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SUPREME CO:CRT REPORTS [i953]

KUMBHA MAvVJI

UNION O:F INDIA-

[iVIEHR CHAND MAHAJAN, VrvIAN BosE and

JAGANNADHA DAS JJ.]

Indian Arbitration Act (II of 1940), ss. 14 (2), 31 (3) and (4) --Filing of award--Urnpire handin(I over award to parties--li'iling in Court by part11--Necessity of a11thorisa.tion of arbitrator or mnpi1'e--Award filed in two Courts--Exclnsive j11risdiction of Co11rt in which awa.rd was filed earlier-Filinu awctrrl after arbitration is coinpletc--Applicability of s. 31 ( 4)--"In a reference", meaninq of.

The mere filing of award in Court by a party to it without the authority of the arbitrator or umpire is not a su!licient OOlllpliance with the terllls of s. 14 of the Indian Arbitration Act, 1940, nor can it bo inferred from the mere handing over of the original award by the umpire to both the parties that he autlwrised thelll to file the same in Court on his behalf; that authority has to be specifically alleged and proved.

The phrase "in a reference" in s. 31, sub-s. (4), of the Indian Arbitration Act1 1940, is coml_)rehensive enough to cover an applic. ation first made after the arbitration is completed and a iinal award made, and the subsection vests exclusive jurisdiction in the Court in which an application for filing an •ward has been first made nuder s. 14 of the Act.

The respondent who was a party to an award filed itn application before the Subordinate Jndge of Gauhati under s. 14 ('2) of the Indian Arbitration Ad, on tho 10th August, 1949, praying that the umpire may be directed to file the award in Court and upon this notice \Yas issued to the umpire to file the award in Court before 24th August, 1949.

As the original award had been handed over to the parties, the umpire sent by post on the 18th August, 1949, a copy of the award signed by him.

The Court directed the respondent to file the original award in Court and he did so on the 3rd September, 1949. :\!eanwhile the appellant's solicitors sent to the Registrar of the Calcutta High Court Original Side, on the 17th August, 1949, the original award for being filed in Court and the award was filed on the 29th August: Held, that, as the umpire had, on the direction of the Subordinate Jndge of Gauhati sent a copy of the award signed by him to the Court on the 18th August, 1949, the earlier filing for the purposes of s. 31(3) of the Arbitration Act was in the Ganhati Court and not in the Calcutta High Court, though the original award was filed by the respondent in the Gauhati Court only after the appellant's solicitor had sent the award for filing to the

Calcutta High Court.

In the circumstances the Gauhati Court 1953 alone had jurisaicition to proceed with the hearing of the dispute - under s. 31 of the Act.

KumbhaMawji Judgment of the Calcutta High Court affirmed. v.

Union of lndia ..

CIVIL APP.ELLATE .JURISDICTION : Civil Appeals Nos. 133 and 131of1952.

Appeals from the .Judgment and Decree dated the 23rd February, 1951, of the High Court of .Judicature at Calcutta (Harries C.J. and Bannerjee .J.) in Appeal No. 11of1950 arising out of the Judgment and Decre 0

dated the 16th day of December, 19i9, of the said High Court (Sinha J.) in its Ordinary Original Civil .Jurisdiction in Award Case No. 208 of 19i9.

N. 0. Chatterjee (Amiya Kumrir Jfukhe1:jea, with him) for the appellant.

0. K. Driphtary, Solicitor-General for India (G. N.

Joshi and Jindra Lal, with him) for the respondent.

1953. April 16. The .Judgment of the Court was delivered by

JAGANXADHA DAS J.-On the 28th of January, 1948, the appellant, Khumba Mawji, entered into an agreement with the respondent, the Dominion of India (as it then was) to manufacture and supply, to the Bengal Assam Railway, stone boulders and ballast from Chutiapara quarry. The agreement was entered into at Calcutta, though the work was to be carried ont in Assam. It was a term of the agreement that if any differences arose between the parties, they were to be referred to the arbitration of two persons, one to be nominated by each side, and that if the arbitrators were not able to agree, the matter was to be decided by an umpire to be nominated by both the arbitrators. Differences having, in fact, arisen, the dispute was referred to two arbitrators and on their disagreement the matter went up to an umpire, one Mr. P. C. Chowdhury. The umpire made two awards on or about the 20th of .Julv, 1949, in favour of the appellant.

By one of then1 he directed a sum of Rs. 3,67,000 to be paid by the respondent to the

1953 appellant on or before the 19th of Augu; t, 1949, with - .. interest thereafter at 6 per cent per annum in case of Kumbha Mawp default. J3y the other he directed a sum of Rs. 83,000

Uni'.oa ~India. to be similarly paid by the respondent to the ap:iellant. He is said to have made over each of the two

Jagannadha awards, in original, to each of the parties. On the

DasJ. 10th of August, 1949, the respondent filed an application under section 14, sub-seCltion (2), of the Indian Arbitration Act, 1940, before the court of the Subordinate Judge of Gauhati in Assam praying that the umpire, Mr. Chowdhury, might be directed to file both the awards in court so that the petitioner might get an opportunity for filing objections thereto.

On this application notice was issued to the umpire to file the awards into that court before the 24th of August 1949.

The umpire sent a letter dated 18th August, 1949, to the Subordinate Judge, which is as follows with copies of the awards :-

"Dear Sir, With reference to your notice in money suit No. 63 of 1949 requiring me to submit the awards made by me in the above mentioned dispute on 20th July, 1949, I beg to submit that the two awards were made and signed by me in the presence of the parties and handed over to me on 20th July, 1949.

As directed by you 1 am sending herewith copies of the same signed by me.

On the back of each of these copies occurs the receipt of the parties to the awards."

On receipt thereof, the Subordinate , Judge made an order on 24th August, 1949, in the following terms :---

"Notice on the umpire served. Seen his report forwarding copies of the award of which the originals are said to have been made over to the parties. Applicant to file his copy on Brd Septem her, 1949".

On the 3rd of September, 1949, the respondent filed the awards which were handed over to it bv the umpire, and the matter was being proceeded with by issue of further notices Mtd filing of objectiom in the court of the Suhordina, te .Tudge1 GauhiJ'ti, .

Meanwhile on the 17th of August 1949, i.e., a week

19S3 after the respDndent made its first application in the . -- ..

G h t. t th ]] ' ]" M KumbhaMawJ1 au a i cour , e appe ants so imtors, " essrs. v Mukherjee and Biswas, sent a letter to the Registrar Unian af.India. of the High Court, Original Side, as follows :

"On behalf of our client Mr. Kumbha Mowjee we Jagannadha

Da~ J. beg to enclose herewith two original Awards duly stamped and both dated 20th July, 1949, for the respective sums of Rs. 3,67 ,000 and Rs. 83,000 duly signed by the Umpire Mr. P. C. Chaudhury for filing.

Please therefore direct the office to file the said two Awards and to issue notices in respect thereof expeditiously."

After some correspondence between the Deputy Registrar and the solicitors calling for some further papers, the Deputy Registrar informed the solicitors by his letter dated the 29th August, 1949, that the award had been filed and asked the solicitors to take out from the court and serve on the parties concerned the statutory notice fixing a date for judgment upon the said award by the Commercial Judge of the court.

Notices were thereupon issued to both the parties in the following terms :

"To

1. Kumbha Mawji.

2. The Dominion of India represented by the Assam Railway.

Take notice that the Award of the Umpire appointed in the matter of the above Arbitration Agreement had been .filed on the 29th day of August, 1949, and that the Court hearing the commercial causes will proceed to pronounce judgment on such award on 7th day of November, 1949.

Dated the 29th day of August, 1949." This notice was served on the respondent on the 2nd of September, 1949. Thus in respect of these awards, proceedings were initiated purporting to be under section 14 (2) of the Indian Arbitration Act simultaneously both in the court of the Subordinate Judge 114

882 Sl'PR.EME COt'R.T REPORTS

1953 of Gauhati in Assam as well as on the Original Side - of the High Court at Calcutta. • Ku1nbha-Mawj~· . , v.

The appellant m answer to the notice rnsued by the

f; nionof India. Gauhati court on 3rd September, 1949, appeared before that court on 28th October, 1949, and obtained Jagannadhn adjournments from time to time until 10th December,

DaoJ. 1949.

On that date the Gauhati court rejected his prayer for any further adjournment and fixed 20th .January, 1950, for an ex parte hearing.

Meanwhile, the respondent after receiving the notice issued to him by the Calcutta High Court filed, on the 24th of November, 1949, an affidavit dated the 15th of November, 1949, stating his objections to the jurisdiction of the Calcutta Court and to the validity of the awards.

On the same date a counter affidavit thereto dated the 19th of November, 1949, was filed on behalf of the appellant. On these affidavits the matter was taken up for consideration by the Commercial , Judge of the Calcutta High Court on the 16th of December, 1949.

The learned Judge overruled J, he objections of the respondent, and passed judgment on the two awards. On appeal therefrom by the respomlent to the Division Bench, the learned Judges reversed the judgment of the single Judge. They held that there had been no proper application under section 14(2) of the Indian Arbitration Act, before the High Court of Calcutta, anrl that consequently thnt Court had no jurisdiction to deal with the matter.

Before the learned single Judge of the High Court the main objection taken and set out in paragraph 14 of the respondent's affirlavit dated the 15th of November 1949 was as follows:

"I submit further that inasmuch as the applic>ttion of the Dominion of India nuder section 14 (2) of the Indian Arbitration Act was made as aforesaid to the said Court a, t Ganhati before the award was filed in this Hon'ble Court by Kumbha Mawji, the Court at Gau ha ti alone has jurisdiction."

Under section 31 (1) of the Indian Arbitration Act an award may be filed in any court having jurisdiction in the matter to which the reference relates. The

s.c.1~.

SUPREME UOCHT ItRPOH1'S 883

reference in tqis case arose out of a contract which, as 1963 already statrd, wa.s entered into a.t Calcutta. and had -- to be performed in Assam.

Thus the Gauhati court KumbhaMawji as well as the Calcutta High Court admittedly had Union~ India. jurisdiction over the subject-matter of the reference. _ The point taken, however, on behalf of the respondent .f agannadha in their objections was that, having regard to section Da., .J. 31, sub-section (4) of the Aet 11nd to the fact tlmt an application under section 14, sub-section (2) for a direction to the umpire to file the award was made to the Gauhati court as early as the 10th August, that court was seized of the matter from that date, amt that therefore a11y application under section 14 on a later date to another court, though otherwise compe tent, was liarred u11der section 31, 'mh-section (4).

This was the main question that was Sl'riously pressed before the learned single Judge. But the learned , Judge was of the opinion that section 31 (4) related only to applications made during the pendency of a reference to arbitration and not to applications made subsequent to the m11king of 11n 11\rnrd. He thought that in respect of applications for filing an award the exulusive

jurisdiction w11s determined with reference to the question as to which was the competent court in which the award was, in fact, first filed under section 14, sub-section (2) (as distinct from when the application for the filing of the award was first presented).

In this view, the learned Judge held on the facts th11t the 11ward must be taken to have been filed earlier in the Calcutta court and not in the Gauhati court. He accordingly held that the Calcutta High Court had exclusive jurisdiction lrnving regard to section 31 (3), and hence proceeded to judgment on the 11ward, the respondent not having filed any objections before him in time.

On appeal, the learned Judges considered it unnecessary for them to dispose of the case on either of tlw above grounds c:onsiclercd by the single .Judge, t<ncl held that on the facts it was quite c.lear that there had been no rlue filing of the aw11rd at 11ll in the Calcntta court under seetion 14 (2) inasmuch as t\lc mrnrd3

884 SUPitEME COUitT REPOH:I18 [1953]

1953 which were claimed to have been duly , filed were, in

K nb--;:-:\1 .. fact, not filed by the umpire ; nor was it shown that "' :. ' awp they were filed under his authority.

On this limited Union of India. ground they reversed the decision of the learned single Judge and vacated the judgment given in favour of Jaganoodha the appellant on the basis of the two awards.

Hence Das J. these two appeals to us.

On the facts stated above three questions i1risc for consideration:

(1) Whether the appellant had the authority of the umpire to file the awards on his behalf into court in terms of section 14 (2) of the Arbitratiou Act ;

(2) Whether in view of sub-section (3) of section 31 of the Act it can be said that the awards were filed in the CvJcutta High Court earlier than in the Gauhati court ; and

(3) Whether the scope of sect.ion 31, sub-section (4) of the Act is limited to applications under the Act during the pendency of the arbitration proceedings only.

As regards the first question, section 14, sub-section (2) provides that,

"the arbitrators or umpire shall, at the request of any party to the arbitration agreement or any person claiming under such party or if so directed by the court and upon payment of the fees and charges due in respect of the arbitration and award and of the costs and charges of filing the award cause the award or a signed copy of it, together with any depositions or documents which may have been taken and proved before them, to be filed in court, and the court shall thereupon give notice to the parties of the filing of the award."

This section clearly implies that where the award or a signed copy thereof is in faut filed into court by a party he should have the authority of the umpire for doing so.

This is, at any rate, the assumption on which the question has beeli dealt with in the High Court, and it has not been contended before us that the filing of the award into court by a party himself

s.c.R.

SUPliE:ME COURT l~EPORTS 885

though without the authority of the umpire to do o 1953 on his behalf, is sufficient compliance with the terms K b-;-;,1 . . . of this section. The learned Judges of the High Court um '~. awi• were of the opinion that the authority of the umpire Union of India. empowering the appellant to file the original awards into court on his behalf has not been made out on the Jagannadha evidence in the case. The argument stressed before us Das 1 is that in para 7 of the affidavit dated the 19th of November, 1949, filed on behalf of the appellant in the High Court on the 24th of November, 1949, it is stated that" On or about the 21st July, 1949, the said Umpire made over the said original award to this deponent for filing." lt is urged that this is an averment of the requisite authority from the umpire, and it is pointed out that this assertion has not been contradicted on the other side by any reply affidavit. It is contended therefore that the filing was valid. The learned Judges in coming to the contrary conclusion relied on two facts, namely, that the umpire in his letter to the Gauhati court dated 18th August, 1949, when sending copies of the awards in compliance with the notice issued to him by that court merely stated that he handed over the awards to both the parties, but did not say that he authorised any of them to file the same into court on his behalf. The learned Judges were also of the opinion that the umpire as a person of commonsense could not be supposed to have authorised both the parties to file the awards into court on his behalf. We are inclined to agree with this reasoning. vVhere, as in this case, the originals are said to have been handed over to both the parties, it cannot be assumed that the mere handing over of the awards to the parties necessarily implies the authority of the umpire to file the same into court on his behalf. That authority has to be specifically alleged and proved. In the present case the statement in the affidavit relied on by learned counsel before us is no more than an assertion that the umpire handed over the original awards to the appellant for filing, but there is no allegation that they were so handed over to him for filing on behalf of the umpire.

886 SUPREME COURT ltEPORTR [1953]

l953 The umpire may not have been aware that the awards

K bl ,, .. should be filed into court onlv bv himself or under his tun inJ~-1.UU'J'l h .t • v. aut on .y.

Union of lnrfla.

.J aga.nna.dhrJ

DasJ.

Learned counsel for the appellant urged that the question of the authorisation of the umpire for the filing of the award by the appell1111t was one that was not raised at all as an objection before the learned single Judge of the High Court, and that such an objection should not have been taken notice of for the first time on appeal. It is no doubt true that neither the affidavit filed on behalf of the respondent nor the judgment of the learned single Judge gives any indication of this question having been raised in the first court. Indeed, the learned .Judges on appeal recognise it when they say towards the concluding portion of their judgment as follows:

"It does not appear that the point on which the appeal succeeds was argued in the court below. But it is a point of law and no ojection was taken before iis by the respondent to the appellant taking the point before us ".

Though it is somewhat difficult to see how the qnos tion raised can be said to be a pme question of law, it is quite clear from the above extract that no objection was taken by the respondent to the point being raised.

It has not been suggested before us that this statement in the judgment was in .111y way erroneous. Appellant's counsel argued that if the learned Judges on appeal felt inclined to dispose of the case on this point alone, they should have called upon the umpire to dari(y whether or not the appellant had his authority, or given an opportunity for production of his affidavit in support of the autho1; ity.

Learned counsel presses that an opportunity should now be allowed. It does not appear, however that it is either necessary or desirable at this stage and after this lapse of time to allow this matter to go back for that purpose.

Because, apart from the question of mere want of proof of authority, it is clear that in a case of this kind and on the facts above stated, it was

S.C.R.

SlJP8EME COURT REPORTS 887

incumbent on. the appellant to allege categorically 19.53 that, in terms of sub-section (2) of section 4, he had - th 't h 't f h Th ]] Kumbha Mawji e reqrns1 e aut on y o t e umpll'e. , at a egat10n iR wanting not only in the affidavit dated the 19th of Union~ India.

November, 1949, but what is more important is that when the awards were filed into court on the 17th of Jagannndha August, 1949, by the solicitors on behalf of the appel- DaaJ. !ant with a letter which might be treated as the initial application to the court, there is not a word to suggest that the awards were being filed nuder th•.' authority of the umpire. The letter contained only a

bald statement that the two original awards duly signed by the umpire were enclosed therewith for filing, with a request to direct the office to file the two awards and to issue notices in respect thereof expeditiously.

In those circumstances, there has been cleurly no sufficient compliunce with the terms of section 14, sub-section (2) of the Act to constitute the filing of the awards by the appellant's solicitors the filing thereof by the umpire.

As regurds the second question, numely, as to whether with reference to the terms of section 31, subsection (3) the awards should be held to have been filed earlier in tho Calcutta court •or in the Gauhati court, the view taken by the learned Comrnerciul .Judge was that the filing in the Calcutta court must

lie taken to have been earlier.

For the purpose of the consideration of this question it may be assumed that that filing was under the uuthority of the umpire.

The learned Judge wus of the opinion that the filing of the awards in the Gauhati court must be tuken to have been made on the 3rd September \Vhcn in pursuuncc of the prior order of the Subordinate Judge duted 24th August, 1949, the present respondent filed into court the origi1ml uwards with him.

In coming to this conclusion the learned Judge ignored the fact that on 18th August, 1949, the umpire in response to the notice previously issued to him forwarded to the court signed copies of the awn, rds and that the same were in that court on or brfore 24th August, 1949. This seems, in terms, to

l.,

1953 be sufficient compliance with the proviions of section

K bh M .. 14, sub-section (2) which only requires that on the um. ; aw; i directions of the court the original award or the copy

Union of India. thereof should be caused by the umpire to be filed into it. The learned Judge stated that he was not aware Jagannadha whether the copies sent to the Subordinate Judge were

Das J. signed copies or not. The learned Judge failed unfortu- 1iately to notice that the umpire himself in his letter dated 18th August, 1949, stated clearly as follows:

"As directed by you I am sending herewith copies of the same (a wards) signed by m.e".

The learned Judge was also inclined to think that the mere forwarding of the awards does not amount to the filing of them. Here again, the learned Judge has overlooked that under section 14, sub-section (2) the actual filing by the umpire is not essential, but that it is sufficient if the umpire C11; uses the awards to be filed.

It is not suggested that sending by post in compliance with the notice is not such "causing",

It appears to us therefore clear that the filing of the awards in the Gauhati court must be taken to be on the 24th of August, 1949. So far as the Calcutta comt is concerned, though no doubt the awards were put into that court by the appellant's solicitors on the 17th August, 1949, it appears clearly from the notice issued by the Registrar dated the 30th of August, 1949, that the awards were treated as filed only on the 29th day of August, 1949. Paragraphs 8 and 9 of the respondent's affidavit filed in the Calcutta court on 24th of November, 1949, contain categorica.l assertions that so far as the Gauhati court is concerned, the copies of the 11wards were filed by the umpire on the 24th of August, 1949, while as regards the Calcutta High Court the awards were filed on the 29th of August, l!l49.

Thes0 assertions have not been contradicted on behalf of the appellant in the counter-PAfidavit filed on the same day. From these facts, it is clear that the earlier ti.lino for the purposes of section 31(3) is in the Gauhati eomt

and not in the Calcutta court as held bv the learned single Judge under an wroneous imprcssi"on as to the fa, cts, We may as well mention a, t this stage that

. "

it was not . suggested before us that for legal 1953 purposes the filing of the awards in the Calcutta High K bl\f ..

Court (on the assumption of existence of authority in "'" :: awJ• the appellant for such filing on behalf of the umpire) Union of India. is not the 29th of August, 1949, but only the 10th of August when the letter was sent by the solicitors to Jagannadha the Registrar enclosing the awards. \Ve mention this Das J. because it appears from the judgment of the Division Bench of the Calcutta High Court that some such point was raised there, but before us the contrary was assumed.

We are accordingly of the opinion that even if the authority of the umpire for the filing of the award into court on his behalf by the appellant is to be taken for granted, it was in the Gauhati court that the awards must be taken to have been filed earlier.

On this ground, therefore, we are inclined to hold that the Gauhati court alone has jurisdiction under section 31 (3) of the Act.

The third question which remains for consideration is whether sub-section ( 4) of section 31 of the Indian Arbitration Act of 1940 applies only where the first application under the Act was made during the course of pendency of a reference to arbitration or also to a case like the present one where such first application is made after the completion of the arbitration and on the making of an award. As already stated, the learned Judges on appeal did not deal with this question.

The trial Judge, however, considered the matter, and held that the above provision related only to an application made during the pendency of a reference to arbitration. In the view of the learned Judge,

"In order to attract sub-section (4) an application must have been made during the pendency of the reference, and if such an application had been made, all other applications arising out of that reference (whether made in the reference or not) must be made in that court".

Apparently, the learned Judge construed the phrase "in a reference" in section31, sub-section (4), as meaning "in the course of a reference", and that is ;1]so the

"' .

1953 contention before us of the counsel for the appellant, -- which requires closer examination.

Ku1nbhaMawji , . "· Section 31 of the Indian Arbitration Act of 1940 is Union of India. in the following terms:

"(l) Subject to the provisions of this Act, an Jagannadha j b fil l 1 h · Da. J. aware may e ec in any Court avmg JUrIS diction in the mattel' to wbich the reference relates.

(2) Notwithstanding anything contained in any other law for the time being in force and save as otherwise provided in this Act, all questions regarding the validity, effect or existence of an award or an arbitration agreement between the parties to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed, and by no other Court.

(3) All applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings shall be made to the Court where the a ward has been, or may be, filed, and to no other Court.

(4) Notwithstanding :1nything contained else where in this Act or in any other Jaw for the time being in force, where in any reference an application under the Act has been made in a Court competent to entertain it, that Court alone shall have jurisdiction over the arbitration proceedings and all subsequent applications arising out of that reference and the arbitration proceedings shall be made in that Court and in no other Court".

Sub-section ( l) relates to the question as to where a completed award has to be filed, and prescribes the local jurisdiction for that purpose. Sub-section (2) deals with the ambit of the exercise of that jurisdiction, and declares it to be exclusive by saying that "all questions regarding the validity, effect or existence of an award or arbitration agreement between the parties , to the agreement or persons claiming under them shall be decided by the Court in which the award under the agreement has been, or may be, filed and by 110 other Court". Sub-section (B) is intended to provide

. ~

that all applieations regarding the conduct of arbitra- 1963 tion proceedings or otherwise arising out of such pro- - d. b d 1 Kumbha Mawji cee mgs are to e ma e on y m one court, and lays on the concerned party the obligation to do so. Then comes Union ; j Indict. sub-section (4), the object of which apparently is to go - further than sub-section (3), that is, not merely casting Jagannadha on the party concerned an obligation to file all applica- Das J. tions in one court but vesting exclusive jurisdiction for such applications in the court in which the first application has been already made. Thus it will be seen on a comprehensive view of section 31 that while the first sub-section determines the jurisdiction of the court in which an award can be filed, sub-sections (2), (B) and ( 4) are intended to make that jurisdiction effoctive in three different ways, (I) by vesting in one court the authority to deal with all questions regarding the validity, effect or existence of an award or an arbitration agreement, (2) by casting on the persons concerned the obligation to file all applications regarding the conduct of arbitration proceedings or otherwise arising out of such proceedings in one court, and (3) by vesting exclusive jurisdiction in the court in which the first application relating to the matter is filed.

The context, therefore, of subsection (4) would seem to indicate that the sub-section was not meant to be confined to applications made during the pendency of an arbitration. The necessity for clothing a single court with effective and exclusive jurisdiction, and to bring about by the combined operation of these three provisions the avoidance of conflict and scramble is equally essential whether the question arises during the pendency of thn arbitration or after the arbitration is completed or before the arbitration is commenced. There is no conceivable reason why the Legislature should have intended to confine the operation of sub-section (4) only to applications made during the pend ency of an arbitration, if as is contended, the phrase "in any reference " is to be taken as meaning " in the course of a reference ".

It may be noticed that the Arbitration Act deals with arbitrations of three different categories: (I) arbitration

892 SUPI'tEM:E COUl'tT REPOR1 1S [195:!]

1963 without intervention of the court, dealt with in

K ;,:~ .. sections 3 to 19 comprising Chapter II; (2) ar"bitration "'" a aw;• with the intervention of a court where there is no suit v.

Union of India. pending provided in section 20 which is a separate - Chapter III; and (3) arbitration in suits dealt with in Jagannadha sections 21 to 25 comprising Chapter IV. The i'iris-

Das J. diction as regards the latter two classes of arbitrations in respect of certain matters is provided in the very provisions relating to those two classes of arbitrations, that is, section 20, sub-section (1) and section 21.

Sub-section (1) of section 31 appears to refer only to the first class. It may, therefore, have been, plausibly, suggested that sub-sections (2), (3) and (4) refer only to this class. But no such position was taken up before us. Indeed, having regard to the wide language employed in these sub-sections it has been assumed that sub-sections (2) and (3) cover all three classes in all their stages. If so, is there any sufficient reason to think that sub-section (4) was meant to have a very restricted operation ? On the view of this sub-section suggested for the appellant, not only would an application made after the award was pronounced be excluded from sub-section (4) but also an application made before the commencement of the arbitration, i.e., for the filing of an agreement of reference and for a direction thereupon. It must be remembered that section 31 is one of the group of sections headed " General " which by virtue of section 26 are applicable to all arbitrations. Unless therefore the wording in sub-section ( 4) of section 31 is so compelling as to confine the scope thereof to applications during the pendency of an arbitration, such a limited construction must be rejected.

As already stated, the entire basis of the limited construction is the meaning of the phrase " in any reference" used in sub-section (4) as meaning "in the course of any reference ". But such a connotation thereof is not in any ordinary sense compelling. The preposition " in" is used in various contexts and is capable of conveying various shades of meaning. In the Oxford English Dictionary one of the shades of meaning of this preposition is

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SUPREME COURT REPOR'rs 893

" Expressing reference or relation to something; in 19o3 reference or regard to; in the case of, in the matter, K ·- .. ffi · f umbha Maw3i a arr, or provmce o . v.

Used especially with the sphere or department in Union of India. relation or reference to which an attribute or quality is predicated ".

Jaga1madha In the context of section 31, sub-section (4), it is reasonable to think that the phrase "in any reference" means " in the matter of a reference ". The word

"reference" having been defined in the Act as "reference to arbitration", the phrase "in a reference" would mean "in the matter of a reference to arbitration".

The phrase "in a reference" is, therefore, comprehensive enough to cover also an application first made after the arbitration is completed and a final awiud is made, and in our opinion that is the correct construction thereof in the context.

We are, therefore, of the opinion that section 31 ( 4) would vest exclusive jurisdiction in the court in which an application for the filing of ai1 award has been first made under section 14 of the Act.

It is undisputed that the application by the respondent Union of India was made before the Gauhati court on the 10th August, 1949, and the earliest move by the appellant before the Calcutta court was on the 17th August, 1949.

On these facts and on the view of the interpretation of section 31, sub-section (4), which

we are inclined to take, it is clear that the Gauhati court only has the jurisdiction and not the Calcutta High Court as regards the present dispute.

In the result, the two appeals must I.Jc dismissed with costs.

Appeals dismissed.

Agent for the appellant : S1tku1nar Ghose.

Agent for the respondent: 0. 11. Rajadhyakslw.

DasJ.

UNION O:F INDIA

iVIEHR CHAND MAHAJAN

VrvIAN BosE

Indian Arbitration Act

ss. 14

s. 31

s. 14

Indian Arbitration Act, 1940

s. 31

s. 14

s. 14

s. 31(3)

Ganhati Court

Calcutta High Court

Gauhati Court

Gauhati Court 1953

s. 31

KumbhaMawji

Union of lndia

Harries C.J.

Bannerjee

Sinha

Amiya Kumrir Jfukhe1

K. Driphtary

G. N.

Joshi

Jindra Lal

JAGANXADHA DAS

28th of January, 1948

Khumba Mawji

Dominion of India

Chutiapara

Calcutta

Assam

P. C. Chowdhury

19th of Augu; t, 1949

Kumbha Mawp

10th of August, 1949

section 14

Indian Arbitration Act, 1940

Subordinate Judge of Gauhati

Chowdhury

24th of August 1949

18th August, 1949

20th July, 1949

24th August, 1949

Brd Septem her, 1949

3rd of September, 1949

17th of August 1949

M KumbhaMawJ1

Kumbha Mowjee

P. C. Chaudhury

29th August, 1949

Kumbha Mawji

2nd of September, 1949

section 14

3rd September, 1949

28th October, 1949

20th .January, 1950

19th of November, 1949

16th of December, 1949

section 14(2)

High Court of Calcutta

15th of November 1949

Dominion of India

section 14

section 31

S 883

Gauhati court KumbhaMawji

section 14

Gauhati court

section 14

section 31

section 31

section 14

Calcutta court

section 31

Calcntta court

Jaganoodha

Das

section 14

section 31

CvJcutta High Court

section 14

Union of India

24th of November, 1949

21st July, 1949

section 4

17th of Jagannndha August, 1949

DaaJ. !

section 14

section 31

Jagannadha

section 14

24th of August, 1949

17th August, 1949

30th of August, 1949

29th day of August, 1949

29th of August, l!l49

section 31(3)

29th of August, 1949

10th of August

section 31

section 31

Section 31

section 31

sections 3 to 19

Union of India

section 20

sections 21 to 25

section 20

section 21

section 31

section 31

section 26

section 31

section 31

section 31

section 14

10th August, 1949

section 31

Rajadhyakslw


May 18.

894 SUPREME COUR'f REPOR'l'S [1953)

UHERUVU NAGESWARASWAMI

RAJAH VADREVU VISW'ASUNDARA RAO

AND OTHERS ME!fR CHAND MAHA.JAN, MuKHERJEA, GnuLAill

HASAN AND BHAGWATI JJ.

Hindu law-Debts-Father's power to alienC<te sons' interest for antecedent debts-Whether 'property' and passes to Receiver on insolvency of father-Sale by Receiver, whether vests sons' interest in purchaser-Provincial InsoZ.Vency Act, 1920, as amended in 1948, s. 28A--Retrospective operation-Nadras Agricultnrists' Relief Act, 1938, ss. 7, 8-Pnrchaser of eq•dty of redcmption- Right tv claim relief.

Under the provisions of s. 28A of the Provincial Insolvency Aot, 1920, as amended by the Provincial Insolvency (Amendment) Act of 1948, which bas been expressly made retrospective, when a Hindu father governed by the :\Iitakshara law is adjndged a bankrupt, his power to alienate the interest of bis sons in the joint family properties for che satis(action of his antecedent debts not contracted for illeg•l or immornl purposes, passes to the Receiver as his "property" within the meaning of the Act.

Consequently, where a Hindu father who has mortgaged the joint family property for an antecedent debt which is not illegal or immoral becomes insolvent ancl the receiver sells the property, the interest of his sons in the property also vests in the purchaser, even in the case of a sale held before the Amendment Act of 1948 came into force, and the sons cannot redee1n the property.

Sat Narain v. Sri Xishen (63 LA. 384), Rama Sastruln v.

Balltkrislma Rao (I. L. l'.. 1943 )fad. 83) and Viswanath v.

Official Receiver (I.L.R. 16 Pat. 60) referred to.•

Though the liability of a person who has purchase<l an er1uity of redemption after 22nd )farch, 1938, to 11ay the mortgage debt arises only on the date of his purchase, ii the debt itself existed on the 22nd ;\Jarch, 1938, and if it was payable by an agriculturist on that date, the purchaser can clahn the benefits conferred by s. 7 of the Madras Agricultural Relief Act, 1938, if he himself \vas an agriculturist on the date of his application.

Perianna v. Sellappa (LL.IL 1939 )lad. 218) referred to.

CrvrL APPELLA~'E JURISDICTION: Civil Appeal No. 76 of 1950.

Appeal from the Judgment and Decree of the High Court of Madras dated 18th April 1945, in

s.c.R.

SUPREME COVRT REPORTS 895

Oheruvu Appeals Nos. 56 and 192of1941 reversing in part the decree of the Court of the Subordinate Judge of Masulipatam in Original Suit No. 29 of 1937.

N ageswa"'aswanii B. Somayya (C. J11allikaijnna Row, with him) v. th ]] t Raja V adtevu 10r e ap1)e an . 1,. a • • iswasun (f?'t~ K. Rajah Aiyar (R. Ga1111p((, thy Aiya.r, with him) HaoandOrhm for Respondent No. 1.

Respondent No. 10 appeared in pernon .

1953. May 18. The Judgment of the Court was delivered by

MUKHER.JEA J.- -The appellant before us is the sixth defendant in a suit, commenced by the plaintiff-respondent in the court of the Subordinate Judge at Masulipatam (being Original Suit No. 29 of 1937) for recovery of a sum of Rs. 99,653 annas odd by enforcement of a simple mortgage bond. The mortgage bond is dated 28th September, 1930, and it was executed by defendant No. 1 for himself and as guardian of his two minor sons-- -defendants 2 and 3-all of whom constituted together a joint Hindu family at that time. The plaintiff mortgagee happens to be the son-in-law of defendant No. 1 and at the time of the execution of the mortgage the first defendant was indebted to a large number of persons including the mortgagee himself, and being hard pressed by his creditors requested the plaintiff to lend him a sum of Rs. 1,25,000 on the hypothecation of the properties in suit, to enable him to tide over his difficulties and discharge his debts.

The total consideration of Rs. 1,25,000 as stated in the deed is made up of the following items :- ( l) Rs. 13,065, which was the amount due on a promissory note executed in favour of the plaintiff by the first defendant on the 17th January, 1928.

(2) Rs. 13,285 due under another promissory note dated 18th August, 1930 executed by defendant No. 1 in favour of the wife of the plaintiff and later on transferred by her to the plaintiff on 28th September, 30.

Mukherjea .T.

(3) Rs. 25,000 paid by the plaintiff by endorsing in favour of defenda, nt No. 1 a cheque for that amount

SLTPREME COURT REPORTS [1953]

 w.13 drawn in his name hy the Co-operative Central Bank,

Ghcmi>u Ramchandrapuram on the Central Urban Bank, Madras.

Nageswaraswami

(4) Rs. 937-8-0, the amount paid in cash by plainv. tiff to defendant No. 1 for purchasing stamps for the ll"ia Vad1evu mortgage document. 1 r iswasunda.r{l RnoandOth"s

(5) Rs. 72,712-8-0, the amount of future advances which the plaintiff promised to make from time to time MukherJeaJ. to defendant No. 1 according to his convenience.

The money lent was to carry interest at 7!% simple per annum and the clue date of payment of the principal money was 30th September, 1933. The interest would, however, have to be paid annually on the 30th of September every year, in default of which the whole of the principal and interest in arrears would become repayable immediately with interest at 9% compound per annum with yearly rests. It was expresly stated in the mortgage deed that if the mortgagee was unable to advance tho entire amount of Rs. 1,25,000, the terms set out above would apply to the amount actually advanced. It appears that after the execution of the mortgage bond a sum of Rs. 3,000 only was paid by the mortgagee to defenda.nt No. 1 on 5th of November, 1930. In the plaint, which was filed by the plaintiff on the 15th Septem her, 1937, the total claim was laid at Rs. 99,653 annas odd, out of which Rs. 55,287 annas odd constituted the principal money as stated above and the rest was claimed as interest calculated at the rate of 9% per annum compound with yearly rests ..

Besides the original mortgagors, who were defendants Nos. 1 to 3 in the suit, there were three other persons imp leaded as parties defendants. Defendant No. 4 was the Receiver in insolvency in whom the entire estate of the defendant No. 1 vested bv reason of his being adjudged a bankrupt by an order" of the District Judge of Kistna dated the 18th January, 1932 in Insolvency Proceeding No. 20 of 1931, started at the instance of another creditor of the first defendant.

Defendant No. 5 was a lessee in respect of the mortgaged properties under defendant No. 4, while the sixth defendant was the purchaser of all the mortgaged

properties from the Receiver in insolvency. The 1963 Receiver, it seems, had put up all the suit pro- . ] · h CheriJ-VU perties to sac subject to the mortgage on 19t Na9Mwaraswami April, 1937, and they were knocked down to defendv. ant No. 6 for the price of Rs. 1,340. A registered deed Raja Vadrevu of sale was executed by the Receiver in favour of the Viswaaundma purchaser on 20th January, 1939.

Raa and Oehm The defendants 1 to 3 did neither appear nor contest Mukherj'a J. the suit. Defendant No. 4 appeared in person but disclaimed any interest in the suit properties. The defendant No. 5 contended that he was a lessee under defendant No. 4 for one year only and was not a necessary party to the snit at all. The suit was really contested by defendant No. 6, the purchaser at the Receiver's sale. The defence taken by defendant No. 6 in his written statement was substantially of a two-fold character. It was pleaded in the first place that the bond in suit was a collusive docnmen t not supported by any consideration and was executed by defendant No. 1 in favour of his own son-in-law, with a view to shield his properties from the reach of his

croditorn. The other contention put forward was that the interest claimed was penal and usurious.

After the passing of the Madras Agriculturists' Relief Act in March, 1938, this defendant filed an additional written statement, with the permission of the court, in which he raised the plea that as an agriculturist he was entitled to the reliefs provided in that Act and that the mortgage debt should be scaled down in accordance with the provisions of the same.

The trial Judge by his judgment dated the 29th July, 1940, decreed the suit in part. It was held that the mortgage bond was not a collusive document executed with the intention of defrauding the creditors of the mortgagor; it was a genuine transaction and was supported by consideration. On the other point, the court held that defendant No. 6 was an agriculturist and was entitled to claim the reliefs under Madras Act IV of 1938. After deducting all outstanding interest which stood discharged under section 8( 1) of the

1953 Agriculturists' Belief Act, the principal money due to the

Oh creditor on that date was found by the trial court to be

Nnge8i:a"'::::vami Bs. 42,870 annas odd. This figure was arrived at by

v. taking only the original amounts actually advanced on llnjn l'adrevu the two promissory notes mentioned above and further, Fiswasuudara deducting from them, the payments made by the 11"0 aad Others debtor towards the satisfaction of the pr.incipals in each.

l'>Tuk~~0,0 .J. Thus a preliminary decree was made in favour of the plaintiff entitling him to recover a sum ofBs. 42,870-4-0 together with interest at 6±% per annum from 1st October, 1937, to 1st November, 1940, the date fixed for payment under the preliminary decree. ln default, the whole amount was to carry interest at 6% per annum. It may be mentioned here that the Subordinate .Judge in deciding issue No. 3 held expressly that the provision relating to payment of compound interest at an enhanced rate in default of payment of the stipulated interest on the due dates was in the nature of a penalty and should be relieved against; but as the court scaled down the inLeresL under Madras Act IV of 19:38, it became unnecessal'v to consider in what manner this relief should be grinted under section 74 of the Indian Contract Act.

Against this decision, two appeals were taken to the High Court of Madras, one by the plaintiff and the other by defendant No. 6.

The plaintiff in his appeal (being Appeal No. 56 of 1941) assailed that part of the judgment of the Subordinate Judge which gave the defendant No. 6 relief under the Madras Agriculturists' Relief Act; while the appeal of the sixth defendant (being Appeal No. 192 of 1941) attacked the very foundation of the mortgage decree on the ground that the mortgage being a collusive and fraudulent transaction, the plaintiff's suit should have been dismissed in toto.

The defendants 2 and 3, although they remained ex parte during the trial in the first court, filed, in forrna pauperi8, a memorandum of cross-objection challenging the decree of the Subordinate Judge on the ground that as their interest in the mortgaged properties did not pass to the defendant No. 6 by virtue of the Beceiver's sale, their right of

S.C.R.

SUPREME COtJR.T R.EPORTS 899

1953 redemption remained intact and ought to have been declared by the trial Judge.

Uheruvu Both these appeals as well as the cross-objection Nageswa, aswami were heard together by a Division Bench of the High R . vv.J_ . aJa awrevu Court and they were disposed of by one and the same Viswasundara judgment dated the 18th of April, 1945.

Rao and Others

The High Comt affirmed the finding of the trial Judge that the bond in suit was supported by consideration to the extent of Rs. 55,287-8-0 as alleged in the plaint and that it was a valid and bona fide transaction.

The learned Judges held, differing from the trial court, that the defendant No. 6 was not entitled to claim any relief under the provisionR of the ?lfadras Agriculturists' Relief Act, and that in any event the court below was not right in reducing the amount of the principal money from Rs. li5,287-8-0 to Rs. 42,870, there being no renewal of a prior debt so far as defendant No. 6 was concerned.

The court agreed in holding that the provisian relating to payment of enhanced interest in case of default amounted to a penalty and reduced the rate of interest from 9% compound to 7§·% compound with yearly rests. Lastly, the High Court allowed the cross-objection of defendants 2 and 3, being of opinion that their interest in the mortgaged properties could not vest in the Receiver on the insolvency of their father and that the defendant No. 6 could not acquire the same by virtue of his purchase from the Receiver.

The defendants Nos. 2 and 3 were, tht>refore, allowed the right to redeem the mortgaged properties along with defendant No. (j.

The result was that the plaintiff was given a decre0 for a sum of Rs. 55,287-8-0 with interest at 7t% compound wit, h yearly rests up to the date of redemption ancl suhsequent interest was allowed at the rate of 6% per annum. Interest was to be calculated from 28th Septern ber, 1930, on Rs. 52,287-8·0 and from 5th November, 1930, on the amount of Rs. 3,000. Against this decree, the defendant No. 6 obtained leave to appeal to the Privy Council and because of the abolition of the jurisdiction of the Privy Council, the appeal has come before us.

M ukherjea J,

1953 Mr. Somayya, who appeared in support of the appeal, did not press before us the contention raised on behalf

Nag~~:~:,"wami of his client in the comts below that the mortgage was

 v. a fraudulent transaction or was void for want of consi-

T?aja l'adrevu deration. He assailed the propriety of the judgment of riswa8nndarn the High Court substantially on three points. His first Rao and Othm contention is, that the decision of the High Court allow-

Mukherjea J. ing a right of redemption to defendants 2 and 3 ca1mot stand in view of the amendment introduced by the Provincial Insolvency Amendment Act, 1948, which has been expressly made retrospective. The second point taken by the learned counsel is that the defendant o. 6 should have been given relief under the MadmsAgriculturists' Relief Act and the debt should have been scaled down in accordance with the provisions thereof. It is said that the defendant No. 6 was an agriculturist himself and even if he was not, the relief under Madras Act IV of 1938 was still available to him by reason of the original mortgagors being agriculturists. The third and the last point urged is that in any event.having regard to the finding arrived at by the High Court that the stipulation to pay compound interest at an enhanced rate was a penalty, adequate relief should have been granted against it and no compound interest should have been allowed a.t a.II.

The first point raised by the learned counsel, in our opinion, is well-founded and must succeed. There was some difference of judicial opinion a.s to whether the powers of a. father under the Mita.ksha.ra. law to alienate the joint family property including the interest of his sons in the same for discharge of an antecedent debt not contracted for illegal or immoral purposes vests in the Receiver on the adjudication of the fa.th er a.s a.n insolvent .. Under the Presidencv Towns Insolvency Act, this power was held to vest in the Official Assignee under section 52(2) of the Act( 1).

As regards cases governed by Provincial Insolvency Act, it was held by a Full Bench of the Madras High Court tha. t the father's power to dispose of his son's interest in the joint family property for satisfaction of his untainted

{I) Sat Narain v. Sri KiBhen, (1936) 63 I.A. 384.

S.U.R.

SUPREME COURT 1-tEPORTS 901

debts was not "property " within the meaning of

].'J53 sertion 28 (2) (d) of the Provincial Insolvency Act('); 0 while a contrary view was taken y a Full Bench of the Nages'.~;,~:;, ami Patna High Court (2). The conflict has now been set at v. rest by the enactment of section 28A in the Provincial Tlaja Vadrevu Insolvency Amendment Act of 1948 which came into l'ismasundam force on the 12th April, 1948. The new section reads as Rao and Others follows:- ·· "The property of the iusolvent shall comprise and shall always be deemed to have comprised also the capacity to exercise and to take proceedings for exercising all such powers in or over or in respect of property as might have been exercised by the insolvent for his own benefit at the commencement of his insolvency or before his discharge."

The language of the section indicates that its operation has been expressly made retrospective.

The result, therefore, is that the power of the defendant No. 1 to alienate the interest of his sons, the defendants

MukherjeaJ.

2 and 3, in the mortgaged properties for satisfaction of his antecedent debts, did pass to the Receiver as "property" within the meaning of the Provincial Insolvency Act and consequently on a sale by the Receiver the interest of defendants 2 and 3 did vest in the sixth defendant, and he alone must be held competent to • exercise the right of redemption.

The second point urged by 1\fr. Somayya raises the question as to whether the appellant could claim relief under the Madras Agriculturists' Relief Act. The High Court decided this point against the appellant firstly on the ground that the appellant was not a debtor at the date of the commencement of the Act, he having acquired no interest in the equity of redemption at that time.

The other reason given is that the defendant No. 6 was not an agriculturist within the meaning of the Agriculturists' Relief Act and although he was possessed of r1gricultural lands and hence priina facie came within the definition of an " agriculturist " as given in section 2 (ii) of

(1) l?ama.8atrulu v, Bala.fJrishna /{ao, I.L.R. [1943] i\Iad. 83.

(2) Viawanathv. Official l?eceivcr, I.L.R. (1936) r6 Pat. 60 (F . .B.J.

1953 the Act, he was excluded from the de{inition by the operation of proviso (D) attached to the sub-section.

Oheruvu Nageswaraswami So far as the first ground is concerned, section 7 of v. the Agriculturists' Relief Act expressly lays down that Raja Vadreva "all debts payable by an agriculturist at the com-

Viswasundara mencement of this Act, shall be scaled down in accord.

RM and Othern ance with the provisions of this chapter".

The

Mukherjea .J. essential pre-requisite to the application of the provisions of the chapter, therefore is the existence of a debt payable by an agriculturist on the date when the Act commenced, that is to say, on the 22nd March,

1938. The learned Judges of the High Court wtwe certainly right in saying that the sixth defendant was not a debtor on that date, as he did not become the owner of the equity of redemption till the 20th of January, 1939, when the deed of sale was executed in his favour by the Receiver in insolvency. But this by itself is not sufficient to disentitle the appellant to the privileges of the Agricu tt.urists' Relief Act. It is not necessary that the applicant for relief himself should be liable for the debt on the date that the Act came into force.

The right to claim relief as is well settled by decisions(') of the i\fadras High Court is not contined to the person who originally contracted the debt, but is available to his legal representatives m1d assigns as well; nor is it necessary that tho applicant should be personally .liable for the debt. The liability cf a. purchaser of the equity of redemption to pay the mortgage debt uucloubtedly arises on the date of his purchase; but the debt itself which has its origin in the mortgage bond did ex:ir; t from before his purchase, and if it was payable by an agriculturist at the relevant date, the purchaser could certainly claim the privileges of the Act if he himself was au ngrieulturist nt the date of his application. The material question, therefore, is whether the mortgage debt was payable by an agriculturist on 22nd March, 1938 ? Tbe appellant argues thi1t it was payable by the mortgagors and they were certainly agriculturists. vVe do not think that there is warrant for any such assumption on

(1) Vide Perianna v. Sellappa, I.L.R. [1939] l\.Iad. 2~8.

the materials as they exist on the record. The only 1953 issue before the trial .Judge was, as to whether Ch defendant No. 6 was an agriculturist. There was Nag'"w::::aini neither any question raised nor any evidence adduced "· as to whether defendants Nos. 1 to ;3 were agricultnr- Raja V<1drevu ists as well.

In fact, this aspect of the case was not Viswasundara adverted to by the trial Judge at all.

Before the Rao and Others High Court it was argued on behalf of defendant No. 6 h f h 1 h f f

;\fnlcherjea J. t at even i e was not an agricu turist imsel , yet i the defendants Z and 3 were given relief as agriculturists, that would enure for his benefit as well and accordingly he invited the court to go into the question and hold that the original mortgagors were agricul - turists. This the learned Judges refused to do and dismissed this part of the claim of defendant No. 6 with these remarks :

"In the present ease,· the mortgagors have not claimed such a benefit, nor have they adduced any evidence to show that they are agriculturists. We therefore cannot accede to the request of the sixth defendant that the right of the mortgagors to relief should be investigated merely with the object of giving an accidental relief to the non-agriculturist purchaser."

As the point was not investigated at all, it is not possible for us to hold that the debt was payable by an agriculturist on the relevant date. It may be that the mortgaged properties were agricultural lands but it is not known whether the mortgagors did possess other estates which might bring them within the purview of any of the provisos attached to the definition.

In these circumsta.nces, the appellant must be deemed to have failed to show that there was in existence a debt payable by an agriculturist on 22nd March, 1938.

The High Court has held further that the defendant No. 6 was not an agriculturist because he was the purchaser of certain villages at a court sale in respect of which Peishkush exceeding Rs. 500 was payable.

Consequently, he became "land-holder of an estate" under the Madras Estates Land Act and could not claim to be an agriculturist as laid down in the proviso (D) to section 2 (ii) of the Act. Mr. Somayya

1953 lays stress upon the fact that this purch1tse on the part of his client was mere! v as a benamidar for defendant Clteruvu ,, Nage .. wamBwamiNo. 5 as has been held by both the coyrts below and v. consequently the proviso did not affect him at all.

Raja Vadr""u This is a deba.t.able point upon which the judicial Yiswaaundam opinion of the Madras High Court itself does not Pao and Oth"" seem to be quite uniform. A distinetion can certa.inly

;.lfukherjen .!. be drawn between the rights of a person in his own individual or personal capacity and those which he exercises on behalf of another. On the other hand, if we look to the definition of" land-holder" as given in section 3 ( 5) of the Madras Estates Land Act, it may be argued that a benamidar of an estate, who is entitled to collect rents and is at least the titular owner of the estate could come within the description.

Having regard to the view taken by us that section 7 of the Agriculturists' Relief Act is not applicable on the facts of the present case, this question does not really become material and it is not necessary for us to express any final opinion upon it. For the identical reason section 8 ( 1) of the Act cannot also be invoked in favour of the appellant. It may further be mentioned thtLt Mr. Somayya in course of his arguments made it plain that he would not press for relief under the Agriculturists' Relief Act if the high rate of interest allowed by the High Court was substantially reduced.

This takes us to the third point and we think that the stipulation as to payment of compound interes~ in case of default, being held to be a penalty by both the courts below, the High Court should not have allowed interest at the rate of 7 i % compound with yearly rests.

The High Court seems to have been misled by a statement occurring in the judgment of the trial Judge that the original rate of interest was 7}% compound with yearly rests. This is not true and as a matter of fact, the original agreement was to pay interest at 7i% simple. We consider it proper that the mortgage money payable to the plaintiff should carry interest at the rate of7!% simple up to the expiry of the period of .redemption which we fix at six months from this date,

The result, therefore, is that we allow the appeal in 1963 part and modffy the judgment of the High Court. A 0 preliminary decree should be drawn up in favour of Nag"~::~::, aini the plaintiff against defendant No. 6 alone for a sum v. of Rs. 55,287 annas odd which will carry interest at Raja Vadmu 7!% simple per annum. Interest will be calculated Viswa•undara on Rs. 52,287 on and from the date of the mortgage, Rao and Others while on the balance of Rs. 3,000 interest will run MukherjeaJ. from 5th November, 1930. We make no order as to costs of this court or of the High Court. The plaintiff will have his costs of the trial court.

Appeal allowed in part.

Agent for the appellant: Al. 8. K. Aiyangar.

Agent for respondent No. 1 : Ganpat Rai.

BOPPANNA VENKATESWARALOO AND OTHERS 1962

V • N ovembcr24

SUPERINTENDENT, CENTRAL JAIL,

HYDERABAD STATE.

UNION OF INDIA-Intervener. [MEIIB CHAND MAHAJAN, S.R. DAS and BHAGWATIJJ.]

P1eventive Detention (Second Amendment) Act (XLI of 1952), s. 11-A-Act passed on 22nd August, 1952-Brought into force on 30th Sevteinber, 1952-Detention exviring on 30th September, 1952 -Order on 22nd September, 1959, extending detention uvto 31st December, 1952 -Validity of order of extension-General Clauses Act (X of 1897), s. 22-Act LXI of 1952, s. 11-A (2), apvlicability of.

The petitioner was served with an oriler of detention on the 20th October, 1951, and, after a reference to the Advisory Board, the Govemment confirmed the detention and specified 31st March, 1952, as the date up to which the detention was to continue.

On the 20th l\farcb, 1952, the detention was extended till the 30th September, 1952, and on the 22nd September, 1952, the detention was again extended up to the 31st December, 1952. It was contended on behalf of the petitioner that the Government had no power on 22nd September, 1952, to extend the detention.beyond the 1st October, 1952, as the Preventive Detention (Second Amendment) Act of 1952, even though it had received the assent of the

May 18.

894

UHERUVU NAGESWARASWAMI

RAJAH VADREVU VISWASUNDARA RAO AND OTHERS

MuKHERJEA

HASAN

BHAGWATI JJ.

Vency Act, 1920

s. 28A

Relief Act, 1938

ss. 7, 8

s. 28A

s. 7

Madras Agricultural Relief Act, 1938

CrvrL APPELLA~'E JURISDICTION

High Court of Madras

N ageswa"'aswanii B. Somayya

Raja V adtevu

K. Rajah Aiyar

MUKHER.JEA

28th September, 1930

18th August, 1930

28th September, 30

Mukherjea

30th September, 1933

5th of November, 1930

15th Septem her, 1937

District Judge of Kistna

18th January, 1932

Raja Vadrevu

Viswaaundma

20th January, 1939

Raa

Oehm

Mukherj'a

29th July, 1940

Madras Act IV of 1938

section 8( 1)

1st October, 1937

1st November, 1940

LeresL under Madras Act

section 74

Indian Contract Act

Uheruvu

Nageswa

18th of April, 1945

Rao

28th Septern ber, 1930

5th November, 1930

M ukherjea

Somayya

Mukherjea

Madras Act IV of 1938

section 52(2)

Madras High Court

S.U.R.

Patna High Court

section 28A

12th April, 1948

MukherjeaJ.

Somayya

section 2

Viawanathv

section 7

Raja Vadreva

20th of January, 1939

22nd March, 1938

\fnlcherjea

section 2

Somayya

Clteruvu

Raja Vadr""u

.lfukherjen

section 3

section 7

section 8

Rao

K. Aiyangar

Ganpat Rai

BOPPANNA VENKATESWARALOO

UNION OF INDIA

MEIIB CHAND MAHAJAN

S.R. DAS

BHAGWATIJJ

s. 11

s. 22

s. 11

20th l\farcb, 1952

22nd September, 1952

1st October, 1952