absence of the applicant cannot be deemed to be one under Order 9 Rule 2 or Order 17 Rule 2 and thus there is no question of application of Order 9 Rule 9 of the Code.
29. Learned Counsel for the petitioner has urged that once it is conceded that valuation has to be found out for the purpose of jurisdiction, even if there be no provisions relating to this matter, the general principle of valuation ought to be adopted. For this proposition he has placed reliance on a Bench decision of this Court in the case of Dhaturi Singh v. Kedar Nath Goenka A.I.R. 1927 Patna 224, Ram Charitar Pandey v. Basgit Rai A.I.R. 1932 Patna 9, Jadunandan Gope v. Syed Najmuzzaman A.I.R. 1957 Patna, Ram Pravesh Singh v. Muneshwari Prasad Narain Deo . In Dhaturt Singh's case (supra) a Bench of this Court has held that a party is not entitled. Where the valution of a suit can be correctly ascertained, to put a purely fancy valuation on the suit for the purpose of jurisdiction. In the case of Ram Charitar Pandey (supra) a Bench of this Court held that a plaintiff seeking consequential relief is bound to fix a reasonable valuation and the Court is empowered to revise the valuation put by the plaintiff to find out whether it is insufficient or arbitrary. In the case of Jadunandan Gope and others (supra) another Bench of this Court held that the view of this Court has always been that where a consequential relief is sought the plaintiff though entitled to put his own value on the plaint must give a reasonable value and not an arbitrary value and in order to find out whether the value is reasonable or arbitrary the Court has to find out the real value of the property. This was a case under Section 7(iv)(c) of the Court Fees Act. In the case of Ram Prabesh Singh (supra) a learned Judge of this Court was called upon to decide as to what would be the basis of valuation in a suit instituted for a declaration that certain sale under the Public Demands Recovery Act is void and not binding upon the plaintiff. The suit had been valued at the price at which the sale was held. That was challenged by the defendant. The learned Judge held that no rule having been framed by the State Government or by the High Court, respectively under Sections 3 and 9 of the suits Valuation Act and Section 8 thereof not being applicable for determining the valuation of a purely declaratory suit, the valuation of such suit has to be determined under the general principles of law. True, these decisions lay down the proposition that the valuation given by the plaintiff cannot be arbitrary even in cases where he is entitled to put his own valuation and further that the general principles of valuation should apply to cases where no principle has been laid down therefor. Apart from these decisions I have ventured to come to the conclusion that even though the suits Valuation Act has not been made applicable by any provisions of law ,to proceedings relating to arbitration, in other words to proceedings arising out of applications under Sections 14 and 20 of the Act, the valuation has to be given for the purpose of jurisdiction and for this purpose the applications should be treated as suits and the principles laid down in the Suits Valuation Act, therefore, as a logical corollary, should apply as far as applicable. Of course, in respect of such matters as are not provided for in the Suits Valuation Act, the general principles of Suits Valuation, as held in the cases cited above ought to apply.
30. In this background of law the question arises whether in the present case the learned. Subordinate Judge has decided the question correctly. In the present case the dispute between the parties undoubtedly is for damages said to be nearly 14 lacs, but the dispute also relates to excess payment of Rs. 6 lacs. So far as damages are concerned even though an amount has been mentioned it is well known that the damages have to be ascertained by the court and damages are unascertained amount till then. The same cannot, however, be said with regard to the particular sum of Rs. 6 lacs and odd which the company claims to be entitled to either for the purpose of refund or for the purpose of set off. The valuation of Rs. 5,100/- given by the company in the application under Section 20 of the Act can by no stretch of imagination be deemed to have any nexus with any principle of valuation. The contention on behalf of the petitioner that it is arbitrary is thus well founded. Assuming that the principles of Suits Valuation Act do not apply still the suit should have been valued on the basis of the claim for a sum of Rs. 6 lacs at least even if one may ignore the amount of damages claimed. The suit has been valued at Rs. 5,100/- only taking into consideration the damages claimed. No consideration has been paid to the amount of 6 lacs claimed. There can thus be no escape from the conclusion that the valuation for the purpose of jurisdiction should have been 6 lacs plus Rs. 5,100/-. The subject-matter of dispute relates to both the matters and not to damages alone.
31. The question arises whether it is within the competence of this Court to hold the correct value in absence of any enquiry in that matter by the court below. It will appear that in the case of Ram Pravesh Singh (supra) the learned Judge fixed the valuation on the basis of the sale price at a certificate sale. In this case before me no enquiry is needed for the purpose of fixing the valuation. The court below accepted the value given by the Company on the ground that it has a right to value it as it liked. That being not acceptable it requires to indicate that the valuation would be not merely what the plaintiff assessed as the Value of the damages but also on the basis of the value of the claim of excess payment. Besides that what the court below could do this Court is certainly entitled to do. Therefore, there can be no objection to this Court fixing the value of the suit. There is thus no point in remanding the matter with regard to valuation to the court below.
32. For the reasons stated above the order passed by the learned Subordinate Judge accepting the valuation given by the plaintiff must be set aside.
33. In the result the order dated 20th of September, 1972 must as a whole be set aside. I would, accordingly set aside the order and allow this application. In the circumstances of the case, however there will be no order as to costs.