Subbayya and Another vs Bhamidipati Venkataramanayya and Others

Madhavan Nair, J.—This is an application u/s 115, Civil Procedure Code, to revise the order of the Subordinate Judge of Bapatla making

the award passed by the arbitrator in O.S. No. 76 of 1923 a decree of Court. The plaintiff''s suit was for a declaration of his title to the properties

in the schedule together with mesne profits. There were nine defendants in the suit. Defendants Nos. 6 to 9 were alleged to be lessees of the

properties holding them from the other defendants. A decree for mesne profits was also asked for in the plaint. After the issues were framed in the

course of the suit, the plaintiff and defendants Nos. 1 to 5 put in a petition asking the Court to refer the subject-matter of their dispute to the

decision of an arbitrator under para. 1, Schedule II, Civil Procedure Code. They ""appointed one Suryanarayana of Bezwada as arbitrator, for the

purpose of enquiring into and deciding upon the allegations in the plaint and in the written statements"" and they undertook that they ""shall without

filing an appeal etc., abide by the award which the said person shall give either after holding an enquiry or without an enquiry.

In due course the arbitrator passed an award and an application was made to the Subordinate Judge to make it a decree of the Court.

Objections were filed by defendants Nos. 1 to 5. One of them was that the award should not be accepted for the reason that the arbitrator heard

evidence of the plaintiff in the absence of the defendants. The learned Judge overruled this and the other objections and passed an order which is

the subject-matter of this petition.

Mr. Govindarajachari for the petitioners i.e., defendants Nos. 1 and 2, argues that the decree and the award should be set aside on the ground

that all the parties interested in the dispute were not parties to the reference. This argument is based on the fact that defendants Nos. 6 to 9 were

not parties to the reference. It has been decided in a series of cases in this Court: see Polita Pavana Panda v. Narasinga Panda 51 Ind. Cas. 155 :

42 M. 632 : 36 M.L.J. 538, Bhagavanulu v. Seetharamaswami 73 Ind. Cas. 202 : AIR 1923 Mad. 502 : 44 M.L.J. 359 : 17 L.W. 424 : (1923)

M.W.N. 296 : 32 M.L.T. 298, Venkataramanujacharlu v. Vasudeva Acharyulu 96 Ind. Cas. 273 : 23 L.W. 769 : (1926) M.W.N. and (Samitti)

Ranga Reddi and Others Vs. Vallialuru China Sidda Reddi and Another, that an award passed on a reference to which fall the parties interested in

the dispute are not parties, is illegal and should be set aside. This proposition is not disputed by Mr. Raghava Rao, the learned Advocate for the

respondents. But he contends that the petitioners should not be allowed to raise this objection now, because that was not raised before the lower

Court and that even if they are to be permitted to raise it in this Court for the first time, a decision should not be given in their favour without calling

for a finding from the lower Court on the question whether defendants Nos. 6 to 9 are interested in the dispute in the suit to which they along with

others are parties.

Neither of these contentions can be accepted. The question now raised relates to the jurisdiction of the Court in making the reference to the

arbitrator. Schedule II, para. 1, Civil Procedure Code, clearly states that all the parties interested in the subject-matter in dispute should join in

asking the Court to make a reference; it follows that if any of such parties does not join in the application, the Court has no jurisdiction to make the

reference and the arbitrator can have no jurisdiction to pass an award on the reference. The question as it relates to the jurisdiction of the Court

was allowed to be raised for the first time in this Court in Polita Pavana Panda v. Narsinga Panda 51 Ind. Cas. 155 : 42 M. 632 : 36 M.L.J. 538,

see also in Venkataramanujacharlu v. Vasudeva Acharyulu 96 Ind. Cas. 273 : 23 L.W. 769 : (1926) M.W.N. This contention must, therefore, be

overruled.

As regards the second contention that the objection now raised should not be given effect to without a finding from the lower Court see in this

connexion Bhagavanulu v. Seetharamaswami 73 Ind. Cas. 202 : AIR 1923 Mad. 502 : 44 M.L.J. 359 : 17 L.W. 424 : (1923) M.W.N. 296 : 32

M.L.T. 298. I agree that it may perhaps be necessary in certain cases that the Court should call for a finding on the question whether the parties

who did not join in the reference are really interested in the matter in dispute. But in this case, no finding is necessary as I have no doubt that

defendants Nos. 6 to 9 are interested in the subject-matter of the dispute. As I have already pointed out, the plaint asks for relief against them and

the award that has been made by the arbitrator gives relief against them specifically. In view of these facts, I do not think it is open to the counter-

petitioners to contend that they are not parties interested in the dispute. This objection also must be overruled.

As the reference has been made without jurisdiction the award passed by the arbitrator is not legal and the Court has no jurisdiction to make the

award a decree of the Court; the entire proceedings should, therefore, be set aside. This would be enough to dispose of this civil revision petition.

But another point was also argued by the learned Advocate for the petitioners, viz., that the award is vitiated by the misconduct of the arbitrator

inasmuch as he received the evidence given by the plaintiff in the absence of the defendants. In support of this argument various decisions of English

Courts were brought to my notice, viz., Dobson and John Sullon v. Groves (1844) 115 E.R. 239 : 6 Q.B. 637 : 14 L.J.Q.B. 17 : 9 Jur 86 : 66

R.R. 509, Harvey v. Shelton (1844) 49 E.R. 1141 : 7 Beav. 455 : 13 L.J.Ch. 466 : 64 R.R. 116 and Walker v. Frobisher (1801) 31 E.R. 943 : 6

Ves. 70 : 5 R.R. 223. These decisions support the petitioner''s contention and are referred to in Sanyasi Rao v. Venkata Rao 73 Ind. Cas. 470 :

AIR 1923 Mad. 301 : 47 M. 30 : 17 L.W. 71 : (1923) M.W.N. 7 : 44 M.L.J. 263 : 32 M.L.T. 32, where the point is dealt with elaborately. It

should be held on the authority of these decisions that the arbitrator in this case did not conduct himself properly if the facts alleged against him by

the petitioners are true. His conduct was apparently sought to be justified in the lower Court on the ground that under the reference the arbitrator

may dispose of the case with or without enquiry. This provision, no doubt, gives power to the arbitrator to dispose of the matter without holding

any inquiry at all. But it does not give him any power if he decides to hold an inquiry to take the evidence given by one party in the absence of the

other party. On this ground also the award and the decree are liable to be set aside, if the facts alleged by the petitioners that the evidence of the

plaintiff was taken in their absence is true. The respondent states that the decree should not be set aside on this ground, without a finding whether

the allegation made by the petitioners is true; but having regard to my decision that the entire proceedings should be set aside as the Court had no

jurisdiction to make the reference, I do not think it is necessary to make any investigation as regards the truth of the allegation made by the

petitioners and disputed by the respondent. The decree of the lower Courts set aside with costs. The learned Subordinate Judge will take the suit

on file to dispose of it in accordance with law.