1988 PLP 1472 (CLC)

"39.‑(1) An appeal shall lie from the following orders passed under this Act (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order:‑ An order‑ (i) superseding an arbitration; (ii) on an award stated in the form of a special case; (iii)modifying or correcting an award; (iv)filing or refusing to file an arbitration agreement; (v)staying or refusing to stay legal proceedings where there is an arbitration agreement; (vi)setting aside or refusing to set aside an award; Provided that the provisions of this section shall not apply to any order passed by a Small Cause Court. (2) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court." There is no doubt that High Court Appeal would lie from the order dismissing the objections to the award by a Single Judge of the Court but we are of the opinion that reference to arbitration was misconceived as such a reference could be made in a suit, not in a appeal from a decree passed in a suit as section 21 speaks of suit and not appeal. We may here quote the relevant provisions of section 21 of the Arbitration Act which reads as follows: "

21. 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 may at any time before judgment is pronounced apply in writing to the Court for an order of reference." Although we are fully aware of the principle that an appeal from a decree passed in a suit is continuation of the proceedings in the suit, yet in our opinion, section 21 of the Arbitration Act does not apply to an appeal from decree as there is nothing in the Arbitration Act which would enable the appellate Court to refer the decree under appeal to arbitration, as in appeal from decree only decree or part of the decree is normally questioned. Further the definition of the term "Court" as given in section 2(c) of the Arbitration Act, 1940 indicates that reference to arbitration under section 21 of the Arbitration Act in respect of the subject‑matter of the suit can be made by consent of all the parties to the suit, by the Court in which the suit is pending as would be clear from the definition of H "Court" given in section 2(c) of the Arbitration Act, which reads; "Court" means 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, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court;" Thus it is clear that it is only the trial Court and not the appellate Court, which could make a reference and that too in respect of the subject‑matter of the suit and not of the subject matter of the appeal as it has been held that the term "suit" as is used in section 2(c) is to be given restricted meaning. We are fortified in our view by the judgment of a Division Bench of Calcutta High Court in Abani Bhusan Chakravarty and others v. Hem Chandra Chakravarty and others (A I R 1947 Cal. 93). We may here for the sake of convenience quote the relevant observations made in paragraphs 9 and 10 of the judgment: "(9) For these reasons we think that "Court" as defined in the Arbitration Act does not include an appellate Court and consequently that there is nothing in that Act which enables an appellate Court to refer to arbitration the matters in dispute between the parties. We feel too that in view of the earliest decisions which indicated the difficulty in the exercise of powers of reference to arbitration by an appellate Court without some enabling provisions of the nature of S.107, Civil P.C., 1908, the Legislature would have made some clear provisions in the Arbitration Act for such references if it had been intended that these should be made at the appellate stage. (10)In our opinion, therefore. the reference to arbitration in appeal in the lower appellate Court and the subsequent proceedings were without jurisdiction." The same view was taken by a Division Bench of the Allahabad High Court in Shukrullah and another v. Mt. Rahmat Bibi and others (AIR 1947 All. 304). It was held in this case that the High Court as an appellate Court had no power under the Arbitration Act to make reference to arbitration. It was further held that the word "Suit" can only have the more technical and restricted meaning of a proceeding instituted in a Court of first instance not in the appeal. We quote the relevant observations which are contained in paragraphs (8) to (10) of the Report: ‑ (8)The question whether an appellate Court has power under the Arbitration Act, 1940, to make a reference to arbitration is one of some interest, and we have not been referred to any case in which the question had been considered. In the case of arbitration in suits an order of reference is made under S.23 of the Act, by the Court to which an application for that purpose is made by the parties under S.21. That section which is in terms almost identical with those of sub‑para. (1) of para. 1 of the repealed Sch.2 to the Civil Procedure Code, reads as follows: "

21. 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 may at any time before judgment is pronounced apply in writing to the Court for an order of reference." There is no doubt that under the provisions of the Civil Procedure Code an appellate Court was empowered to make an order of reference, but it was so empowered, not by anything contained in Sch.2, but by the provisions of subsection (2) of S.107 of the Code which conferred upon an appellate Court the same powers, and imposed on it as nearly as may be the same duties. as were. conferred or imposed by the Code on Courts of original jurisdiction. Now there is not to be found in the Arbitration Act any section corresponding to subsection (2) of section 107, Civil P.C., and although under S.41 of the former Act the provisions of the Code are generally made applicable to all proceedings before the Court, and to all appeals under that Act, this does not in my opinion carry the matter further, for subsection (2) of section 107 has ceased to have application to matters falling within the ambit of the Arbitration Act as the duties or powers which are thereby conferred or imposed on an appellate Court are limited to such as are conferred or imposed by that Code on Courts of original jurisdiction. (9) Had Ss21 and 23 Arbitration Act, stood alone I should have been inclined to hold that the term "suit" included an appeal, see 7 N.W.P.H.C.R.243 at P.246, and accordingly that "Court" embraced an appellate Court, but I think we are precluded from taking that view by the fact that the term '"Court" is itself defined in S.2, Arbitration Act as meaning '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, but does not except for the purpose of arbitration proceedings under S.21, include a Small Cause Court.' (10)Now, in this definition I think that the word "suit" can only have the more technical and restricted meaning of a proceeding instituted in a Court of first instance by a plaint or in such other manner as may be prescribed. In other words "Court" for the purpose of the Arbitration Act means a Civil Court having jurisdiction to decide, as a suit, the questions forming the subject‑matter of the suit. This is not a power which i: possessed by an appellate Court as such; and in particular it is not a power which is possessed by this High Court which under its Letters Patent has no original civil jurisdiction in respect of a dispute of the nature which formed the subject matter of the reference to arbitration in this case. In my opinion, therefore, the appellants' contention is right, and so much of the decree of this Court dated 8‑11‑1940, as constituted a reference to arbitration of the matters in dispute in Suit No.8 was not in accordance with law.." We are therefore, of the opinion that reference to award was without jurisdiction and consequently the award was void (See Yousuf Ali v. Muhammad Aslam Zia and 2 others P L D 1958 SC 104). Since however, the learned Single Judge while hearing the appeal has modified the decree passed in the suit in terms of the award by which the decretal amount was reduced from fifty thousand D to thirty‑five thousand, the appellant's remedy is with the Supreme Court. We, therefore, dismiss this appeal in limine as being not maintainable. A . A . / A‑308/ K Appeal dismissed.