Bajjuri Ramakistam vs Bhoopati Somalingam and Others

P. Chandra Reddy, C.J.—(C. M. A. No. 190 of 1959): This appeal is filed by the 1st defendant against the order of the Subordinate Judge, Warangal, refusing to set aside an award and passing a decree in terms of the award.

As disputes arose between the appellant and the 1st respondent in regard to the properties left by one Latchamma, who died in or about 1957, the parties, submitted them to the arbitration of two persons, Konduru Ramalingam and J. Lakshminarayana, the present respondents 3 and 4. The arbitrators, after making the necessary enquiries into the matter, made an award dated 20-6-1958 and gave notice of it to the parties on 2-7-1958. Under the award the 1st and 2nd respondents were to be given the house property which is involved in this appeal and the appellant was to be paid by the 1st and 2nd respondents a sum of Rs. 3285-11-9. As the appellant was not willing to abide by the award, the 1st respondent field a petition under S. 14 of the Arbitration Act to direct the arbitrators to file the award into Court and to make the award a rule of Court. The appellant filed objections to the award and prayed for setting aside the award.

The chief grounds of attack against the award were that the arbitrators misconducted themselves in that one of them did not participate in the proceedings which culminated in the award and that the arbitrators failed to note that the widow had acquired absolute rights to the property in the suit under the Hindu Succession Act, 1956, the award decree of 1902 which only gave a life estate to the widow in the house being a nullity by reason of its having been passed against a minor without appointing a guardian. The Subordinate Judge rejected the objections raised by the appellant and passed a decree in terms of the award. It is that decision that is under appeal now. In support of this appeal, the same contentions are urged before us.

In order to appraise the legal Contentions arising in this, it is useful to state briefly the material facts. One Bhoopathi Somalingam died in or about 1901 leaving considerable properties behind him and survived by his adopted son, the present 1st respondent the father of the 2nd respondent and his widow Latchamma who was then very young having been married a year or two before his death. Immediately thereafter, there were disputes between the parties in regard to those properties and they were referred to some arbitrators. After taking into consideration all the relevant factors, the arbitrators gave their award by and under which Latchamma was to get Rs. 19,000/- in cash, and gold and silver jewels etc. worth Rs. 4,000/- and houses with limited rights therein. This award was embodied in a decree of Court on an application filed on behalf of Latchamma. Ever since, she was in enjoyment of these properties till her death in or about 1957. On her demise, the adopted son of Somalingam and his son, the present respondents 1 and 2, laid claim to these properties as the nearest reversioners, while Latchamma''s brother, the present appellant claimed these properties as a legatee under a will alleged to have been executed by Latchamma on 8-9-1942. These disputes were referred to the arbitration of respondents 3 and 4 and they resulted in the award which is the subject matter of this appeal.

Before we discuss the merits of the contentions urged on behalf of the appellant, we will have to deal with the preliminary objection raised on behalf of the respondents as to the competence of this appeal. It is urged by Sri B. V. Subrahmanyam that a Civil Miscellaneous Appeal could not be entertained having regard to the terms of S. 17 of the Arbitration Act, which bars an appeal from a decree made under that section except on the ground that it was in excess of or not otherwise in accordance with the award. The view sought to be pressed upon us by the learned counsel is that as the decree is in conformity with the award, no appeal would lie against that award and that, in any event, it is only an appeal as contemplated by S. 96 C. P. C. with ad valorem court fee that could be filed and not a Civil Miscellaneous Appeal with a fixed Court fee.

As this objection is founded on the terms of S. 17 of the Arbitration Act, it is convenient to quote it here.

Where the Court sees no cause to remit the award or any of the matters referred to arbitration for reconsideration or to set aside the award, the Court shall, after the time for making an application to set aside the award has expired, or such application having been made, after refusing it, proceed to pronounce judgment according to the award, and upon the judgment so pronounced, a decree shall follow and no appeal shall lie from such decree except on the ground that it is in excess of or not otherwise in accordance with the award.

If it is this section that governs the matter, there can be little doubt that the present appeal is incompetent since it could not be postulated that the decree of the Subordinate Judge is in excess of or is inconsistent with the award. But we are not persuaded that S. 17 comes into play in this behalf. In our judgment it is S. 39 of the Arbitration Act which is applicable here.

Section 39, so far as it is of immediate relevance, is as follows:

An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the orders.

An order:

i) superseding an arbitration.

ii) on an award stated in the form of a special case.

iii) modifying or correcting an award.

iv) filing or refusing to file an arbitration agreement.

v) staying or refusing a stay legal proceedings where there is an arbitration agreement.

vi) setting aside or refusing to set aside an award.

It appears to us that the instant case comes within the ambit of clause (vi). It is true, that, after refusing to set aside the award, the trial Court made a decree giving effect to the award. But that is not decisive of the matter. It should be borne in mind that the appellant wanted that his objections to the award should be upheld and that the award should be set aside. This prayer of the appellant was not granted and his petition to set aside the award was dismissed and then the award was made a rule of Court. It is the order overruling the objections of the appellant and refusing to set aside the award that is the subject of challenge in this appeal and consequently it attracts S. 39 of the Arbitration Act and it is not an appeal under; S. 17 of the Arbitration Act read with S. 96 C. P. C.

There is also no substance in the argument of Sri B. V. Subrahmanyam that ad valorem court fee should be paid on the value of the property involved in this appeal, since under Article 4 of Schedule II of the Court Fees Act, a faxed fee of Rs. 200/- is prescribed when the value exceeds Rs. 20,000/- and that court fee has been paid. It is true that, in the lower Court, the same Court fee of Rs. 200/- was paid instead of Rs. 300/- as provided by Article II(m)(II)(3) of the Court Fees Act. The counsel for the appellant says that his client will pay the deficit court fee of Rs. 100/- Accordingly the preliminary objection is over-ruled. We will now proceed to consider the two points bearing on the validity of the award.

The question which is strongly contested before us is as to the alleged legal misconduct of the arbitrators. The argument pressed upon us by Sri K.B. Krishnamurthy for the appellant is that, as one of the arbitrators alone recorded all the evidence, the other being absent at all meetings at which it was taken down, the arbitrators were guilty of legal misconduct which has invalidated the award. We are not inclined to accede to this proposition. In the decision of the question as to the effect of the absence of one of the arbitrators at some of the meetings, the following circumstances have material bearing. At no stage of the proceedings had the appellant demurred to this procedure though he was present at every one of the meetings. More than that, he acquiesced in the course adopted by the arbitrators as could be seen from his having affixed his signature under each day''s proceedings.

What emerges from the record is that the 3rd respondent, when he was approached by the parties, specifically said that, on account of ill-health he would not be in a position to attend every one of the meetings, that he could take part only at the final stages of the proceedings and in giving the award, that the parties were agreeable to this condition and executed the muchilika in their favour and that this arbitrator authorised the other one to record the evidence. This evidence was taken into consideration by both the arbitrators inreaching their decision. The award was the conjoint act of both. The award was signed by the arbitrators. The parties also signed in token of having read the contents of the award. Could it be said in these circumstances that the absence of one of the arbitrators at some of the meetings has affected the validity of the award?

It is urged by Sri Krishnamurthy that the consent of a party to such a procedure would not cure the defect as it goes to the root of the competence of the arbitrators. It was not within the jurisdiction of one arbitrator alone to conduct the proceedings as in law both of them are bound to act and non-compliance with this requirement would vitiate the award, proceeded the argument of the counsel. We do not think that this contention could prevail. There is little doubt that all the arbitrators should act together and the award should be the result of the joint deliberation of all of them. But that is not the same thing as saying that the absence of one or the other arbitrators at some of the meetings would render the award ineffective, notwithstanding the failure of the party concerned to raise an objection to it. Such an absence does not involve any question of jurisdiction.

Nor are we convinced that the recording of evidence by one of the arbitrators is without jurisdiction or illegal and is incapable of being cured by consent. In our judgment, it is only an irregularity, the right to object to which, could be waived by the concerned party. There is also nothing contrary to principles of natural justice as the evidence so recorded could be looked into by both the arbitrators before arriving at the final decision.

In this case, the appellant was aware of the absence of one of the arbitrators on such occasions and did not take any exception to it and in fact agreed to that course and allowed the arbitration proceedings to go on till the final stages, taking a chance of decision in his favour. He did not put forward this objection even at the time when the award was read out to him or when served with notice of it. It is too late for him to insist on that objection after the filing of the award into Court. He cannot be allowed to get out of the award especially when this objection does not affect the substantial justice of the case. A court will be unwilling to assist parties of this description who, with full knowledge of the circumstances, allow a proceeding to proceed, take part in it and then seek to evade it later on, raising objections to the award.

This view of ours gains support from decided cases. In (Ardhikai) Lakshmamma Vs. Gorle Appadu and Another, it was ruled by Curgenven, J. that though it was incumbent on each of the arbitrators to be present at each of the meetings, yet, if one of the parties to the reference, who was aware of the absence of one of the arbitrators on some of the meetings, raised no objection at that time and allowed the arbitration to go on, he could not seek to invalidate the award on the ground of such absence.

In Bai Laxmibai Vs. Shridhar Manik Patel, Kania, J. held that though the general rule was that the meetings of the arbitrators must be attended by all the arbitrators and the decision arrived at must be the decision of all, yet if some formal decision was made in the absence of some of them, the irregularity could be waived.

To like effect is a ruling of the Rangoon High Court in U. Gunuwa v. Pyinnayadipa, ILR 1 Rang 15: (AIR 1923 Rang 187). That contains the proposition that where the appellants went on with an arbitration without objection after an irregularity had occurred, they were precluded from seeking to set aside the award on the ground of irregularity - the irregularity being that at one of the meetings, when witnesses were examined, one of the arbitrators was absent.

This is also the principle of Ramnath Misra Vs. Ramranjan Misra

In U Po Hlaing v. Daw Ngwe, AIR 1941 Rang 22, it was laid down by a Single Judge of the Rangoon High Court that it was not absolutely essential that all the arbitrators should be present when all the evidence was recorded, provided all the arbitrators were made acquainted with the evidence before they came to their decision and there was nothing illegal or contrary to the principles of natural justice in some of the arbitrators alone recording the evidence.

There is not therefore, much substance in this objection. It follows that this contention was rightly negatived by the trial Court

This takes us to the question whether the earlier award of 1902 is a nullity and consequently Latchamma could obtain absolute rights in the property in appeal by reason of the Hindu Succession Act, 1956, which she could dispose of under a will. The argument advanced for the appellant on this issue was that the earlier award decree of 1902 giving the house property to Latchamma with limited rights should be ignored as a nullity for the reason that Latchamma was not represented by a properly appointed guardian in the arbitration proceedings, that she should be deemed to have been in possession of the properties in her capacity as a Hindu widow and that on the passing of the Hindu Succession Act 1956, that property became her absolute property and as such she had full powers to dispose it of by a will. The argument that the award was a nullity is based only upon the age of Latchamma as given in the decree embodying the award as 16 and nothing more. At no time was it ever suggested that throughout the relevant period, she was a minor and that a guardian ad litem was not appointed and consequently that decree was not binding on her. It is interesting to note that the present appellant had attested that award. Further, on attaining majority, she did not question the award on the ground that no guardian ad litem was appointed. On the other hand, throughout her life, she proceeded on the assumption that she had only a limited right in the property. In fact the statement of the appellant adverted to by the arbitrators shows that Latchamma never believed that she had full rights over the property and that she applied to her adopted son and others for permission to give away the property in question in charity.

The appellant seems to have also stated before the arbitrators that Latchamma bad rights only over the properties that were given to her under the award. The arbitrators found that Latchamma always understood as having only a life estate in the immoveable property as per the decree. If that were the real position, she could not bequeath the property she got under the award to any one under a will. That apart, the arbitrators found, on a discussion of the various aspects of the matter, that Latchamma had not executed the will "with full knowledge and understanding" and as such no effect could be given to it even if it was a genuine one. This is not a conclusion which can be impeached in proceedings u/s 14 of Arbitration Act. That cannot furnish a ground for setting aside an award even if it amounts to can error of law It is not absolutely necessary that awards should be strictly in accordance was very provision of law. In examining the awards, such reasonable latitude must be allowed, having regard to the type of people that are called upon to give decisions and the circumstances surrounding them. It is difficult to posit that an error of this kind is an error apparent on the face of the award.

For these reasons, we cannot give effect to the second contention either. It means none of the contentions of the appellant could be upheld and the order of the lower Court could not be successfully impeached.

In the result, the appeal fails and is dismissed with costs. Civil Revision Petition No. 1342 of 1959.

This revision petition raises a question relating to advocate''s fee allowable in an application u/s 14 of the Arbitration Act. The trial Court allowed fee on the basis of Rule 2(II) of the Rules framed by the High Court u/s 27 of the Legal Practitioners'' Act and the amount so computed was included in the decree for costs. The aggrieved 1st defendant filed a petition u/s 152, C P.C. for amendment of the decree on the contention that advocate''s fee should be calculated on the basis of Rule 6(5) of the said rules and not under Rule 2(II). This petition was dismissed by the trial Court on the ground that as the application u/s 14 of the Arbitration Act was converted into a suit, Rule 2(II) of the said rules would govern the case and not, Rule 6(5). In this revision petition against that order, that view of the Subordinate Judge is canvassed.

The point for determination is whether legal practitioner''s fee is payable on the scale contemplated by Rule 2 or under Rule 6(5). The opinion of the trial Court is sought to be sustained by the counsel for the respondents on the plea that when once an application u/s 14 is registered as a suit, Rule 2 comes into operation. This contention is unacceptable to us. It is no doubt true that applications u/s 14 of the Arbitration Act should be numbered and registered as suits by virtue of Rule 5 of the Rules framed by the High Court under the Arbitration Act of 1940. But this does not, in our opinion, postulate the fee is payable in such an application as in regard to suits falling within the purview of Rule 2(II) The mere fact that an application u/s 14 of the Arbitration Act has to be numbered and registered as a suit does not brine it under Rule 2. Rule 5 of the said Rules is procedural in character and has no bearing on the question of fee payable to a practitioner. Legal Practitioners'' fees are governed by the rules framed by the High Court u/s 27 of the Legal Practitioners'' Act and not by rules framed under the Arbitration Act for regulating the procedure relating to the proceedings initiated under the Act.

Moreover. Rule 2 provides for the payment of fees to legal practitioners in suits for money, effects or other personal property or for land or other immoveable property of any description filed in Subordinate Courts on the ad valorem basis. This rule is inappropriate in the context of suits which originate u/s 14 of the Arbitration Act. There is a provision in the shape of Rule 6(5) applicable to the fee allowable for applications for filing an award passed on a submission out of Court (Section 14 of the Arbitration Act). That fee should be one half of the fee allowable on the amount or value of the matter calculated as under Rule 2(11) subject to a minimum of Rs. 5/- and a maximum of Rs. 100/-. Now. when there is a specific provision governing the fee payable to a legal practitioner in an application u/s 14, there is no warrant for invoking Rule 2 which prescribes a fee on ad valorem basis, merely because the application has to be registered as a suit. It should be regarded as a suit only for purposes of procedure. But for purpose of legal practitioner''s fee we have to look to the Legal Practitioners'' Fees Rule. Those rules have made specific provision in regard to applications u/s 14 of the Arbitration Act and consequently it is those rules that should be applied.

Further, as already remarked, Rule 2 could not come into operation in regard to applications which are numbered and registered as suits as they cannot answer the description of suits for money, effects or other personal property or for land or other immovable property of any description. It is only an application to file an award into Court and to make it a rule of Court and it cannot be regarded as a suit within the contemplation of Rule 2. Again, this is not a suit which was instituted by the presentation of a plaint. It is started by the presentation of an application. Notwithstanding its being registered as a suit, the Court-fees payable under Article 4, schedule II of the Court fees Act remains the same and the applicant-plaintiff is not called upon to pay additional Court-fee. In substance, it is only an application and not a suit as envisaged by Rule 2.

If the argument of the respondents should find favour with us. Rule 6(5) will be otiose. Every application u/s 14 of the Arbitration Act has to be registered as a suit and if the argument of the respondents were to prevail. Rule 6 (5) would remain a dead letter. It is a well-settled canon of construction of statutes that effect must be given to every provision of the statute and also that we should not read repugnancy into the statutory provisions. A court should, as far as possible, so read the provisions of a statute as to harmonise them and not to import repugnancy between them. Even if the doctrine of repugnancy could be invoked, the special provision contained in Rule 6(5) should prevail. It is significant that Rule 6(5) specifically refers to Rule 2(II). What Rule 6(5) contemplates is that, while the fee allowable in such an application should be calculated as under Rule 2, it fixes a maximum of Rs. 100/-. That being the position, in computing the legal practitioners'' fee in regard to suits of this description, Rule 6(5) cannot be ignored. It is that rule that furnishes the basis of the legal practitioners fee and not Rule 2. Hence the maximum fee that could he allowed in suits of this description is only Rs. 100/-.

In these circumstances, the order of the trial Court is set aside and the decree for costs wilt be modified as indicated above. The Civil Revision Petition is allowed with costs.