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PETITIONER: CT. A. CT.  NACHIAPPA CHETTIAR AND OTHERS

       Vs.

RESPONDENT: CT. A. CT.  SUBRAMANIAM CHETTIAR

DATE OF JUDGMENT: 13/11/1959

BENCH: GAJENDRAGADKAR, P.B. BENCH: GAJENDRAGADKAR, P.B. SUBBARAO, K. SHAH, J.C.

CITATION:  1960 AIR  307            1960 SCR  (2) 209  CITATOR INFO :  R          1961 SC 908  (20)  R          1967 SC1030  (4)  R          1967 SC1032  (5)  R          1972 SC1507  (22)  RF         1981 SC2075  (14)  D          1988 SC1520  (18)  RF         1990 SC1340  (13,16)  RF         1992 SC 732  (10,20,22,33)

ACT: Arbitration-Partition suit-Preliminary decree-Appeal to High Court-Reference  to  arbitration by  Trial  Court-Competency -Foreign  immoveable  Properties  excluded  by   preliminary decree-Whether reference and award include such  properties- Construction-Indian  Arbitration Act, 1940 (X of  1940),  s. 21.

HEADNOTE: In a suit for partition of the joint family properties filed by  the  respondent  against  his  brother  and  his   sons, appellants  1 to 5 respectively, the latter while  admitting the relationship of the respondent and his half share to the family  properties, pleaded, inter alia, that the court  had no jurisdiction to divide the immoveable properties situated in  Burma and in the Indian State of Pudukottai.  The  trial court  passed  a  preliminary  decree  excluding  from   its operation the aforesaid immoveable properties.  Against  the preliminary  decree appeals were preferred before  the  High Court by the several parties on various grounds, but in  his appeal the respondent did not -challenge the finding of  the trial court that it had no jurisdiction to deal with foreign immoveable properties.  During the pendency of the  appeals, on  the  joint application made by the  parties,  the  trial court  made an order referring for determination by the  two arbitrators  named by them " all the matters in  dispute  in the suit and all matters and proceedings connected therewith ".  In  due course the arbitrators gave an award  which  was then  filed  in  the trial  court.   As  regards  immoveable properties  in Pudukottai the award recited that  since  the parties had separated and the properties in suit before  the arbitrators  had been actually divided by metes and  bounds,

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the  two branches shall enjoy the Pudukottai  properties  in equal  halves;  while with reference to  the  properties  in Burma  the  arbitrators  asked  the  parties  to  hold   the documents of title half and half for safe custody and  added that  when the parties decided to divide the properties  all the documents would have to be 27 210 brought together and a partition made according to law.  The appellant  challenged  the  validity of  the  award  on  the grounds  inter  alia (1) that the reference  and  the  award dealt with immoveable properties in Burma and Pudukottai and so they were   invalid, and (2) that the trial court was not competent to make the order of reference under s. 21 of  the Indian Arbitration Act, 1940.   Held:   (1) that the reference and the award could not  be challenged  on the ground that they purported to  deal  with foreign  immoveable properties because (a) at the time  when the  matters in dispute were referred to arbitration it  was on  the  basis of the finding of the trial  court  that  the court  had no jurisdiction to deal with  foreign  immoveable properties,  and  (b)  the award did  not  divide  the  said properties  or  declare  their shares in  them,  but  merely recited the fact that the parties having become divided  and accepted  a  half share in each of the branches  they  would hold and enjoy the properties half and half.   There  is a distinction between a mere recital of  a  fact and something which in itself creates a title.    Bageshwari  Charan Singh v. Jagarnath Kuari, (1932)  L.R. 53 I.A. 130, relied on.   (2)     that the words " suit " and " court " in s. 20  of the  Indian Arbitration Act, 1940, include  appellate  court proceedings and appellate court, respectively.   Abani  Bhusan  Chakravarthy  and  Others  v.  Hem  Chandra Chakravarthy and Others, A.I.R. 1947 Cal. 93, disapproved.   Thakur  Prasad v. Baleshwar Ahir and Others,  A.I.R.  1954 Pat.  106, Moradhwaj v. Bhudar Das A.I.R. 1955 All. 353  and Subramannaya Bhatta v. Devadas Nayak and Others, A.I.R. 1955 Mad. 693, approved.   (3)that the word " judgment " in s. 21 of the Act means a judgmentwhich finally decides all matters in controversy  in the  suit and does not refer to the various interlocutory  - orders  and judgments that may be passed during the  hearing of the suit.  (4) that  a  judgment delivered by a court in  a  partition suit  which  is followed by a preliminary decree  is  not  a final  judgment  in  the  suit and  that  a  court  after  a preliminary decree has been passed has jurisdiction to  make an order of reference under s. 21 of the Act.     Jadu  Nath  Roy  and Others v.  Paramesway  Mullick  and Others, (1939) L.R. 67 I.A. 11, relied on.   (5)     that where a preliminary decree has been drawn  up and  an  appeal has been filed against it,  both  the  trial court  and the appellate court are possessed of the  matters in  dispute in part and it would be open to either court  to make an order of reference in respect of all the matters  in dispute between the 211 parties; that as in the present case proceedings  subsequent to  the  preliminary decree were pending  before  the  trial court,  the latter was competent to act under S. 21  of  the Act.

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JUDGMENT:   CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  112  to 116 of 55.   Appeals  from  the  judgment  and  order  dated   December 14,1951, of the Madras High Court, in AAO 210 of 1946, C. M. Ps.  Nos. 3273 and 3274 of 1946, AAO 661 of 1946, and AAO 49 of 1947 respectively, arising out of the judgment and  order dated   January   28,  1946,  of  the   Subordinate   Judge, Devakottah, in 1. A. No. 18 of 1945 in O. S. No. 91 of 1941. A.   V. Viswanatha Sastri, K. Parasaran and M.S.K. Aiyangar, for the appellants. K.   Rajah  Iyer, R. Rangachari and R. Ganapathy  Iyer,  for the respondent. 1959.  November 13.  The Judgment of the Court was delivered by GAJENDRAGADKAR J.-These five appeals arise from a  partition suit  (O.S.  No.  91  of  1941)  filed  by  the   respondent Subramanian   Chettiar  against  his  brother  Ct.  A.   Ct. Nachiyappa  Chettiar  and his four sons, appellants 1  to  5 respectively,  in  the  court of the  Subordinate  Judge  of Devakottai, and they have been brought to this Court with  a certificate  granted by the High Court of Madras under  Art. 133 of the Constitution.  The principal appeal in this group is  Civil Appeal No. 112 of 1955 and the questions which  it raises for our decision relate to the validity of the  award made  by  the  arbitrators to whom the  matters  in  dispute between  the  parties  were referred  pending  the  present- litigation.  It would, however, be convenient at the  outset to state broadly the material facts leading to the suit  and indicate  the  genesis  and nature of  the  five  respective appeals.   The   appellants   and  the  respondent  belong   to   the Nattukottai  Chettiar  community and their family  which  is affluent  had  extensive money-lending  business  in  Burma. Chidambaram  Chettiar,  the father of appellant  1  and  the respondent,  died  on August 20, 1926.  At the time  of  his death the respondent was an 212 infant  6  years  of  age.  Appellant  1  had  already  been associated with his father in the management of the business and on his father’s death he became the      manager of  the family and took charge of its affairs   and  business.    On September 6, 1941, the respondent gave notice to appellant 1 calling  upon  him  to  effect a  partition  and  to  render accounts of his management and the properties of the family. This  demand  was not complied with and  so  the  respondent instituted the present suit on September 24, 1941.  According to the plaint the assets of the family  consisted of  immoveable properties in India which was then  described as British India and in Pudukottai, an Indian State.   These consisted of Items Nos, 1 to 12 and Item No. 13 respectively in  Sch.   ’A’.  The jewels and moveables belonging  to  the family were set out in Sch.  ’B’, whereas two  money-lending firms  which  the family owned and conducted at  Minhla  and Sitkwin  in  Burma  were set out in Schs.  ’ D ’  and  ’E  ’ respectively.   The plaint further alleged that  Chidambaram Chettiar  had entered large amounts belonging to the  family in,  the  names  of the members of the family  in  what  are called  Thanathu  maral  accounts  and  these  amounts  were invested  in various firms or lent to  several  individuals. The  total of these investments came to about Rs.  15,00,000 described in Sch.  ’C’.  The assets thus described in  Schs. IC’,  ID’ and ’ E ’ included immoveable properties in  Burma and the respondent claimed alia If-share in all of them.  It appears  that the family had endowed several  properties  in

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favour  of charities and they were described in Sch.  ’  F’. The  respondent claimed that in effecting partition  between the parties a scheme should be framed for the management  of the said respective charities.  According to the  respondent appellant I had in the course of his management  manipulated accounts and had in fact misappropriated large amounts,  and so he claimed an account from appellant 1. That in brief  is the  nature  of  the claim made by  the  respondent  in  his plaint.  At  the date of the suit appellants 3 to 5 were minors  and they  were  represented by appellant 1. It  appears  that  a written statement was filed by appellant 1 for 213 himself  and  as  guardian of his minor sons  in  which  the relationship  of  the respondent and his half-share  to  the family properties were admitted.  Several contentions  were, however,  raised with reference to the properties  available for partition.  It was alleged that Items Nos. 10 and 11  in Sch.   ’A’  were  dedicated  to  charity  and  as  such  not divisible  and that Item No. 3 was being used as  a  school. The written statement referred to some more properties which had not been included in the plaint though they were  liable to partition.  In regard to the jewels and moveables it  was contended  that several items not belonging to  the  family, and some not even ’in existence, bad been shown in the  said schedule.  It was also alleged that some of the jewels shown in  the said schedule belonged to the several appellants  as their separate property.  Then as regards the Thanathu maral accounts  the  appellants  gave a detailed  history  of  the amounts  and  their investments.  It was admitted  that  the said  amounts belonged to the family though the  investments had  been made in the names of the different members of  the family.  It was, however, urged that the total value of  the assets  enumerated in Sch.  ’C ’ would be only Rs.  9,00,000 and  not  Rs. 15,00,000 as alleged by the  respondent.   The respondent’s case that appellant I had manipulated  accounts and  misappropriated  family funds was denied,  and  it  was urged  that for the purpose of partition the assets  of  the family as they stood on the date of the partition should  be taken  into account.  The appellants also pleaded  that  the court   had  no  jurisdiction  to  divide   the   immoveable properties situated in Burma.  According to them there was a special  practice  obtaining  among  the  families  of   the Nattukottai Chettiar community according to which  appellant I  was entitled to a decent remuneration for the  management of  the joint family business and properties.  According  to another custom pleaded by the appellants it was alleged that provision  had  to  be made for future  Seermurais  for  the unmarried  daughters  of the family.  Broadly  stated  these were the pleas raised by appellants 1 and 3 to 5.  Appellant 2 who was a major filed a separate written 214 statement generally adopting the written statement filed  by appellant  1  ; nevertheless he put the  respondent  to  the strict proof of the allegations made by him in the plaint in support of his claim. In  reply to the contentions thus raised by  the  appellants the respondent filed a reply.  In this statement he  pleaded inter alia that there was a custom amongst the community for a  member  of the joint family to set up a  separate  family after marriage and that monies drawn by him thereafter would be entered in a separate account called Pathuvazhi and  that at  the time of the partition the amounts appearing  in  the said  account  would  be debited to the  said  member.   The respondent claimed that account should be made in accordance

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with  this custom in affecting the partition of the  family. On  these pleadings the learned trial judge  framed  fifteen issues. It  appears that an attempt Was made by the parties to  have their  disputes  referred  to arbitration,  and  in  fact  a reference  was  made  on April 6,  1943,  but  this  attempt proved,  abortive  and  the suit was set  down  for  hearing before  the  court, and the hearing  actually  commenced  on December   11,  1943.   Meanwhile,  on  December  6,   1943, appellant  2 filed an application under 0. 8, r. 9,  of  the Code of Civil Procedure for permission to file an additional written  statement.  This application was numbered as I.  A. No. 988 of 1943.  It would be relevent to refer to the  plea which  appellant 2 sought to raise by this application.   He alleged that the deceased Chidambaram Chettiar bad set apart on March 25, 1925, two sums of money of Rs. 2,10,251-4-0 each separately in the name of the respondent and  appellant I  so  as to vest the same in them forthwith, and  he  urged that  these  amounts  and  their  accretions  were  not  the properties  of the family liable to partition in  the  suit. This application was opposed by the respondent.  On December 14, 1943, the trial judge dismissed the said application  on the  ground that it sought to raise a new  and  inconsistent plea  and that had been really inspired by appellant  1.  On December 29, 1943, the learned judge delivered his  judgment in the suit and it was followed by a preliminary decree. 215 Against  this decision three appeals were  preferred  before the  High Court of Madras.  A. S. No. 115 of 1948 was  filed by appellant 2 and No. 199 of 1944 by appellants 1, 3 to  5, whereas A. S. No. 499 of 1944 was  filed by  the respondent. It appears that under his appeal No. 115 of 1944,  appellant 2 made an application for stay of further proceedings before the  Commissioner  (C.M.P.  No.  1402  of  1944).   On  this petition  the High Court ordered that there was no  need  to stay  all  proceedings before the Commissioner and  that  it would be enough if the passing of the final decree alone was stayed.   As a result of this order interim stay  which  had been granted ex parte was vacated.  After the final order on this  application was passed the Commissioner commenced  his enquiry, but before the enquiry could make any progress  the parties decided to refer their disputes for arbitration.  Accordingly on July 18, 1944, a joint application was filed by  the  parties before the trial judge  requesting  him  to refer  to  the arbitration of Mr. VE.  RM.   AR.  Ramanathan Chettiar  of  Kandanoor  and  RM.   AN.  S.  RM.   Chellappa Chettiar  of Kothamangalam " all matters in dispute  in  the suit and all matters and proceedings connected therewith  ". An application under 0. 32, r. 7, was also filed since three of  the  parties to the dispute were minors.   On  July  21, 1944,  the  trial  court allowed the  said  application  and certified that the proposed reference was for the benefit of the  minors and so referred " the matters in dispute in  the suit  and all matters and proceedings connected therewith  " for  determination  by  the two  arbitrators  named  by  the parties.  The  arbitrators then began their proceedings and  made  an interim  award on August 1, 1944.  It was followed by  their final award on December 6,1944.  This award was filed in the trial court.  On January 3, 1945, the appellants filed a petition (I.  A. No.  18  of  1945)  under  ss.  30  and  31  of  the  Indian Arbitration  Act  (hereinafter  called the  Act).   By  this petition  the appellants urged that the award should be  set aside  on  the grounds enumerated by them in  the  petition.

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Their case was that the reference to arbitration 216 had been brought about by coercion and undue influence, that the arbitrators had not held any proper Chettiar enquiry and that  they  were  partial and biased.  Thus  the  award  was sought to be set aside on the ground that the reference  was bad and that the arbitrators were guilty of misconduct.  The validity  of the award  was- also challenged on  the  ground that’ both the reference and the award were invalid  because they contravened the principle of private international  law that  courts  in one country would have no  jurisdiction  to adjudicate  on  title to immoveable property situated  in  a foreign country or to direct its division; the reference and the  award dealt with immoveable properties in Burma and  so they  were invalid.  The appellants further  contended  that the  reference  to  arbitration was opposed  to  the  orders passed by the High Court in C.M.P. No. 1402 of 1944, and  as such it was invalid.  This  application  was  resisted  by  the  respondent.   He traversed  all  the allegations made by the  appellants  and claimed  that  a  decree in terms of  the  award  should  be passed.   At the hearing of this petition no  oral  evidence was led by the parties; they were content to base their case on the documents produced on the record and on points of law raised by them.  The  trial  judge rejected the appellants’ case  about  the alleged  misconduct of the arbitrators.  He also found  that there was no substance in the contention that the  reference was  the  result  of undue influence or  coercion.   He  was satisfied that the arbitrators had made a proper enquiry and that the award was not open to any objection on the  merits. He,  however,  held that the reference  to  the  arbitrators which  included  matters in dispute in  the  suit  comprised questions  of title in relation to immoveable properties  in Burma,  and so it was without jurisdiction and invalid.   In his opinion the reference also included the dispute relating to  the sums of Rs. 2,10,251-4-0 which had been  entered  in the   Thanathu  maral  accounts  of  appellant  1  and   the respondent  and that this part of the reference  contravened the  order  passed by the High Court in C.M.P. No.  1402  of 1944.  He thus upheld these two 217 contentions  raised  by  the appellants and  set  aside  the reference and the award.  It was against this order that the respondent preferred C.M.A. No. 210 of 1946.  The High Court has allowed the respondent’s appeal.  It has confirmed the findings of the trial court in respect of  the pleas  raised by the appellants as to the misconduct of  the arbitrators  and as to the invalidity  of  the  reference on the  ground  that it was the result of  coercion  and  undue influence.  It has, however, reversed the conclusions of the trial  court that the reference and the award  were  invalid inasmuch  as they related to immoveable properties in  Burma and  contravened  the stay order passed by the  High  Court. The  High Court has construed the order by  which  reference was  made to the arbitrators in the present  proceedings  as well as the award and has held that they are not open to  be challenged  on  either  of  the two  grounds  urged  by  the appellants.   It was also urged before the High  Court  that the  order of reference was invalid because under s.  21  of the  Act,  the  trial court was not competent  to  make  the reference;  this contention has been negatived by  the  High Court.   In  the result the High Court has  found  that  the reference and the award were valid and it has directed  that a  decree  should be passed in terms of the  award.   It  is

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against  this  decision that Civil Appeal No.  112  of  1955 arises;  and,  as we have already mentioned,  the  questions which it raises relate to the validity of the award on which the  two  courts  have differed.  Before we  deal  with  the merits  of  these points, however, we may indicate  how  the other appeals arise.  In  A. S. No. 115 of 1944 filed by appellant 2  before  the High Court the appellant presented Miscellaneous Application C.M.P. No. 2374 of 1946 under 0. 23, r. 3, for an order that the  interim  award (Ex.  P. 15) passed by  the  arbitrators which  had been signed by all the parties in token of  their consent  should  be  treated as a compromise  and  a  decree passed  in  accordance with it under 0. 23, r. 4.  The  High Court  has observed that in view of its decision  in  C.M.A. No. 210 of 1946 it was really unnecessary to pass any  order in  this  appeal; but it thought that since the  matter  was likely to go 28 218 in appeal to this Court it would be better to make a  formal order  and direct that a decree in terms of  the  sayinterim award  should  be  drawn under 0. 23,  r.  3.  Against  this decision the appellants- have preferred Civil Appeal No. 116 of 1955 in this Court.  The appellants had made a similar application in A. S.  No. 199 of 1944 and it was numbered as C.M.P. No. 3273 of  1946. The  High  Court has allowed this  application  for  similar reasons and its decision has given rise to Civil Appeal  No. 115 of 1955.   In  the trial court the appellants had filed  two  similar applications  under 0. 23, r. 3; but they had been  rejected by  the  trial  court; these orders had given  rise  to  two appeals in the High Court, C.M.A. No. 661 of 1946 and C.M.A. No.  49 of 1947.  The High Court has allowed  these  appeals and has ordered that a decree in terms of compromise  should be passed under 0. 23, r.     3.  Against  the  orders  thus passed by the High Court in   these   two   appeals,   Civil Appeals Nos. 113 and 114 of   1955, have been filed in  this Court.   That  is  the  genesis  and  nature  of  the   four subsidiary appeals in the group.  We will now revert to  the points  which arise for our decision in the principal  Civil Appeal No. 112 of 1955. The first ground on which the validity of the reference  and the award is challenged is based on the assumption that  the reference  involved  the  determination  of  the  title   to immoveable  properties  situated in Burma  and/or  that  the award  has actually determined the said question  of  title. The  appellants  contend  that there can be  no  doubt  that courts  in  this country have no jurisdiction  to  determine questions  of title in respect of immoveable  properties  in foreign  countries  or to direct a division  thereof.   This position is not and cannot be disputed.  The rule of law  on this subject has been thus stated by Dicey: "The courts of a foreign country have no jurisdiction to adjudicate upon  the title  or  the  right to the possession  of  any  immoveable property  not situate in such country."(1) It is also  urged that where a court has no jurisdiction to determine any  (1) Dicey’s " Conflict of Laws ", 6th Ed., pp. 141 and 348. 219 matter  in  controversy  such as the question  of  title  in respect  of  the  foreign  immoveable  property  it  has  no jurisdiction  to  refer  it for  the  determination  of  the arbitrators.   This  position  also is  not  and  cannot  be disputed.   The  appellants  further  argued  that  if   the reference  includes  properties  over which  the  court  had jurisdiction  as  well  as  those  over  which  it  had   no

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jurisdiction the whole of the reference becomes invalid  and in such a case it is not permissible to separate the invalid part  of  the  reference  from that  which  is  valid.   The correctness   of   this  contention  is  disputed   by   the respondent; but, for the purpose of the present appeal,  the respondent is prepared to argue on the assumption that  even this  contention is well-founded.  The respondent’s case  is that  neither the reference nor the award purports  to  deal with any immoveable property in Burma; and so the  challenge to the validity of the reference and the award on the  legal points  raised  by the appellants cannot  succeed.   It  is, therefore, necessary to examine the reference and the  award and  decide  whether  the factual  assumption  made  by  the appellants  in  urging  their  legal  grounds  against   the validity of both the reference and the award is justified. In  dealing  with  this question it is  necessary  first  to ascertain the scope of the request made by the parties  when they  applied  to  the trial court for  reference  of  their dispute  to arbitration.  In their application (Ex.  P.  12) the  parties  have  briefly  indicated  the  nature  of  the respondent’s claim and have stated that the dispute  between the  parties was then pending before the High Court  in  the form of three appeals preferred by them.. Then it is averred that  appellants 3 to 5 are minors but it is added that  the proposed  reference  was for their benefit  and  so  another application  had  been  separately  made  for  the   court’s sanction  to  the  said reference in  respect  of  the  said minors.    The  parties  desire  and  agree  ",   said   the application,  that all matters in dispute in this  suit  and all  matters and proceedings connected therewith  should  be referred  to  the  unanimous  decision  of  the  two   named arbitrators".  They had also agreed that they would abide by the 220 unanimous   decision  of  the  arbitrators  and   that   the arbitrators should be empowered to partition the  properties of  the  joint family between the parties and  if  necessary also  by  payment of monies to equalise the shares  and,  to take  the. necessary accounts and to decide all  matters  in dispute  between  them  including costs.   The  parties  had further agreed to produce their own papers and copies before the  arbitrators  and  that if the  arbitrators  needed  any further  papers, accounts or documents which had been  filed in   court  they  should  be  authorised  to   require   the Commissioner to send them to the arbitrators.  It is on this application that the court made the order that " all matters in  dispute  in this suit and all  matters  and  proceedings connected  therewith " be referred for determination to  the two  named  arbitrators, The question which arises  for  our decision  is: What was the scope and extent of  the  matters thus  referred  to arbitration ?  In other words,  did  this order  of  reference include the respondent’s  claim  for  a share in the immoveable properties in Burma ?  The appellants contend that the order of reference includes not  only  all matters in dispute in the suit but  also  all matter,-, and proceedings connected therewith and their case is  that  these  clauses  are wide  enough  to  include  the respondent’s claim for a share in the immoveable  properties in  Burma.  There is no doubt that the latter clause  refers to matters and proceedings connected with the suit; but  the appellants’  contention  can be upheld only if it  is  shown that the respondent’s claim for a share in the properties in Burma  was  connected  with the suit or was a  part  of  the matters connected with it at the material time.  What then was the nature and extent of the dispute  between

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the  parties  at  the material time?   Let  us  examine  the pleadings  of  the parties, the issues framed by  the  trial court, the decision of the trial court on them and ascertain the nature and extent of the subsisting dispute between them which was pending in the High Court in the three  respective appeals.   There  is  no  doubt  that,  in  his  plaint  the respondent had claimed a share in the immoveable  properties in 221 Burma.  In regard to this claim his allegation was that with the  aid of the advances made by the family  firms  in Burma and  of  those in the accounts described as  Thanathu  maral accounts, lands and other properties had been purchased  and they formed part of the assets of the firms and the Thanathu maral accounts.  The written statement filed by appellant  1 admitted that there were Thanathu maral transactions  during the lifetime of Chidambaram Chettiar and that all sums taken from  the  family assets, though invested for  the  sake  of convenience  in the name of one or the other member  of  the family,  belonged  to  the family and had  been  treated  as family  assets.  According to the appellants,  however,  the extent   of  the  Thanathu  maral  transactions   had   been exaggerated  by  the respondent.  On the whole  the  written statement clearly admitted that the branches of appellants 1 to  5 on the one hand and of the respondent and his  son  on the  other  are  entitled to a, half-share  each;  but  they pleaded that the said shares have to be allotted only  after making some provisions out of the joint family funds for the payments of the future Seermurai etc., due to the  unmarried daughters in the family.  They also contended that the court had  no jurisdiction to divide the immoveable properties  in Burma  though  it  was  admitted  that  the  respondent  was entitled  to  the relief in respect of the division  of  the family  assets as set forth in the written statement.   This written  statement  was adopted by appellant 2 though  in  a general  way be denied the allegations in the  plaint  which had  not  been  expressly admitted by  him  in  his  written statement.   It  would thus be seen  that  the  respondent’s share  in the family properties was not in dispute  nor  was his  share in the properties in Burma seriously  challenged. The only plea raised in respect of the latter claim was that the  court bad no jurisdiction to deal with it.  This  state of  the pleadings in a sense truly reflected the  nature  of the  dispute between the parties.  It is common ground  that the  family is a trading family and there could be no  doubt that  the  assets of the family were  partible  between  the members of the family.  It was on these 222  pleadings  that the trial judge framed fifteen  issues  and set  down  the case for hearing. At  this  stage  appellant 2  wanted to  go  back  upon  his written  statement by making further and  additional  pleas. That  is  why he filed an application (Ex.  P.  3  (a))  for leave  to file an additional written statement.  As we  have already mentioned this application was rejected by the trial court;  but  for  our  present purpose  it  is  relevant  to consider  the  pleas  which  he  wanted  to  raise  by  this additional statement.  He wanted to contend that the amounts set  apart  in  favour of appellant  1  and  the  respondent respectively  by their father remained  invested  distinctly and  separately  during his lifetime and that  in  law  they ought to be taken to be separate properties belonging to the two  respective  branches.  In other words,  the  plea  thus sought to be raised was that by reason of the investment  of the  amounts in the names of appellant 1 and the  respondent

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respectively the said amounts constituted the individual and separate  monies  of the respective persons and  became  the separate  properties  of their branches.  Appellant  2  thus raised  a  Contention  about the character  of  the  amounts invested  by  the deceased Chidambaram Chettiar in  the  two names  of his sons respectively and in that sense the  issue which  he sought to raise was in regard to the character  of the  amounts themselves.  It had no direct reference to  any immoveable properties in Burma. Since the trial court refused to allow appellant 2 to  raise this additional plea he proceeded to try the issues  already framed  by him, and, as we have already indicated,  he  held that  he  had  no  jurisdiction  to  deal  with   immoveable properties in Burma, and appointed a Commissioner to make an enquiry  in  pursuance  of  the  preliminary  decree.    The preliminary decree in terms excluded from its operation  the immoveable  properties  in Burma as well as  in  the  Indian State   of  Pudukottai.   In  the  proceedings  before   the Commissioner parties agreed that the properties in Burma and Pudukottai  should be left out of account and so no  dispute appears 223 to  have  been raised before him that the  accounts  of  the firms in Burma should be taken by him.  In the appeal filed by the respondent against this preliminary decree he did not challenge the decision  of the trial  court  that  he  had no  jurisdiction  to  deal  with immoveable  properties  out of British  India.   His  appeal raised some other points which it is unnecessary to mention. This fact is very significant.  It shows that the respondent accepted the finding of the trial court and did not want the High Court to consider his claim for a share in the excluded properties.   In the appeal preferred by appellant 2 he  had urged  inter alia that the trial court should  have  allowed him to raise the additional pleas and it appears that he had also raised a point that the trial court bad no jurisdiction to direct a division of the moveable properties of the firms in  Burma.   The grounds taken by appellant 2  in  his  memo leave  no  manner of doubt that none of the pleas  which  he sought  to raise before the High Court had any reference  to immoveable  properties  in Burma.  It is,  therefore,  clear that  in none of the three appeals pending before  the  High Court  was  it  urged  by  any  party  that  the  immoveable properties  in Burma should be brought within the  scope  of the partition suit. The application made by the parties for arbitration to which we  have  already  referred has  deliberately  set  out  the pendency  of  the  three appeals in the High  Court  at  the material  time  in  order  to  furnish  the  background  for determining  the extent and nature of the dispute which  was sought  to  be referred to  arbitration.   The  respondent’s claim  for a share in the properties outside India had  been negatived  by the trial court and the decision of the  trial court had become final because it was not challenged by  the respondent and so there can be no doubt that the said  claim was-  outside  the  purview of the dispute  which  was  then pending between the parties in the High Court.  It was  not, and could not have been, intended to be a matter in  dispute in   the  suit  between  the  parties  or  any  matter   and proceedings connected therewith.  Therefore we are satisfied that the High 224 Court  was  right  in  coming to  the  conclusion  that  the reference  did  not  include any claim with  regard  to  the immoveable properties in Burma.

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It  is,  however, urged that the reference did  include  the points   raised  by  appellant  2  in  his   appeal   before the High Court; and that no doubt is true.  But what is  the effect  of the said grounds raised by appellant 2 ?   As  we have already pointed out the said grounds did not raise  any question about immoveable properties in Burma.  They  merely raised a dispute about the character of amounts invested  by the deceased Chidambaram Chettiar in the names of  appellant 1  and  the respondent respectively.  It was  a  dispute  in regard to monies or moveables and so appellant 2 was  driven to contend that the trial court had no jurisdiction to  deal with  such moveables.  This contention is obviously  without substance and has not been raised either in the courts below or  before  us.   The  only  argument  raised  is  that  the reference included claims in regard to immoveable properties in Burma and this argument cannot be supported on the ground of the pendency of the appeal by appellant 2 before the High Court because, even if the said appeal was allowed, it could have  no  reference to any immoveable properties  in  Burma. Thus the attack against the reference on the ground that  it included immoveable properties in Burma must fail.  Does the award deal with the said immoveable properties  in Burma  ?  That  is  the next  question  which  falls  to  be considered.  -If  it  does, it would  be  invalid  not  only because   it  purports  to  deal  with  foreign   immoveable properties but also for the additional reason that it is  in excess  of  the terms of reference.  At the hearing  of  the present appeals in this Court Mr. Viswanatha Sastri, for the appellants,  attempted  to  criticise the  decision  of  the arbitrators on several grounds; but we did not allow him  to raise  any  contentions  against the  merits  of  the  award because both the courts below have rejected the  appellants’ objections  in that behalf, and in view of their  concurrent findings it would not be open to the appellants to raise the same points over again.  That is why we would 225 confine  ourselves  to those portions of  the  award  which, according  to  the  appellants, show  that  the  arbitrators divided the immoveable properties in Burma and Pudukottai. In regard to the properties in Pudukkottai this is what  the award  says  in  paragraph  3:  "  The  plaintiff    and the defendants  shall  enjoy  them  in  equal  halves  as  under marukkal  kuttu.  In proportion to their respective  shares. the  plaintiff  shall  pay one-half of  the  taxes  and  the defendants  1  to  5 the other half.   Since  the  aforesaid property  has  been situate in Pudukottai State it  has  not been  divided on the good and bad qualities of the soil;  if it is necessary, the plaintiff and the defendants shall have it divided in equal halves later on when required." In  regard  to the properties in Burma, paragraph 1  of  the award  recites that " after communications are  restored  in Burma  the plaintiff and the defendants have to  divide  the firms in Burma at the places Minhla and Sitkwin belonging to them  and  the  lands,  godowns,  homes,  gardens  and   the properties  items,  bank  deposits,  jewels,  movables,  all assets etc., and the subsequent income attached thereto into two  halves; and the plaintiff has to take one half and  the defendants  the other, half ". Paragraph 2 adds  that  since both   the  parties  have  agreed  to  divide  the   movable properties   attached  to  the  said  shop  later   on   the arbitrators had not divided them.  The award has also stated that  the sale deeds at Alagapuri and relating to the  lands attached  to the said firms have been divided into two  lots and for the purpose of safe custody two lists known as Schs. A and B have been prepared and both parties have signed  the

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lists.  Later on, at the time of division of the said lands, firms  and  assets,  all the documents  shall  be  collected together  and the parties shall take the documents  relating to their respective shares.  The arbitrators then dealt with the additional plea  sought to  be raised by appellant 2, and in substance they  refused appellant  2  permission  to raise that  plea  because  they thought that having regard to the conduct of the parties  it was futile to raise such a plea.  That is why they  directed that " the plaintiff’s branch 29 226 and  the defendant’s branch have shares in all  the  amounts and  they added that their conduct fully justified the  said conclusion and the parties agreed to it.  "  It  is these portions of the award on which the  appellants based   their  contention  that  immoveable  properties   in Pudukottai   and   Burma  have  been  dealt  with   by   the arbitrators.   In our opinion this contention is  not  well- founded.   What the arbitrators have done is to  divide  the properties which were then the subject-matter of the dispute between the parties; and having done so they have  indicated what  the legal position of the parties would be in  respect of the properties outside the dispute.  In appreciating  the effect  of the words used in the award we must bear in  mind that  the  arbitrators  were laymen not  familiar  with  the technical significance of legal expressions, and so we  must read  the  relevant  clauses  as a  whole  with  a  view  to determine  what  in effect and substance  they  intended  to decide.   Now  take  the  recitals  in  the  award  to   the Pudukottai properties.  The award expressly states that  the properties  had  not  been  divided by  them  and  that  the plaintiff and the defendants shall have them divided when so required.  All that the award says is that since the parties had  separated  and  the  properties  in  suit  before   the arbitrators  had been actually divided by metes and  bounds, the  two branches shall enjoy the Pudukottai  properties  in equal  halves.  This clause in the award cannot be  said  to divide the said properties or even to determine their shares in  them.  The shares of the parties in the said  properties were  admitted and so the award merely says that as  divided members  they  will hold and enjoy the properties  half  and half.    Similarly in regard to the properties in Burma the  award expressly  states  that  the said properties  had  not  been divided and it merely refers to the true legal position that they  would  be enjoyed by the two branches half  and  half. The  arrangement proposed by the arbitrators in  respect  of the  immoveable  properties in Burma  is  very  significant. They merely asked the parties to hold the documents of title half and half for 227 safe  custody  and  they have added that  when  the  parties decide to divide the properties all the documents would have to  be  brought together and a partition made  according  to law.  That again is an  arrangement dictated  by commonsense and  cannot be said to amount to a decision in any way.   It is not as if the award declares the shares of the parties in respect of the properties.  What it does is no more than  to state  the true and admitted legal position of the  parties’ rights in respect of the said properties. In  this  connection  it would be useful  to  refer  to  the observations  made by Viscount Dunedin in Bageshwari  Charan Singh  v.  Jagarnath  Kuari (1).  In  that  case  the  Privy Council  was called upon to consider the question about  the

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admissibility  of  a petition which was relied  upon  as  an acknowledgment  of liability under s. 19, sub-s. (1) of  the Limitation Act; and it was urged that the said petition  was inadmissible  because it purported or operated to create  or declare  a  right  to immoveable property and  as  such  was compulsorily  registrable  under s. 17(1)(b) of  the  Regis- tration   Act,  1908.   In  urging  the  objection  to   the admissibility  of  the  petition a large  Dumber  of  Indian decisions  were cited before the Privy Council dealing  with the word " declare " used in s. 17(1)(b) of the Registration Act,  1908;  and  it was apparent that  there  was  a  sharp conflict  of  views.   In  Sakha  Ram  Krishnaji  v.   Madan Krishnaji (2), West, J., had observed that the word  declare in  s.  17(1)(b) is placed along with ’create’   ’assign’  ’ limit  ’ or ’ extinguish ’ a right, title or  interest,  and these words imply a definite change of legal relation to the property  by an expression of will embodied in the  document referred  to, and had added that he thought that is  equally the case with the word "declare".  On the other hand certain other decisions had construed the word " declare " liberally in a very wide sense and it was on those decisions that  the objection against admissibility of the petition was founded. In  repelling  the  objection  Lord  Dunedin  observed  that "though the word (1)  (1932) I.L.R. 11 Pat. 272; 53 I.A. 130. (2)  (1881) I.L.R. 5 Bom. 232. 228   "  declare  "  might be given a  wider  meaning  they  are satisfied that the view originally taken by West, J.,  is right.   The distinction is between a mere recital  of  fact and  something  which  in itself  creates  a  title."  These observations  assist  us  in deciding  the  question  as  to whether  the  impugned  portions of the  award  declare  the parties’  rights  in immoveable properties in the  sense  of deciding them as points or matters referred to  arbitration. In  our opinion, the High Court was right in answering  this question against the appellants.  Therefore the award is not open to the attack that it deals with immoveable  properties out of the jurisdiction of the court. That  takes  us  to the next ground of  attack  against  the validity  of  the  award.   It  is  urged  that  the   award contravenes  the order passed by the High Court on the  stay petition filed before it by appellant 2. There is,  however, no  substance in this contention.  All that the  High  Court directed was that pending the final decision of the  appeals before  it a final decree should not be drawn.  In fact  the High  Court  clearly observed that there was no  reason  for staying all the proceedings pending before the Commissioner. That  is  the  usual order made in such  cases,  and  it  is difficult to appreciate how this order has been  contravened by  reference to arbitration or by the award  that  followed it.   The  award is not and does not purport to be  a  final decree  in  the proceedings and the proceedings  before  the arbitrators  substantially correspond to the proceedings  of the  enquiry  which the Commissioner would  have  held  even under  the  order  of  the  High  Court.   Therefore   this, contention must also fail.  We must now consider another objection against the validity of the reference which has been seriously pressed before us. It  is  urged that the reference and the award  are  invalid because the trial court was not competent to make the  order of reference under s. 21 of the Act.  Section 21 reads thus:   " Where in any suit all the parties interested agree  that any  matter in difference between them in the suit shall  be referred to arbitration, they

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229 may  at  any  time before judgment is  pronounced  apply  in writing to the Court for an order of reference." Two  conditions must be satisfied before an  application  in writing  for reference is made.  All the interested  parties to  the  suit  must  agree to obtain  a  reference  and  the subject-matter  of  the  reference must  be  any  matter  in difference between the parties in the suit.  When these  two conditions are satisfied the application for reference  must be made at any time before the judgment is pronounced.  Thus broadly  stated the construction of the section presents  no difficulty.  But when we analyse the implications of the two conditions and seek to determine the denotation of the  word " court " difficulties arise.  What does the word it  court" mean in this section?  According to the appellants " court " means  the court as defined by s. 2(c) of the Act.  S.  2(c) define,% the " court " inter alia as " a civil court  having jurisdiction  to decide the questions forming  the  subject- matter  of the reference if the same had been  the  subject- matter  of a suit " ; and this prima facie means  the  trial court.   The argument is that an order of reference  can  be made only by the trial court and not by the appellate court, and  so there can be no reference after the suit is  decided and  a  decree  has been drawn up  in  accordance  with  the judgment of the trial court.  In the present case a judgment had  been  delivered by the trial court  and  a  preliminary decree  had been drawn in accordance with it, and  so  there was no scope for making any order of reference.  That is the first part of the argument which must be carefully examined.   Does  the  "court" in the context mean the trial  court  ? This  construction cannot be easily reconciled with  one  of the conditions prescribed by the section.  After a decree is drawn  up  in  the trial court and an  appeal  is  presented against it, proceedings in appeal are a continuation of  the suit; and speaking generally, as prescribed by s. 107 of the Code  of  Civil Procedure the appellate court  has  all  the powers  of the trial court and can perform as nearly as  may be  the  same duties as are conferred and  imposed  on  the- trial court. 230  If that be so, during the pendency of the appeal can it not be  said that matters in difference between the  parties  in suit  continue  to  be matters in dispute  in  appeal?   The decision of the appeal can materially  affect the nature and effect  of the decree under appeal ; and there is  no  doubt that all the points raised for the decision of the appellate court can be and often are points in difference between them in the suit; and, in that sense, despite the decision of the trial  court the same points of difference in suit  continue between  the parties before the appellate court.  If  during the pendency of such an appeal parties interested agree that any  matter in difference between them in the appeal  should be  referred to arbitration the first two conditions of  the section  are,  satisfied.   When  s.  21  was  enacted   did Legislature intend that during the pendency of the appeal no reference  should be made even if the parties satisfied  the first two conditions prescribed by the section ? In  considering  this  question it  would  be  relevant  and material  to  take  notice of the fact  that  prior  to  the passing  of  the Act in 1940 the  longstanding  practice  of Indian  courts was to refer to arbitration disputes  pending before the appellate court between the respective parties to the  appeals.   If  the  object of enacting  s.  21  was  to prohibit such reference at the appellate stage it would,  as the  High  Court has observed, cause " a revolution  in  the

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existing practice ". Was such a revolution really intended ? Having  regard to the fact that the words used in s. 21  are substantially  the same as those used in Sch. 11,  paragraph 1, of the earlier Code, it would be difficult to to  sustain the  plea that the enactment of s. 21 was intended to  bring about  such a violent departure from the existing  practice. If  that had been the intention,of the Legislature it  would have  made appropriate changes in the words used in  s.  21. There-fore, the word " court " cannot be interpreted to mean only  the  trial  court  as  contended  by  the  appellants. Similarly,  the  word " suit " cannot be  construed  in  the narrow sense of meaning only the suit and not an appeal.  In our opinion, "court" in s. 21 includes 231 the  appellate court proceedings before which are  generally recognised as continuation of the suit,; and the word " suit "  will  include such appellate proceed_ ings.  We  may  add that whereas s. 41 of the Act is  consistent with  this view no other section militates against it. The next question is: When can an application for  reference be made ? The section prescribes that it can be made at  any time before the judgment is pronounced.  It has been  fairly conceded before us that the word "judgment" cannot refer  to the  various interlocutory orders and judgments that may  be passed  during  the hearing of the suit; and so the  word  " judgment" cannot be given the meaning assigned to it by s. 2 (9)  of  the  Code.   It cannot  mean  in  the  context  the statement  given by the judge of the grounds of a decree  or order.   It must mean a judgment which finally  decides  all matters in controversy in the suit.  Thus it follows that it is open to the parties to apply for a reference at any  time before  the  final judgment is pronounced in the  suit.   If that  be  so, can the parties apply for an  order  referring matters  indifference between them even though such  matters may  have been covered by interlocutory judgments  delivered in  the  meanwhile?   The  appellants  suggest  that  though reference to arbitration may be made at any time before  the final  judgment  is  pronounced the  subject-matter  of  the reference must be such as is not covered by any decision  of the court pronounced in the meanwhile.  This argument  reads the  word " judgment " as judgment in regard to a matter  in difference between the parties; if a difference between  the parties has been covered by an interlocutory judgment it can no  longer  be  referred to arbitration; that  is  the  con- tention.   We are not impressed by this contention.  In  our opinion  the  scheme  of the section  does  not  permit  the addition of any words qualifying the word judgment " used in it.   The expression " at any time ’before the  judgment  is pronounced  "  is only intended to show the  limit  of  time beyond  which  no reference can be made, and that  limit  is reached when a final judgment is pronounced.  The  provision that " any 232 matter in difference between the parties in the suit can  be referred to arbitration " cannot be subjected to the further limitation   that  the  said  matter  can  be  referred   to arbitration  if  it is not covered by the  judgment  of  the court.  The effect of the section appears to be that so long as  the  final judgment is not pronounced by the  court  any matter-i. e., some or all the matters-in difference  between the parties can be referred to arbitration provided they are agreed  about  it. If a reference can be made  even  at  the appellate  stage when all matters in difference between  the parties  are  covered  by the final judgment  of  the  trial court,  it  is  difficult  to  understand  why  in  allowing

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reference to be made during the pendency of the suit in  the trial  court any further conditions should be  imposed  that only  such matters of difference can be referred to  as  are not  covered by an interlocutory judgment of the court.   We would accordingly hold that it is open to the trial court to refer  to arbitration any matters of difference between  the parties  to  the suit provided they agree and apply  at  any time  before the court pronounces its final judgment in  the suit.   But  this  construction still leaves one  question  to  be considered.   Had  a final judgment been pronounced  by  the trial  court  in this case at the time when  it  passed  the order  of  reference ?  It had delivered a  judgment  and  a preliminary decree had been drawn up.’ A judgment  delivered by  a  court  in a partition suit which  is  followed  by  a preliminary decree cannot be said to be a final judgment  in the  suit.  Proceedings which parties may take  pursuant  to the preliminary decree are still a part of the suit, and  it is  only with the passing of the final decree that the  suit comes  to an end.  As observed by the Privy Council in  Jadu Nath Roy & Ors. v. Parameswar Mullick & Ors. (1) a partition suit in which a preliminary decree has been passed is  still a  pending suit with the result that the rights  of  parties who  are  added  after the preliminary  decree  have  to  be adjusted at the time of the final decree.  This position  is not disputed.  Therefore, the fact that a preliminary decree had been drawn up in the present (1)  (1939-40) 67 1. A. I. 233 case and it was based upon a judgment delivered by the court cannot exclude the application of s. 21.  The judgment which had  been  delivered  by  the court  not  a  final  judgment contemplated  by s. 21.  The trial  court  would, therefore, have jurisdiction to make the order of reference.  There   is,  however,  another  fact  which  introduces   a complication; and that is the pendency of the three  appeals before  the  High Court at the material time.   As  we  have already observed the three appeals which were pending before the   High  Court  raised  before  that  court  matters   in difference  between  the parties in the suit,  and  to  that extent  the said matters of difference were  really  pending before  the High Court and not before the trial  court.   In such  a  case, which is the court that has  jurisdiction  to make  the  order of reference?  There is  no  difficulty  in holding that if the suit is pending in the trial court and a final  judgment  has not been pronounced by it,  it  is  the trial  court  which  is  competent  to  make  the  order  of reference.   Similarly, if a suit has been decided, a  final judgment  has been delivered and a decree had been drawn  up by the trial court-and no appeal has been preferred  against it,  the  matter  is concluded and there  is  no  scope  for applying  s.  21  at all.  On the other hand,  if  a  decree determining  the suit has been drawn up by the  trial  court and it is taken to the appellate court, during the  pendency of  the appeal, it is the appellate court that is  competent to  act under s. 21.  These three cases do not  present  any difficulty; but where a preliminary decree has been drawn up and  an  appeal has been filed against it  the  complication arises  by reason of the fact that the disputes between  the parties are legally pending before two courts.   Proceedings which  would  have to be taken between the parties  in  pur- suance  of, and consequent upon, the preliminary decree  are pending   before  the  trial  court;  whereas   matters   in difference  between  the parties which are  covered  by  the preliminary  judgment  and  decree are  pending  before  the

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appellate court.  In such a case it may perhaps be logically possible to take the view that 30 234 the  arbitration in respect of the disputes in  relation  to proceedings  subsequent  to the preliminary  decree  can  be directed   by   the   trial   court,   whereas   arbitration in respect of all the matters concluded by the trial   court’s preliminary judgment which are pending before the  appellate court can be made by the appellate court; but such a logical approach  is not wholly consistent with s. 21 ;  and  rather than help to solve any difficulty it may in practice  create unnecessary complications.  In most cases matters in dispute before  the trial court in final decree proceedings  are  so inextricably connected with the matters in dispute in appeal that  effective  arbitration  can be  ordered  only  by  one reference  and not by two.  We are, therefore,  inclined  to hold  that in a case of this kind where both the courts  are possessed of the matters in dispute in part it would be open to either court to make an order of reference in respect  of all  the  matters  in dispute between the  parties.   It  is argued that on such a construction conflict of decisions may arise  if two sets of arbitrators may be appointed.   We  do not  think that such a conflict is likely to occur.  If  the parties  move  the  trial  court  and  obtain  an  order  of reference  they would inevitably ask for appropriate  orders of  withdrawal or stay of the appellate proceedings; if,  on the  other  hand, they obtain a similar order  of  reference from  the  appellate court they would  for  similar  reasons apply  for stay of the proceedings before the  trial  court. In   the   present  case  proceedings  subsequent   to   the preliminary  decree were pending before the trial court  and so  we must hold that the trial court was competent  to  act under  s.  21.   On  that view  the  objection  against  the validity  of the reference based on the provisions of s.  21 cannot succeed. We  may now briefly refer to some of the decisions to  which our  attention  was invited.  Before the Act was  passed  in 1940, the procedure for referring matters in dispute between the parties in pending suits was governed by the  provisions of Sch. 11 to the Code of Civil Procedure.  There appears to have  been a consensus of judicial opinion in favour of  the view  that under Sch. 11, paragraph 1, the  appellate  court could make 235 an  order  of  reference in respect of  matters  in  dispute between the parties in an appeal pending before it.  A  note of dissent had, however, been struck by a Full Bench of  the Calcutta  High Court in Jugessueur Dey   v.  Kritartho Moyee Dossee  (1).  In that case the question for  decision  arose under the provisions of the Code of 1859 and the Full  Bench held that an appellate court had no power even by consent of parties   to  refer  a  case  for  arbitration   under   the arbitration sections of Act VIII of 1859 which applied  only to  courts  of  original jurisdiction  nor  was  such  power conferred  on  an appellate court by s. 37 of Act  XXIII  of 1861.   One of the reasons which weighed with Couch, C.  J., who  delivered the principal judgment of the Full Bench  was that  according  to  him  neither  reason  nor   convenience required  that  the appellate court should refer a  suit  to arbitration  after the matter had been decided by the  trial court.    Kemp,  J.,  who  concurred  with   the   decision, apprehended  that  "  if the parties are  allowed  to  refer matters  to  arbitration  after  a  case  has  been  finally disposed  of by a court of justice such a  proceeding  might

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tend  to bring lower courts into contempt ". In our  opinion this apprehension is not well-founded.  Besides it is  well- known  that  when  parties agree to  refer  the  matters  in dispute between them in suit to arbitration they desire that their  disputes  should be disposed of untrammelled  by  the rigid technicalities of the court procedure.  A search for a short-out  by means of such arbitration sometimes takes  the parties  on  a  very long route of litigation  but  that  is another matter. The  Calcutta  view was dissented from by  the  Madras  High Court in Sangaralingam Pillai(2) in somewhat emphatic words. "Entertaining  all respect for the opinions of  the  learned judges  of  the High Court of Calcutta by whom the  case  of Jugesseur Dey (1) was decided ", observed the judgment, " we are  not convinced by the reason given in the  judgment  for holding  that an appellate court might not, with consent  of the  parties, refer the matters in dispute in the appeal  to arbitration." Having thus expressed their disapproval (1) 12 Beng.  L.R. 266.     (2) (1881) I.L.R. 3 Mad. 78. 236 of  the Calcutta view, the learned judges proceeded  to  add that  in  the  case before them an order  of  reference  was sought  for under s. 582 of the Code of 1877 and  they  held that  under the said provision the appellate court is  given the  same  powers  and  is  required  to  perform  the  same functions as nearly as may be as the trial court.  The  view thus  expressed  by the Madras High Court  was  subsequently accepted and approved by the Calcutta High Court in  Bhugwan Das  Marwari & Anr. v. Nund Lall Sein & Anr. (1) and  Suresh Chunder Banerjee v. Ambica Churn Mookerjee (2 ). As we  have already  observed, prior to the enactment of the  Act  there has been a longstanding judicial practice under which orders of reference have been passed by appellate courts in respect of matters in dispute between the parties in appeals pending before them. The  construction  of  s.  21 has led  to  a  divergence  of judicial opinion.  In Abani Bhusan Chakravarty & Ors. v. Hem Chandra Chakravarty & Or8. (1), the Calcutta High Court  has taken the view that the court as defined in the  Arbitration Act.  does not include an appellate court  and  consequently there is nothing in the Act which enables an appellate court to  refer  to  arbitration matters in  dispute  between  the parties.  This decision proceeds on the erroneous view  that the it    court"  in s. 21 means only the court  as  defined ins. 2(c)  and that the considerations based on  the  powers of   the  appellate court prescribed,by s. 107  are  foreign to   the  Act.  It also appears that the learned  judgeswere disposed to think that if the matter in dispute between  the parties  at the appellate stage was referred to  arbitration it  might  tend  to bring the lower  courts  into  contempt. There  is  no doubt that a court cannot  claim  an  inherent right  to refer a matter in dispute between the  parties  to arbitration.   Before  a  matter can  be  thus  referred  to arbitration it must be shown that  the court in question has been  statutorily  clothed with the power to  make  such  an order; and that would depend on the construction of s. 21 of the  Act.   The Calcutta High Court has-construed  the  said section in (1)  (1886) I.L.R. 12 Cal.  173.  (2) (1891) I.L.R. 18  Cal. 507. (3) A.I.R. 1947.  Cal. 93. 237 substance consistently with the view taken by it in the case of Jugesseur Dey (1). On the other hand the Patna High Court has taken a  contrary

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view  in  Thakur  Prasad  v. Baleshwar  Ahir    &  Ors. (9). Jamuar,  J.,  who delivered the judgment of the  court,  has considered  the decision of the Calcutta High Court  in  the case of Jugesseur Dey (1) and has dissented from it.  In the Allahabad  High  Court somewhat conflicting views  had  been expressed on different occasions; but, on the question as to whether  the appellate court can refer a matter  in  dispute between  the parties to arbitration or not, and whether  the suit  includes an appeal, the decision of the Full Bench  of the  Allahabad  High Court in Moradhwaj v.  Bhudar  Das  (3) seems  to  be on the same lines as that of  the  Patna  High Court.   This Full Bench also considered the question  about the applicability of s. 21 to execution proceedings but with that  aspect  of  the matter we are  not  concerned  in  the present  appeal.  The Madras High Court has taken  the  same view  in  Subramannaya Bhatta v. Devadas Nayak &  Ors.  (1). However,  none of these decisions had occasion  to  consider the  question about the competence of both the  trial  court and the appellate court in cases where a preliminary  decree has  been  passed and an appeal has been filed  against  the said decree.  It would thus appear that the majority of  the Indian High Courts have construed the words 11 suit " and 11 court  "  used  in s. 21 liberally  as  including  appellate proceedings  and the appellate court respectively.   In  the result  we hold that the trial court was competent  to  make the reference and its validity is not open to any objection. That leaves only one point to be considered.’ It is urged by the  appellants  that the arbitrators  acted  illegally  and without  jurisdiction in directing the Appellants to pay  to the  respondent  Rs.  2,682-6-0 by way of  interest  on  the amounts  specified in the award up to December 5, 1944,  and from  that  date at the rate of 5as. per cent.  per  mensem, thus imposing on (1)  12 Beng. L.R. 266.  (3)  A.I.R. 1955 All. 353. (2)  A.I.R. 1954 Pat. 106. (4)     A.I.R. 1955 Mad. 693. 238 the   appellants a total liability of Rs.  2,36,782-11-9.The appellants have also been directed to pay future  interest on  the  same amount at 8as. per cent. per mensem  from  the said date until the date of payment. This argument is  based solely  on the observations made by Bose, J., who  delivered the  judgment of this Court, in Seth Thawardas  Pherumal  v. The  Union of India (1).  It appears that in that  case  the claim  awarded  by  the  arbitrators  was  a  claim  for  an unliquidated  sum to which Interest Act of 1839  applied  as interest  was otherwise not payable by law in that  kind  of case.   Dealing  with the contention  that  the  arbitrators could not have awarded interest in such a case Bose, J., set out four conditions which must be satisfied before  interest can  be  awarded under the Interest Act, and  observed  that none  of them was present in the case; and so  he  concluded that  the arbitrator had no power to allow  interest  simply because  he  thought that the payment was  reasonable.   The alternative  argument urged before this Court that  interest could be awarded under s. 34 of the Code of Civil Procedure, 1908, was also repelled on the ground that the arbitrator is not a court within the meaning of the Code nor does the Code apply  to  arbitrators.  Mr. Viswanatha Sastri  relies  upon these  observations  and contends that in no  case  can  the arbitrators award interest.  It is open to doubt whether the observations  on which Mr. Viswanatha Sastri relies  support or  were intended to lay down such a broad  and  unqualified Proposition.   However,  we do not propose  to  pursue  this matter  any further because the present contention  was  not urged  before  the High Court.  It was no doubt taken  as  a

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ground  of appeal but from the judgment it is clear that  it was  not  urged  at  the  time  of  hearing.   Under   these circumstances  we  do  not think we would  be  justified  in allowing this point to be raised before us.   The  result  is that the conclusion reached  by  the  High Court  is  right and so its order that a  decree  should  be drawn in terms of the award must be confirmed.  Civil Appeal No.  112  of 1955 accordingly fails and  is  dismissed  with costs.  It is conceded that -if the (1)  [1955] 2 S.C.R. 48. 239 principal appeal fails it would not be necessary to make any effective  orders on the rest of the appeals in this  group. The  said  appeals also fail and are  dismissed;  but  there would be no order as to costs.                            Appeals dismissed.