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Civil Revision Case No. 155 of 1957, decided on 14th November 1957, from the order of Muhammad Shafi, Civil judge 4th Class, Lahore, dated the 1st June 1957.
Ss. 2 (c) & 33 --Validity of award challenged by application under S. 33 --Pecuniary Jurisdiction of Court how to be determined.
The Court which would have jurisdiction to decide a suit in respect of the subject‑matter, which is the subject -matter of the reference which led to the making of the award, would have jurisdiction to determine the validity of the award.
S. 33‑Applicant may put any valuation on application under S. 33‑Suits Valuation Act (VII of 1887). S. 9‑R. 10 of Rules framed by High Court under S. 9 is applicable to suits only.
Rule 10 of the rules framed by the High Court under section 9 of the Suits Valuation Act, 1887, is not applicable to application made under section 33, Arbitration Act, 1940. The rule applies only to suits. The valuation for the purpose of jurisdiction of the application under section 33, Arbitration Act. 1940 must be determined in accordance with the provisions of the Arbitration Act, 1940 and not by a direct reference to the Suits Valuation Act. 1887.
It is, therefore, open to an applicant to put any valuation on application made by him under section 33 of the Arbitration Act, 1940.
Muhammad Fazil for Petitioners.
Muhammad Abbas for Respondent.
Dates of hearing: 12th and 14th November 1957.
This is an application in revision against an order dated the 1st of June 1957, passed by Sheikh Muhammad Shafi, Civil Judge Fourth Class. Lahore. by which he decided that he had jurisdiction to entertain an application filed by the respondent, Malik Muhammad Sadiq, under section 33 of the Arbitration Act of 1940.
The respondent was a member of the petitioner Society, the Lahore‑Ferozepur Transport Co‑operative Society Limited, Lahore, and held 132 shares of the value of Rs. 100 each. It is alleged that by an application dated the 8th of December 1954, made to the Society, the respondent declared that he had transferred all his shares to his nephews and that the transfer was duly recorded in the books of the Society. Subsequently, however, the respondent challenged this transfer and the dispute was referred to the arbitration of Sayyed Manzoor Hussain, Deputy Registrar. Co‑operative Industrial Society, Lahore, under Rule 18 of the Government notification No. 13819 made under section 43. (1) of the Co‑operative Societies Act, 1912. By his award dated the 8th of February 1957, Sayyed Manzoor Hussain held:
"132 shares belonging to the petitioner, Malik Muhammad Sadiq* * * * * stand legally and finally transferred in favour of * * * sons of Malik Muhammad Ishaq and their dividend, with effect from the date of the transfer, be paid to them or their guardian:'
The respondent filed a petition under section 33 of the Arbitration Act on the 19th of February 1957, in the Court of the Senior Civil Judge, Lahore, praying "that the award dated the 8th of February 1957 made by Sayyed manzoor Hussain. P. C. S. Deputy Registrar. Co‑operative Industrial Societies. Lahore, be set aside". It might be noted that in this petition the respondent repudiated the alleged transfer by him of his shares in favour of his nephews. The son of his real elder brother, Malik Muhammad Ishaq. No Valuation for the purpose of jurisdiction is mentioned in the application; but it is quite clear from it that the impugned award had the effect of taking away from the respondent the ownership of 132 shares of a total value of Rs. 13,200. The Semor Civil Judge, who is the receiving officer for ill the plaints and applications, without either requiring the applicant (namely Malik Muhammad Sadiq, respondent in this Court) to specify the valuation for jurisdiction or ascertaining that valuation from the contents of the application itself transferred it for adjudication to a fourth class Civil Judge. The application is admittedly one under section 33 of Arbitration Act which runs:--
"Any party to an arbitration agreement * * * * desiring to challenge the* * * * * validity of * * * * an award" * * * * " shall apply to the Court and the Court shall decide the question * * * *"
The expression "Court" is defined by section 2 (c) of the Act, but before referring to that definition, it is necessary to refer to section 31 which relates to "Jurisdiction". Sub section (2) of the section runs as follows:‑
'Notwithstanding anything contained in any other law for the time being in force grid save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award " * " * * shall be decided by the Court in which the award* * * * may be filed, and by no other Court."
Subsection (1) provides:--
"Subject to the provisions of this Act, an award may be filed in any Court having jurisdiction in the matter to which the reference relates."
Therefore, in order to ascertain the Court which will have jurisdiction to decide an application which challenges the validity of an award, the Court which has "jurisdiction in .the matter to which the reference relates" must be ascertained. Section 2 (c) provides:-
"'Court' means a Civil Court having jurisdiction to decide the question forming the subject‑matter of the reference if the same had been the subject‑matter of a suit, but does not, except for the purpose of arbitration proceedings under section 21, include a Small Cause Court."
It is thus obvious that the Court which would have jurisdiction to decide a suit in respect of the subject‑matter, which is the subject‑matter of the reference which led to the making of the award would have jurisdiction to determine the validity of the award.
Counsel for both the parties said that the reference itself has not been filed in this case and that its terms are clear from the following paragraph in the award:‑
"It is alleged by Malik Muhammad Sadiq, petitioner, that 132 shares owned by him in the Lahore‑Ferozepur Co‑operative Transport Society Limited. Lahore, have been illegally transferred by the Society in favour of his nephews."
It is conceded by the learned counsel for the petitioner that if, instead of having to go to arbitration. Malik Muhammad Sadiq had been at liberty to file a suit, he could have asked for, a bare declaration either that the alleged transfer was a nullity or that it was never made. It is further admitted by the learned counsel that in such a suit it would have been open to the plaintiff to value his suit at any amount for the purpose of Court fee and that the same valuation would have been the valuation for jurisdiction of the Court. It was thus open to the applicant, Muhammad Sadiq, to put any valuation on his application tinder section 3 of the Arbitration Act. As this has not been done, it is impossible to determine which Court would have Jurisdiction to decide the application. I, therefore, remand the case to the lower Court with the direction to require the applicant to amend his application so as to indicate its valuation. After this has been done, the Court will decide whether it has jurisdiction to proceed in the matter or not.
Learned counsel for the petitioner urged that the valua tion for the purpose of jurisdiction in this case must be determined in accordance with Rule 10, framed by the High Po‑srt under section 9 of the Suits Valuation Act, as the relief asked for in the application is for setting aside the award and not for a mere declaration. The relevant portion of Rule 10 is as follows:‑
"Suits in which the plaintiff asks for cancellation of a decree for money or other property having a money value or other document securing money or other property having such value.
(a) * * * *
(b) For the purposes of the Suits Valuation Act, 1887, and the Punjab Courts Act, 1918. according to the value of the subject‑matter of the suit and such value shall be deemed to be‑
(i) If the whole decree or other document is sought to be cancelled the amount or the value of the property for which the decree was passed or other document executed;
(ii) If a part of the decree or other document is sought to be cancelled, such part of the amount or value of the property...
In the first place, the rule in terms, is not applicable t an application under section 33 of the Arbitration Act. I applies only to suits. The valuation for the purpose of jurisdiction of the present application must be determined in accordance with the provisions of the Arbitration Act an not by a direct reference to the Suits Valuation Act. A already pointed out, under that Act the valuation must b determined on the assumption that the present application is a suit for a declaration‑‑‑and not for cancellation of a decree or document,
The present petition is accepted to the extent indicated in the last but one paragraph, the finding of the lower Court is set aside and the case is remanded for the determination of the question of jurisdiction after the applicant has valued the application. In the particular circumstances of this case, the parties are ordered to bear their own costs here as well as in the Court below.
K. M. A. Case remanded.
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