http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 4  

PETITIONER: THE KALYAN PEOPLE’S CO-OPERATIVE BANK

       Vs.

RESPONDENT: DULHANBIBI AQUAL AMINSAHEB PATIL

DATE OF JUDGMENT: 23/04/1962

BENCH: GUPTA, K.C. DAS BENCH: GUPTA, K.C. DAS KAPUR, J.L. DAYAL, RAGHUBAR

CITATION:  1966 AIR 1072            1963 SCR  (2) 348

ACT: Co-operative  Society-Arbitration-Tribunal, if and when  can act  on evidence taken before previous  Tribunal-Party  con- senting to such evidence-if can object later-Bombay Co-oper- ative Societies Act, 1925 (Bom.  VII of 1925), s. 54.

HEADNOTE: The  dispute between the appellant a cooperative bank and  A who   had  taken  loan  and  his  surety  was  referred   to arbitration under s. 54 of the Bombay Go-operative Societies Act.   The Board of Arbitrators consisted of three  members; after  the Board has recorded some evidence, the nominee  of the   borrower   retired.    Thereafter,   the   Board   was reconstituted.  This Board also recorded some evidence ; but after some time, the newly appointed nominee of the borrower retired.   There was a fresh constitution of the Board  with the  other  two members as before and a new  member  as  the nominee  of the borrower.  Further evidence was recorded  by the  Board thus constituted and finally the Board  gave  its award  in the matter.  Dissatisfied with this award A  filed revision   applications  before  the   Bombay   Co-operative Tribunal.    Apart  from  certain  objections  on  merit   a preliminary. objection was taken as regards the legality  of the  award on the ground that the Board as last  constituted had  acted on evidence not recorded before it. The  Tribunal accepted this preliminary objection and set aside the  award and remanded the cases to the Assistant Registrar.   Shortly after  this A died but his heirs and  legal  representatives moved   the  Bombay  High  Court  under  Art.  227  of   the Constitution against the Tribunal’s- decision.  It set aside the  orders  passed by the Tribunal and restored  the  award made  by  the  Board of Arbitrators.  The Bank  came  up  in appeal by special leave to the Supreme. Held,  that  when the parties expressly or  impliedly  agree that  some evidence not taken before the Tribunal should  be treated  as evidence and taken into consideration,  it  will not  be  wrong or illegal for the Tribunal to  act  on  such evidence not taken before it, the question of mode of  proof is  a question of procedure and is capable of  being  waived and   therefore  evidence  taken  in  a  previous   judicial proceeding of a civil nature can heir made permissible in  a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 4  

subsequent proceeding by consent of parties, 349 While what is not relevant under the Evidence Act cannot  in proceedings to which Evidence Act applies, be made  relevant by  consent of parties, relevant evidence can be brought  on the  record for consideration of the Court or  the  Tribunal without following the regular mode, if parties agree. When a party does not only raise no objection before a Court or  Tribunal  to proceed on the  evidence  already  recorded before the previous Court or Tribunal and impliedly  invites the  Court  or Tribunal to act on such  evidence  previously recorded,  he  cannot be allowed later on to object  to  the Court or Tribunal having considered such evidence. The  High  Court  having come to  the  conclusion  that  the Tribunal  was  wrong in allowing the  preliminary  objection raised before it, the High Court was not entitled to  ignore the  fact that before the Tribunal other questions had  been raised  which  had not been considered by  it.   The  proper order  to  pass in such a case ordinarily would  be  to  set aside the order of the Tribunal and direct it to decide  the applications for revision on their merits.

JUDGMENT: CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 555 & 556 of 1960. Appeals by special. leave from the judgment and order  dated July  17,  1956, of the Bombay High Court in  Special  Civil Applications Nos. 580 and 581 of 1956. A.V.  Viswanatha Sastri, B. R. Nayak and Naunit Lal,  for appellants. Abdurrahman  Adam Omer, S. N. Andley, Rameshwar Nath and  P. L. Vohra, for the respondents No. 1 and 3 to 6. 1962.  April 23.-The Judgment of the Court was delivered by DAS GUPTA, J.-Disputes having arisen between the  appellant, a Co-operative Bank and one Amin Saheb Patil, who had  taken loans  from the Bank and Kutubuddin Mohamad Ajim  Kazi,  who had stood surety in respect of the loans they were 350 referred to arbitration in two references under s.54 of  the Bombay  Co-operative  Societies  Act, 1925.   The  Board  of Arbitrators  originally consisted of Mr.- L. V. Phadke,  Mr. C.  K.  Phadke  and Mr. Trilokekar.   After  the  Board  had several meetings and recorded some evidence Mr.  Trilokeker, who  was the nominee of the borrower, Amin  Saheb,  retired. Thereafter  the Board was re-constituted with Mr. Kotwal  as the  new nominee of the borrower.  This Board also  recorded some  evidence but after sometime Mr. Kotwal  also  retired. There  was a fresh constitution of the Board with the  other two members as before and Mr. M. D. Thakur as the nominee of the,  borrower.  Further evidence was recorded by the  Board thus constituted and finally the Board gave its award in the matters on March 14, 1955. Dissatisfied with these awards amin Saheb filed two revision applications before the Bombay Co-operative Tribunal.  Apart from  certain  objections  on the merits  of  the  awards  a preliminary  objection  was  taken before  the  Tribunal  as regards  the legality of the awards on the ground  that  the Board  as  last  constituted  had  acted  on,  evidence  not recorded before it.  The Tribunal accepted this  preliminary objection,  set aside the awards and remanded the  cases  to the Assistant Registrar for a rehearing. Shortly  after this Amin Saheb died but his heirs and  legal representatives  made  two applications to the  Bombay  High

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 4  

Court  under  Art.  227 of  the  Constitution  against  the, Tribunal’s decision.  The High Court held that the  Tribunal had  erred  in thinking that the Board  of  Arbitrators  had acted  illegally in seting on the evidence recorded  by  the previous  Boards when this was done with the full  knowledge of  the  parties and without any objection on  either  side. Accordingly,  they  set  aside  the  orders  passed  by  the Tribunal and  351 restored the awards made by the Board of Arbitrators. The  Bank has now appealed against the decision of the  High Court after obtaining special leave from this Court. Three points are raised before us in support of the  appeal. The  first  is that the Tribunal had not made any  error  in holding  that the Board had acted illegally in  acting  upon the evidence recorded by the previous Boards.  ’Secondly, it is urged that even if the Board had erred it was not such an error  as  would entitle the High Court to  interfere  under Art. 227 of the Constitution.  Lastly, it was contended that in  any  case, the High Court was not justified  in  setting aside  the  awards’ when the Tribunal had  disposed  of  the application   only  on  preliminary  points  and   had   not considered  it  on  merits.  In. our  opinion  there  is  no substance  in the first two contentions.  As the High  Court has pointed out normally it would have been wrong and indeed illegal  for  the-  Tribunal to act on  evidence  not  taken before  it.   The  position is however  different  when  the parties expressly or impliedly agree that some evidence  not taken before the Tribunal should be treated as evidence  and taken  into consideration.  It is settled law that  question of  mode of proof is a question of procedure and is  capable of  being waived and therefore evidence taken in a  previous judicial  proceeding can be made admissible in a  subsequent proceeding   by  consent  of  parties.   This   applies   to proceedings  of a civil nature.  While what is not  relevant under  the  Evidence  Act cannot  in  proceedings  to  which Evidence  Act applies, made relevant by consent of  parties, relevant   evidence  can  be  brought  on  the  record   for consideration of Court or the Tribunal without following the regular mode, if parties agree.  The reason behind this rule is 352 that  it  would  be  unfair to ask  any  party  to  prove  a particular  fact when the other party has  already  admitted that  the  way  it has been brought  before  the  Court  has sufficiently proved it.  We are therefore of opinion that in the  facts of these cases when the appellant Bank  not  only raised  no  objection  to  the  Board  as  last  constituted proceeding  on  the  evidence already  recorded  before  the previous  Boards,  but indeed appears to  have  invited  the Board  to  act  on such evidence  previously  recorded,  the appellant cannot be allowed later on to object to the  Board having  considered the evidence-merely because the  decision has  goes  against it.  The Tribunal was  clearly  wrong  in thinking otherwise and the error cannot but be considered to be  an error apparent on the face of the record and as  such the High Court had not only the power but duty to  interfere with the Tribunal’s order. It appears to us however that having come to the  conclusion that  the  Tribunal was wrong in  allowing  the  preliminary objection  raised before it the High Court was not  entitled to ignore the fact that before the Tribunal other  questions had  been raised which had not been considered by  it.   The proper  order to pass in such a case, in our opinion,  would be  to set aside the order of the Tribunal and direct it  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 4  

decide the applications for revision on their merits. We  therefore  allow  the appeals in  part,  and  order,  in modification  of the order made by the High Court, that  the Tribunal’s  order  remanding  the  cases  to  the  Assistant Registrar  be set aside but the Tribunal should now  proceed to  hear the revision applications on their merits.  In  the circumstances  of the case, we order that the  parties  will bear their own costs. Appeals allowed in part.  353