JUDGMENT
Kulwant Sahay, J.
1. This is an application in revision on behalf of the defendant in a Small Cause Court suit against an order of the Small Cause Court Judge of Patna, dated the 28th February 1924, whereby he allowed the plaintiff to withdraw; from a reference to arbitration.
2. The suit was for recovery of a sum of money from the defendant on the ground that the defendant had unlawfully caught fish from a portion of the river Ganges which runs from Sherpur Manopur to Dinapur alleging that the plaintiff had the exclusive right of fishing therein and the defendant had no right to do so. The defence was that the defendant had not fished in the portion of the river to which the plaintiff had the exclusive right, but in another portion to which the defendant had a right to fish. Upon an application of the parties the Court by its order dated the 15th February 1924 referred the matter in difference between the parties to the arbitration of one Munshi Abdul Ghani;. the order was made under para. 3 of the. Second Schedule to the C.P.C. Before the order was communicated to the arbitrator and before the records were sent to him the plaintiff filed an application before the Court on the 19th February 1924 wherein he alleged that he had been to see the arbitral r and had informed him of the reference, but that the said arbitrator had demanded money from the plaintiff and had told him that unless he was paid, he would not decide the case in the plaintiff’s favour, that the arbitrator seemed to be a dishonest man and wanted to make money, by the litigation, and the petitioner, therefore, prayed that the order of reference be cancelled and the arbitrator be ordered not to decide the case and to return the reference if the same had been forwarded to him. On the same date the defendant filed a petition of objection traversing the allegations made by the plaintiff and objecting to the cancellation of that order of reference. The application came on for hearing on the 25th of February when it was postponed to the 28th of February 1924., On the 26th of February the plaintiff filed an affidavit of a karpardaz to the effect that in his presence the arbitrator had demanded, money from the plaintiff and had told him that the defendant was ready to pay him a sum of Rs. 75 in order that the award might be made in his favour and that if the plaintiff paid a sum of Rs; 100, the arbitrator would make the award in the plaintiff’s favour. On the 28th of February the learned Judge considered the affidavit and made the order complained of, cancelling the order of reference and allowing the plaintiff to withdraw from reference.
3. Against this order the defendant has come up in revision to this Court and it has, been contended on his behalf that once an order of reference had been made by the Court under para. 3 of the Second Schedule to the C.P.C. the learned Judge had no jurisdiction to cancel that older and to proceed with the trial of the suit.
4. Reliance has been placed on the provisions of Clause (2) of para. 3 which provides that where a matter is referred to arbitration, the Court shall not, save in the manner and to the extent provided in this Schedule, deal with such matter in the same suit; and, to para. 5 of the Schedule which deals with, cases in which the Court can make an order superseding the arbitration and if is contended that the arbitration can be superseded only for one or other of the causes set out in para. 5 of the Schedule, and that the Court had no jurisdiction to supersede the arbitration and to cancel its order of reference on the ground stated in the plaintiff’s petition, and the allegation of corruption contained in the petition could only be considered after the award had been filed and the matter had come up before the Court under para. 15 of the Schedule.
5. On the other hand, it has been contended that although there is no specific provision in, the Second Schedule to the C.P.C. empowering the Court to supersede an arbitration on the ground set out in the plaintiff’s application before the award is made by the arbitrator, yet the Court has an inherent power to cancel its order if good cause is shown as to why the arbitration should not proceed.
6. There has been a divergence of opinion on the point.
7. In the case of Pestonjee Nussurivanjee v. Manbckjee & Co 12 M.I.A. 112 : 10 W.R. 51 (P.C.); 1 Ind. Jur. (N.S.) 69 : 2 Sutn. P.C.J. 164 : 2 Sar. P.C.J. 390 : 20 E.R. 283 their Lordships of the Privy Council were of opinion that when persons have agreed to submit the matter in difference between them to the arbitration of one or more certain specified persons, no party to such an agreement can revoke the submission to the arbitration unless, for good cause; and that a mere arbitrary revocation of the authority is not “permitted. Their Lordships observed: “That the direction of recent legislation, both by the English Acts and the Acts of the Indian Legislature, has been to put an end to the distinction between the agreement to refer, and the authority thereby conferred, which formerly enabled a person who was a party to a binding agreement to revoke the authority thereby conferred, and by so doing to put an end to the agreement for submission to arbitration; and to put such agreement for arbitration on the same footing as all other lawful agreements by which the parties are bound to the terms of what they have agreed to, and from which they cannot retire unless the scope and object of the agreement cannot be executed, or unless it be shown that some manifest injustice will be the consequence of binding the parties to the contract”. That was a reference to arbitration under Section 326 of Act VIII of 1859 which corresponds with para. 17 of the Second Schedule to the present C.P.C., but the principles laid down by their Lordships are of universal application and according to that principle a submission to arbitration can be revoked for good cause and the Court will be justified in superseding the arbitration if it is satisfied that some manifest injustice will be the consequence of binding the parties to the contract.
8. In Nil Monee Bose v. Mohina Chunder Dutt 17 W.R. 516, it was held that a reference to arbitration made under an order of Court cannot be revoked at the instance of a party. That case arose out of a reference to arbitration in a pending suit by the order of the Court. The arbitrator filed his award in favour of the defendant; the plaintiff thereupon objected on the ground that the arbitrator had omitted to record the evidence of a material witness who was present and had not examined any witness on the point in issue; the Court thereupon remanded the case to the arbitrator under Rule 323 of Act VIII of 1859. The plaintiff then filed a fresh petition to supersede the reference to arbitration. Upon that application the Small Cause Court Judge, before whom the suit was pending referred the case to the High Court for opinion on the point as to whether after once giving free consent to have his case decided upon arbitration, the plaintiff could withdraw his consent and apply to have his case tried by the Court. Sir Richard Couch, C.J., in dealing with this point observed as follows: “With reference to the question which the Judge of the Small Cause Court puts as to the power of the plaintiff to revoke the reference to arbitration, we think that, as this arbitration is under an order of the Court, the plaintiff cannot annul or revoke that order, he is bound by it, and the arbitration must proceed subject to the provisions of law.” Now, it does not appear from the report of the case what reason, if any, the plaintiff gave for withdrawing from the, reference and, all that was held in that case was that the plaintiff could not annul or revoke the order of the Court. This case does not deal with the powers of the Court to cancel its own order on good cause being shown.
9. The case of Halimbhai Karimbhai v. Shankersai 10 B. 381 : 5 Ind. Dec. (N.S.) 642 is, however, a direct authority for the contention raised on behalf of the petitioner. In that case an application for reference to arbitration was made by both parties on the 19th June 1884 under Section 506 of the C.P.C. (1882). The plaintiff’s Pleader, however, was not on that date especially authorized in writing by his client to make the application and the Court postponed making an order until 23rd June 1884. On the 23rd June the 1st defendant was absent but the plaintiff’s Pleader produced his authority and the Court made the order of reference under Section 508 of the Code. On the 27th June, the. 1st defendant applied to revoke the authority of the arbitrator and to appoint a new arbitrator on the ground that after signing the application of the 19th June he had come to know that the arbitrator was not worthy of confidence. No order was passed upon this application till after the submission of the ward by the arbitrator when it was rejected by the Court. It was held by a Division Bench of the Bombay High Court in that case that the objection raised by the 1st defendant could only be considered after the submission of the award and then only to the extent permitted by Section 521 of the Code of 1882, and that when once a matter is referred to arbitration it is not competent to the Court under the second paragraph of Section 508 of the C.P.C. (1882) to deal with the matter in difference between the parties, except as provided in Ch. XXXVII of the Code. It was held that there is no section in that Chapter which authorizes the Court to revoke the authority conferred on an arbitrator and to appoint a new man, except in cases falling strictly within the purview of Section 510 of the Code where the scope, and object of the reference cannot be executed; and, it is only in these ‘cases, apparently, that the authority conferred on, arbitrators can be revoked for good cause, the cause being such as is contemplated in that section, as where an arbitrator refuses or neglects, or becomes incapable to act, or leaves British India under circumstances showing that he will probably not return to India at an early date. Now, this case is a direct authority for the proposition that an objection of the kind raised in the present case cannot be entertained by the Court before the submission of the award by the arbitrator. Their Lordships, however, did not consider the inherent power of a Court to cancel an order if it be shown that some manifest injustice will be the consequence of keeping the order in force. With very great respect to the learned Judges, I am of opinion that although there is no distinct provisions in the Chapter dealing with arbitration in the C.P.C. of 1882 as well as in the Second Schedule of the present C.P.C. still the inherent power of a Court to make proper order for the ends of justice can always be invoked to prevent a miscarriage of justice.
10. In O.R. Coley v. V.A. Dacoste 17 C. 200 : 8 Ind. Dec. (N.S.) 672, it was taken for granted that an application to arbitration can be revoked on good grounds. In Mahomed Wahiduddin v. Hakiman 29 C. 278 : 6 C.W.N. 235, a party to reference to arbitration was held entitled to withdraw from the reference if it transpired after the reference had been made that the arbitrator has been acting am mokhtar of one of the parties without any remuneration. In this case also it was taken for granted that for good cause a party can be allowed to withdraw from the reference before the award was made. In Kunj Lal v. Banwari Lal 48 Ind. Cas. 711 : 4 P.L.J. 394, a Division Bench of this Court held where parties submit their difference to arbitration they cannot be allowed to revoke or withdraw from the submission, except for good cause. It was, therefore, conceded that if good cause is shown a party can be allowed to revoke or withdraw from the submission. In Chaturbhaj v. Raghubar Dayal 23 Ind. Cas. 758 : 36 A. 354 : 12 A, L.J. 529, although it was held that the intention of the Second Schedule to the C.P.C. is that when once a reference to arbitration has been made under the orders of the Court, that reference should only be superseded for one of the reasons in the Schedule itself, and that allegations of corruption against the arbitrator should be dealt with under para. 15, after the award has been received, yet the learned Judges appear to be in some doubt as to whether or not the Court has an inherent jurisdiction to supersede the arbitration proceedings under its orders, and they proceeded to lay it down that if the Court does possess such inherent jurisdiction then such jurisdiction should be cautiously and sparingly exercised and that an application invoking such jurisdiction should at least suggest grounds for supposing that the applicant will suffer some irreparable injury if prompt action is not taken.
11. Upon a review of the authorities I am of opinion that although there is no specific provision in the Second Schedule to the C.P.C. authorizing a Court to cancel an order made by it under para. 3 of the Schedule yet in a proper case and for good cause the Court has inherent power to cancel that order. The ground of misconduct of the arbitrator would be a sufficient ground for setting aside the award when made and I fail to see why the Court should allow the arbitration to proceed with the knowledge that the award must inevitably be set aside in the end, and not invoke its inherent power and revoke the submission to arbitration before the award is made. I am therefore of opinion that the order passed by the learned Small Cause Court Judge is not without jurisdiction.
12. This was the only point taken by the learned Vakil for the petitioner. It was not suggested in the present case that the cause shown was not a good cause to supersede the arbitration if it could under the law be superseded.
13. For the reasons given above, I am of opinion that the order passed by the learned Judge in the Court below was not without jurisdiction and cannot be disturbed.
14. This application is dismissed with costs.