Harishankar Laxmiram Rajyaguru of Rajkot Vs. Pratapray Harishankar Rajyaguru of Rajkot  INSC 104 (13 April 1988)
Sabyasachi (J) Mukharji, Sabyasachi (J) Rangnathan, S.
1988 SCR (3) 534 1988 SCC (3) 21 JT 1988 (2) 224 1988 SCALE (1)955
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.
Procedure Code, 1908: Section 9- Award under Arbitration Act-Cognizance
of-Civil Court-Whether has jurisdiction.
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.
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.
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
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
the execution proceedings, the petitioner filed a civil revision application,
which was summarily rejected.
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.
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.
the Special Leave Petition, ^
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]
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,  2 SCR 747; Vasudev Dhanjibhai Modi
v. Rajabhai Abdul Rehman and others,  1 SCR 66; M/s. Guru Nanak
Foundation v. M/s. Rattan Singh and Sons,  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,  3 Indian Appeal 209 at 220,
APPELLATE JURISDICTION: Special Leave Petition (Civil) No. 4783 of 1988.
From the Judgment and order dated 23.2.88 of the High Court of Gujarat in Civil
Rev. Appln. No. 1737 of 1982.
D.L. Kothari, R.C. Bhatia and P.C. Kapur for the Petitioners.
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.
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 was stated by the arbitrator that he had called both
the father and the son at his residence on 18th January, 1977.
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.
he made the award on 18th
January, 1977. Below
the award, both the parties and the arbitrator had signed.
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.
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
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
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.
application was decided against him, against which he preferred an
appeal/revision but later on, he withdrawn the said appeal/revision.
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.
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,  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).
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
jurisdiction to take cognizance of the award under sections 14 and 17 of the
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.
9 of the Civil Procedure Code provides that the Courts shall (subject to the
provisions herein contained) 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,  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,  1
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.
M/s. Guru Nanak Fundation v. M/s. Rattan Singh and Sons,  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
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