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Suit No. 282 of 1982, decided on 8th December, 1983.

‑‑ Ss. 15 & 41‑Civil Procedure Code (V of 1908), S. 141‑Award of arbitrator‑Scope of authority of court to modify same in terms of compromise filed by parties in arbitration proceedings‑Parties agreeing to award with regard to movable assets of deceased but coming to compromise with regard to immovable property outside award‑Held: Act does not disable parties from terminating their dispute in a different way if they are dissatisfied with award and want to substitute it by a compromise‑Joint statement made by parties' counsel in Court praying for modification of award, coming within scope of reference to arbitra tion‑Award confirmed subject to modification as indicated in joint statement of parties.

Munshi Ram v. Banwari Lai A I R 1962 S C 903 rel.

M. A. Rafiq Khan for Plaintiffs.

S. A. Wadood for Defendants.

Dates of hearing: 21st and 29th November, 1983.

This order is to be read in continuation of my earlier order dated 26‑10‑1983 whereby I confirmed the award of the Sole Arbitrators in so far as it related to the distribution of movable assets of the deceased Mian Abdul Aziz, amongst his heirs. On that date the learned counsel for the parties took time to arrive at some settlement with regard to the disposal of the immovable assets of the deceased as I had shown my inclination to set aside the award in so far it related to the disposal of immovable assets of the deceased. On 29‑11‑1983, when this matter came up before me the learned counsel for the parties filed a joint statement indicating the manner in which they have agreed to the disposal of immovable property of the deceased amongst the heirs and prayed for another in terms of the joint statement. The joint statement filed by the learned counsel reads as under:‑

"That the parties to the above matter agree that the award, dated 19‑12‑1981 may be set aside in respect of ground floor of Bungalow No. 633/2 Jamshed Road Karachi and the parties may be called upon to send sealed bids to the Nazir of the Court in respect of above, who shall get the above house mutated and transferred in the name of the party who puts in the highest bid and the others will relinquish their right in the said house and sign, execute and deliver all documents to affect the transfer. The Nazir on receipt of sale price will distribute the said sum in accordance with the Muslim Hanafi Law of Inheritance to all the legal heirs.

It is prayed that the orders in terms of above may please be passed and rest of the award may be made rule of the Court."

When the above joint statement was filed before me I reserved orders thereon as I entertained doubts as to the competency of the Court to modify the award in the manner asked for by the learned counsel in the joint state ment. However, I find that in the case of Munshi Ram v. Banwari Lal (AIR1962SC903), the Supreme Court of India considered the scope of authority of a Court to modify an award in terms of the compromise filed by the parties before the Court in award proceedings. The following observation of the Court may be reproduced here with advantage which appears at page 910 of the report:‑---

(19) We are aware that the Privy Council case has led to a great difference of opinion in India; but it does furnish the right one to the decision of the problem with the view of avoiding the anomalies pointed out by Chakravartti, J. when an award is given the parties cannot, under the Act, challenge it except as laid down there. The powers of the Court are indicated by the Act. They are limited to accepting the award, if there be no objection and passing a decree in accordance therewith, or superseding the reference or revoking or modifying the award or remitting it for further consideration, as laid down in the Act. But, the Act does not disable the parties from terminating their dispute in a different way, and if they do, it could not be intended by law that a dispute, which has been successfully terminated, should again become the subject of litigation. If the parties are dissatisfied with the award and want to substitute it by a compromise involving matters alien to the original dispute which are inseparable, the Court may supersede the submission, and leave the parties to work out their agreement in accordance with the law outside the Arbitration Act. In such circumstances the new compromise itself may furnish a very good ground for superseding the reference and thus revoking the award, as said by Chakravarti, J. where the parties do not throw the award overboard but modify it in its operation the award, in so far as it is not altered, still remains operative and continues to bind the parties and cannot be revoked. In that contingency, the Court may follow one of two modes indicated by the Privy Council in Hemanta Kumari's case 46 lad App 240: A I R 1919 P C 79. If the whole of the subject‑matter of the compromise is within the reference, the Court may include in the operative part of the decree the award as modified. But if it is not so, the Court may confine the operative part of the decree to the award as far as accepted and the other terms of settlement which form a part thereof, if severable and within the original reference, in a schedule to the decree. The portion included in the operative part would be executable, but the agreement included in the schedule would be enforccable as a contract, of which ' the evidence would be the decree but not enforceable as a decree. The power to record such an agreement and to make it a part of the decree, whether by including it in the operative portion or in the schedule to the decree, in our opinion, will follow from application of the Code of Civil Procedure by section 41 of the Arbitration Act and also section 141 of the Code. It only remains to point out that in a reference without the intervention of the Court, the Court has no general jurisdiction over the subject‑matter as in a reference in a pending suit. If the submission is superseded in the former, there is nothing more the Court can do but in the latter, the Court must proceed with the suit before it and give effect to the compromise in the suit according to law."

I am in respectful agreement with the views expressed in the above Indian Supreme Case and 1 am of the view that joint statement made by the learned counsel for the parties praying for modification of the award comes within the scope of reference to the arbitrator. I accordingly confirm the award subject to modification that the disposal of the immovable properties ordered by the arbitrator in the award shall stand modified in the manner stated in the joint statement, dated 29‑11‑1983 filed by the learned counsel for the parties. The award is made rule of the Court subject to above modification and decree to follow accordingly.

M . B . A Order accordingly.

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