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Civil Rule No. 490 of 1965, decided on 20th December 1965.

‑Compromise of suit‑Parties to pending suit alleged to have proceeded to arbitration without intervention of Court‑Award given by arbitrator can be taken into consideration only if both parties consent to such award being taken into consideration as compromise or adjustment.

Where parties to a pending suit proceed to arbitration without any reference by the Court, the arbitration is not under the provisions of the Arbitration Act, 1940 and an award obtained in such an arbitration cannot be enforced under those provisions. Proviso to section 47 of the Act applies to such awards, i.e. awards obtained otherwise than under the provisions of the Act and empowers the Court to take the same into consideration subject to the requirement of consent of the parties to their being taken into consideration. It is to be noted that the sine qua non of a Court taking into consideration an award in an arbitration without the intervention of the Court is the consent of all the parties interested to the award being taken into consideration as a compromise or adjustment of the suit by the Court.

Consent of the parties to the submission is not sufficient if there are other parties interested. The joint consent of all parties interested is necessary at the point of time when the Court is to take the award into consideration as a compromise or adjustment. Antecedent consent is immaterial just as antecedent invalidity does not debar the Court from recognising it as compromise by common consent. The proviso to section 47 of the Arbitration Act, 1940 does not render the award valid nor does it make it enforceable as an award pro prio vigore. The proviso enables the recognition of the award for a limited purpose by consent. Where such consent is withheld, it cannot be recognised even for the limited purpose.

Ammu Gam v. Bala Subramania A I R 1945 Mad. 294 not fol.

Zeauddin and others v. Abdur Rafique and others A I R 1952 Pat. 66 and Jugaldas Domodar & Co. v. Pursottam Umedbhai & Co. A I R 1953 Cal. 690 ref.

R. K. Banik with Lutfar Rahman for Petitioner.

S. M. Habibul Huq for the Opposite‑Party No. 2.

It appears that the petitioner as plaintiff instituted Title Suit No. 41 of 1958 in the 4th Court of Munsif at Narayanganj against the opposite‑parties and others for declaration of title to and recovery of khas possession in, some land said to have been encroached upon by the latter. Her husband Rakibuddin Ahmed also brought another title suit, being Title Suit No. 2 of 1958 against the self‑same defendants. This suit appears to have been ultimately compromised on the basis of a Solenamah which provided inter alia that after preparation of a sketch map by some persons named as arbitrators a rafanama would be filed in this suit, i.e., Title Suit No. 41 of 1958, as well. Sometime thereafter the opposite‑parties filed an application purporting to be under order XXIII, rule 3 of the Code of Civil Procedure stating inter alia that an award had duly been made by the arbitrators in Title Suit No. 41 of 1958, but the plaintiff, i.e., the petitioner here, did not agree to the same. A prayer was accordingly made for recording the compromise or adjustment, as the case might be, under the provision referred to above. This was opposed by the present petitioner; but the learned Munsif eventually allowed the prayer of the opposite‑party and passed the following order:

"The award passed by the arbitrators on 7‑9‑61 along with the sketch map be recorded as terms of compromise and part of the decree of T. S. No. 41/58."

This was subsequently affirmed in appeal whereupon the petitioner came up to this Court in revision under section 115 of the Code of Civil Procedure.

The short point taken by Mr. R. K. Banik appearing on behalf of the petitioner is that the learned Courts below had no jurisdiction to record the so‑called award as a compromise or adjustment under Order XXIII, rule 3, of the Code, as on the admission of the opposite‑parties themselves the present petitioner did not consent thereto. His contention is that where, as in this case, the parties to a pending suit proceed to arbitration without the intervention of the Court and an award is made by the arbitrators, the Court can take such an award into considera tion only if both the parties to the suit consent to the same being taken into consideration by it. In support of this contention learned Advocate has cited two reported decisions, to writ, Zeauddin and others v. Abdur Rafique and others (A I R 1952 Pat. 66) and Jugaldas Domodar & Co. v. Pursottam Umedbhai & Co. (A I R 1953 Cal. 690).

Mr. S. M. Habibul Huq, appearing on behalf of the opposite -party, has, on the other hand, placed his reliance upon Ammu Gam v. Bala Subramania (A I R 1945 Mad. 294) and contended that reference in the present instance was made with notice to the Court, and that being so, the learned Courts below cannot be said to have acted illegally in taking the award into consideration and recording the terms thereof as an adjustment lawfully arrived at between the parties. This contention, it may be noted, is based on the aforementioned recital in the solenamah filed in Title Suit No. 2 to the effect that a rafanamah in this suit, too, would be filed after the Arbitrators had appeared a sketch map.

Section 47 of the Arbitration Act, which prima facie governs reference to arbitration between the parties in a pending suit without the intervention of the Court reads:‑

"47. Subject to the provisions of section 46, and save in so far as is otherwise provided by any law for the time being in force, the provisions of this Act shall apply to all arbitrations and to all proceedings thereunder:

Provided that an arbitration award otherwise obtained may with the consent of all the parties interested be taken into con sideration as a compromise or adjustment of a suit by any Court before which the suit is pending."

Under the proviso an arbitration award obtained otherwise than in proceedings taken in accordance with the tact cannot without something more be regarded as a compromise or adjustment of the suit. That something more is the consent of the parties interested to the award being taken into consideration as a compromise or adjustment of the suit by the Court before which the suit is pending. It is well‑settled that where the parties to a pending suit proceed to arbitration without any reference by the Court the arbitration is not under the provisions of the Arbitra tion Act and an award obtained in such an arbitration cannot be enforced under those provisions. Proviso to section 47 applies to such awards, i.e. awards obtained otherwise than under the provisions of the Act and empowers the Court to take the same into consideration subject to the requirement of consent of the parties to their being taken into consideration. It has thus been laid down in Zeauddin and others v. Abdur Rafique and others relied upon by Mr. Banik:‑

"Where the parties to a suit have referred the matters in dispute between them to arbitration without the intervention of the Court and award has been made, then either party to the suit may insist on his right to have the suit tried out. The Court has no jurisdiction to treat an award as an adjustment of the suit and to record it unless all the parties have consented in Court to the matters in disputes between them being referred to arbitration and to be bound by any award may be passed."

This has been stated in clearer terms in the other authority cited by the learned Advocate, namely, Jugaldas Damodar & Co. v. Pursottam Umedbai & Co. Therein the relevant proposition has been enunciated in these terms:

"The proviso to section 47 applies to all arbitration awards obtained otherwise than under the provisions of the Act and enables the consideration of the award as a compromise or adjustment of the suit with the consent of all the parties interested, by the Court before which the suit is pending and by no other Court. Consent of the parties to the submission is not sufficient if there are other parties interested. The joint consent of all parties interested is necessary at the point of time when the Court is to take the award into consideration as a compro mise or adjustment. Antecedent consent is immaterial just as antecedent invalidity does not debar the Court from recognising it as compromise by common consent. The proviso does not render the award valid nor does it make it enforceable as an award pro piro vigore. The proviso enables the recognition of the award for a limited purpose by consent. Where such consent is withheld, it cannot be recognised even for that limited purpose."

It is thus clear from the relevant provision as well as the authorities to which reference has already been made above that the sine qua non of a Court taking into consideration an award in an arbitration without the intervention of the Court is the consent of all the parties interested to the award being taken into consideration as a compromise or adjustment of the suit by the Court.

It has already been indicated that the solenamah filed in Title Suit No. 2 of 1958 between the husband of the present petitioner on one hand and the opposite‑party and others on the other, provided that after preparation of a sketch map by the arbitrators a rafanamah would be filed in Title Suit No. 41 of 1958 as well. From this the learned Advocate for the opposite‑party wants to argue that reference in this case, though without the intervention of the Court, was made by the parties within its knowledge or rather with notice to it. It has therefore been contended that intimation thus given to the Court amounted to consent on their part to the award, if and when made, being taken into consideration by the Court. Reliance in this behalf has been placed upon Arumugha Mudallar v. Y. S. v. Bala Subramania Mudaliar wherein it was observed: "There is nothing in the proviso which precludes antecedent consent." This view has not, however, been accepted by any other High Court. The consensus of opinion is to the contrary, i.e. that consent of the parties is necessary at the point of time when the Court is taking the award into considera tion. It may be interesting to refer here to Jugal Das Damodar & Co. v. Pursottam Umedbhai & Co. and quote therefrom the following.

"I am aware that my opinion clashes with the observations in Aramugha v. Balasubramania', and also with some of the observations in A I R 1950 Orissa 169 at p. 180. Those observations are based upon principles and concepts which were never recognised as sound by our Court."

It may as well be noted that in the Madras case, referred to above, the parties had, in Court, consented to the matters in dispute between them being referred to an arbitrator and had also agreed to be bound by any award that might be passed by him but in the instant case before me no intimation was given to the Court of any intended or proposed arbitration in the relevant suit itself, i.e., Title Suit No. 41 of 1958 between the present parties themselves and that the present petitioner was not a party to the suit in which the above‑mentioned solenamah was filed, to wit, Title Suit No. 2 of 1958. Regard being had to these facts, it cannot, to my mind, be said that reference to the disputed arbitration was made with notice to the learned Court concerned. Furthermore the parties, too, cannot be said to have bound themselves to abide by the award that might be passed.

For the reasons indicated above, I am of opinion that the decision of the learned Courts below recording the award under Order XXIII, rule 3 of the Code of Civil Procedure is contrary to law and cannot be sustained.

The Rule is accordingly made absolute. The impugned order passed by the learned Courts below directing the disputed award to be recorded as under Order XXIII, rule 3 is set aside and it is directed that the suit be proceeded with and disposed of in accordance with the law.

Having regard to the circumstances of the case, I, however, leave the parties to bear their own costs.

K. B. A.

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