Hoshiarpur Central Co-operative Bank Ltd., Hoshiarpur vs Urmar Harmonium Reed Workshop C.I.S. Ltd. and Others

J.V. Gupta, J.—This case has come up before us, on a reference by the learned single Judge as there were two conflicting decisions of this Court in the Lalru Co-operative Agricultural Service Society Ltd., Lalru v. Patiala District Wholesale Co-operative Supply and Marketing Society 1979 P LR 66 and the Pandhwa Co-op. Agricultural Service Society v. Sukdev Singh 1979 PLR 287. The controversy between the parties is; whether the award given by the Arbitrator under the Punjab Co-operative Societies Act, 1961, (hereinafter called the Act) can be held to be a nullity by the executing Court if it is a non-speaking one?

In the present case, there was an award in favour of the Hoshiarpur Central Cooperative Bank Ltd. for a sum of RS. 35,311.70. When the execution of the said award was being sought, objections were filed on behalf of the judgment-debtor alleging that the award was void, illegal and invalid; hence it could not be executed. According to the judgment-debtor, no notice was given by the Arbitrator before the award was announced and that the Arbitrator had no jurisdiction to award the future interest. It was also pleaded that the award was a non-speaking one and, thus, a nullity. The said objections were contested on behalf of the decree-holder, the petitioner. The executing Court found that the judgment-debtor did receive the notice regarding the arbitration and, therefore, the plea that no notice was issued to it was negatived. However, the executing Court found that the arbitrator had no powers to grant future interest and that the award was a non-speaking one. It was therefore held to be a nullity on these grounds. In coming to this conclusion, reliance was placed on the Lalru Co-operative Agricultural Service Society Ltd., Lalru''s case (supra).

So far as the question of the grant of the future interest by the Arbitrator is concerned, the matter stands concluded by the Full Bench judgment of this Court in the State of Punjab Vs. Ajit Singh and Others, , wherein it has been held that the Arbitrator has the jurisdiction to grant future interest in references under Sections 55 and 56 of the Act.

Thus, the only controversy as observed earlier is; whether the award can be held to be a nullity by the executing Court if it is a non-speaking one?

In Lalru Co-operative Agricultural Service Society Ltd., Lalru''s case 1979 PLR 66 as well as in Sukhdev Singh''s case 1979 PLR 287 (supra), reliance was placed on the judgment of this Court in Mathra Dass v. State of Punjab 1975 PLR 42. According to the Lalru Co-operative Agricultural Service Society Ltd. Lalru''s case (supra), the decision in Mathra pass''s case (supra), was that the proceedings before the Arbitrator are quasi-judicial and that the Arbitrator is bound to give reasons for his decision. According to the learned single Judge in the said case, since no reasons were given by the Arbitrator inter alia awarding the costs, the award was a nullity. An argument raised on behalf of the respondent that the executing Court cannot go beyond and decree even if some error of law has been committed by the Arbitrator while passing the award, was repelled with the observations that it was not sustainable because Section 63 of the Act says that the award duly made would be deemed to be a decree which obviously means that only that award would be deemed to be a decree which conforms to the provisions of the statute. Subsequent thereto, when in Sukhdev Singh''s case (supra), Mathra Dass''s case (supra), was cited, the learned single Judge observed that the decision in Mathra Dass v. State of Punjab 1975 PLR 42, was not ony made in a different context, but also it was not laid down therein that a non-speaking award would be non est and a nullity. It was further held therein that the executing Court cannot go behind the decree unless it comes to the conclusion that the same is a nullity. No decree is a nullity if the Court that passed it had the inherent jurisdiction and the parties involved were duly represented. In the present case, admittedly, as it has also been held by the executing Court itself that the Arbitrator had the jurisdiction to pass the award and that the parties had the notice and were afforded due opportunity. The infirmity of the omission of the reasons from the award would not render it non est and a nullity. A decree which can be said to be non est and a nullity is the one which a court having no jurisdiction to pass it, passed it, or it was a decree against a dead person or against a person who at no stage was legally present before the Court which passed the decree.

The learned counsel for the petitioner also cited Amir Hassan Khan v. Sheo Baksh Singh ILR (1885) 11 Cal 6, Privy Council to contend that the Arbitrator had the authority to decide rightly or wrongly and jurisdiction to decide the same, even if he decided wrongly, he did not exercise the jurisdiction illegally or with material irregularity. A reference was also made to Yusufbhai Ismailbhai and Another Vs. Vakil Mohanlal and Others, , wherein it was held that it is not. open to the executing Court to question the terms of the decree or to question the validity of any part of the decree; hence it was not open to the executing Court to hold that a part of the decree violated the provisions of Section 23 of the Bombay Money Lenders Act and, therefore, could not be executed.

After hearing the learned counsel for the parties and going through the case law cited and the bar, we are of the considered opinion that the Lalru Co-operative Agricultural Service Society Ltd. Lalru''s case 1979 P LR 66 (supra), has not been correctly decided and, therefore, is to be overruled whereas the view taken in Sukhdev Singh''s case 1979 PLR 287 (supra) is to be affirmed. In Mathra Dass''s case 1975 PLR 42 (supra), the matter was discussed by the learned single Judge in para 7 of the judgment and what was held therein was that the award made by the Arbitrator was in accordance with law. That being so, in the writ petition, the impugned award of the Arbitrator and the order of the appellate authority were quashed and the matter was remanded to the Arbitrator for deciding the matter afresh in accordance with law keeping in view the observations made therein. There is another reason also. If an appeal would have been filed against the award on the ground that it was a non-speaking one, the appellate authority would have set aside the award and remanded the case for passing a fresh award whereas now the executing Court after declaring the award a nullity could not send it back for giving a fresh award and, thus, the decree-holder was debarred for ever to realise the amount. In case the award does not conform to the provisions of the statute, then it could not be successfully argued that it was a nullity and void ab initio because such a defect, if any, was a curable one and could be cured on remand. The executing Court could only declare it a nullity if it was passed without jurisdiction and/or the defect, if any, was not curable. It is in this context that it has been laid down that the executing Court cannot go behind the decree or the award. It could only do so if it was made by the Arbitrator who had no jurisdiction to I pass the same, which is not the case of either party. In the present case, the Arbitrator had the jurisdiction to give the award. Notice of the proceedings was given to the judgment-debtor and in case the Arbitrator did not give reasons for the award that itself will not render the award a nullity as to hold that the Arbitrator had no jurisdiction to give the award. It was observed by the Privy Council in Amir Hassan Khan''s case ILR 1885 Cal 6) (supra), as follows.-

"The question then is, did the Judges of the lower Courts in this case, in the exercise of their jurisdiction, act illegally or with material irregularity. It appears that they had perfect jurisdiction to decide the question which was before them, and they did decide it. Whether they decided it rightly or wrongly, they had jurisdiction to decide the case; and even if they decided wrongly, they did not exercise their jurisdiction illegally or with material irregularity."

The result of the above discussion is that the revision petition succeeds and is allowed with costs. The order of the executing Court dt. Sept. 20, 1979 is set aside and the case is sent back to it for proceedings further in accordance with law. The parties have been directed to appear before it on 9-1-1989.