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Miscellaneous Appeal No. 21 of 1947, decided on 24th October 1955.

, O. XXXII, r. 7 Agreement on behalf of minors to refer dispute to arbitration without leave of Court‑Void‑Arbitration proceedings and award a nullity‑Separate suit not required to set aside such an award‑Arbitration Act (X of 1940), S. 32.

Held, the Provisions of O. XXXII, r. 7, C. P. C. are mandatory and an agreement of reference to arbitration on behalf of minors in a suit, without leave of Court, is void and of no effect. Proceedings held in arbitration in implementing such agreement and the award, are null and void.

According to sub‑rule (2) of Rule 7, other parties also can avail such agreement if they choose do to so.

Held further : No separate suit by minors is required to set aside an award given as a result of such an agreement, in view of section 32 of the Arbitration Act (X of 1940).

Kaluram Ramchandra v. Nandlal Gulab Chand and others A I R 1949 Nag. 298 ; Johara Bibi and others v. Mohamed Sadik Thambi Marakyar and others A I R 1951 Mad. 997, and Chhbba Lai v. Kallu Lal and others A I R 1946 P C 72 ref.

Shamsul Hag Memon for Appellants.

Sharifuddin for Respondent No. 1.

--This is an appeal under section 39 of the Arbitration Act 1940 from an order of the learned First Class Sub‑Judge, Sukkur setting aside an award and putting back the case in Court for trial according to law.

This was a partition suit filed by the 11 Appellants against respondent No. 1 who was the main contesting defendant. There were 6 other defendants also but they were all formal because they were co‑shareres in certain properties sought to be partitioned.

From amongst the eleven appellants five were minors and suit on their behalf had been filed by the appellant No. 1 as their next friend. These five minors were under the Court of Wards.

Written statements were filed in the case and issues were framed. Thereafter this suit was referred to the Arbitration of three gentlemen on 20th November, 1941. It was provided in this agreement that the decision of the case by the arbitrators will be by majority. It appears that no leave of the Court was obtained on behalf of the minors to this agreement of reference as provided by O. XXXII, rule 7. The arbitrators submitted their award and it was a majority award. Objections were filed and the matter came up for hearing in the Court. The learned judge came to the con clusion that the decision of the arbitrators on certain issues was vague and indefinite and requires further clarification. He, therefore, remitted the award to the arbitrators with requisite directions for clarification. Against this order of remission the present appellants who are plaintiffs in the case came in revision to this Court. This revision application was rejected on the ground that the order of the judge remitting the award to the arbitrators was not a "case decided" within the meaning of section 115 Civil P. C. and therefore the revision application did not lie. The learned advocate for the appellants has said that it was decided by the judgment of this Court that the question regarding the propriety or otherwise of the remission to the arbitrators could be agitated at the time of this appeal. That decision of the Division Bench of this Court is reported in I L R 1946 Kar. page 21. The respondents party had also filed an application in revision against that order of remission and they claimed that the award instead of being remitted to the arbitratcus should have been forthwith set aside. In any case the matter went back to the arbitrators and it is amazing to find that the fresh award was sent in by only two of the three arbitrators and the third arbitrator was not even informed regarding the sitting of the arbitrators and without his knowledge the two arbitrators decided the case and sent in a further award clarifying the issues in accordance with the directions of the learned Sub‑Judge. It has been stated at the bar that all the three arbitrators were at the relevant time actually living in three far‑flung places. One was in Simla, the other was in Karachi and the third was in Shikarpur and it is alleged that none of them ever met together. There appears truth in this statement as it has not been contradicted by the other. In any case we can ignore this aspect at the present moment, as I will show later.

The learned advocate for the appellants started arguing this matter. Two main legal questions were involved in this case. The first was whether the question regarding the correctness or otherwise of the order of remission of the first award could be agitated in this appeal and the second question was whether the second award by two arbitrators alone without the knowledge of the third arbitrator can be con sidered a valid award and an award duly made in accordance with law. While this matter was being argued the plea advocate for the respondent after answering on the first legal question, set out above, drew my notice to the fact that on 20th November 1941, when this agreement of reference was entered into by the parties and the Court made the order referring the suit to arbitrators, no leave of the Court had been obtained as laid down by O. XXXII, rule 7, Civil P. C, I considered this point to go to the very root of the whole case and, therefore, I called upon the parties to argue on this aspect without going into other question. I think this appeal can now be disposed of on this preliminary point.

Order XXXII, rule 7 reads as follows :

"(1) No next friend or guardian for the suit shall, with out the leave of the Court, expressly recorded in the proceedings, enter into any agreement or compromise on behalf of a minor with reference to the suit in which he acts as next friend or guardian.

(2) Any such agreement or compromise entered into without the leave of the Court so recorded shall be voidable against all parties other than the minors."

It is clear that this provision of law is mandatory and any violation of the same renders the agreement of reference or compromise null and void so far the minors are concerned. Sub‑rule (2) makes it further clear that the adults also can avoid such compromise or agreement of reference if they choose to do so. As against them it is voidable, but as regards the minors it is altogether void. In this connection several rulings have been quoted at the bar and I need refer only to two or three of them. In the case of Kaluram Ramchandra v. Nandlal Gulabchand and others (A I R 1949 Nag. 298) it was held that the compromise by next friend or guardian‑ad‑litem of minor without leave of Court‑is void as against minor. In this case the rulings reported in I L R 28 All. 585 (P C) and 36 Mad. 295 (P C) were relied on. In a rulling of Madras High Court in the case of Johara Bibi and others v. Mohamed Sadik Thambi Marakyar and others (A I R 1951 Mad. 997) it was held as follows

" Where a muslim mother, who has no authority whatso ever under the Muslim Law to act on behalf of her minor sons as the legal guardian, without getting herself appointed as their guardian and without obtaining leave of Court as such guardian agrees to prefer the subject matter of suit to which the minors are parties, to the arbitration, the reference and the award passed thereon are nullities. The question of voidability provided for in O. XXXII, rule 7 (2) cannot arise in such case as it cannot be the intention of O. XXXII, rule 7 (2) to make void agreements voidable."

In the case of Chhbba Lai v. Kallu Lai and others (A I R 1946 PC 72) it has been held as follows :‑

"Rule 7 is imparative and its terms must be strictly com plied with."

The rule supplies to an agreement to refer matters in dispute to arbitration. Such an agreement, which removes the decision of a matter in dispute from the jurisdiction of the Court and refers it to some outside party is clearly an agreement with reference to the suit and not only falls within terms of the rule, but comes within the mischief at which the rule appears to be aimed. The interests of minors might well be sacrificed by an improper reference to arbitration and it is necessary that their interests be protected by the Court. If minors successfully, challenge an went to refer as not made in compliance with sub‑rule (1) of rule 7, it is avoided against all parties under sub‑rule (2)."

In Chitaley, 5th Edition (1951) Vol. III at page 2937 para. 5 it has been clearly said that in the absence of such leave a compromise on behalf of the minors cannot be supported. Such a compromise is, however, not a nullity so far as regards parties other than the minors are concerned. It is voidable against all the other parties but as against the minor himself it is void.

In view of these decisions and in view of the express words of O. XXXII, rule 7 there can be no room for doubt that an agreement of reference in absence of the leave of the Court is void and of no effect. Therefore, in this case there was no valid reference and consequently an award which is based on that reference must fall through. It was argued by the learned advocate for the appellants that the minors had to challenge this agreement by means of a separate suit. I do not think this view is correct. In the first place there has been no decree in the case and the suit has been set down for final hearing. The award had been set aside. The suit had been filed in 1940 and hearing of the case has not yet started although we are in 1955. Then in view of Section 32 of the Arbitration Act itself there is a clear bar to suits contesting arbitration agreements or awards. Section 32 says :‑

" notwithstanding any law for the time being in force, no suit shall lie on any ground whatsoever for a decision upon the existence, effect or validity of an arbitration agreement or award nor shall any arbitration agreement or award be amended, modified or in any way affected other wise than as provided in this Act."

Under O. XXXII, rule 7 a minor becomes a ward of the Court and it is the duty of the Court to safeguard the interests of the minor. Guardians and next friends are not always invariably honest but even if honest they are many a time careless and, therefore, a duty has been cast by O. XXXII, rule 7 on the Court to look after the interests of the minor and see whether an agreement of compromise or any other kind of agreement filed on the minor's behalf will be to his benefit or otherwise, when this fact has been brought to my notice, now it is ‑my duty to safeguard the interests of the minors by dealing properly and legally with the agreement of reference on which an order was secured without obtaining the leave of the Court. It is stated by the learned advocate for respondent No. 1 that one of the minor plaintiffs, being appellant No. 8 who is daughter‑in‑law, the respondent No.1 does not accept this agreement. Even in the absence of that contingency, in my opinion, this agreement of reference and this order of reference clearly violated and committed a breach of the mandatory provisions of O. XXXII, rule 7 and, therefore, they were altogether void and any proceedings taken thereafter are a nullity and of no consequence whatsoever.

In view of this finding it is needless to go into the other question whether the remission of the award was right or wrong or whether the award by two of the three arbitrators made in the circumstances alleged at the bar can be considered valid. In this connection I would also like to refer to certain remarks of the Division Bench of this Court which decided the case in I L R 1946 Kar. page 21. The pertinent remarks are as follows :‑

" ..In the second place, we are unable to see any grave, manifest or irremediable wrong that has been com mitted by the learned judge in remitting the award for reconsideration to the arbitrators.

The decision of the Calcutta High Court in 2 Cal. 325 has equally no application to the facts of this case. This is not a case where the learned trial judge has taken an erroneous view of the law with regard to a particular matter and has thus acted illegally in the exercise of his jurisdiction. All that the trial judge has done in this case is that he has interpreted the award as requiring further elucidation of the arbitrator's finding on issue 12. It is not suggested that the trial judge has taken an erroneous view of section 16 of the Arbitration Act. Whether a judge is right or wrong in deciding to act under section 16 of the Arbitration Act, is a matter to be considered on the facts of each case, and if a judge wrongly takes the view that in his opinion a certain finding of the arbitrators requires elucidation, we can not see how his action amounts to taking an erroneous view of law."

In view of all these reasons I dismiss this appeal on the preliminary objection that the agreement of reference entered into on 20th November 1941 was altogether void and any proceedings taken thereafter were a nullity. I further direct that the appellants do bear the costs of respondents in this appeal.

A.H. Appeal dismissed.

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