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Judgment
Basheer Ahmed Sayeed, J.—This appeal is against the order of remand made by the learned District Judge of South Arcot directing that the
appellants before him should apply under the Indian Arbitration Act to obtain relief under the relevant provisions of that Act relating to the award
which was set up by them in the Court of first instance. The suit itself was by the uncle of the present first appellant for possession of the suit
properties as belonging to him under a certain sale deed executed by the mother of the present first appellant, the 5th defendant in the suit. The
defence to the action was that the sale deed by the mother of the first appellant was only a nominal and sham one and no rights passed under that
to the respondent. An additional written statement was also filed by the present first appellant in which he contended that the suit by the plaintiff
was barred and was not competent for the reasons that there was an award between him and the respondent and in the face of that award the
plaintiff respondent was not entitled to file the suit claiming title and possession of the properties. The learned District Munsif while finding in favour
of the respondent that he had title to and possession of the properties however held on the issue as to whether the suit was barred and was
incompetent by reason of the award set up by the 1st appellant, that the suit was not competent and therefore dismissed it. On appeal by the
respondent the learned District Judge holding that it was not open to the Court to give a decision even about the existence and validity of the
award, remanded the suit to the lower Court directing that all that could be done was that the 5th defendant should get a determination under the
proper provisions of the Arbitration Act about the existence and validity of the award. Against this order of remand the present appeal has been
preferred.
The point that arises for consideration is whether in the circumstances of the case as appear from the pleadings it was open to the first appellant
to set up in defence to the suit an award and whether it was proper on the part of the trial Court to hold that the existence of the award Pleaded by
the first appellant was sufficient answer to the claim by the plaintiff respondent. The learned counsel for the first appellant relies upon the decision of
a Bench of this Court in ''Suryanarayana Reddi v. Venkatareddi'' ILR (1949) Mad 111 where Happell and Govindarajachari JJ. have held that
Section 32 of the Arbitration Act does not preclude the defendant from pleading the existence of an award in answer to the claim from the plaintiff
for title and possession of properties. Section 32 is as follows:
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"".
After discussing the scope of Sections 31, 32 and 33 as also the previous sections of the Act, the learned Judges have observed at page 117 that,
It would therefore seem as if Section 32, notwithstanding its apparently wider language, had to be read only as precluding a suit praying for the
reliefs for which an application is provided under &. 33"".
They again observe that,
Apart from this, however, and taking the language of Section 33 as it stands, it is difficult to hold that the words ''no suit shall lie'' should be read
as prohibiting a defence which involves a decision upon the existence, effect or validity of an award"".
The learned Judges have examined the scope of the decision in ''Moolchand Jothajee v. Rashid Jamshed sons & Co., ILR (1940) Mad 840 and
observe that:
as held in that suit a person who relies on an award may be said to be seeking a decision upon its existence, effect or validity; but the question,
that arises is whether the inhibition in Section 32 is not confined merely to a plaint by which such decision is sought. We are inclined to think that it
is so confined. There is nothing in ''Moolchand Jothajee v. Rashid Jamshed sons and Co. ILR (1946) Mad 840 inconsistent with this view, that
decision, as already stated being concerned with a suit in which the plaintiffs sought to enforce the award"".
The learned Judges further observe at page 119 to the following effect:
However, the point in this case turns entirely on the construction of Section 32. As previously indicated, its language does not, in our opinion,
extend to a defence as opposed to the filing of a suit. The argument on behalf of the plaintiff would involve our holding that even in a case where
both parties to an award are satisfied with it and it is fully carried out and there is therefore no need for getting a decree passed in its terms and
none is passed, one of the parties can subsequently change his mind and enforce the original cause of action and the defendant cannot resist the
suit. It seems to us that the provisions of the Act do not entail such a result"".
I must state that the facts of the present case are on all fours with the decision in those authorities cited by the learned Counsel for the appellant and
I agree with the principle laid down in the authorities cited. In my opinion, the language of Section 32 which says that no suit shall lie on any ground
whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award, does not contemplate that any defence set up
by any defendant to a claim which ignores the existence of the validity of an award is not competent. This section only lays down the positive rule
that no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of in arbitration agreement and does not shut out
the possibility of a defence being raised when a suit was brought by one of the parties to the arbitration agreement or award, that there exists an
award between the parties which is binding on both and also raising the plea that such an award has been acted upon and accepted by the parties.
In the present case under appeal there has been a reference to an arbitration by 19 persons and subsequently the number of arbitrations has been
by agreement reduced to 5 and the five arbitrators have given an award. That award is found in Ex. D. 29 and it states that the panchayatdars
consider that the sale taken by the plaintiff from the mother of the 5th defendant was not a valid one. It is this award that has been relied on by the
first appellant to non-suit the respondent.
The argument in defence by learned counsel for the respondent is that there is no award between the parties and there is no evidence that the
award has been acted upon. I do not think that I can agree with this contention. As I have already observed, the award is found in Ex. D. 29 and
the findings of the lower Court are that the award had been accepted and that it settled the points in controversy between the parties. It is therefore
futile to contend now that there is no award or that the award has not been acted upon in the face of the findings of the trial Court. The learned
District Judge on appeal has not considered any of these findings nor has he expressed any opinion for or against these findings. He has confined
himself only to the point as to whether Section 32 of the Arbitration Act applied to the facts of the case and has come to the conclusion that the
proper thing would be for the first appellant to apply to the Court under the provisions of the Arbitration Act. I do not think that the learned District
Judge has acted correctly in having directed that the first appellant should approach the Court and apply under the provisions of the Arbitration Act
to get the relief under the award. I do not agree that this was the proper approach or the procedure that should have been followed by the lower
appellate Court.
The learned counsel for the respondent has however invited my attention to a decision in Bhimavarapu Venkatasubbayya Vs. Addanki Bapadu
and Others, wherein Raghava Rao J. have tried to explain the decision of the Bench in ''Suryanarayana Reddi v. Venkatareddi'', ILR (1949) Mad
The judgment of Raghava Rao J. has been read ''in ex-tenso'' by both counsel and I do not think that decision helps the respondent to any
extent on the facts of this case. It would appear from a reading of the judgment of my learned brother that where there is an award which has been
acted upon and the defendant has discharged his duties under the award Section 32 would not preclude the defendant from pleading the existence
of an award. In the present case as already observed there is not merely an award existing but the findings are that that award had been accepted
and acted upon. It would therefore appear that the decision of Raghava Rao J. relied on by the learned counsel for the respondent is not of much
avail. There is also an earlier decision of Raghava Rao J. in ''Surayya v. Anandayya'', 1950 2 M. L.J. 313 which has been brought to my notice by
learned counsel for the appellants; learned counsel for the respondent however does not rely on this decision and I do not think that that decision
carries the point in controversy any further. On the whole, as I am inclined to agree with the principle enunciated by Happell and Govindarajachari
JJ. in ''Suryanarayana Reddi v. Venkatareddi'', ILR (1949) Mad ill, I think that this remand order cannot be sustained. The learned District Judge
will therefore be directed to restore the appeal to his file and dispose of the same on merits and on the evidence already recorded and the findings
given there by the learned District Munsif. In the view I have taken of the matter, I do not think it is necessary for me to consider the further point
raised by learned counsel for the respondent that the award is not admissible in evidence for the reason that it has not been registered as required
in the amended Section 17 of the Registration Act This question has been left open by the trial Court and has not been touched upon by the
learned District Judge and it will be open to the learned District Judge to go into it as well and come to a decision after hearing the parties. In the
result the appeal is allowed and the costs of this appeal would abide the result of the decision by the lower appellate Court. I do not think there is
justification for me to grant leave to file a Letters Patent Appeal on the facts of this case. The application is rejected.