' This judgment shall dispose of S. A. O. No, 146/75 and C. R. No, 263/75, as common questions of law are involved therein, It shall, however, remain on the file of the S. A.
0.
2. The facts giving rise to this litigation are that on 7th October, 1968 Mst. Hashmat Bibi filed a petition under section 13 of the Rent Restriction Ordinance against Mohammad Rafi who is husband of Mst. Kaneez Begum, the respondent in civil revision, for his ejectment from a room measuring 12' x 7.1-2" comprising part of Shop No, 326/2 situate in Main Bazar, Khushab. Her case was that the shop was allotted to her husband, who constructed the room in dispute and leased it out to Muhammad Rafi respondent. The entire shop including the property in dispute was claimed to have been transferred to her by the Settlement Department.
3. Earlier on 20th January, 1968 Mst. Kaneez Begum filed a suit against Mst. Hashmat Bibi and her two sons, namely, Muhammad Rafique and Muhammad Sadique, for possession of a site, falling exactly at the back of the room/shop occupied by her husband, which is the subject matter of the ejectment petition. She pleaded that Shop No, 326/2 consisted of two portions; the Eastern portion was settled on her and whereas the western portion was transferred to Mst. Hashmat Bibi. It was asserted that the site in question formed part of the Eastern portion. It may be observed that through a deed dated 13th January, 1968 Mst. Kaneez Begum appointed her husband, as her attorney who conducted the civil suit on her behalf.
4. In addition to these two cases, the property in dispute was also the subject matter of litigation before the Settlement authorities.
5. Without the intervention of the Court, the parties entered into an agreement dated 18th March, 1969 to get their dispute pending before the Civil Court, the Rent Controller and the Settlement Commissioner, decided through arbitration. One Gul Muhammad was named in the agreement, to act as sole arbitrator. This agreement was drawn in two sets and one set was signed by each of the parties. The agreement was not signed by Mst. Kaneez Begum. However, it bears the signatures of her husband who participated in the arbitration proceedings. The arbitrator made his award on 25th March, 1969 in favour of Mst. Hashmat Bibi and others.
6. Mst. Hashmat Bibi filed two applications, one before the learned Rent Controller and the other in the civil Court to get the award made rule of the Court. The opposite-party contested the applications. The authority of Muhammad Rafi to enter into arbitration agreement on behalf of his wife was questioned by her. The learned Civil Judge, who was also acting as Rent Controller, through two separate orders dated 4th July, 1969 rejected these applications on the ground that the reference for arbitration was not made through the Court, as provided by section 21 of the Arbitration Act. After having failed to get the award made rule of the Court, she then applied to the learned Rent Controller as well as to the civil Court that the award may be treated as a compromise under Order XXIII, rule 3, C, P. C., and the case decided in accordance therewith. These applications were also contested by Mst. Kaneez Begum and her husband.
7. On the basis of the evidence led by the parties before him, the learned Civil Judge/Rent Controller, held that Mohammad Rafi entered into arbitration agreement without the permission of his wife ; the agreement also did not indicate that it was executed by him on her behalf. In his opinion the agreement having been made without the intervention of the Court was illegal. He further maintained that the existence of a lawful agreement was the condition precedent for the applicability of Order XXIII, rule 3, C. P. C. He was also influenced by Mst. Hashmat Bibi's failure to rely on the award, before the Settlement Commissioner. Thus he passed two separate orders dated 11th October 1972 rejecting both the applications.
8. In appeal the learned Additional District Judge disagreed with the Courts below that the agreement was not entered into with the consent of all the parties and held that it was binding on them. He however, maintained that under section 47 of the Arbitration Act consent of the parties was essential to treat the award as a compromise and as one of the parties did not accord her consent, the award could not be taken as a compromise. He therefore dismissed both the appeals on 6th March, 1975.
9. The S. A.
0. Has arisen out of the ejectment petition and whereas the judgment passed in the Civil suit has been challenged through the revision petition.
10. The learned counsel for the appellant/petitioner argued that the award given by the arbitrator was in the nature of a compromise between the parties. He submitted that section 47 of the Arbitration Act does not control the provisions of Order XXIII, rule 3, C. P. C. And even if the consent of some of the parties to the award was lacking, the Court could record the compromise and pass a decree in accordance with the award. In his submission, the satisfaction of the Court that the parties had come to a lawful agreement or compromise adjusting the suit, should have been the predominant consideration, for applicability of Order XXIII, rule 3, C. P. C. It was argued that a lawful agreement was reached between the parties and the award made, in pursuance thereof, which could validly be the foundation for adjustment of suit and the ejectment petition. For his these submissions the learned counsel sought support from Arumuga Mudaliar v. Balasubramania Mudaliar and others (1).
11. On behalf of the respondents, their learned counsel raised a preliminary objection that Mst.
Kaneez Begum was not party to the arbitration agreement and that therefore, the award was not binding on her. He contended that both the learned lower Courts after proper appreciation of the evidence had come to the conclusion that the agreement was not executed by Muhammad Rafi respondent on behalf of his wife and that on this short ground alone, the suit could not be adjusted on the strength of the award. He argued, that even otherwise under section 47 of the Arbitration Act, consent of all the parties, is a condition precedent for considering the award as a compromise and as the respondents had declined to accord their consent, no jurisdiction vested in the Court to adjust the suit or the ejectment case in accordance with the award. He heavily relied on Asmatennessa Bibi v. Arju and another (2).
12. Thus the main point falling for consideration is the interpretation of section 47 of the Arbitration Act. The procedure for making reference to arbitration in a pending suit is provided in the Arbitration Act. If the parties want to get their suit decided through arbitration, they must comply with the provisions of sections 21 to 25 of the Act. Reference to arbitration, and an award procured in a pending suit without intervention of the Court, are nullity and such an award cannot be made rule of the Court in accordance with the provisions of sections 14 and 17 of the Act. However, an award procured without recourse to the provisions of sections 21 to 25 of the Act is saved by section 47 from being altogether a nullity, provided the requirements of the proviso to section 47 are complied with. The proviso confers powers on the Court to take into consideration the award obtained, otherwise than through the procedure prescribed by the Arbitration Act, as a compromise or adjustment of the suit, if all the parties to the award give consent thereto.
13. There is no bar on the parties to get their case decided by mutual agreement at any time prior to the final adjudication. Under Order XXIII, rule 3, C. P. C. If the parties enter into a lawful agreement or compromise adjusting their suit wholly or partly, and the Court is satisfied of such (1) AIR. 1945 Mad. 294 (2) PLD 1967 Dacca 603 adjustment, it is bound to record such compromise and pass a decree in accordance therewith. Thus, in case of a valid adjustment in a pending] suit through compromise of the parties, the Court cannot pass a decree except in accordance with the terms of the compromise. Upon the language of rule 3 of Order XXIII, existence of a lawful agreement is one of the essential pre-requisites for applicability of this provision. An arbitration agreement without the orders of the Court in a pending suit, c being a departure from the mandatory provisions of sections 21 to 25 cannot be categorised as a lawful agreement. Such an agreement is not enforceable in law and a party to the suit can legitimately approach the Court to proceed with the trial of the pending cause.
It is clear to me that, even if such an agreement is not tainted with an illegality, the proviso to section 47 places an embargo on the rights'0 of the litigating parties, conferred on them under rule 3 of Order XXIII; that unless all the parties to the award give their consent, it cannot be considered by the Court as a compromise for the purpose of adjustment of the suit.
14. In the instant case, it is quite obvious that the respondents' declined to give their consent for adjustment of the suit according to the award. This gives rise to the question as to whether in such circum-stances the Court could justifiably consider the award as a compromise or adjustment. In this respect, the submission made by the appellant/ petitioner's learned counsel that despite the lack of such a consent, the suit could be adjusted under Order XXIII, rule 3 is devoid of any merit.
This point fell for determination in Asmatennessa Bibi's case, and after consideration of some case law cited from the Indian Jurisdiction it was held 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."
15. Before the enforcement of Arbitration Act, 1940 the law relating to the arbitration was embodied in section 89 and the Second Schedule of the Code of Civil Procedure, 1908. There was no provision in the schedule parallel to the proviso of section 47 of the Arbitration Act. Section 89 read with para. 20 of the schedule permitted filing of the award in the Court in the matter referred to arbitration without intervention of the Court. Under para. 21 condition for making such an award as rule of the Court was the satisfaction of the Court that the matter was referred to arbitration and that an award made which was not hit by paras. 14 and 15 of the Schedule. Para. 14 contained provisions regarding remission of the award akin to section 13 of the Arbitration Act of 1940. Para. 15 enumerated the grounds for setting aside the award. Leach, C. J., who awarded the judgment in Arumuga Mudaliar's case was influenced by the decision of the Full Bench of Madras High Court in Subbaraju v. Venkataramaraju (1) which was given before the enforcement of Arbitration Act of 1940. Even in Arumuga (I) A 1 R 1928 Mad. 1025 Mudaliar's case the view that the proviso to section 47 is sine qua non for considering the award as compromise was not departed with. It was, however, maintained that the proviso did not preclude from consideration an antecedent consent.
In that case, as per arbitration agreement, the parties consented that in the suit pending before the Court, they would abide by the decision or the award to be passed by the arbitrator. This clause was considered as an antecedent consent. So far as the instant case is concerned there is no such condition incorporated in the arbitration agreement.
I do not find myself in agreement with the view taken by the learned Judges in this case. The consent envisaged by the proviso is not the antecedent consent. For attracting the proviso, such consent should be accorded after the award and not when the award did not even come into existence.
16. As regards the objection of the respondents' learned counsel that the arbitration agreement was not reached with the consent of all the parties, the learned Additional District Judge does not appear to have examined this question in true perspective. According to him, there was no power- of-attorney on the file authorizing Muhammad Rafi respondent to refer the matter to the arbitration on behalf of his wife. This finding is, however, contrary to the record. I have found on the file of the civil suit a deed of power-of-attorney dated 13th January 1968, executed by Mst. Kaneez Begum in favour of her husband authorizing him to compromise the suit and refer the matter to the arbitrator. It may be observed that Muhammad.Rafi all along has been appearing in the suit as attorney for his wife. In view of the authority given by Mst. Kaneez Begum to her husband to refer the matter to arbitration she could not be permitted to resile, when the power of attorney had already been acted upon and reference made to the arbitrator, under the agreement. The view taken by both the Courts below in holding that Mst. Kaneez Begum was not bound by the agreement is thus palpably wrong. However, the construction put on the proviso to section 47 by the learned Additional District Judge is not open to exception, and in this respect I entirely agree with him.
17. For all these reasons, I do not find merit in this S. A.
0. As well as the revision petition, which are hereby dismissed, leaving the parties to bear their own costs.
Revision .