1943 (2) TMI 14 - HC - Indian Laws

Summary

Issues Involved:
1. Binding nature of the Indore High Court judgment under Section 13 of the Civil Procedure Code, 1908.
2. Jurisdiction of the Indore High Court to deal with the arbitration award.
3. Whether the judgment of the Indore High Court was given on merits.
4. Alleged misconduct of the arbitrator.
5. Whether the decision of the Indore Court was opposed to principles of natural justice.
6. Validity of the plaintiffs' remaining claims after the award was deemed valid.

Issue-wise Detailed Analysis:

1. Binding Nature of the Indore High Court Judgment Under Section 13 of the Civil Procedure Code, 1908:
The primary question was whether the judgment of the Indore High Court was binding under Section 13 of the Civil Procedure Code, 1908. Section 13 stipulates that a foreign judgment shall be conclusive as to any matter directly adjudicated upon between the same parties, with certain exceptions. The exceptions include judgments not pronounced by a Court of competent jurisdiction, not given on merits, or opposed to natural justice. The Court analyzed that the judgment of the Indore High Court did amount to an adjudication that the award is valid and ought to be filed. Therefore, it was binding unless it fell under any of the exceptions.

2. Jurisdiction of the Indore High Court to Deal with the Arbitration Award:
The plaintiffs contended that the Indore High Court had no jurisdiction under the Indore Arbitration Act to deal with the filing of an award, which was the domain of the District Court. However, the transfer was made under Section 24 of the Code of Civil Procedure of Indore, which allows the High Court to withdraw any suit, appeal, or proceeding pending in any subordinate Court and dispose of the same. The Court held that the Indore High Court had jurisdiction to deal with the matter after it was transferred to it, and it was not open to the Bombay High Court to disagree with the Indore tribunal's decision on jurisdiction.

3. Whether the Judgment of the Indore High Court was Given on Merits:
The plaintiffs argued that the decision of the Court of Appeal in Indore was not on merits, thereby affecting the finality of the lower Court's judgment. The Court distinguished this case from the Privy Council decision in Sheosa & Sitaram Singh, noting that the Court of Appeal in Indore did not entertain the appeal due to a difference of opinion on whether an appeal lay. Therefore, the decision of the lower Court prevailed, and the Court concluded that there was indeed a decision on merits.

4. Alleged Misconduct of the Arbitrator:
The plaintiffs alleged misconduct by the arbitrator, claiming he allowed non-parties to the arbitration to influence his decision. The Court held that misconduct not going to jurisdiction is not a matter that can be addressed by a foreign Court. Such issues should be raised in the foreign Court where the arbitration took place. The Court referenced the Privy Council decision in Oppenheim & Co. v. Mahomed Haneef, which supports this view.

5. Whether the Decision of the Indore Court was Opposed to Principles of Natural Justice:
The plaintiffs argued that the decision was opposed to principles of natural justice. The Court found no basis for this claim, noting that the parties were heard by the learned Judge in Indore, who reached his conclusion. Disagreement with the conclusion does not justify a finding that it was opposed to natural justice.

6. Validity of the Plaintiffs' Remaining Claims After the Award was Deemed Valid:
The plaintiffs sought declarations that they continue to be partners and an injunction to restrain the defendants from excluding them from the partnership. The Court held that if the award is valid, there is nothing left for the plaintiffs once the price is paid. The High Court in Indore had interpreted the award to mean the capital brought into partnership by the plaintiffs, excluding any value for goodwill. Since the award was filed and could be executed as a decree, the learned Judge was right in dismissing the suit. Any order reserving the plaintiffs' rights outside the award would be useless, as they were directed to sell at a specified price, which had been tendered.

Conclusion:
The appeal was dismissed with costs, and the injunction was dissolved. The judgment of the Indore High Court was found to be binding, given on merits, and within jurisdiction. The allegations of misconduct and opposition to natural justice were not upheld. The plaintiffs' remaining claims were rendered moot by the validity of the award.