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Madras High Court
Sammiti Ranga Reddi And Ors. vs Yallialuru Chinasidda Reddi And … on 9 December, 1926
Equivalent citations: (1928) 55 MLJ 78
Author: M Nair


Madhavan Nair, J.

1. The father of the plaintiff and the 4th defendant, the father of defendants Nos. 1 and 2, and another started a partnership business. On the death of the plaintiff’s father, his sons became members of the partnership, and the 3rd defendant was also taken in as a partner. Later on, the father of defendants Nos. 1 and 2 having died, they also became members of the partnership. The plaintiff and the 4th defendant were entitled to one-twelfth share in the partnership business. Unpleasantness having arisen between the parties, the plaintiff instituted a suit for the dissolution of the partnership, settlement of accounts, and recovery of his and his brother’s one-twelfth share and for other allied reliefs. The defendants including the 4th defendant disputed the correctness of some of the statements made in the plaint. The 4th defendant also prayed that the amount due to him might be paid to him. The case was, by an order of Court, referred to an arbitration of three persons. The 4th defendant did not join in the reference and was not a party to it. One of the arbitrators did not attend three of the meetings of the arbitration board. The arbitrators gave their award and the plaintiff and the 4th defendant were given their one-twelfth share.

2. Before the District Munsif the award was objected to on the ground that “the reference itself from the Court was invalid for the reason that the 4th defendant had not joined the reference”, and also on the ground that all the arbitrators were not present at all their meetings. He overruled the latter objection and, as regards the former, he held that, if the plaintiff was given only half of the one-twelfth share awarded to him and the 4th defendant jointly, the fact that the 4th defendant did not join the reference would not affect the validity of the award. He, therefore, gave a “judgment in the terms of the award as modified with reference to the 4th defendant’s share in the amount for the plaintiff’s share, viz., Rs. 608-4-10 with subsequent interest”. The present petition has been filed by defendants Nos. 1 to 3 to revise the decree of the District Munsif; and the 4th defendant has filed a memorandum of objections effectively supporting the revision petition.

3. The same two objections that were pressed before the District Munsif have again been urged before me by Mr. Somayya on behalf of the petitioners. Either of the grounds, if accepted, would lead to the setting aside of the District Munsif’s decree. In this judgment I propose to deal only with the first objection, namely, that the award is invalid as the 4th defendant was not a party to the reference.

4. It cannot be denied that the 4th defendant is a necessary party to the reference. Section 1 of Schedule II of the Civil Procedure Code states that
Where in any suit all the parties interested agree that any matter in difference between them shall be referred to arbitration, they may, at any time before judgment is pronounced, apply to the Court for an order of reference.

5. The section requires that all parties interested should agree before the Court makes a valid reference to arbitration. As the 4th defendant has not joined in the reference, it follows that the reference is not a valid one. What gives the Court jurisdiction to refer matters to arbitration is the consent of all the parties interested, and as the 4th defendant has not given his consent, the Court had no jurisdiction to refer the matter to arbitration. This defect which vitiated the reference and all the subsequent proceedings cannot be cured by the Court ignoring the 4th defendant and giving the plaintiff only half of the one-twelfth share due both to the plaintiff and the 4th defendant. The 4th defendant not being a party to the reference has a right to question the validity of the award and this will affect the interest of defendants Nos. 1 to 3 also. In these circumstances, I hold that the reference itself is invalid. This conclusion is supported by the decisions of this Court in Potita Pavana Panda v. Narasinga Panda (1919) I.L.R. 42 M. 632 : 36 M.L.J. 538 and Subba Rao v. Appadurai Iyer (1924) 48 M.L.J. 142. It is unnecessary to refer to the other decisions brought to my notice on this point.

6. In this view, the District Munsif should not have given effect to the award of the arbitrators even in a modified form.

7. Allowing this objection, I set aside the decree of the lower Court. The District Munsif will restore the suit to his file and proceed to dispose of it on the merits. The 1st respondent will pay the petitioners’ costs of this revision petition. The memorandum of objections by the 4th defendant is allowed but I make no order as to costs.

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