1. The appellants before us were the defendants party No. 1 in the Court below. The plaintiffs in the suit are now the Respondent No. 1 and his minor son Ramgopal. They brought the suit out of which this appeal has arisen, for the partition of property, moveable and immovable, on the allegation that they and the defendants first party formed a joint Hindu family subject to the Mitakshara law and that it had been found impossible for the plaintiffs to live with the defendants jointly.
2. The pedigree, set forth as a part of the plaint, will show that one Bansidhar had three sons, Tursi Ram, Defendant No. 1, (now one of the appellants), Makkhan Lal and Basdeo (Plaintiff No. 1 and one of the respondents). It was the plaintiffs’ case that Makkhan Lal separated from the family during the lifetime of his father Bansidhar and had ceased to do anything with the family, the rest of the family continued joint and on the death of Bansidhar the family property belonged jointly and equally to the two branches of Tursi Ram and Basdeo. The defendants party No. 1 wore Tursi Ram and his son; the defendant party No. 2 was Mt. Anandi, the widow of Daulat Ram, a deceased son of Tursi Ram. The defendants third party were made proforma defendants and it was alleged that they had nothing to do with the family property. They had, however, a share in some of the khatas of zamindari property in which the plaintiffs and the defendants first party owned share.
3. The defence of the defendants first party, who alone contested the suit, was that the family had separated at the time Makkhan Lal separated and that nothing was joint between the parties. They also said that most of the moveable properties were the self-acquisition of the defendants party.
4. Before the case could come to trial the plaintiffs and the defendants first party agreed that they should refer their dispute to three arbitrators, one nominated by the plaintiffs, another nominated by the defendants first party and the third by both the parties. An application therefore to that effect was made to the Court on the 17th of January 1922. This application will be found at page 28 of the record. The Court accepted the application for reference and referred the case to the three arbitrators, The arbitrators, after obtaining time on several occasions, delivered an award. They declared that the plaintiffs and the defendants first party were members of a joint Hindu family; that they owned the properties belonging to the family equally but directed that all the moveable properties that might be held by one of the parties should be retained by that party; that the bonds and decrees and other documents held by the parties or any one of them should be treated as joint property, each party taking a half share in the same and that a certain amount of cash, held to be in possession of Tursi Ram, should be divided equally amongst the parties. They divided the houses between the plaintiffs and defendants first party. As regards landed properties, they prepared three lots and gave one each to the plaintiffs and defendants first party; the third lot was given to the defendants third party.
5. On this award being submitted to the Court, an exception was taken to it by the defendants first party. They said that the award was open to several defects. They pointed out that one of the arbitrators bad not taken part in the preparation of the award, and that the defendants third party had not joined in the arbitration. They also said that the arbitration was vitiated by the misconduct of the arbitrators.
6. The learned Judge considered all the points. He found that the arbitrator nominated by the defendants first party had taken part in the preparation of the award throughout but had refused, at the last moment, to sign it and that there was no misconduct on the part of the arbitrators. As regards the preparation of the three lots, one of which was given to the defendants third party, the learned Judge was of opinion that the defendants party No. 3 not having joined in the making of the reference, the arbitrators exceeded their powers in dividing the property. He accordingly directed that the portion of the award which dealt with the division of the zamindari property should be remitted to the arbitrators. This order was passed on the 12th of August 1922.
7. When the award was sent to the arbitrators, the arbitrator nominated by the defendants first party refused to take any further part in the matter and Lala Makkhan Lal, the arbitrator appointed by the parties, returned the papers to the Court with the statement that they could not reconsider the award owing to the conduct of Narain Das, the gentleman nominated by the defendants first party. The learned Judge took up the matter again. He was of opinion that the portion of the award which the arbitrators refused to reconsider, became Void, but that this did not affect the rest of the award. He accordingly ignored the portion of the award aforesaid and declared that the parties (plaintiffs and defendants first party) were entitled to half share each in the zamindari property. He upheld the rest of the award and made a decree, partially on the award and partially on his own judgment. The defendants first party have appealed, as already stated. When the appeal came to be argued, a preliminary point was taken on behalf of the plaintiffs-respondents that the appeal was incompetent. It urged that the decree was based on an award and that having regard to the provisions of paragraph 16, Clause (2) of Sch II of the Civil Procedure Code an appeal was incompetent.
8. The case was very ably argued on both sides and we thought it necessary to hear the learned Counsel for the appellant on the merits. The case having bean argued on the merits, the learned Counsel for the plaintiffs-respondents expressed a desire to support the decree of the Court below on the merits of the case, and for that purpose, he read out to us the evidence of Lala Makkhan Lal, the umpire. The Court allowed the parties to read all relevant evidence, though the same had not been printed.
9. Before dealing with the merits of the case, it would be necessary to see whether an appeal is competent or not.
10. Under paragraph 16, Clause (1) of Sch. II, of the Civil Procedure Code, the Court is bound to pronounce judgment according to the award in the following circumstances, namely,
where the Court sees no cause to remit the award or any of the matters referred to arbitration for re-consideration in manner aforesaid, and no application has been submitted to set aside the award or the Court has refused such application.
11. In this case the award was such as to which the Court did see a cause to remit it. It followed therefore that one of the conditions required for the pronouncement of a judgment, according to the award, was not fulfilled. The reason why finality attaches to a particular class of award is this. The award should be such as cannot be taken exception to. If the Court sees reason to remit the award because the award is defective and requires to be re-considered by the arbitrators, it cannot be treated as final When the arbitrators have re-considered the award, a fresh award or an amended award is brought before the Court, that award is not open to any further exception on the grounds mentioned in paragraph 14 of the second schedule. Then when such an award is before the Court, the Court has to consider any objection that may be taken by the parties to the award and to see whether any ground for setting aside the award exists or not. When the Court has decided that there are no grounds for setting aside the award, the award is good in all respects and thereupon the Court is directed to pronounce a judgment.
12. The language of Clause (2) of paragraph 16 of the Second Schedule is as follows: “Upon the judgment so pronounced, a decree shall follow and no appeal shall lie from such decree, etc.” It is clear that for the finality of the award, the judgment must be so pronounced namely as stated in paragraph No. 1. Again the only decree against which an appeal is prohibited is such a decree as is mentioned in Clause (1) of paragraph 16. We are therefore of opinion that, in this case, the award having been remitted by the Court below for the re-consideration of the arbitrators, the award was not one on which a final decree could be based. Further, it is clear that the learned Judge did not base his decree completely on the award but partly on the award and partly on his own findings. We hold therefore that an appeal was competent.
13. When it is once held that an appeal is competent, it follows that the learned Judge in the Court below ought to have set aside the entire award under the provisions of paragraph 15 of the Second Schedule of the Civil Procedure Code. According that provision “an award remitted under paragraph 14 becomes void on failure of the arbitrator or umpire to re-consider it.” There does not appear to be any provision in the Civil Procedure Code by which a portion of an award may be remitted. The reasons are obvious. It is impossible to say for any person who is not the arbitrator, how the arbitrator proceeded to frame his award. It may be that the portion objected to has an intimate connexion with the portion which is not objected to. The arbitrators therefore must be given a free hand to re-cast the award. It has been argued on behalf of the appellants that the entire award should have been set aside by the Court below, and if it failed to pass any such order this Court, on allowing the appeal, should declare the award as void and should direct the Court below under Clause (2), paragraph 15 the of Second Schedule, to take up the case and try it on the merits.
14. On behalf of the respondents it was urged that the lower Court was wrong in its conclusion that the award required remission to arbitrators, that the award was unimpeachable and that the award should have been upheld in its entirety.
15. To appreciate the whole position, it would be necessary to state how the arbitrators proceeded to make the three lots, one lot being given to the defendants third party. Attached to the plaint will be found a long schedule of zamindari properties, held by the parties, either as proprietors or as mortgagees. It appears that among these properties there are some which belong not only to the plaintiffs and defendants first party, but also to the plaintiffs-defendants first party and defendants third party. In such cases, in the 8th column of the schedule, are given the amounts of shares held by the plaintiffs and defendants first party alone. For example the fourth item is a share in village Sultanpur. The total area is 774 and odd acres and the shares of the plaintiffs and defendants third party are shown as only 258 and odd acres. It is said on behalf of the respondents that when the arbitrators were asked to actually divide the zamindari property, the parties, that is to say, the plaintiffs, the defendants first party and the defendants third party, requested them to so divide the property as to leave each party an independent and sole owner of a particular item of the property. For example a certain item, say item No. 47 on the list (to take from facts), consisted of 7’27 acres out of which 4’84 acres belonged to the plaintiffs and defendants firsts party. The arbitrators decided that the defendants third party alone should have the 7 and odd acres, the plaintiffs and defendants first party taking their share elsewhere.
16. Such being the arrangement, it was urged on behalf of the respondents that this arrangement was arrived at with the consent of all the parties concerned, namely, the plaintiffs, the defendants first party and the defendants party No. 3, and that it was not open to any of the parties now before the Court to contest the validity of such an arrangement.
17. Before evidence could be laid before us as to this alleged consent of all the parties to this arrangement, it was urged on behalf of the appellants that it was not open to the respondents to prove by oral evidence, any deviation from the agreement of reference recorded on the 17th of January 1922. It was argued that Section 92 of the Evidence Act was conclusive on the point and it was not open to the plaintiffs to prove by oral evidence that after the execution of the reference, the parties agreed that the defendants third party should join partially, in the reference to the arbitration and that the arbitrators were given authority to divide the property as described above. We are of opinion that oral evidence could be adduced to prove the alleged fact. Proviso 2 to Section 92 of the Evidence Act reads as follows:
The existence of any separate oral agreement as to any matter on which a document is silent: and which is not inconsistent with its terms may be proved. In considering whether or not this proviso, applies the Court shall have regard to the degree of formality of the document.
18. When we come to the merits of the case, we shall show that the arrangement as to the partition which was suggested to the arbitrators and which was accepted by them, amounted to so little variation of the original reference that it could really be ignored. The reference itself said that the matters in dispute in the suit between the parties should be referred to arbitration. At this stage, when the reference was made, the only question that was raised between the parties was one as to whether the family was joint or separate. No question as to what method should be adopted for division of landed property had arisen between the parties and the arbitrators had not been asked (except possibly by implication) to consider any such question. It seems to be clear to us therefore that the proposed arrangement, which is now sought to be proved, was a separate oral agreement and it was not at all inconsistent with the terms of the written agreement. That being so, we allowed the learned Counsel for the respondents to read to us the oral evidence.
19. For the appellants, a further objection was taken that, even if it was competent for the parties to tell the arbitrators to deviate from the original reference, the reference having been made through the Court, the award would be unacceptable to the Court as (so it is said) it exceeded the reference made by the Court, In support of this argument, the recent Privy Council case of Ram Protap Chamaria v. Durga Prasad Chamaria AIR 1925 PC 298 was cited. In that case, there was a family whose pedigree is given at page 14 of the A.L.J. report. A suit was filed on the original side of the Calcutta High Court in which one Mt. Annarday (one of the family) was not party. Certain questions, mentioned in para. 1, at page 16 of the report, arose in the suit and they alone could be referred to arbitration through the intervention of the Court. There were two other sets of questions that had arisen among the parties, including Annarday and those are mentioned in paras 2 (at page 16 of the report). Arbitration however was sought on all the questions (safes 1 to 3) and an application was made to the Court for reference. A reference was ordered and an award was made on all the three sets of questions and it was impossible to separate one portion of the award from another. The question arose how far the award could be acted upon by the Court. As to the nature of the reference, their Lordships say (at page 17):
The terms in which the document is couched suggest very cogently to their Lordships’ minds that it was so far, at all events, the intention of all parties to it that the proceedings in the suit should become merely ancillary to the arbitration if in deed they were not thereby to be entirely superseded.
20. What their Lordships mean is perfectly clear. The matter in dispute in the suit was insignificant when compared with the remaining questions raised amongst the parties. Their Lordships dealt with the several questions raised amongst the parties and came to the conclusion that “such an award is in no true sense one made in obedience to the order of 23rd May. 1922,” Then their Lordships further say:
It is impossible to uphold an award in relation to a suit the conclusions of which were plainly coloured if not dictated, by the view taken by the arbitrators of other questions between the parties or some of them to which this suit had no reference.
21. It is under these circumstances that the Court of original jurisdiction, the appellate Court and their Lordships of the Privy Council set aside the award and directed that the suit should be tried on the merits. It is true, their Lordships say:
The Court had on that application no power to refer to arbitration any questions between the parties to the suit other than those in question in the suit or any questions in which was concerned any one not a party to the suit.
22. Again their Lordships say.
It is incumbent upon arbitrators acting under such an order (order of reference) strictly to comply with its terms. The Court does not thereby part with its duty to supervise the proceedings of the arbitrators acting under the order. An award made otherwise than in accordance with the authority by the order conferred upon them is their Lordships cannot doubt an award which is “otherwise invalid” and which may accordingly be set aside by the Court under Section 15 of the same Schedule.
23. All these remarks of their Lordships must necessarily be read with reference to the peculiar facts of the case. That their Lordships were not laying down any broad principles of law by the remarks quoted is clear from their own remarks with reference to what was said by Rankin, J., at time of the hearing of the appeal from the original jurisdiction of the High Court. At page 20 of the Allahabad Law Journal Report, their Lordships are reported to have said with respect to Rankin, J.’s remarks as follows:
Their Lordships desire to reserve their opinion upon the question whether there may not be exceptions to that comprehensive statement,
24. Mr. Justice Rankin, among other matters, had remarked that it was impossible, according to Statute Law of India, that one and the same arbitration should be held
as to matters within the jurisdiction of the Court and matters without the jurisdiction of Court.
25. We, of course, do not infer from the remarks of their Lordships of the Privy Council that every sort of arbitration, however loosely made and however flagrantly in opposition it might be to the order of reference, should be upheld. All that we do mean to say is this that their Lordships’ remarks were mostly made in reference to the peculiar facts of the case before them. In our opinion the case quoted on behalf of the appellants has no bearing whatsoever on the case before us.
26. We have considered the evidence, and we find that the arbitrator Makkhan Lal who has been described as the umpire having been chosen by both the parties, spoke the truth before the Court below. The Court below believed him and we have no reason to disbelieve him. If we believe Lala Makkhan Lal, we find that what happened was this. When the zamindari property came to be actually partitioned, the parties, that is to say, the plaintiffs, the defendants first party and Defendant No. 7, as representing himself and his brothers, suggested it to the arbitrators that the zamindari properties, either owned or held under mortgages, should be so divided as to leave one party independent of another. Accordingly it was decided that the plaintiffs should have a lot in which the defendants first party or the defendants third party should have no share, the defendants second party should have a lot in which the plaintiffs and defendant third party should have no share and the defendants third party should have a lot in which neither the plaintiffs nor the defendants first party should have any share. It is significant that in their objection to the award, the defendants first party did not anywhere say that the defendants third party or the defendants first party themselves, had not agreed to this allotment of shares. Indeed it is impossible to believe that ‘a division, like the one that has bean made by the arbitrators, could possibly be thought of without the active consent of the plaintiffs, the defendants first party and the defendants third party. Before us Mr. Indu Bhushan Benerji representing the defendants third party, who are respondents in this appeal has stated definitely that his clients are entirely agreeable to the arrangement that has been made by the arbitrators. This again confirms us in our opinion that the entire arrangement that was arrived at the instance of not only the plaintiffs, the defendants third party but also of the defendant party No. 1. The case of Mahmud Sheikh v. Messrs. Kankinarah Co. Ltd. AIR 1924 Cal 665 has been quoted before us as an authority for the proposition that even when a reference has been made through the Court, where the parties have accepted a variation in the reference and an award has been arrived at accordingly, it is not open to either of the parties, who induced the variation and brought about the award, to impeach it on the ground that the actual reference was not in accordance with the order of the Court. We need not express any opinion as to whether we should agree with this decision or not. In our opinion however this case before us is even simpler than the case before the Calcutta High Court. There one of the arbitrators refused to act and thereupon the parties chose a man, not mentioned in the order of reference, and brought about an award by the original arbitrators and the now man. It was held that the award was good and the party objecting was estopped from contesting the award.
27. In this case, as already indicated the reference related to the ‘dispute in the suit’ and, at the time of the reference, there was no dispute whatsoever as to the method of division of property. The only dispute that was before the Court and presumably as to which a reference was made was whether the family was joint and whether the several valuable moveable properties held by the defendants first party were liable to be partitioned. When the actual method of partition came to be discussed, it was suggested that certain people who were already parties to the suit, might be brought in for the purpose of division of property and properties might be exchanged with their consent and with the consent of the parties, at whose instance the reference had been made. We are of opinion that such an award did not exceed the terms of reference and was not open to the objections mentioned in the Privy Council case quoted on behalf of the appellants.
28. The result is that we are bound to uphold the award and we do uphold it. We modify the decree of the Court below and direct that a decree be prepared, in this Court, in accordance with the terms of the award. Having regard to the fact that the plaintiffs were in the right throughout, we direct that the respondents will have their coats in this Court. The order as to costs in the Court below, as passed by the lower Court, will stand.