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PETITIONER: VAIDYA HARISHANKAR LAXMIRAM RAJYAGURU OF RAJKOT

       Vs.

RESPONDENT: PRATAPRAY HARISHANKAR RAJYAGURU OF RAJKOT

DATE OF JUDGMENT13/04/1988

BENCH: MUKHARJI, SABYASACHI (J) BENCH: MUKHARJI, SABYASACHI (J) RANGNATHAN, S.

CITATION:  1988 SCR  (3) 534        1988 SCC  (3)  21  JT 1988 (2)   224        1988 SCALE  (1)955

ACT:      Arbitration Act,  1940: Sections  2, 14, 17, 30 and 33- Award-Main objection-No  written agreement  signed  by  both parties  to  refer  the  matter  to  arbitration-Conduct  of parties-Whether  can  be  construed  as  proper  arbitration agreement-Whether  civil  court  has  jurisdiction  to  take cognizance of award.      Civil Procedure  Code, 1908:  Section  9-  Award  under Arbitration  Act-Cognizance   of-Civil   Court-Whether   has jurisdiction.

HEADNOTE:      The  Petitioner   and  the  respondent-father  and  son respectively referred  certain disputes, which arose between them to  the Arbitrator, who made the award. The award, duly signed by  the parties  and  the  Arbitrator,  contained  an endorsement to  the effect  that the award was agreed to and binding upon both the parties.      The respondent  filed an  application, which  was later converted into  special civil suit, for filing of the award, and sought  a judgment  in terms of the award under s. 17 of the Arbitration Act, 1940. Consequent upon the filing of the award, notice  was  issued  to  the  petitioner,  who  filed objections. The  trial court  rejected  the  objections  and passed decree in terms of the award.      The petitioner  preferred a  first appeal  against  the aforesaid decree  and also filed a revision application, but later withdrew  them in  pursuance of  an agreement  reached between the  parties on  August 14,  1978,  reaffirming  the appointment of  the arbitrator and the award made by him and the trial court judgment became final.      Thereafter, the  petitioner filed  a suit  for  setting aside the  decree  passed  by  the  trial  court  which  was dismissed.  The   revision/appeal  against   the   aforesaid decision was withdrawn.      During the  execution proceedings, the petitioner filed a civil  revision application, which was summarily rejected. The High Court held 535 that the  petitioner was not entitled to challenge the award and the revision before it suffered from res judicata. Hence the Special Leave Petition to this Court.

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    The main  objection to  the award was that there was no written agreement  signed by  both the  parties to refer the disputes to  arbitration. It  was also  contended  that  the previous proceedings were without Jurisdiction.      Dismissing the Special Leave Petition, ^      HELD: 1.1  It is  clear from the conduct of the parties that there was a proper arbitration agreement in terms of s. 2(a) of  the Arbitration  Act, 1940. By signing the award it could be  said that  the parties  had agreed  to  refer  the disputes  in   writing  to  the  arbitration  of  the  named arbitrator.  This  agreement  was  done  twice,  firstly  by signing an  endorsement below  the award  and  secondly,  by entering into  an agreement  in the  form of  a letter dated 14th August, 1978. [538E]      1.2 Section 9 of the Civil Procedure Code 1908 provides that the  Courts shall,  subject to the provisions contained in the  Code, have  jurisdiction to try all suits of a civil nature excepting  suits of  which their cognizance is either expressly or impliedly barred. [539B]      In the  instant case  there  was  no  such  express  or implied provision  nor any inability of the Judge concerned. The  Civil   Court,  therefore,  had  jurisdiction  to  take cognizance of  the award  under sections  14 and  17  f  the Arbitration Act [538G]      The High  Court was, therefore, right in dismissing the application of the petitioner. [539E]      Rajah Amir  Hassan Khan  v. Sheo  Baksh Singh,  11 I.A. 237; Seth  Hira Lal  Patni v.  Shri Kali  Nath, [1962] 2 SCR 747; Vasudev  Dhanjibhai Modi  v. Rajabhai  Abdul Rehman and others, [1971]  1 SCR 66; M/s. Guru Nanak Foundation v. M/s. Rattan Singh  and Sons,  [1982] 1 SCR 842; Prasun Roy v. The Calcutta Metropolitan  Development  Authority  and  another, A.I.R. 1988  S.C. 205  and Chowdhri  Murtaza Hossein v. Mst. Bibi  Bechunnissa,  [1876]  3  Indian  Appeal  209  at  220, referred to.

JUDGMENT:      CIVIL APPELLATE  JURISDICTION: Special  Leave  Petition (Civil) No. 4783 of 1988. 536      From the  Judgment and  order dated 23.2.88 of the High Court of Gujarat in Civil Rev. Appln. No. 1737 of 1982.      S.K. Dholakia, D.L. Kothari, R.C. Bhatia and P.C. Kapur for the Petitioners.      The Judgment of the Court was delivered by      SABYASACHI MUKHARJI,  J. This  is  an  application  for leave to  appeal under  Article 136  of the  Constitution of India from  the judgment  and order  of the  High  Court  of Gujarat dated 23rd February, 1988. By the impugned judgment, the High  Court has dismissed the civil revision application which challenged the award made in this case.      The petitioner is the father of the respondent. Both of them are  established Vaidyas  in Rajkot.  They come  from a well-to-do family.  The petitioner  is advanced  in age  and both the  father and  the son  have  been  fighting  between themselves since  more than  a decade.  The High Court found that the  petitioner and  the respondent  had referred their disputes to  one Kantibhai  Vaidya  (Shri  Kantilal  Dayaram Jani)  who   had  intervened  between  them  with  the  good intention to  bring their  disputes to  an end.  He made  an award. The award was produced. It appears that the award was endorsed and  signed by  both the  parties. In the award, it

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was stated  by the  arbitrator that  he had  called both the father and  the son  at his residence on 18th January, 1977. He had discussed the matter with both of them and had warned them that both of them would ruin themselves in the property disputes, if  they did not solve the matter amicably. In the award, it  was stated  that  the  entire  responsibility  of solving the  dispute was entrusted to him and the petitioner and  the   respondent  had   agreed  to   such  entrustment. Accordingly, he  made the award on 18th January, 1977. Below the award,  both the  parties and the arbitrator had signed. The endorsement  reads, when translated in English, as found by the  High Court  that the  award is agreed to and binding upon both  the parties and that the entire responsibility of the arbitrator will lie on Shri Kantibhai Vaidya and that he has taken the responsibility. Thereafter followed a spell of litigation. The  respondent applied  on 20th  June, 1977 for filing the  award and  sought the  judgment in  terms of the award  under   section  17  of  the  Arbitration  Act,  1940 (hereinafter called ’the Act’). A notice consequent upon the filing of  the award  was  issued  to  the  petitioner.  The application was  converted into Special Civil Suit No. 84 of 1977. It  was stated  in the  application to file the award, that the 537 petitioner had  torn  off  the  award  and,  therefore,  the respondent was  compelled to  rely upon  a photo-copy of the original award, which was produced with the application. The petitioner filed  his objections  to the application but did not file any application within the prescribed limitation of 30 days.  The learned  trial Judge  rejected the  objections filed beyond  the period  of limitation  and for the reasons that (1) the notice was already given to the party concerned about the  filing of  the award,  (2) the time for making an application to  set aside  the award had expired and no such application was  made (3)  the award was not set aside under section 30  and (4)  that the  award was  not remitted under section 16(5)  of the  Act. The  learned trial  Judge made a decree in terms of the award.      The petitioner  preferred a  Civil First Appeal against the judgment  and decree passed in Special Civil Suit No. 84 of 1977  and had  also preferred  Civil Revision Application No. 655 of 1978. Both these legal proceedings were, however, withdrawn by  the petitioner  and thus  the judgment  of the trial court  in Special  Civil Suit  No. 84  of 1977  became final. The High Court had recorded that the First Appeal and Civil Revision Application were withdrawn in pursuance of an agreement reached  between the  parties  on  or  about  14th August, 1978. A copy of the said agreement was also produced before the  Court as  Exhibit 40.  It was signed by both the parties as well as their respective advocates. The agreement was in  the form  of a  letter addressed  to the  arbitrator wherein it was stated that both of them had appointed him as an arbitrator  to resolve the disputes between them and that he had given an award dated 20th January, 1977 in respect of which award,  there had  been continued  objections but  now they have agreed that both of them should abide by the award dated 20th  January, 1977 and that its interpretation should be left to the arbitrator himself. It was also categorically mentioned therein  that its interpretation by the arbitrator would  be  binding  on  both  the  parties.  It  was  clear, therefore, that  both of them had re-affirmed the acceptance of the award.      This letter  of 14th  August, 1978  was replied  in the form of  a letter dated 4th September, 1978 addressed to the petitioner by  the arbitrator,  that  is  Exhibit  137.  The

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petitioner thereafter  filed a  civil suit for setting aside the decree  passed in  Special Civil Suit No. 84 of 1977 and had also  submitted an application to obtain interim orders. That application  was decided  against him, against which he preferred an  appeal/revision but later on, he withdrawn the said appeal/revision.      During the  course of  the execution  proceedings,  the petitioner 538 preferred a  civil revision application against the judgment and order  passed by the Civil Judge raising practically all the disputes which had been raised by the petitioner in this civil revision application. The same was rejected summarily.      The main  objection to  the award  is that there was no written agreement  signed by  both the  parties to refer the disputes to  arbitration. It  is clear from the narration of facts that  the parties  had agreed  to refer the dispute to the arbitrator.  The award  was signed  by both the parties, about which there is no factual dispute, reiterated the fact that the  parties had  agreed to  refer the  dispute to  the arbitration of  the said  arbitrator and  that  he  made  an award. All  these are  in writing  and  signed  by  all  the parties. This, in our opinion, in the light of the facts and circumstances of the case can certainly be construed to be a proper arbitration agreement in terms of section 2(a) of the Act. In  this  connection  reference  may  be  made  to  the observations of  this Court  in Prasun  Roy v.  The Calcutta Metropolitan Development  Authority and another, A.I.R. 1988 S.C. 205  where all  the relevant  authorities on this point have  been  discussed.  See  also  in  this  connection  the decision of  the  Judicial  Committee  in  Chowdhri  Murtaza Hossein v. Mst. Bibi Bechunnissa, [1876] 3 Indian Appeal 209 at 220.  The observations  in the said decision were made in different context.  But in  the present context, it is clear that  the   conduct  of   the  parties  that  there  was  an arbitration agreement  and by  signing the award it could be said that  the parties  had agreed  to refer the disputes in writing to  the arbitration  of the  named arbitrator.  This agreement was  done twice, firstly by signing an endorsement below the  award and secondly, by entering into an agreement in the  form of  a letter  dated 14th  August, 1978 (Exhibit 40).      In that  view of  the matter,  we are in agreement with the High  Court that  on this  aspect the  petitioner is not entitled to  challenge the award. The High Court has further held that  the revision  before the High Court suffered from res judicata.  The High  Court, in our opinion, was right in doing so.  It was  contended that  the previous  proceedings were without  jurisdiction. We  are unable  to  accept  this contention.  The   Civil  Court  had  jurisdiction  to  take cognizance of the award under sections 14 and 17 of the Act. This question  had come  up  for  consideration  before  the Judicial Committee  in Rajah  Amir Hassan Khan v. Sheo Baksh Singh, 11  I.A. 237.  The Judicial  Committee held that they had perfect  jurisdiction to  decide the  question which was before them  (namely, whether  the suit  was barred  as  res judicata) and  they did  decide  it.  It  was  not  relevant according to the Judicial Committee, 539 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.      Section 9 of the Civil Procedure Code provides that the Courts shall  (subject to  the provisions  herein contained)

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have jurisdiction  to  try  all  suits  of  a  civil  nature excepting  suits   of  which   their  cognizance  is  either expressly or  impliedly barred.  In this  case, there was no such express or implied prohibition nor any inability of the Judge concerned.  In this  connection, it  may be  useful to refer to  the observations  of this  Court in  Seth Hira lal Patni v.  Shri Kali Nath, [1962] 2 SCR 747, where this Court observed that  the validity  of a decree could be challenged in execution  proceedings only  on the ground that the Court which passed the decree was lacking in inherent jurisdiction in the  sense that  it could  not have  seizing of  the case because  the  subject  matter  was  wholly  foreign  to  its jurisdiction or  that the defendant was dead at the time the suit had  been instituted  or decree was passed or some such other ground  which could  have the  effect of rendering the court entirely  lacking in  jurisdiction in  respect of  the subject-matter of  the suit  or over  the parties  to it. In this connection reference may be made to the observations of this Court  in Vasudev  Dhanjibhai Modi  v.  Rajabhai  Abdul Rehman and others, [1971] 1 SCR 66.      Having regard  to all these factors, we are of the view that the  High Court was right in dismissing the application in the manner it did.      In M/s.  Guru Nanak  Fundation v. M/s. Rattan Singh and Sons, [1982]  1 SCR  842, where  this  Court  observed  that interminable, time  consuming, complex  and expensive  court procedures impelled  jurists to  search for  an  alternative forum, less formal, more effective and speedy for resolution of disputes  avoiding procedural  claptrap and this led them to the  Arbitration Act.  However,  the  way  in  which  the proceedings under  the Act  are  conducted  and  without  an exception challenged  in Courts,  has made lawyers laugh and legal philosophers  weep. This  Court further  observed that experience shows  and law  reports hear ample testimony that the proceedings  under the  Act have become highly technical accompanied by  unending prolixity, at every stage providing a legal trap to the unwary. With respect, we could not agree more in the facts and the circumstances of this case.      In the  view, however,  we have  taken  of  the  matter indicated above,  we decline  to interfere with the order of the High  Court. The  special leave  petition fails  and  is accordingly dismissed. N.P.V.                              Petition dismissed. 540