Moolchand Jothajee vs Rashid Jamshed Sons and Co.

Alfred Henry Lionel Leach, CJ.

While the Indian Arbitration Act, 1889, was in force a party to an arbitration award was entitled to enforce it by way of suit. The % question in

this appeal is whether he has the same right now that the Indian Arbitration Act, 1940, is in force.

The appellants entered into a contract with the respondents to sell to them a certain quantity of camphor. The respondents failed to take delivery

of the goods in accordance with the terms agreed upon and consequently the appellants sold the camphor. The price realised was less than that

which the respondents had contracted to pay and they failed to pay the difference. The contract provided that disputes in relation to'' it should be

referred to the arbitration of the Madras Kirana Merchants'' Association. The appellants referred the dispute to arbitration, in accordance with the

agreement and the arbitrators found that they were entitled to receive from the respondents by way of damages the sum of Rs. 1,605-6-0. The

appellant did not, however, ask the arbitrators to file the award in Court. They took no action until they filed in the City Civil Court the suit out of

which this appeal arises. The award was delivered on the 17th September, 1940 and the suit was filed on the 2nd May, 1941. The appellants

averred that the award had become "" final, conclusive and binding on the parties "" and asked for a. derree in the terms thereof. The respondents

denied that there had been a valid reference to arbitration and consequently they averred that there was no proper award. They further pleaded

that the award was vitiated by the misconduct of the arbitrators and had been improperly procured. The appellants contended that it was not open

to the respondents to maintain these pleas. They said that as the respondents had neglected to cause the award to be filed in Court they (the

appellants) became automatically entitled to a decree in the terms of the award on the expiration of the three months allowed for its filing. The

Principal Judge of the City Civil Court who tried the suit found for the appellants but his decision was overruled by Somayya, J., on appeal Rashid

Jamshed Sons and Co. Vs. Moolchand Jothajee, . Consequently the learned Judge dismissed the suit. This appeal is from his judgment.

It is an elementary principle of law that where a remedy has existed by way of suit, the remedy continues to exist, unless it is taken away by

statute, either expressly or by necessary implication. The appellants say that the Indian Arbitration Act., 1940, has not taken away their right to

institute a suit to enforce the award and that the learned Judge misinterpreted the provisions of the Act. Therefore it is incumbent upon us to

examine the relevant sections of the statute.

Section 14(1) says that when the arbitrators have made their award, they shall sign it and give notice of the fact in writing to the parties-. Sub-

section (2) says that the arbitrators shall, at the request of a party, cause the award to be filed in Court and, when this is done, the Court shall give

notice of its filing to the parties. Sections 15 and 16 empower the Court to modify the award or to remit it to the arbitrators for further

consideration. Section 17 states that when the Court sees no cause to remit the award for reconsideration, it shall, after the time for making an

application to set it aside has expired, or when such an application has been made and refused, proceed to pronounce judgment according to the

award and upon the judgment so pronounced a decree shall follow. No appeal lies from the decree except on the ground that it is in excess of, or

not otherwise in accordance with, the award.

Section 15 of the old Act provided that an award, on being filed in Court, should be enforceable as if it were a decree of the Court. Now it is

made a decree of the Court when judgment has been pronounced in accordance with the terms of the award. Section 17 of the new Act brings the

statute in accordance with the provisions of the English Arbitration Act of 1934.

Sections 31 and 32 of the Indian Act of 1940 have great bearing on the question to be decided in this appeal and we will quote them in extenso.

Section 31 reads as follows:

(1) 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.

(2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions

regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under

them shall be decided by the Court in which the award under the agreement has been, or may be, filed and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where

the award has been, or may be, filed and to no other Court.

(4) Notwithstanding anything contained elsewhere in this Act or in any other law for the time being in force, where in any reference any application

under this Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all

subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court.

Section 32 states:

Notwithstanding-any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity

of an arbitration agreement or award, nor shall any arbitration agreement or award be set aside, amended, modified or in any way affected

otherwise than as provided in this Act.

Section 33 provides that a party to an arbitration agreement or award desiring to challenge the existence or validity of the arbitration agreement or

award or to have the effect of either determined 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 allow other evidence to be admitted.

By reason of Section 31 no Court other than that in which the award has been, or may be, filed has jurisdiction to decide any question relating

to the validity, effect or existence of the award. Section 32 emphasises this by stating that no suit shall lie on any ground whatsoever for a decision

upon the existence, effect or validity of the award.

The Act of 1940 was intended to consolidate and amend the law of India relating to arbitration matters. The scheme of the Act is to prevent the

parties to an arbitration agitating questions relating to the arbitration in any manner other than that provided by the Act. The suit which the

appellants filed clearly raised the question with regard to the existence and validity of the award and such a suit is expressly barred by Section 32.

The learned advocate has laid great stress on the fact that the Act of 1940 has not repealed Section 30 of the Specific Relief Act, that it has

not eliminated Form No. 10 from Appendix A to the CPC and that under the English Act a suit may be filed in order to enforce an award without

making it a judgment of the Court. Section 30 of the Specific Relief Act merely says that the provisions of Chapter II as to contracts shall mutatis

mutandis apply to awards and to directions in a will or codicil to execute a particular settlement. This section obviously cannot override Section 32

of the Indian Arbitration Act, 1940, which applies "" notwithstanding any law for the time being in force."" The governing section is Section 32 of the

Arbitration Act. We fail to see what bearing Form No. 10 printed in Appendix A to the CPC has. Even if it has beat-ing, it is not of any

importance because Section 30 of the Specific Relief Act is subordinate to Section 32 of the Arbitration Act. The fact that in England,

notwithstanding the amendment to the English Act of 1889 by the Act of 1934, a suit can be filed to enforce an award notwithstanding that

judgment has been entered in the terms of the award does not assist the appellants, because in the English Act there are no corresponding

provisions to those to be found in Sections 31 and 32 of the Indian Act.

A single Judge of the Nagpur High Court in Nanhelal Anandilal v. Gulabchand ILR (1944) Nag. 340 accepted the argument now advanced on

behalf of the appellants, but the judgment does not discuss the question. On the other hand in Ratanji Virpal and Co. v. Dhirajlal Manilal ILR

(1942) Bom. 452, the Bombay High Court read Section 32 in the way which we read it.

We regard Sections 31 and 32 as being conclusive against the appellants and consequently we hold that the suit does not lie. The appellants

have only themselves to blame for not causing the award to be filed in Court. The appeal is dismissed with costs.