' This order would dispose of an application made under section 21 of the Arbitration Act, 1940 by the plaintiffs (one of whom is a minor) and the defendants Nos. 1 to 4 for referring the matters in dispute in the suit to arbitration. The defendant No, 5 is not a party to the application.
1. The plaintiff's case in the plaint, briefly stated, is that they for valuable consideration acquired the plot in suit from the defendant No, 5 who put them in its possession and agreed to execute in their favour a lease deed for a period of 99 years. They also pleaded that the defendants Nos. 1 to 4 subsequent to the above transaction illegally trespassed upon the said plot and started raising a compound wall and some structures and in spite of demands made, they did not restrain themselves from continuing with their wrongful acts and that the defendant No, 5 when called upon to intervene and execute the lease deed refused to do so.
' The plaintiffs in the suit have prayed that decree be passed against all the defendants (i) for declaration that they are entitled to possession and peaceful enjoyment of the plot in suit and (ii) for issuance of permanent injunction restraining them from taking forcible possession of the said plot or putting up any construction on it. Against the defendants Nos. 1 to 4 they have also prayed for grant of mandatory injunction so as to compel them to demolish the compound wall and structures raised by them over the said plot. Prayer for issuance of direction to the defendant No, 5 to execute and register a lease deed in favour of the plaintiffs for a period of 99 years has also been made.
' The suit has been contested by the defendants Nos. 1 to 3 who in their written statement, while denying the claim of the plaintiffs, have pleaded that the defendant No, 3 is the owner of the plot in dispute and is in its possession in his own right having acquired the same from one Abdul Ghaffar and that the documents on which the plaintiffs have based their claim are not genuine. The allegation that the defendants Nos. 1 to 4 wrongly encroached upon any plot of the plaintiffs has also been expressly denied.
' The defendants Nos. 1 to 4 have clarified that the defendant No, 2 and defendant No, 4 are not two persons but one and the same person whose correct name is Abdullah Haroon.
2. The defendant No, 5 though served with the summons has not appeared. Accordingly the suit against him has been ordered to proceed ex parte.
3. It appears that the plaintiffs and the defendants Nos. 1 to 4 having agreed to refer the disputes in suit to arbitration moved the present application under section 21 of the Act for obtaining necessary orders from the Court.
4. I heard Mr. Mohsin Tayabali, Advocate for the plaintiffs and Mr. Muhammad Zaki Ahmed, Advocate for the defendants Nos. 1 to 4 in support of the application but find that the question as to the maintainability of the application as framed requires to be resolved first, for which purpose it would be relevant to refer here to section 21 of the Arbitration Acts which reads as follows :-- `'21. Parties to suit may apply for order of reference.-Wherein any suit all the parties interested agree that any matter in difference between them in the suit shall be referred to arbitration, they may at any time before judgment is pronounced apply in writing to the Court for an order of reference."
It would thus be observed that where reference is sought to be made of matters in dispute in a pending suit to arbitration it is an essential requirement of the law that all the parties interested must agree to submit their differences to arbitration and apply in writing to the Court A for an order of reference. In the present case the defendant No, 5 has not joined the application wherein the prayer has been made for the reference, for which reason, therefore, no valid reference can be made to arbitration under section 21 of the Act.
5. (i) When confronted with the reasoning as above, both the learned counsel conceded that the application as framed under section 21 is maintainable. They, however, proceeded to argue that the matters in difference between the parties who are signatories to the application, may be referred to arbitration in accordance with the provisions of section 24 of the said Act. In order to appreciate the argument thus advanced, it would be relevant to reproduce below section 24 upon which reliance is placed :- "24. Reference to arbitration by some of the parties.-Where some one of the parties to a suit apply to have the matters in difference between them referred to arbitration in accordance with, and in the manner provided by section 21, the Court may, if it thinks fit, so refer such matters to arbitration (provided that the same can be separated from the rest of the subject-matter of the suit) in the manner provided in that section, but the suit shall continue so far as it relates to the parties who have not joined in the said application and to matters not contained in the said reference if no such application had been made, and an award made in pursuance of such reference shall be binding only on the parties who have joined in the application."
' Though permitted to argue the application by placing reliance on section 24, on the principle that a mere wrong quotation of the provision of law by itself may not defeat the application, I find that the prayer made for reference still cannot be granted for more than one reason.
Firstly it would be seen from the pleadings of the parties that the main disputes in the suit relate to the right of the plaintiffs to enforce specifically the agreement for grant of lease for 99 years of the disputed plot against the defendant No, 5, for its peaceful possession against defendants Nos. 1 to 4, and declaration and permanent injunction against all the defendants. Thus, the matters in dispute between the plaintiffs and the defendants Nos. 1 to 4 cannot be separated from the rest of the subject-matter of the suit. As award given, if reference is allowed to be made, is bound to affect the rights and obligations of defendant No, 5 whose absence from the proceedings in the circumstances, would, render the same invalid.
Mr. Mohsin Tayabally, the learned counsel for the plaintiffs in order to overcome the objection arising out of the non-joinder of the defendant No, 5 submitted that this defendant is merely a pro forma defendant, that in any case . He has already been declared parte by the Court and thy he cannot be described as an interested party and that in the circumstances his non-joinder would not be an impediment in referring the matters to arbitration as prayed by the plaintiffs and the rest of the defendants, I am afraid that this argument is not of any avail for the reason that against the said defendant. No, 5 substantial reliefs have been claimed in the suit and, therefore, he cannot be described as a mere pro forma defendant.
The further contention raised by the learned counsel that the defendant No, 5 who did not join in the application for referring the matters to arbitration has all along remained absent and against him the case has been ordered to proceed ex parte, in my opinion has no force. The said defendant against whom substantial reliefs have been claimed does not cease to be an interested party in the suit for the mere reason that proceedings against him are taking place ex parte. I am fortified in the view taken as above by the case reported as Ram Harakh Singh v. S. Mumtaz Hussain and another (1), wherein placing reliance upon the cases reported as Imtiaz Khan v. Dost Muhammad Khan and others (2) and Mst. Ghafooran v. Abdul Hamid (3) it was held :- "There is authority for the proposition that where all the parties interested have not agreed that the matter be referred to arbitration, any a and that may have been given is invalid and the fact that proceedings against some of the defendants who did not join in the reference were ex parte does not render the award valid."
6. I may also refer to the case of Guizar Ahmed and others v. Ata Muhammad and others (4). The facts of the said case were that in a suit for dissolution of partnership and rendition of accounts, some of persons
(1) AIR 1949 All. 679 (2) AIR 1933 Oudh 384 . (3) AIR 1938 Oudh 154 (4) AIR 1971 Kar. 570 who were parties to the suit did not contest the suit and were ex parte throughout. The parties contesting the suit made an application to the Court under section 21 of the Arbitration Act, 1940, to refer the disputes to a sole arbitrator, which was granted. The award made by the arbitrator was filed in the Court which was challenged inter alia on the ground that the reference to arbitration was invalid for the reason that all the parties interested had not joined in the application under section 21 for referring the dispute to arbitration. The learned Single Judge (Original Side) overruled the objections holding that the same were neither bona fide nor had any substance as the non- applicant were not parties interested within the meaning of section 21 for the purposes of reference and in any case the plaintiffs were not competent to raise objection on their behalf. The learned Single Judge further observed that the said non-applicants took no interest in the proceedings and at any rate their interest in the subject-matter of the suit would have been infinitesimal. The said judgment was challenged in appeal and was set aside by a learned Division Bench with the observation that where all the parties interested have not been joined in the reference, any award that may be given is invalid even though the proceedings against the party who had not joined in the reference, was ex parte. On the facts of the case, coming to the conclusion that the non- applicants were parties interested it was observed :- " . - ..... The requirements of section 21 could not be ignored upon the consideration relied on by the learned Single Judge to do away with the mandatory requirement."
' The learned D. B. Further held :- if....................... Even if the objections were not filed by the appellants for setting aside the award yet the non-filing of the objections will not make the reference valid as was held by the learned Judge, as the jurisdiction to refer the dispute in terms of section 21 of Arbitration Act can only be exercised if all the persons interested in the suit join in the application. The lack of jurisdiction cannot thus be cured upon this reasoning of the learned Single Judge. It is well-settled that unless conditions necessary for the exercise of jurisdiction are fulfilled it cannot be exercised in the absence of those conditions."
7. Lastly I find there exists yet another objection which in my opinion is fatal to the maintainability of the application made for reference of the disputes which are subject-matter of the pending suit to arbitration.
' It has been noted earlier that the plaintiff No, 3 is a minor. None of the parties, however, before entering into an agreement to refer the disputes in the pending suit obtained leave of the Court as required by rule 7 of Order XXXII, C. P. C. Which provides :- "7. (1) No next friend or guardian for the suit shall, without the leave of the Court, expressly, recorded in the proceeding, 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.
(1-A) Where an application is made to the Court for leave to enter into an agreement or compromise or for withdrawal of a suit in pursuance of a compromise or for taking any other action on behalf of a minor or other person under disability, and such minor or other person under disability is represented by a Council (Advocate) or Pleader, the Counsel (Advocate) or Pleader shall file in Court with the application a certificate to the effect that the agreement or compromise or action proposed is in his opinion for the benefit of the minor or other person under, disability. A decree or order for the compromise of a suit, appeal or matter to which a minor or other person under disability is a party, shall recite the sanction of the Court thereto and shall set out the terms of the compromise in Form No, 24 in Appendix D to this Schedule."
' In the absence of the leave of the Court, which is required to be recorded expressly in the proceedings, on an application made in the manner provided under the Rule reproduced above, the agreement by which reference is sought to be made in the suit cannot be recorded by this Court.
' The view taken as above by me, finds support from the case reported as Mst. Zarel Bibi and others v. Shamsuddin Khan and others (1), wherein placing reliance on rule 7 of Order XXXII, C. P. C. It was held :- "It is clear that this provision of law is mandatory and any violalation 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."
' The learned Judge, after referring to the cases reported as Kaluram Ramchandra v. Nandlal Gulab Chand and others (2), Johara Bibi and others v. Muhammad Sadik Thambi Morakyar and others (3) and Chaba Lal v. Kallu Lal and others (4), further observed :- "In view of these decisions and in view of the express words of Order XXXII, rule 7 there can be no room for doubt that an agreement of reference in the absence of the leave of the Court is void and of no effect."
' The following observations of the learned Court being instructive may also be noted here Under Order 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 the 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 Order 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 interest 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, 2 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,
(1) PLD 1956 Kar. 150 (2) AIR 1949 Nag. 298
(3) AIR 1951 Mad. 997 (4) AIR 1946 P C 72 ' in my opinion, this agreement of reference and this order of reference clearly violated and committed a breach of the mandatory provisions of Order XXXII, rule 7 and, therefore, they were altogether void and any proceedings taken thereafter are a nullity and of no consequence whatsoever.
8. Reference may also be made to some of the other cases, which have bearing on the question under consideration :-
(i) In the case of Davuluru Vijaya Ramayya v. Davuluru Venkatasubba Rao and others (1), after discussing the case law on a question similar to that presently under consideration a learned Division Bench of the Madras High Court held :- "In my opinion, therefore, the agreement contemplated in Schedule I, para. 1, et seq is an "agreement with reference to the suit" under Order XXXII, rule 7, and it is not validly entered into on behalf of a minor where the guardian of the minor purports to bind the minor without the leave of the Court expressly recorded and thus exceeds the authority given to him by the said rule."
(ii) The facts of the case reported as Chhajumal v. Tarloki Natu (2). Were that the disputes, subject- matter of a suit filed by a minor, were referred to arbitration by an order passed by the Court on the application filed by the parties. On behalf of the plaintiff (a minor) the said application was signed by his next friend. After the award was made it was filed in the Court but was set aside by the subordinate Court at the instance of the minor on the ground that no expressed sanction of the Court vk as obtained by his next friend to refer the dispute to arbitration. The said order was challenged before the High Court which, following the decision given earlier by the Punjab Chief Court, held that express sanction of the Court was necessary to bind the minor.
(iii) In the case of Sadashirappa and others v. Sangappa (3), it was held that the provisions of Order XXXII, rule 7, C. P. C. Are imperative and that where one of the parties to the suit is a minor and represented by his Mother as guardian ad /item and the suit is referred to the arbitration by the parties by a reference made without the sanction of the Court, the award and decree passed in terms of the award are void.
(iv) In the case reported as Chhabba Lal v. Kallu Lal and others, the learned Judges of the Privy Council after observing that rule 7 of Order XXXII, C. P. C. Is imperative and its terms must be strictly complied with agreeing with the observations made in the case of Mariam Rib! v. Mst. Amina Bibi
(4) held. C ...................................... That Order XXXII, rule 7 applies 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 the 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 interest be protected by the Court. If minors successfully challenge an
(1) AIR 1917 Mad. 672 (2) AIR 1926 Lah. 665
(3) AIR 1931 Born. 500 (4) AIR 1937 All. 65 ' agreement to refer as not made in compliance with subsection (1) of rule 7, it is avoided against all parties under subsection (2)."
(v) The facts in the case of Deo Narain Singh and others v. Siaber and others (1), were that during the pendency of the suit an application was filed for reference to arbitration purporting to be on behalf of the parties to the suit. The Court on the basis of that petition made an order of reference and an award was made which was made rule of the Court and a decree was ordered to be passed on its basis. The decree was unsuccessfully challenged before the lower appellate Court and thus the matter came before the High Court. Citing with approval the case of In re : Kedar Natu Basant Lal (2), wherein it was held that where the next friend or guardian ad litem of a minor party agrees to join in a reference to arbitration, the leave of the Court to do so on behalf of the minor must be obtained by the next friend of guardian ad litem and the leave must be expressly recorded in the proceedings in compliance with the provisions of Order XXXII, rule 7, C. P. C. And the omission to obtain the leave renders an award or any decree upon it voidable at the instance of the minor, the learned High Court on the facts of the case held :- "It is to be remembered that the suit was for declaration of title and recovery of possession in respect of a certain piece of land in which the minors as well as the other plaintiffs had a common case and so had the minor defendant a common case with the other defendants. That being so, the award based upon such a reference was not a valid award and could not be given effect to."
' The learned High Court after discussing the effect of the provisions of sections 21 and 24 of the Arbitration Act, 1940 and finding that it was impossible for the Court to refer the matter in dispute between the parties to reference to arbitration only and continue to proceed with the suit so far as the minors were concerned and that having regard to the nature of the suit itself it was essential that all the parties to the suit should have joined in the reference, held that leave of the Court ought to have been obtained by the natural guardians on behalf of the minors before a valid reference could be made.
(vi) The principle that where a minor is a party to the litigation no effective reference to arbitration can be made by the parties unless the next friend or the guardian ad litem obtains leave of the Court to agree to any such reference and that permission in general terms given by the Court that the matter may be referred to arbitration would not be sufficient was recognised also in the case of Lilju Mandal v. Smt. Chandra Devi (3) wherein the learned Court observed :- "The Court must first be asked by the guardian of the minor for leave to permit him to agree to the reference to the arbitration and the Court must specifically record its reasons for giving or refusing such permission. It is only after obtaining the leave of the Court that the guardian can agree to a reference to the arbitration. That clearly laid down under Order XXXII, rule 7 of the .Code of Civil Procedure which also provides that the minor concerned
(1) AIR 1952 Pat. 461 (2) I L R 18 Pat. 217
(3) AIR 1964 Pat. 498 can avoid the award or decree if there is no compliance with the requirement of this rule."
(vii) In the case of Girdhari Prasad v. Ambika Prasad (1), while citing with approval the decision given in the case of Deonarain Singh v. Siyabar Singh (ibid) and Lilju Mandal v. Chandra Devi (ibid) it was observed :- " But it is well-settled that on account of non-compliance of the provisions of Order XXXII, rule 7, C. P.
C. The minors could avoid the award."
(viii) In the case of Ghulam Abbas and others v. Faqir Hussain (2), a learned Judge of the Lahore High Court after coming to the conclusion that while passing the impugned judgment and decree based on compromise the learned lower appellate Court did not take into consideration the interest of Ghulam Abbas, a minor appellant, as required under Order XXXII, rule 7, C. P. C. Held that the said judgment and decree were, therefore, void so far as the said minor was concerned. It was further held that as the judgment and decree were indivisible, the same were invalid in toto. The learned Judge in coming to the above conclusion relied upon the cases reported as Mst. Mohbat Bi v. Qasim Ali and -others (3), Subramanian Chettiar v. Raja Rajeswar Doral and others (4), Mahatab Singh and others v. Raja Durga Narain Singh and another (5), Mst. Sajida Sultana and another v.
Messrs Eastern Traders and 3 others (6) and Aril Yazda, I and another v. Sheikh Abdul Salam and others (7).
(ix) In the case of Ahrnad Khan and others v. Jaffar Abbas and others (8) it was observed that sub- rule (1) of rule 7 does not specify the exact stage at which a guardian ad litem is to apply for permission of Court for entering into agreement or compromise on behalf of the minor and that the permission can be granted even after the agreement has been entered into and that such an agreement is not ab initio void but only voidable and that the agreement to advantage of a minor can be given effect even though Court's permission had not been obtained before entering upon the same.
' I may observe here that this case has been noted by me to throw light on the opinion expressed by the learned Judge though the principle stated therein, would not be attracted in the (present) case under consideration, as at no stage the parties applied for grant of permission as required by rule 7 of Order XXXII, C. P. C.
(x) Finally, I may refer to the case of Smt. Vidayabai and others v. Moorajmal (9). The facts of the said case were that an application for ejectment was filed by the landlord against one Jiandmal, who was the tenant. The application was contested and the Rent Controller dismissed the same.
The landlord challenged the said order by filing an appeal which was allowed by the appellate Court/District Judge, Jacobabad. The petitioners, therefore, filed a second appeal in the High Court which
(1) AIR (?) Pat. 218 (2) 1983 CLC 99
(3) 1980 CLC 1642 (4) AIR 1915 P C 33
(5) AIR 1936 All. 811 (6) PLD 1971 Kar. 109
(7) P T, D 1957 Lah. 983 (8) 1983 CLC 3043 ' however, was dismissed on the basis of a concession made by the petitioners' counsel. This led to the filing of a petition for grant of special leave to appeal before the Honourable Supreme Court where inter cilia it was argued that the High Court had erred in dismissing the appeal on a concession albeit by counsel, without applying its mind to the question whether the compromise was in the interest of the minors. The Honourable Judges of the Supreme Court accepted this arguments, with the following observations :- "Mr. Khoja referred us to the provisions of rule 7 of Order XXXII of the Civil Procedure Code and submitted that even if they were not applicable in terms to proceedings in rent cases, the beneficial principle laid down in this rule had to be followed in rent cases. We agree with great submission and we have to record with great satisfaction that Mr. Noori, who appeared for the caveator conceded that the principle of equity enshrined in rule 7 of Order XXXII of the Civil Procedure Code should be applied to rent cases. Therefore, we convert this petition into an appeal and allow it."
9. The upshot of the above discussion is that the application made for reference to arbitration of the matters in dispute in the suit can neither be granted under section 21 or in terms section 24 of the Arbitration Act, 1940. The application is accordingly dismissed.