Raghunath Sukul and another vs Ramrup Raut and others

Dawson Miller, C.J.—This is an application in revision on behalf of the Plaintiffs in the suit against an order of the Subordinate Judge of Muzafferpur. The matters in difference between the parties were referred to arbitration, by the Court. The arbitrators made their award in due course. It was presented for filing in Court and the Plaintiffs petitioned the Court to pronounce judgment according to the award. The learned Subordinate Judge refused to file the award or pronounce judgment in accordance therewith on the ground that he had no jurisdiction as all the parties to the suit had not properly submitted the matters in difference between them to arbitration in accordance with Cl. 1 of the second schedule to the Civil Procedure Code.

The suit was instituted by the Plaintiffs against a number of Defendants, some 15 in all, claiming a declaration of title to, and recovery of possession of, 13 bighas 5 kathas of land of which they had been dispossessed by the Defendants. The land consisted of numerous plots and the case of the Plaintiffs was that each of the Defendants had dispossessed them of specific plots, the numbers and areas of which were specified, and that the Defendants severally were in separate possession of one or more of the said plots. Although only one suit was brought against the several Defendants, there were really separate causes of action against the different defendants severally in respect of the plots of which they separately were in possession. Before the matters were referred to arbitration, Balgobind Nunia, one of the Defendants in the suit, died and his two sons Nathuni and Manu were substituted as his representatives in the suit. A written statement was filed on behalf of the other 14 Defendants in which they contended inter alia that they were each in separate possession of specific plots bearing a separate rental and that one suit was not maintainable against all of them. No written statement was filed on behalf of Manu and Nathuni, the sons of the deceased Defendant Balgobind Nunia. On the 25th of January 1922, the Plaintiffs and each of the Defendants including Nathuni and Manu filed a petition praying that the disputes between them should be referred to arbitration. On that petition an order was passed referring the matters in dispute between the parties to arbitration. After the award was made and signed by the arbitrators it was duly presented for filing in Court A petition was then filed on behalf of Nathuni and Manu, the petitions of Balgobind Nunia, through Balgobind Raut, their uncle, objecting that the reference was invalid inasmuch as they were minors at the time when the reference was made and were not properly represented in the suit by a guardian ad litem. The learned Judge considered that in these circumstances there was no proper reference within the meaning of Cl. 1 of the second schedule of the Code and that he had no jurisdiction to receive and file the arbitration award. He accordingly rejected it and ordered the suit to proceed.

The question for determination is whether the Court had jurisdiction to file the award and pronounce judgment in accordance therewith in so far as it disposed of the matters in dispute between the Plaintiffs and Defendants other than Nathuni and Manu. The determination of the question depends upon the proper construction to be placed upon the first clause of the second schedule of the Code. The clause provides as follows:

(1) Where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may, at any time before judgment is pronounced, apply to the Court for an order of reference. (2) Every such application shall be in writing and shall state the matter sought to be referred.

It must be borne in mind that there was no objection to the arbitration award taken by any of the parties except the Defendants Nathuni and Manu, but the learned Subordinate Judge was of opinion that the whole award was void and was not effective against any of the parties. The Petitioners do not contend that the award was effective against the two objectors who in fact were minors at the time when they were substituted in place of their deceased father. They contend, however, that the award is binding upon the other Defendants and that it ought to have been accepted in so far as it deals with the matters in dispute between the Petitioners and those Defendants, and that judgment ought to have been pronounced in accordance therewith. In my opinion the Petitioners'' contention is right. There were in fact a number of matters in difference between the Plaintiffs and the various Defendants to the suit. It can hardly be suggested that the submission to arbitration is bad on the ground that it does not refer to arbitration all the matters that may be in dispute between the parties. The clause in terms provides that where all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may apply to Court for a reference, and sub-cl. (2) provides that the application shall state the matter sought to be referred. It may well be that some of the parties are interested in certain of the matters in dispute only, whilst others are interested in other matters, and I can see no reason why all the parties interested in one or other of the matters in difference between them should not agree to refer their disputes, if there are other matters still to be determined in the suit It is contended on behalf of the objectors, however, that the words "all the parties interested" mean all the parties interested in any part of the subject-matter of the suit and unless all the parties to the suit agree there can be no reference to arbitration upon any point. I do not think that this is the proper interpretation of the clause. In my opinion the words "all the parties interested" do not mean necessarily all the parties to the suit, but all the parties interested in any matter in difference between them which they wish to refer. In the present case although the Plaintiffs were interested in the whole subject matter of the suit the Defendants respectively were interested only in separate and specific plots in respect of which the suit was brought They had no interest at all in the plots claimed from the other Defendants. I can find nothing in the wording of the clause to prevent any of the parties submitting to arbitration the matters in dispute between them merely because some other parties to the suit, who have no interest in that subject-matter, have not concurred in the reference. I assume, of course, that all the parties interested in the subject-matter of the reference have agreed to refer that subject-matter to arbitration. The ground upon which the objection is based is that Nathuni and Manu were not properly parties to the suit at all as they were not represented by a guardian ad litem and therefore no effective submission to arbitration on their part was possible. The logical result of this situation will be that in so far as they were concerned there was no reference to arbitration at all. They, however, were in no way concerned with the matters in dispute between the Plaintiffs and the other Defendants and ex hypothesi they were not even parties to the suit. The arbitrators however, have made an award not only in respect to the matters properly referred but in respect to the matters in dispute between the Plaintiffs and the two minors which were not validly referred at all. Must it be said then that the whole award is bad merely because the arbitrators have dealt with matters outside the terms of the reference in so far as the reference was legal and binding? The answer to this question appears to me to be contained in Cl. 12 of the schedule. That clause provides that the Court may, by order, modify or correct an award, where it appears that a part of the award is upon a matter not referred to arbitration and such part can be separated from the other part and does not affect the decision on the matter referred. The rules in the schedule clearly contemplate a case where the arbitrators in making their award have gone outside the legitimate subject-matter of the reference. If that part of the award which deals with matters outside the reference can be separated from the other part, without affecting the decision on the matters referred, the Court may in such a case modify or correct the award. In my opinion the course which the learned Subordinate Judge should have taken was to modify the award in so far as it dealt with the interests of Nathuni and Manu and to give effect to the rest of it which dealt with the interests of the other parties with which the objectors were in no way concerned.

Certain cases in which the interpretation of the first clause of the schedule has been under consideration were referred to in support of the objectors'' contention. In none of the cases were the facts similar to the present. In each of them where the submission was held to be bad it was on the ground that certain parties interested in the subject-matter of the reference had not been parties to the submission. In Seth Dooly Chand Vs. Mamuji Musaji and Others, the suit was against the members of a partnership to recover certain moneys. All the matters in difference between the parties in the suit including the question of costs were submitted to arbitration. Two of the Defendants, one of whom was a member the partnership and clearly interested in the subject-matter referred, were not parties to the submission. It followed therefore that all the parties interested in the matters in difference which were submitted to arbitration had not agreed to the reference. The Court accordingly, set aside the award on the ground that no valid reference had been made. The award in that case directly affected the interest of the partner who had not joined in the submission and made him liable with the other partners for the payment of a certain sum of money. Without his concurrence the interests of the partners, as a whole, could not be referred to arbitration as they were jointly interested with him.

It is significant that the clause under the present Code differs from that in S. 506 of the Code of 1882. The previous section read as follows: ''''If all the parties to a suit desire that any matter in difference between them in the suit be referred to arbitration they may at any time before judgment is pronounced apply to the Court for an order of reference."

Some doubt arose as to whether it was necessary before a reference could take place under that section that all the parties to the suit should concur in the submission or whether a submission was valid if made with the concurrence of all the parties interested in the matter submitted. In Pitam Mal v. Saliq Ali [1902] 24 All. 229 - (1902) A.W.N. 19 it was held that the words "all the parties to a suit" in S. 506 of the Code of 1882 referred to the succeeding words of the same section any matter in difference between them in the suit'' and did not necessarily include parties who never put in any appearance in the Court and between whom and any of the parties to the submission there was not in fact any matter in difference in the suit. The wording of the present Code appears to me to set the matter at rest in accordance with the decision arrived at by the Allahabad Court in the last-mentioned case. In my opinion it is not necessary that all the parties to a suit should concur in an application for an order of reference under to make the submission valid. It is only necessary that all the parties who are interested in the subject-matter of the reference should have joined in the submission.

The order of the learned Judge will be set aside and the case will be remitted to the lower Court to deal with it under cl. 12 of the second schedule of the CPC with the direction to separate such part of the award as deals with the interests of Nathuni and Manu from the other part of the award and to give effect to the award in so far as it deals with the matters in difference between the Plaintiffs and the other Defendants by filing the same and pronouncing judgment in accordance therewith.

The Petitioners are entitled to the costs of this application and to the costs of the objection petition in the lower Court.

Kulwant Sahay, J.

I agree.