judgement:
Appeal No. 52 of 60.
Appeal from the judgment and decree dated April 15, 1958, of the Bombay High Court in Appeal ' No. 25 of 1957.
B. R. L. lyengar, for the appellants.
M. C. Setalvad, Attorney General of India, section R. Vakil, K. H. Bhabha, J. B. Dadachanji, O. C. Mathur and Ravindra Narain, for the respondent, 170 1962.
April 12.
The Judgment of the Court was delivered by section K. DAS, J.
This is an appeal on a certificate granted by the High Court of Bombay under section 110 of the Code of Civil Procedure, and arises put of a suit which the appellants had brought for recovery of Rs. 9,99,940/ with interest and cost from Mir Nawab Himayatalikban Azamjah, who was then known as the Prince of Berar, being the eldest son of the Nizam of Hyderabad.
The circumstances in which the appeal has arisen are these.
On or about January 31, 1937 Baboo Mull and Co. sold and delivered to the Prince of Berar in Bombay various articles of jewellery the aggregate value of which was Rs. 13,20,750/ .
Lala Kapurchand Godha, who was the first plaintiff in the action and Lala Heeralal Godha, the original second plaintiff, carried on business in jewellery in partnership with their father and one Lala Baboo Mull (since deceased) in the name and style of Baboo Mull and Co. It is not disputed that the appellants now before us own the entire interest in the Subject matter of the suit and instead of using the name of Baboo Mull and Co. we shall same the appellants as the persons who sold the jewellery to the Prince of Berar on January 31, 1937.
A writing dated January 31, 1937 was executed by the Prince Of Berar, respondent before us, by which be declared and acknowledged having purchased the jewellery specified in a schedule from the ' appellants at the aggregate price of Rs. 13,20,750/ .
In that writing (exhibit A) the respondent stated: "I promise on behalf of myself and my heirs, executors, administrators and successors to pay to you or to your order at my option and leisure at your abovementioned 171 address the said sum of rupees thirteen lacs twenty thousand seven hundred and fifty only together with simple interest thereon @ 10% ten per cent.
per annum.
" It is not disputed that the jewellery was in fact delivered by the appellants to the respondent, and after January 31, 1937 the respondent passed various acknowledgements in respect of the debt due at the time of the passing of the respective acknowledgments.
These documents consisted of an acknowledgement of liability and a promise to pay on behalf of the respondent and the last of such acknowledgments was passed on February 15/16, 1948.
By that time the debt of Rs.13,20, 750/ with ten per cent.
interest thereon had in oreased to about Rs.27,79,000/ .
By that last document the respondent admitted his liability for the amount of Rs. 27,79,078 2 0 and promised to pay the amount, again at his option and leisure.
On April 30, 1948, the appellants presented their bill and some time in January, 1949, one of the appellants had an interview with the respondent and was told that the Nizam had passed the bill.
In 1949 when Hyderabad was under military occupation after the Police Action, a Committee was set up on February 8, 1949, by the Military Governor known as the Princes Debts Settlement Committee.
The report of this Committee shows that it was set up in accordance with a resolution made by the Military Governor in order to scrutinize all debts of the Prince of Berar and his younger brother.
On February 19, 1949, the appellants presented a petition to the Military Governor with regard to their claim and asked for payment of the amount due to them or in the at ternative for the return of the jewellery.
The claim of the appellants was considered by the Committee in para 11 of their report.
The Committee recommended that the appellants should 172 be paid a sum of Rs. 20 lacs in full satisfaction of their claim.
The Committee further stated that they did not recommend the return of the jewellery.
It may be here stated that the Committee consisted of two persons, namely, Zaheruddin Ahmed, who was the Controller of Accounts to the Nizam and A. N. Shah, a member of the Indian Civil Service.
It may also be stated that the report of the Committee shows that it made a reduction of about ten per cent.
In the case of all suppliers of goods to the two Princes because the Committee thought that in most of the cases the suppliers inflated the price for the supply of goods to the two Princes.
The Committee also thought that the reasonable rate of interest would be six per cent.
in the case of creditors who had to wait for a number of years for payment of their dues.
On September 27, 1949, a sum of Rs.1 1,25,000/ was paid to the appellants.
At that time there was a dispute going on as to whether the appellants were entitled to the entire amount of Rs.20 lacs or to only 9/16th share there.
That dispute having been finally settled in favour of the appellant , the appellants received a second payment of Rs.8,75,000/ on February 14, 1950.
This amount along with the earlier amount paid to the appellants came to the total of Rs.20 lacs.
which the Committee had recommended should be paid to the appellants in full satisfaction of their claim.
On February 14, 1950, a receipt was passed by the appellants for the sum of Rs.8,75,000/(Ex.
C) and this receipt ran in the following terms: "Received from the Controller General of Accounts and Audit, Hyderabad Government, the sum of Rs.8,75,000/ (Rupees eight lacs and seventy five thousand) only in full and final payment of the balance of rupees twenty lacs allowed by the Government in respect of my claims under the pronote dated 15 February 1948 passed by the Prince 173 of Berar in my fovour, reserving however my right to recover the balance amount due to me under the said pronote from the Prince of Berar.
" The relevant authorities refused, however, to make payment on the receipt exhibit C in which the appellants reserved their right to recover the balance amount due from the Prince of Berar.
Thereupon, the appellants discharged all the previous promotes and on each one of them recorded a satisfaction of full payment.
We may refer to the last of them, namely, the one dated February 15/16, 1948.
This was for a sum of Rs.27,79,078 2 0 and on this document Kapurch and Godha, one of the appellants recorded "received payment in full".
Then, on August 14, 1950, the appellants served through their solicitors a notice on the respondent asking him to make payment of the balance of Rs.9,99,940/ with interest at ten per cent.
The respondent not having paid the amount a suit was instituted on February 5, 1951, in the High Court of Bombay for recovery of the amount.
The suit was tried by Coyajee, J.
The principal issue for trial was issue No. 6, namely, whether the appellants had accepted payment of Rs. 20 lacs in full satisfaction of their claim against the respondent and surrendered all the writings duly discharged and there was absolute release of the debt as stated in paras.
7, 8 and 11 of the written statement.
On a consideration of the oral and documentary evidence given in the case and relying particularly on exhibit C, Coyajee, J. came to the conclusion that the appellants did not take the sum of Rs. 20 lacs in full satisfaction of their claim.
The learned Judge said "Ordinarily, a plaintiff would have been in a most difficult and unenviable position to 174 enforce this claim after having endorsed those documents namely exhibit No. 1 as payment in full satisfaction.
But evidently "payment in full satisfaction" there meant full satisfaction as regards the liability of the Hyderabad State and that would naturally be the meaning if taken in conjunction with exhibit C where, he reserved liberty to proceed personally against the Prince of Berar.
I have therefore come to the conclusion on the main issue in the suit namely, that there was no accord and satisfaction when the plaintiff received the second cheque from the Accountant General of Hyderabad State.
" Then there was an appeal by the respondent which was heard by the appellate court (Chagla, C. J. and Mody, J.) By its judgment dated April 15,1958, the appellate court came to a contrary conclusion and held that on the evidence, oral and documentary, given in the case it was clearly established that the appellants accepted the sum of Rs. 20 lacs in full satisfaction of their claim and duly discharged the promissory notes by endorsing full satisfaction thereon; therefore, section 63 of the , applied and the suit of the appellants was liable to be dismissed.
It accordingly allowed the appeal and dismissed the suit with costs.
In the appeal before us Mr. B. R. L. Iyengar appearing on behalf of the appellants has very strongly contended that the view of Coyajee, J. is the correct view on the evidence given in the case.
He has emphasised two points in connection therewith: (1) the crucial question is what does the evidence show as to the intention of the creditor in accepting Rs. 20 lacs? and '2) what is the effect of exhibit C, a receipt executed contemporaneously with the payment of the second instalment of Rs. 8, 75,000 ? Mr. Iyengar has argued that the appellate 175 court did not attach sufficient importance to these two points and the conclusion which it reached is vitiated for that reason.
As the judgment of the appellate court is a judgment in reversal and the question raised are essentially questions of fact on which there are conflicting findings, we allowed counsel for the parties to place before us the relevant evidence along with the pleadings of the parties.
Two of the witnesses whose evidence appears to be decisive of the questions raised were, Putta Madhava Rao who was examined on behalf of the appellants and Kapurchand Godha, one of the appellants.
Putta Madhava Rao was at the relevant time, Assistant Accountant General,.
Hyderabad and he was present before the Committee on more than one occasion when the claim of the appellants was considered.
Before Coyajee, J. a question was raised whether the statements of this witness as to what transpired before the Committee were admissible in evidence, when none of the two members of the Committee was called for examination.
Madhava Rao was undoubtedly competent to prove what he himself heard or saw if such hearing or seeing was a fact in issue, and we consider it unnecessary to determine the further question as to whether be was competent to prove the statements alleged to have been made by one or other of the two members of the Committee.
Therefore, we confine ourselves to the statements of Madhava Rao as to what happened before him.
Madhava Rao said that before the Committee the appellants insisted on payment of their full claim, but the Committee decided that the appellants must take Rs. 20 lacs in full satisfaction of their claim; on this Kaparchand Godha protested and said that he would have to reserve his right for the balance.
The Committee thereupon made it clear that they could not recommend payment of anything more, because a specific amount for distribution had been allotted to them.
The reference to "a specific 176 amount" was to a sum of rupees two crores earmarked for the liquidation of the debts of the two 'Princes out of a fund known as Sarf e Khan.
What happened after the Committee had made its recommendation is very important.
The first instalment of Rs. 11,25,000/ was paid on September 27, 1949.
At that time a dispute was going on about the share of the appellants to the money.
The receipt which was passed for the payment of Rs. 11,25,000/ is marked exhibit B. That receipt does not show whether the appellants had agreed to accept Rs. 20 lacs in full satisfaction of their claim.
As to the second instalment of Rs.,8,75,000/ which was paid on February 14, 1950, Madhava Rao give the following evidence.
He said that when exhibit C was brought to him by Kapurchand Godha, the witness told the latter that he could not make payment against that receipt as the receipt recited, reservation of the right of the appellants for the balance.
The witness took the document, exhibit C, to Zaheruddin Ahmed who was the Accountant General then.
Zaheruddin Ahmed suggested that the claimant should endorse full satisfaction and payment of all the promissory notes and then only the payment would be made.
The witness then said: "Thereupon I obtained these endorsements (on the promissory notes) from Kapurchand.
Kapurchand whilst endorsing these documents protested that he had been forced to endorse these and he was not at all satisfied.
This happened on the 14th of February, 1950.
" We may here state that no plea was raised by the appellants to the effect that the endorsements on the promissory notes had been obtained by coercion, and no issue was struck between the parties as to the endorsements on the promissory notes having been obtained by coercion.
That 177 being the position, what is the effect of Madhava Rao 's evidence ? The clear effect is that the authorities who were paying the money in discharge of the debt of the respondent made it clear that they would pay the money only if a full satisfaction of the claim was given by the appellants.
The appellants after some initial protests agreed and duly discharged all the promissory notes by endorsing thereon full payment and satisfaction.
The question of coercion was introduced as and by way of after thought.
Two facts seem to be clearly established by the evidence of Madhava Rao.
One is that the authorities refused to pay the second instalment unless full satisfaction of the claim was endorsed in accordance with the recommendation of the Committee; the second is that the appellants did record full payment in satisfaction of the promissory notes before they received the money.
In our opinion, these twofactsclearly established the case of the respondent that the appellants had given a full discharge when they received the second instalment.
Indeed, the evidence of Madhava Rao is supported by the evidence of Kapurchand Godha.
Kapurchand Godha said that when he presented the receipt, exhibit C, to Madhava Rao the latter said that he would not accept the receipt in that form.
Madhava Rao then took Kapurchand to the Accountant General.
Kapurchand was asked to produce the promissory notes and was told that unless the promissory notes were endorsed with full satisfaction, no payment would be made.
Kapurechand then said "I was told that unless I signed the receipt for full payment, no cheque would be issued to me.
Thereupon I endorsed the receipt for full payment.
By that I mean I was asked to endorse full payment on the vouchers and I did so.
I protested and said that as I was asked to endorse full payment, I 178 was doing so despite the fact that I was not receiving full payment.
Thereafter I signed the receipt as the vouchers and handed ever the documents to the Accountant General.
" This evidence is in accord with the evidence of Madhava Rao and again establishes that appellants when they received the second and the last instalment of Rs. 8,75,000/ gave a full discharge of their claim and the plea of coercion was later introduced as and by way of an after thought.
There was some difference of evidence as to whether exhibit C bore the signature of Kapurchand when it was first presented to Madbava Rao or whether the signature was later put on it.
With that difference we are not now concerned.
Nor are we concerned with certain minor discrepancies between the evidence of the two witnesses referred to above.
The substantial result of the evidence of the two witnesses to whom we have referred is that whatever, reluctance Kapurchand might have had in accepting Rs. 20 lacs in full satification of the claim of the appellants, he ultimately agreed to do so, Not; only did he agree, but he actually en dorsed full satisfaction and payment on all the promissory notes and thereafter be receive payment of the second instalment of Rs. 8,75,000/which along with the first instalment of Rs. 11,25,000/ made up the sum of Rs. 20 lacs.
On these facts which are established by the evidence given on behalf of the appellants themselves, the only conclusion is that there was full satisfaction of the claim of the appellants.
The legal position is clear enough.
Section 63 of the reads : "Every promisee may dispense with or remit, wholly or in part, the performance of the promise made to him, or may extend the time for such performance or may accept 179 instead of it any satisfaction which he thinks fit.
" Illustration (c) to the section says "A owes B 5000 rupees.
C pays to B 1000 rupees, and B accepts them in satisfaction of his claim on A.
This Payment is a discharge of the whole claim.
,, It seems to us that this case is completely covered by section 63 and illustration (c) thereof.
The appellants having accepted payment in full satisfaction of their claim, are not now entitled to sue the respondent for the balance.
A reference may 'also be made in this connection to section 41 of the Contract Act under which when a promisee accepts performance of the promise from a third person.
he cannot afterwards enforce it against the promiser.
There is some English authority to the effect that discharge of a contract by a third person is effectual only if authorised or ratified by the debtor.
ID India, however, the words of section 41 of the Contract Act leave no room for doubt, and when the appellants have accepted performance of the promise from a third person, they cannot afterwards enforce it against the promisor, namely, the respondent.
When a statute clearly covers a case, it is hardly necessary to refer to decisions.
In deference however, to the arguments advanced on behalf of the appellants, we refer to the two decisions on which learned counsel for the appellant has relied.
One is the decision in Day vs Mc Lea (1).
In that case the plaintiffs made a claim against the defendants for a sum of money as damages for breach of contract; the defendants sent a cheque for a less amount stating that it was in full payment of all demands.
The plaintiffs kept the cheque stating they did so on account and brought an action for (1) 180 the balance of their claim.
It was held that keeping, the cheque was not as a matter of law conclusive that there was an accord and satisfaction of the claim ; but that it was a question of fact on what terms the cheque was kept.
We do not think that that decision is of any help to the appellants As Lord Justice Bowen said in Day vs Mc Lea (1) : "If a person sends a sum of money on the terms that it is to be taken, if at all, in satis faction of a larger claim ; and if the money X X is kept, it is a question of fact as to the terms upon which it is so kept.
Accord and satisfaction imply an agreement to take the money in satisfaction of the claim in respect of which it; is sent.
If accord is a question of agreement there must be either two minds agreeing or one of the two persons acting in such a way as to induce the other to think.
that the money is taken in satisfaction of the claim, and to cause him to act upon that view.
In either case it is a question of fact.
" We have already referred to the facts which are clearly established by the evidence in this case.
Those facts clearly established that the appellants took the second instalment in full satisfaction of their claim.
The second decision relied on on behalf of the appellants Neuchatel Asphalte Co. Ltd. vs Barnett (2) also proceded on a similar ground.
In that case the claim of the plaintiff company amounted to pound 259, but the defendant raised some minor question which might reduce it by E14 or pound 15.
The defendant then sent a cheque for pound 125 and stated in covering letter that this sum was "on account" pending the receipt of the plaintiffs reply to outstanding queries in connection with the work done.
Some time later the defendant enclosed a further cheque for pound 75 and on the back of the (1) (1899) 32 Q.D. D.610, 613.
(2) [1957] 1 All.
R.R. 362.
181 cheque was endorsed ,in full and final settlement of the account".
The cheque was accepted by the plaintiff company, which later sued for the balance of the amount of the claim.
It was held that having regard to the correspondence and the surrounding circumstances, there was no intention on the part of the plaintiff company to accept the cheque for pound 75 in full satisfaction of the plaintiff 's claim, because the words "in full and final settlement of the account" typed on the back of the cheque were inconsistent with the main object and intention of the transaction, particularly since (a) the covering letter sent by this defendants plainly imported that the cheque was sent only on account and riot in full and final settlement, and (b) it could not reasonably be supposed that.
in the circumstances, the plaintiff company had agreed to a reduction of the amount claimed.
The facts of the case before us are entirely different.
The appellants were clearly and unambiguously told that unless they gave a full satisfaction of their claim, they would not be paid the amount.
The appellants were left in no doubt as to the condition on which payment would be made to them.
The appellants clearly accepted the condition and recorded full satisfaction on all the pro missory notes.
It is now impossible to accept the 'position that the appellants reserved their right to sue the respondent for the balance of the amount.
In Hirachand Punam chand vs Temple (1) the father of a debtor wrote to the creditor offering an amount less than that of the debt in full settlement of the debt and enclosing a draft for that amount.
The creditor cashed and retained the proceeds of the draft and afterwards brought an action against the debtor for the balance of the debt.
It was held that the creditor must be takan to have accepted the amount received by him on the terms upon which it was offered and therefore he could not (1) [1911]2 K. B. 330.
182 maintain the action.
The case was considered under the English law and it was observed that assuming that there was no accord and satisfaction in the strict sense of the law in England, it could still be held that the creditor had ceased really to beholder of the negotiable instrument on which he sued.
With the niceties of English law in the matter of accord and satisfaction we are not concerned.
The position in the present case is that the appellants must have known that they could receive the second instalment and retain the first instalment by accepting the condition on which the sum of Rs. 20 lacs was offered to them, namely that they must record a full satisfaction of their claim.
They accepted the money on the condition on which it was offered and it is not now open to them to Jay, either in fact or in law, that they accepted the money but not the condition.
For these reasons we are satisfied that the appellate court was right in the view which it took.
Therefore, thus appeal fails and is dismissed with costs.
Appeal dismissed.

dataset_name: IN-Abs

summary/full:
In January 1937 one M & Co. sold and delivered jewellery valued at about 13 lakhs to the respondent Prince of Berar.
The Prince acknowledged in writing the purchase of the jewellery and the price thereof and passed various acknowledgments in respect of the debts due and the last of such acknowledgments was made for sum of Rs. 27,79,000.
In April 1948, the appellants presented their bill and were informed in January, 1949, that the Nizam had passed the bill.
In February, 1949, when Hyderabad was under military occupation, a Committee was set up by the Military Governor to scrutinise all debts of the Prince of Berar and his younger brother.
The claim of the appellants was considered by the Committee which recommended that the appellants should be paid a sum of Rs. 20 lakhs in full satisfaction of their claim.
The appellants were paid the sum of Rs. 20 lakhs in two instalments.
The appellants tried to pass a receipt when they received the second instalment reserving their right to recover the balance under the pronote from the 169 Prince of Berar.
The relevant authorities refused to make payment on the said receipt.
Thereupon the appellants dis charged all the previous pronotes and on each one of them recorded a satisfaction of the full amount.
The appellants thereafter sued the respondent for the recovery of the balance of the monies due to them on the pronote.
The trial court decreed the suit on the ground that there was no accord and satisfaction when the plaintiff received the second cheque from the Accountant General, Hyderabad.
In appeal by the respondent the Appellate Court set aside the decree holding that the appellants had accepted the sum of Rs. 20 lakhs in full satisfaction of their claim and duly discharged the promisory notes by endorsing full satisfaction thereon.
The appellants came up to the Supreme Court in appeal by certificate granted by the High Court.
Held, that when payment is accepted on the condition on which it is offered, it is not open to the person receiving the payment to say, either in fact or in law, that they have accepeted the money but not the condition.
A promisee accepting performance of the promise from a third person, can not afterwards enforce it against the promiser.
In the present case the appellants had given a full discharge when they received the second instalment; and as they accepted the money in full satisfaction of their claim, they were not entitled to sue the respondent for the balance.
Obiter : When a statute clearly covers the case it is hardly necessary to refer to a decision.


judgement:
iminal Appeal No. 30 of 1961.
Appeal from the judgment and order dated September 6, 1960 of the Calcutta High Court in Cr.
Revision No. 647 of 1960.
B. Sen, P. K. Chatterjee and P. K. Bose, for the appellant.
D. C. Roy and P. K. Mukherjee, for the respondent.
April 12.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Calcutta quashing the investigation started against the respondent in regard to offences under section 420, Indian Penal Code, and section 120B read with section 420 of the Indian Penal Code.
On March 26, 1960, Sub Inspector.
B. L. Gbose of Police Inforcement Branch filed a written report before the Officer in charge Chakdha P. section, alleging that the respondent in conspiracy with three others 54 had cheated the Government of West Bengal of a sum of Rs. 20,000.
The respondent at the time was an Assistant cum Executive Engineer, Kancbrapara Development Area, Kalyani Division.
On the basis of this report a First Information Report was drawn up and the police started investigation.
On April 4, 1960, the respondent surrendered in the court of the Judicial Magistrate at Ranaghat and was released on bail for a sum of Rs. 1,000/ .
The respondent then on May 9, 1960, filed a petition under sections 439 and 561A of the Criminal Procedure Code and prayed for a rule against the District Magistrate, Nadia, to show cause why the judicial case pending in the court of the Senior Magistrate Ranagaghat arising out of the Chakdah Police Station Case No. 33 dated March 26, 1960, be not quashed.
The High Court held : "In our view, the statutory power of investigation given to the police under Chapter XIV is not available in respect of an offence triable under the West Bengal Criminal Law Amendment (Special Courts) Act 1949, and that being so, the investigation concerned is without jurisdiction.
In so saying, we are consicious of the observations of their Lord ships of the Privy Council in Nazir Ahmad 's case, 71 Indian Appeals, 203".
and therefore quashed the police investigation of the case holding it to be without jurisdiction.
It is against this judgment and order that the state has come in appeal to this Court on a certificate granted by the High Court under article 134 (1) (c) At the time the respondent filed the petition in the High Court only a written report was made to the police by the Sub Inspector of police Enforcement Branch and on the basis of that report a :First Information Report was recorded by the 55 Officer in charge of the Police Station and investigation had started.
There was no case pending at the time excepting that the respondent had appeared before the Court, had surrendered and had ' been admitted to bail.
The powers of investigation into cognizable offences are contained in Chapter XIV of the Code of Criminal Procedure.
Section 154 which is in that Chapter deals with information in cognizable offences and section 156 with investigation into such offences and under these sections the police has the statutory right to investigate into the circumstances of any alleged cognizable offence without authority from a Magi strate and this statutory power of the police to investigate cannot be interfered with by the exercise of power under section 439 or under the inherent power of the court under section 561A of Criminal Procedure Code.
As to the powers of the Judiciary in regard to statutory right of the police to investigate, the Privy Council in King Emperor vs Khwaja Nazir Ahmad (1) observed as follows: "The functions of the judiciary and the police are complementary, not overlapping, and the combination of individual liberty with a due observance of law and order is only to be obtained by leaving each to exercise its own function, always, a course, subject to the right of the court to intervene in an appropriate case when moved under section 491 of the Criminal Procedure Code to give directions in the nature of habeas, corpus.
In such a case as the present, however, the court 's functions begin when a charge is preferred before it, and not until then.
It has sometimes been thought that a. 561A has given increased powers to the Court which it did not possess before that section was enacted.
But this is not so, the section gives no now powers, it (1)(1944),L. R. 71.
1. A. 203, 212.
56 only provides that those which the court already inherently possesses shall be preserved and is inserted as their Lordships think, lest it should be considered that the only powers possessed by the court are those expressly conferred by the Criminal Procedure Code and that no inherent powers had survived the passing of that Act".
With this interpretation, which has been put on the statutory duties and.
powers of the police and of the powers of the Court, we are in accord.
The High Court was in error therefore in interfering with the powers of the police in investigating into the offence which was alleged in the information sent to the Officer in charge of the police station.
We therefore allow this appeal and set aside the order of the High Court.
The investigation will now proceed in accordance with law.
Appeal allowed.

summary/full:
A Sub Inspcctor of Police, Enforcement Branch, filed a report before the Police Officer in charge of a Police Station alleging that the respondent along with three others committed offences under ss.420, 120B read with s.420 Indian Penal Code.
Thereupon a First Information Report was drawn up and investigation was started.
The respondent surrendered before the judicial Magistrate and he was released on bail.
Subsequently he filed an application in the High Court under sections 439 and 561 A of the Criminal Procedure Code to get the case pending before the judicial Magistrate arising out of the 53 case registered in the Police Station quashed.
This appli cation was granted by the High Court.
The appellant the State of West Bengal then filed an appeal before the Supreme Court by certificate granted by the High Court under article 134 (1) (c) of the Constitution.
Held, that the statutory powers given to the Police under sections 154 and 156 of the Code of Criminal Procedure to investigate into the circumstances of an alleged cognizable offence without authority from a Magistrate cannot be interfered with by the exercise of powers under s.439 of the Code of Criminal Procedure or under the inherent powers conferred by section 561A of the Code of Criminal Procedure.
The High Court was therefore in error in allowing the respondent 's application.
King Emperor vs Khwaja Nazir Ahmad, (1944) L.R. 71 I.A. 203 allowed.


judgement:
Civil Appeal No. 309 and 525 of 59.
Appeals by special leave from the judgment and orders and decree dated August 27, 1958, November 24, 1958, and March 10, 1958 of the Calcutta High Court, in Award Case No. 103 of 1955 and Appeal from Original order No. 26 of 1956 respectively.
N. C. Chatterjee and B. P. Maheshwari, for the appellant (in C. A. No. 309 of 59).
H.N. Sanyal, Additional Solicitor General of India, section K. Gupta and D. N. Mukherjee, for respondent (in C A. No. 309 of 59).
N. C. Chatterjee, M. G. Poddar.
and S.N. Mukerji, for the appellant (in C. A. No. 525 of 59).
H. N. Sanyal, Additional Solicitor General of India A N. Sinha and P.K. Mukherjee, for the respondent (in C. A. No. 525 of 59).
December 12.
The Judgment of the Court was delivered by WANCHOO J.
These two appeals by special leave from the judgments of the Calcutta High Court raise a common question of law and will be dealt with together.
It will be convenient to set out the facts of appeal 309 and deal with them in connection with the point raised on behalf of the appellant.
These facts are that a contract was entered into between the parties for supply of cornsacks on August 29, 1951.
The contract contained an arbitration clause in the following terms: "All matters, questions, disputes, difference and/or claims arising out of and/or concerning and/or in connection with and/or in consequence of or relating to this contract whether or not the obligation of either or both 103 parties under this contract be subsisting at the time of such dispute and whether or not this contract has been terminated or purported to be terminated or completed shall be referred to the arbitration of the Bengal Chamber of Commerce under the rules of its Tribunal of Arbitration for the time being in force and according to such rules the arbitration shall be conducted.
" Disputes arose with respect to carrying out of the contract and on October 25, 1951, the respondent referred these disputes to the arbitration of the Bengal Chamber of Commerce (hereinafter referred to as the Chamber).
That case was numbered 217 of 1951 in the Chamber 's records.
On April 17, 1952, the tribunal of Arbitration made an award disallowing the claim of the respondent.
This award was filed in the High Court.
On May 25, 1953, the award was set aside on the ground of misconduct on the part of the arbitrators by a learned Single Judge.
That order was taken in appeal and on July 8, 1954 L the appeal was dismissed.
Later, leave to appeal to this Court was refused and thus the order of the learned Single Judge setting aside the award finally stood.
Soon after the award had been set aside by the learned Single Judge, the respondent addressed a letter to the Chamber on September 7, 1953.
It was said in this letter that as the award in case No. 217 G of 1951 had been set aside by the High Court, the respondent begged to refer the matter for arbitration de novo and enclosed its statement of the case.
Thereupon another tribunal was constituted under the rules of the Chamber to decide the dispute afresh.
The appellant appeared before the tribunal and contended that it had no jurisdiction to make an award on a second references in the same dispute.
The tribunal, however, proceeded to decide the reference and made the award on 104 March 15, 1955.
This time the award was in favour of the respondent.
Thereupon on August 4, 1955, the appellant made an application to the High Court praying that the award be set aside.
In the alternative, the appellant prayed that the award be declared null and void and the arbitration agreement between the parties be superseded on the ground that the second reference was incompetent.
The application was opposed by the respondent and its contention was that this was not a second reference, and what the respondent wanted was that the Chamber should in the event that had happened take up the dispute again and make a proper award.
Reliance in support of the plea that such a course was permissible was placed on behalf of the respondent on the decision of the Calcutta High Court in The Barangore Jute Factory Co. Ltd. vs Messrs. Hulas Chand Rupchand (1).
The learned Single Judge relied on the decision in The Barangore Jute Factory (1) and held that from what that respondent said to the Chamber its letter of September 7, 1953, it was reasonably clear that all that it wanted was that the Chamber should in the event that had happened take up the dispute again and make a proper award.
It could not therefore be held because of some language used in the letter that the respondent was making a fresh reference.
Consequently, it was held that the Chamber had jurisdiction to decide the dispute after the earlier award had been set aside and what the respondent had asked for was for the continuance of the original reference, which had not been superseded.
The learned Single Judge then went into the question whether there was such misconduct as would justify setting aside the award and held that there were no grounds made out which would justify the setting aside of the award.
Consequently, the application for setting aside the award was dismissed.
Thereafter the appellant came to this Court for special 105 leave, which was granted; and that is how the matter has come up before us.
The main question that has been argued before us is that the first award was set aside on May 25, 1953, the reference was exhausted and the arbitrator had become functus officio and it was therefore not possible without a fresh arbitration agreement to have the same dispute decided again by the arbitrator, irrespective of whether the letter of September 7, 1953, amounted to a second reference or was a mere request for continuation of the proceedings in the original reference, which had proved abortive as the award originally made had been set aside.
Reliance in this connection is placed on what are called certain fundamental principles governing all arbitrations.
It is urged that once an award is wholly set aside, the arbitrator is functus offico and thereafter he cannot function again to decide the same dispute.
This is said to be a fundamental principle of all arbitrations, and reliance is placed on a passage in "Russel on Arbitration" (15th Edn., p. 298), where the effect of setting aside an award is stated thus "If an award is wholly set aside, the arbitrator is functus officio.
" Reliance is also placed on Morduse vs Palmer (1), where it was held "An arbitrator having signed his award is functus officio and cannot alter the slightest error in it, even though such error has arisen from the mistake of the clerk in copying the draft.
The proper course in such a case is to obtain an order to refer the award back to the arbitrator.
" Reliance is also placed on Sutherland and Company vs Hannevig Brothers Limited(2).
That was a case under the English Arbitration Act of 1889 which provided that an arbitrator could correct in an award any clerical mistake or error from any 106 accidental slip or omission and had thus varied the rule laid down in Mordue 's case(1).
It was however held in that case that the correction made by the arbitrator was not justified under the Arbitration Act.
These cases in our opinion have not much bearing on the question before us.
It is true that generally speaking, an arbitrator is functus officio after he has made the award; but this only means that no power is left in the arbitrator to make any change of substance in the award that he had made (except in certain circumstances which have been provided in the law).
What we have to see however are the scheme and the provisions of the Arbitration Act, No. X of 1940 (hereinafter called the Act), which govern the proceedings in arbitration in this case.
These provisions are to be found in Chap.
II of the Act which deal with "arbitration without intervention of Court.
" Sections 3 to 7 deal with various aspects of arbitration agreements with which we are not concerned in the present case.
Sections, 8, 11 and 12 deal with the power of a court to appoint or remove arbitrators or umpire.
Sections 9 and 10 deal with the right of a party to appoint a new arbitrator or sole arbitrator and also with the appointment of an umpire.
Section 13 deals with the power of the arbitrator and section 14 provides for the signing of the award and giving notice in writing to the parties of the making and signing of the award and filing the same in court.
Section 15 gives power to the court to modify the award in the circumstances mentioned therein.
Section 16 gives power to the court to remit the award for reconsideration under certain circumstances.
Section 17 provides for delivery of judgment in terms of the award where the court sees no cause to remit the award or to set it aside.
Section 18 provides for making interim orders.
Section 30 which is in Chap.
V sets out the grounds on which an award may be set aside.
107 Finally, we come to section 19, which is the section on the interpretation of which the decision of this case depends.
Section 19 reads as follows: "Where an award has become void under sub section(3) of section 16 or has been set aside, the court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred.
" Before we consider what section 19; provides we might advert to two matters.
In the first place, it is not disputed before us that the English Arbitration Act does not contain a provision similar to section 19; the consequence of this is that the decisions on English Courts may not be of much assistance on this particular aspect of the matter before us.
Secondly, there was a parallel provision in para.
15(2) of Sch.
II of the Code of Civil Procedure before 1940 as to the order to be passed by the court when setting aside an award, which was in these terms: "(2) Where an award becomes void or is set aside under clause (1), the court shall make an order superseding the arbitration and in such case shall proceed with the suit.
" It will be seen from this provision that when a court set aside an award under Sch.
II the reference had to be superseded also, and the court was enjoined to proceed with the suit, the provision being contained in that part of Sch.
II which dealt with arbitration in suits.
But the provision also applied to cases covered by para.
17 read with para.
19 and also by implication to arbitrations outside court under para 21.
But section 19 of the Act has clearly made a departure from the parallel provision contained in Sch.
II, para.
15 (2) and we have therefore to see what is the extent of the departure made by it.
It is clear from section 19 that there are three matters which have to be borne in mind in arbitration 108 proceedings.
There is first the arbitration agreement.
Next comes the reference to arbitration and lastly the award.
Section 19 provides inter alia that where an award has been set aside, the court may by order supersede the reference and shall thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred.
The section therefore leaves it to the discretion of the court when it decides to set aside an award, whether to supersede the reference or not.
It may not supersede the reference at all in which case though the award may be set aside the reference will continue.
But if it supersedes the reference it has also inconsequence to order that the arbitration agreement on the basis of which the reference was made would cease to have effect with respect to the difference referred.
It is only therefore when the court orders supersession of the reference that the consequence follows that the arbitration agreement ceases to have effect with respect to the subject matter of the reference.
The intention of the legislature in making this change in the consequences to follow the setting aside of an award is clear in as much as the provision recognises that there may be different kinds of arbitration agreements, some of which might be exhausted by the reference already made and the award following thereon which has been set aside while others may be of a more comprehensive nature and may contemplate continuation of the reference relating to the same dispute or successive references relating to different disputes covered by the arbitration agreement.
The legislature has therefore given discretion to the court under section 19 to decide when it sets aside an award what the consequences of its order setting aside the award will be.
If the court finds that the arbitration agreement is of the kind which exhausts itself after the first reference is made or if it finds on account of the reasons 109 which have impelled it to set aside the award that there should be no further reference of the dispute to arbitration, the court has the power to supersede the reference and thereupon order that the arbitration agreement shall cease to have effect with respect to the difference referred.
On the other hand if the court finds that the arbitration agreement is of a general nature and contemplates continuation of the reference with respect to the same dispute or successive references with respect to different disputes arising under the terms of the arbitration agreement it may not supersedes the reference with the result that the reference as well as the arbitration agreement on which it is based survives.
In such a case there can in our opinion be no doubt that there the reference and the arbitration agreement survive the same dispute may go before the arbitrators again provided there is machinery provided in the arbitration agreement which makes this possible.
It will thus be seen that the discretion vested in the court under section 19 depends upon the nature of the arbitration agreement in particular cases and it is on a consideration of those terms that the court may decide in one case to supersede the reference and order the arbitration agreement to cease to have effect after taking into account the reasons which have impelled it to set aside the award and another not to set aside the reference with the result that the reference and the arbitration agreement subsist; and if the arbitration agreement provides for machinery to have further arbitration on the same dispute or other disputes arising under the arbitration agreement it is permissible to have further arbitration on the same dispute or other disputes.
The same discretion is given to the court with respect to arbitration under Chap.
III of the Act dealing with "arbitration with intervention of a court where there is no suit pending," as section 20(5) provides that after the arbitration agreement has been ordered to be filed, the arbitration shall proceed 110 in accordance with, and shall be governed by, the other provisions of the Act so far as they can be made applicable.
Further we find that the same discretion has been given to the court in the matter of arbitration in suits provided under Chap.
IV, was section 25 provides that "the provisions of the others Chapters shall, so far as they can be made applicable, apply to arbitration under this Chapter.
" The proviso to section 25 gives discretion to the court in any of the circumstances mentioned in sections 8, 10, 11 and 12, instead of filling up the vacancies or making the appointments, to make an order superseding the arbitration and proceed with the suit, and where the court supersedes the arbitration under section 19 it shall proceed with the suit.
The scheme of the Act therefore is whether the arbitration is under Chap.
II, Chap.
III or Chap.
IV, to give discretion to the court to decide whether to supersede the reference or not.
Where it decides to supersede the reference it has to order that the arbitration agreement shall cease to have effect with respect to the difference referred; but where it decides not to supersede the reference and the reference and the arbitration agreement subsist and if there is machinery provided in the arbitration agreement for making a further reference or for continuing the same reference, further arbitration can take place.
The contention therefore urged on behalf of the appellant that once the award is set aside the arbitrator becomes functus officio and consequently there can be no further reference with respect to the dispute decided by the award which is set aside, must fail in view of the specific provisions of section 19 of the Act.
We have already said that generally speaking, the arbitrator becomes functus officio after he has given the award; but that does not in our opinion mean that in no circumstances can there be further arbitration proceedings where an award 111 is set aside or that the same arbitrator can never have anything to do with the award with respect to the same dispute.
Section 13 (d), for example, gives power to the arbitrator to correct in an award any clerical mistake or error arising from any accidental slip or omission.
Further section 16 gives power to the court; to remit the award to the arbitrator for reconsideration.
Therefore, when it is said that the arbitrator is generally functus officio after he has made the award, it only means that he cannot change that award in any matter of substance himself.
But that does not take away the court 's power to remit the award for reconsideration under section 16 or to refuse to supersede the reference even though the award is set aside leaving it to the parties to take such further action under the arbitration agreement for further arbitration if it is possible so to do under the terms of a particular arbitration agreement.
We are therefore of opinion that whatever may be the position in the absence of a provision similar to section 19 of the Act there can be no doubt that section 19 gives power to the court not to supersede the reference and so leave the arbitration agreement effective even when it sets aside award and thereupon, it will depend upon the terms of the arbitration agreement whether arbitration proceedings can go on with respect to the same dispute or with respect to some other disputes arising under the arbitration agreement.
This was the view taken in the Barangore Jute Factory case(1).
Similar view has been taken in Rallis India Ltd. vs B.V. Manickam Chetti & Co.(2) and in Firm Gulab Rai Girdhari Lal vs Firm, Bansi Lal Hansraj(3).
We think that this view is correct.
It is not in dispute that the reference was not superseded in this case when the award was set aside in May 1953.
It will therefore depend upon 112 the terms of the arbitration agreement in this case whether it was possible to have further arbitration with respect to the same dispute.
We have already set out the term in the contract relating to arbitration and it is clear that term is very wide in its amplitude and contemplates reference of disputes as and when they arise between the parties to the Chamber.
Further as the Chamber is constituted the arbitrator in this term of the contract and as the Chamber consists of a large number of members and has its own rules for constituting arbitral tribunals.
It is in our opinion quite possible on the terms of such an arbitration agreement to constitute another tribunal to decide the same dispute, where the reference remains pending and has not been set aside under section 19, provided there is machinery for appointing different persons as arbitrators under the rules of the Chamber.
It is however urged that this is a second reference of the same dispute and this at any rate is not contemplated by the term relating to arbitration in the contract.
We are not impressed by this argument.
Stress in this connection has been laid on the letter of September 7, 1953, in which the respondent said that it begged to refer the matter for arbitration de novo.
Those words do not in our opinion show that a second reference was being made of the dispute.
The letter begins by saying that the Chamber was aware that the previous award had been set aside.
It was in those circumstances that the respondent told the Chamber that it begged to refer the matter for arbitration de novo.
In the context this can only mean that the respondent was asking the Chamber to take up the reference again as the reference had not been superseded and arrange to continue the arbitration proceedings further.
The only question therefore 113 that will arise is whether under the rules of the Chamber it was possible to constitute another tribunal to consider this dispute again.
If that is possible, we fail to see why the arbitration proceedings should not go on further as the reference was not superseded in this case, and the arbitration agreement subsisted.
This brings us to the rules of the Chamber relating to the appointment of arbitral tribunal.
It is urged on behalf of the appellant that there is no provision in these rules for appointment of an arbitral tribunal where an award made by an earlier tribunal is set aside say, for misconduct.
If this contention is a justified it will certainly not be possible to appoint another arbitral tribunal to decide the reference after the award made on it by the earlier tribunal set aside.
Reliance however is placed on behalf of the respondent on rr.
V, VII and X made by the Chamber for the appointment of arbitral tribunals.
It appears that no reliance was placed on r. V in the High Court; reliance however was placed on rr.
VII and X in the High Court.
The High Court held that r. VII justified the appointment of the tribunal in the present case, though it was of the view that r. X would not justify it.
The appellant on the other hand contends that none of the three rules authorises the appointment of a fresh tribunal after an award is set aside and therefore there is no machinery under the terms of the arbitration agreement by which the arbitration can be further carried on, it being not disputed that the earlier tribunal whose award had been set aside on account of misconduct could not be again appointed.
Rule V(1) provides for an application for arbitration.
Rule V(2) lays down that "on receipt of such application the Registrar shall constitute a court for the adjudication of the dispute.
" It is urged on 114 behalf of the respondents that a fresh tribunal could be constituted under r. V (2) after the award of the earlier tribunal had been set aside, as the Registrar is authorised to constitute a court on receipt of an application by the Chamber under r. V (1).
We are of opinion that this contention is not well founded.
Rule V(2) applies to the first appointment after the receipt of the application and that appointment was made in this case and the award of the tribunal appointed under r. V (2) was set aside.
Rule V (2) does not in our opinion contemplate a second appointment after the award of the court appointed under it on receipt of the application has been set aside.
The respondent cannot sustain the appointment of a fresh tribunal under r. V(2).
Rule VII has been pressed into service by the High Court in this connection and it has been held on the basis of the Barangore Jute Factory 's case (1) that r. VII justified the appointment of a fresh tribunal in a case where an award made by the earlier tribunal is set aside.
In that case the High Court was conscious that it was stretching the rule in applying it to the situation where an award is set aside.
Rule VII says that "if the Court have allowed the time or extended time to expire without making any award, and without having signified to the Registrar that they cannot agree, the Registrar shall constitute in manner aforesaid another Court which shall proceed with the arbitration and shall be at liberty to act upon the record or the proceedings as then existing and on the evidence, if any, then taken in the arbitration or to commence the arbitration de novo.
" Rule XXV makes provision that the award shall be made within four months or within such extended time as may be agreed to between the parties to the reference.
Rule VII obviously refers to a case where the time or the extended time 115 allowed to the tribunal has been allowed to expire; it cannot refer to a case where the tribunal has made the award within the time fixed but later that award is set aside by court.
It would in our opinion be stretching the language of r. VII too far to make it applicable to a case like the present.
We cannot therefore agree with the High Court that r. VII justified the appointment of a fresh tribunal in the present case.
This brings us to r. X.
The High Court thought that this rule could not apply.
Rule X is in these terms: "If any appointed arbitrator or umpire neglects or refuses to act or dies or become incapable of acting the Registrar shall substitute and appoint a new arbitrator or umpire as the case may be in manner aforesaid and the Court so reconstituted shall proceed with the arbitration with liberty to act on the record of the proceedings as then existing and on the evidence, if any then taken in the arbitration, or to commence the proceedings de novo.
" We are of opinion that it was open to the Registrar under this rule to appoint a fresh tribunal because the earlier tribunal had become incapable of acting in view of the fact that its award had been set aside on the ground of misconduct.
It has been urged on behalf of the appellant that the words "becomes incapable of acting" apply only to physical inability to act and in particular stress is laid on the collocation of words where these words follow the word "dies".
We are however of opinion that these words cannot take their colour from the word "dies" and are a separate category by themselves and must be interpreted on their own.
Now there is no doubt that generally speaking an arbitrator may become incapable of acting because of some physical cause, for example, he may fell ill or may go mad and so 116 on.
But we do not think that these words only refer to physical incapacity; in our opinion, they refer to any kind of incapacity, which may supervene after the appointment of the arbitrators, even to an incapacity from before but which was not known to the parties, or in this case to the Chamber before they are appointed.
We may in this connection refer to the opinion of Russel ("Russel on Arbitration", 15th Edn, p.7), where dealing with similar words in section 10(b) of the English Arbitration Act of 1950, it has been said as follows: "It would appear that the word 'incapable ' in section 10(b) must refer to some incapacity arising after the date of the appointment, or not known to the parties at that date.
" Clearly therefore, the words "becomes incapable of acting" do not merely refer to physical incapacity but to any kind of incapacity which arises after the appointment or which was there before the appointment but was not known to the parties or to the Chamber in this case.
Take, for example, the case of persons appointed by the Chamber to decide a dispute; after the appointment, one arbitratior acquires an interest in the subject matter of the dispute.
Obviously such a person must be held to have become incapable of acting even though there is no question of any physical incapacity on his part.
We are therefore of opinion that the words "becomes incapable of acting" in r. X are of wide amplitude and do not refer to cases only of physical incapacity but to any kind of incapacity arising after the appointment or even before the appointment provided it was not known to the parties, or to the Chamber in the present case.
We cannot therefore agree with the High Court that r. X will not apply to the present case.
What has happened in this case is that the previous tribunal made an award.
That award has 117 been set aside on account of misconduct.
In the circumstances we are of opinion that the previous tribunal has become incapable of acting as arbitrator to decide this dispute because of its misconduct.
Further as the reference has not been superseded and the arbitration agreement subsists, it was in our opinion open to the Chamber, on the request of the respondent, to appoint another arbitral tribunal under r. X.
Therefore, as there is a machinery by which fresh arbitrators can be appointed according to the terms of the arbitration agreement read with the rules of the Chamber and as the reference has not been superseded, the appointment of a fresh tribunal and the carrying on of the arbitration further were within the terms of the arbitration agreement.
No other point has been urged on behalf of the appellant in this appeal to challenge the correctness of the decision of the High Court.
Therefore, appeal No. 309 must fail.
Turning now to appeal No. 525, it is enough to say that it is similar to appeal No. 309 in all respects except one.
The difference is that in this case the appellant objected to the appointment of a fresh tribunal and an application was made under section 33 of the Act paying for the relief that no arbitration agreement existed after the earlier award had been set aside and therefore there could be no further arbitration.
For reasons which we have already given this contention must fail, for it is not in dispute that this appeal also when the earlier award was set aside there was no supersession of the reference and the arbitration agreement is in the same terms as in the other appeal.
What happened in this case was that the learned Single Judge allowed the application and revoked the authority of the Chamber to arbitrate.
There was then an appeal by the present respondent 118 which was allowed on the basis of the Barangore Jute Factory case (1).
Thereupon the present appeal has been brought to this Court by special leave.
It has been contended on behalf of the appellant that the order under section 33 was not appealable in view of the provisions of section 39 of the Act and therefore the High Court had no jurisdiction in appeal to set aside the order of the learned Single Judge.
This point as to jurisdiction was not taken before the appeal court nor has it been taken in the special leave petition to this Court or in the statement of case.
It seems that the appeal was entertained in the High Court on the view that an appeal lay under the Letters Patent from an order of a Single Judge.
Even if we were to entertain this argument the respondent will be entitled to ask for special leave to appeal against the order of the Single Judge and we will be justified having regard to the course of events and the view expressed in the companion appeal in granting leave after condoning the delay and in passing the same order which has been passed by the High Court in appeal.
Technical requirements of procedure may of course be fulfilled by following the course suggested but no useful purpose will be served thereby.
For reasons which we have already given the order of the appeal court is right.
There is no reason to interfere with it and this appeal will also have to be dismissed.
We therefore dismiss the appeals with costs one set of hearing costs.
Appeal dismissed.

summary/full:
Disputes which arose between the parties with respect to carrying out a contract were referred to the arbitration of the Bengal Chamber of Commerce in accordance with an agreement to refer disputes as and when they arose to the arbitration of the Chamber.
The award of the Tribunal of Arbitration was set aside by the High Court.
On an application for referring the matter for arbitration de novo another tribunal was constituted which made a fresh award.
The questions which arose for decision were whether after the first award was set aside the reference to arbitration was exhausted and the arbitrator had become functus offcio and whether without a fresh arbitration agreement it was not possible to have the same dispute decided again by the arbitrator.
^ HELD, that the arbitrator became functus officio after he gave the award but that did not mean that in no circumstances could there be further arbitration proceedings where an award was set aside or that the same arbitrator could never have anything to do with the award with respect to the same dispute.
Section 19 of the Arbitration Act empowered the Court not to supersede the reference and to leave the arbitration agreement effective even when it set aside the award and thereupon it would depend upon the terms of the arbitration agreement whether the arbitration proceedings could go on with respect to the same dispute or with respect to some other dispute arising under the arbitration agreement.
Barangore Jute Factory vs Hulas Chand Rupchand. , Rallis India Ltd. vs B. V. Manickam Chetty, A.I.R. 1956 Mad.
369, and Firm Gulab Rai Girdhari Lal vs Firm Bansi Lal Hansraj, A.I.R. 1959 Punj.
102, approved.
Morder vs Paimer, and Sutherland and Co .
vs Hannevig Bros. Ltd. , referred to.
In the present case the first award was set aside but as the reference had not been superseded and the arbitration 102 agreement subsisted it was open to the Chamber to appoint another tribunal under r. X of the Chamber Rules.


judgement:
minal Appeal No. 115 of 1960.
Appeal from the judgment and order dated September 18, 1.959, of the Calcutta High Court in Government Appeal No. 14 of 1956.
48 B. L. Anand, Ganganarayan Chandra and D. N. Mukherjee and P. K. Bose, for the appellant.
K. B. Bagchi, section N. Mukherjee and P. K. BOSE for the respondent.
April 12.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Calcutta in which a preliminary objection has been taken that the certificate under article 134 (1) (e) is not a proper certificate and should therefore be cancelled.
A further question would arise as to whether it is a case in which special leave to appeal should be granted under article 136 if we find that the preliminary objection is well founded.
The appellant was tried for murder under section 302 of the lndian Penal Code in the court of the Additional Sessions Judge at Alipore sitting with a jury.
The jury returned a verdict of not guilty and the appellant was acquitted.
Against that order the State took an appeal to the High Court and the Division Bench found that there was mis direction in the charge to the jury and therefore after consideration of the evidence it set aside the verdict of the jury, allowed the appeal and sentenced the appellant to imprisonment for life.
The appellant then applied to the High Court for a certificate under article 134 (1) (c) which was granted by another Division Bench of the Court which had not heard the appeal.
Three points were urged before the Bench hearing the applioation for certificate; (1) that there was unusual delay in delivering the judgment and the Division Bench hearing the appeal forget to consider many of the question of fact which were raised and argued before it.
(2) that the High Court had no power to substitute its own estimate 49 of the evidence in an appeal against the order of acquittal in a trial by jury and (3) that as a matter of fact there were no such misdirection as caused a failure of justice or a mistrial and therefore the High Court was not entitled to examine the evidence.
The learned Judges were of the opinion that there was no substance in points Nos. 2 and 3 but the first points did raise a question of importance.
The learned Chief Justice observed: "The delay in delivering judgment is certainly a very unusual fact, and it may lead to the result that some of the points which were argued on behalf of the petitioner before the Division Bench were lost sight of by that learned judges while delivering their judgment.
As already stated, these points have been summarised by the petitioner in that paragraph 18 of the petition.
The points raised in that paragraph may or may not be good points, but if these points were advanced on behalf of the petitioner, the learned Judges of the Division Bench owed it to themselves to come to a decision on those points.
In the arguments before us, it is not denied on behalf of the State that the points which have been summarised in paragraph 18 of the petition were canvassed by the defence Counsel at the hearing of the appeal and having regard to that fact, I am inclined to hold that the petitioner is entitled to a certificate under Article 134 (1) (c) of the Constitution on that ground".
This is the ground on which the certificate was granted.
This Court has had occasion to consider the grounds on which a certificate can be granted under Art.134 (1) (c) of the Constitution.
hi Haripada Dey vs The State of West Bengal(1) it was held that the High Court has no jurisdiction to grant (1) ; , 641.
50 a certificate under article 134 (1) (c) on a mere question of fact and it is not justified in passing on such a question to the Supreme Court for further consideration thus converting the Supreme Court into a Court of Appeal on facts.
Bbagwati J., there said: "Whatover may have been the misgiving" of the Learned Chief Justice.
in the matter of a full and fair trial not having been held we are of the opinion that he had no jurisdiction to grant a certificate under article 134(1) (c) in a case where admittedly in his opinion the question involved was one of fact where in spite of a full and fair trial not having been vouchsafed to the appellant, the question was merely one of a further consideration of the case of the Appellant on facts".
In a later case Sidheswar Granguly vs The State of West Bengal(1) the High Court of Calcutta granted a certificate on the ground that because of the summary dismissal of the appeal the appellant did not have the satisfaction of having been fully heard and it was held by this Court that was no ground for the grant of a certificate and that no certificate should be granted on a mere question of fact.
In that case Sinha J., (as he then was) said ; "This Court has repeatedly called the attention of the High Courts to the legal pos ition that under article 134 (1) (c) of the Constitution, it is not a case of "granting leave" but of "certifying" that the case is a fit one for appeal to this Court.
"Certifying" is a strong word and therefore, it has been repeatedly pointed out that a High Court is in error in granting a certificate on a mere question of fact, and that the High Court is not justified in passing on an appeal for determination by this Court when there are no (1) ; 51 complexities of law involved in the case, requiring the authoritative interpretation by this Court.
" In the present case the High Court has granted leave on the mere ground that there was delay in delivering the judgment of the court and it may have led to the result that some of the points urged by counsel were lost sight of while delivering judgment.
Those points 'were all questions of fact.
The High Court observed that the questions which were sought to be raised in the petition might or might not be good points but if those points were advanced the judges " 'owed it to themselves to come to a decision on those points".
After the pronouncements of this Court in two judgments it is some what surprising that the High Court should have granted a certificate on the mere ground of delay in pronouncing a judgment and the equally slender ground that some of the questions which were raised were forgotten at the time of the judgment.
If the appellant did have any such real grievance it was open to him to apply to this Court under article ' 136 but the mere ground of delay is not a ground on which the High Court can certify a case to be fit one for appeal to this Court.
In Banarsi Parshad vs Kashi Krishna Narain (1) and Radhakrishna Ayyar vs Swaminatha Ayyer(2) the Privy Council in construing section 109 (c) of the Code of Civil Procedure pointed out that under that clause for a certificate to be granted a case had to be of great or wide public importance.
A mere ground of delay in giving a judgment does not, in our opinion, fall within the words "fit one for appeal to the Supreme Court" even if it is felt by the High Court that the delay might have led to omission to consider arguments on questions of fact and law.
It is not open to a High Court to give certificates of fitness under this clause merely (1) [1900] L.R. 28 1 A. 11 (2) (1920) L.R. 48 I. A. 31.
52 because in its opinion the judgment of the court delivered by another Bench suffers from an error in regard to certain facts.
In our view the certificate granted by the Calcutta High Court was not a proper certificate and must be cancelled.
It was then urged that special leave should be granted under article 136 and the appeal be beard as the record had been printed and on that material if leave were to be granted the appeal could be properly argued.
We have heard counsel for the appellant and we see no reason to grant special leave in this case.
The appeal is therefore dismissed.
Appeal dismissed.

summary/full:
The appellant.
was tried by the Sessions judge and acquitted of the charge of murder.
On appeal the High Court convicted him and sentenced him to imprisonment for life.
The appellant applied for and was granted a certificate under Art 134 (1) (c) of the Constitution for appeal to the Supreme Court on the ground that there was unusual delay in delivering the judgment of the High Court and that the judg ment failed to deal with certain questions of fact which were raised at the hearing of the appeal.
Held, that the certificate granted by the High Court was not a proper certificate.
The mere ground of delay in giving judgment did not fall within the words "fit one for appeal to the Supreme Court" in article 134 (1) (c).
The points raised in the appeal before the High Court were questions of fact and the High Court was not justified in passing such questions on to the Supreme Court for further consideration thus converting the Supreme Court into a court of appeal on facts.
Haripada Dev vs State of.
West Bengal; , and Sidheswar Ganguly vs State of West Bengal, [1958] section C. R. 749, followed.
Banaswmi Parshed vs Kashi Krishna Narain, (1900) L. R. 23 1.
A I I and Radhakrishna Ayyar vs Swaminathna Ayyar, (1920) L. R. 48 I. A. 31, referred to.


judgement:
Appeal No. 212 of 1962.
Appeal by special leave from the judgment and order dated February 3, 1961, of the Madhya Pradesh High Court in M. P. No. 139 of 1960.
N. C. Chatterjee and D. N. Mukherjee, for appellants.
B. Sen and 1.
N. Shroff, for respondent No. 1.
B. P. Maheshwari, for respondent No. 2. 1962.
April 16.
The Judgment of the Court was delivered by AYYANGAR, J.
By a communication dated April 5, 1930, from the Secretary to the Government of the Central Provinces addressed to the Commissioner Jabalpur Division, certain Nazul land was made available to the Municipal Committee of Jabalpur.
In this letter the Secretary Stated "I am directed by the Governor in Council with the previous sanction of the Government of India to communicate the following orders of the Government of the Central Provinces : Under Section 38(1)(f) of the Central Provinces Municipalities Act, 1922, Government is pleased to transfer to the Municipal Committee, Jubbiilpore, free of premium and ground rent nazul land measuring. . . of the Jabbulpore town.
The land shall vest in the Municipal Committee subject to the following conditions : (1) The land shall be used only for the purpose of a garden and no part of it 137 shall be used for any other purpose without the previous sanction of the Local Government.
(2) If condition 1 is broken the land shall be liable to be divested under section 38(2) and resumed by Government .and no compensation whatsoever shall be payable to the Municipal Committee upon such resumption.
(3) If the land.
is resumed by Government for any Government purpose the provisions of Section 38(3) will apply.
" Sub sections (2)& (3) of section 38 referred to ran: "38.(2) The State Government may, by notification, direct that any property which has vested in the committee shall cease to be so vested, and thereupon the property speci fied in the notification shall cease to be so vested and the State Government may pass such orders as it thinks fit regarding the disposal and management of such property.
(3) Where any immovable property is transferred, otherwise than by sales, by the State Government to a committee, for public purpose, it shall be deemed to be a condition of such transfer, unless specially provided to the contrary, that, should the property be at any time resumed by the Government, the compensation payable therefor shall notwith standing any thing to the contrary in the Land Acquisition Act, 1894 (1 of 1894), in no case exceed the amount, if any, paid to the Govern ment for the transfer, together with the cost or the present value, whichever shall be less, of any buildings created or other works executed on the land by the committee.
" 138 The land thus obtained was being used by the Municipal Committee in accordance with the condition of the transfer as a public garden.
The Central Provinces & Berar Municipalities Act, 1922 was repealed by the City of Jabalpur Corporation Act, 1948 (M. P. III of 1950).
Under this later enactment the Municipal Committee was substituted by the Jabalpur Corporation, the appellant before us and all properties movable and immovable which were previously vested in the Municipal Committee were transferred to and vested in the Corporation (vide section 71 of the Jabalpur Corporation Act), and by reason of the vesting, the appellant was in enjoyment of the transferred property.
A hostel or boarding house of a public institution the Hitkarni Mahavidyalaya had been located in a building constructed to the north of the Public Garden maintained by the Corporation.
A public road ran to the south of the Public Garden and as there was not a proper and convenient access from the Boarding house to the public road, the authorities of the Mahavidyalaya approached the State Government to obtain for them a narrow strip of land about 20 ft. wide at the eastern extremity of the Public Garden for the purpose of laying a public road which would provide this access.
The Government considered this request reasonable and forwarded this request of the Mahavidyalaya, with a covering letter of their own dated April 28, 1959, to the Corporation for being complied with.
The request however was not acceded to and thereafter on February 11, 1960, the Government of Madhya Pradesh issued a notification under section 81 of the Jabalpur Corporation Act notifying that the strip of land needed for making a road measuring 3, 940 sq.
"stood divested" from the Corporation.
, .Section 81 runs in these terms 139 "81.
The Provincial Government may resume any immovable property, transferred to the Corporation by itself or by any local authority, where such property is required for a public purpose, without payment of any compensation other than the amount paid by the Corporation for such transfer and the market value at the date of resumption of any buildings or works subsequently reacted or executed thereon by the Corporation with the intention that such buildings or works should be permanent : Provided that compensation need not be paid for buildings or works constructed or erected in contravention of the terms of the transfer." (The expression 'Provincial Government ' was amended so as to read 'State Government ' by the Adaptation of Laws Order).
Complaining that this notification was illegal and beyond the jurisdiction of the State Government the Jabalpur Corporation moved the High Court of Madhya Pradesh for relief under Art . 826 of the Constitution praying for the issue of the writ of mandamus quashing the notification of the government as without jurisdiction and forbidding the enforcement of that order.
This was opposed both by the State of Madhya Pradesh as well as the Hitkarini Sabha and the learned Judges dismissed this petition.
An application for a certificate of fitness for appeal to this Court filed by the Corporation was also dismissed and therefore the present appeal has been filed by special leave obtained under article 136 of the Constitution.
The submission of Mr. Chatterji learned Counsel for the appellant was naturally directed to showing that the reasoning adopted by the learned judges of the High Court was erroneous.
The 140 reasoning was briefly as follows: The learned Judges assumed, accepting a submission made on behalf of the appellant Corporation during the arguments on the writ petition, that the authority which effected the transfer of the property to the Municipal Committee of Jabalpur by the order which we have set out as the opening of this judgment was not the Government of Central Provinces & Berar but the Central Government.
Starting from this premise, they concluded that the notification could not be sustained under the terms of section 81.
Section 81, it will be seen, empowers the State Government to resume immovable property transferred to the Corporation by itself when such property is required for a public purpose.
If the property in question had been transferred by the Central Government, the argument ran that section 81 was inapplicable.
It should be added that both in the basic assumption that it was the Central and not the Local Government the predecessor of the State Government that had effected the transfer, as well as in the further consequence that the exercise of the power under section 81 of the Corporation Act was ineffective, the learned Judges were aided by concessions accepting the correctness of this position which appear to have been made by the Deputy Advocate General who represented the State before them.
, We shall have occasion to refer to this aspect later.
Meanwhile to proceed with the reasoning of the learned Judges, section 81 being assumed not to be available to sustain the impugned notification, the learned Counsel for the State appears to have relied on the provisions of section 38 of the Act of 1922 as enabling the State Government to resume the land, and this notwithstanding that by the Jabalpur Corporation Act III of 1950 the entirety of the C. P. & Berar Municipalities Act of 1922 including section 38 bad been expressly repealed.
The learned Judges considered that this was possible by 141 reason of a saving contained in section 3 (1) of the Jabalpur Corporation Act which reads "3.
(1) All debts and obligations incurred, all contracts entered into with and all matters and things engaged to be done by or for, the Municipality of Jubbulpore, before this Act comes into force shall be deemed to have been incurred, entered into with or engaged to be done by, or for, the Corporation as constituted under this Act." Mr. Chatterji learned Counsel for the appellant Corporation submitted to us that the learned Judges of the High Court bad wrongly applied the saving in section 3 (1) of Act III of 1940 to sustain the resumption of land under the impugned notification.
He consider, however, that in view of our conclusion that the impugned notification fell clearly within the power vested in State Government under section 81 of the Jabalpur Corporation Act, it is not necessary to pronounce upon the correctness of the submissions made to us on the construction of section I (1) of that Act, There could not be any dispute that if the authority that had transferred the property covered by the impugned notification, to the Municipal Committee of Jabalpur was the Government of Central Provinces & Berar, the right of the suceessor Government viz. ' the State Government of Madhya Pradesh to take over the land from the Corporation for the purpose of forming a public road would manifestly be within their power under a. 81.
That the Corporation of Jabalpur was the successor in title to the Municipal Committee of Jabalpur and. ' that the property which was vested in the Municipal Committee of Jabalpur was transferred to and became vested in the appellant Corporation under section 71 of the Jabalpur Corporation Act, were never in dispute and indeed formed the 142 very basis of the appellant 's petition to the High Court.
If any particular property had vested in the Municipal Committee subject to its being divested in particular contingencies, that the property in the hands of the Corporation would be held subject to the same obligations or disabilities could also not be in controversy.
Nor could it be contested that the making of a public road is "a public purpose" for which land may be resumed by the State under section 81.
What we desire to point out is that if the State of Madhya Pradesh was or must be deemed to have been the transferee of the property under the communication dated April 5, 1930, the validity of the notification under section 81 could not be challenged.
As we have pointed out earlier, the learned Judges proceeded, however on the assumption that it was not the Government of C. P. & Berar but the Central Government that was the transferrer of the land in question.
There ' was, however, no basis upon which the learned Judges could have rested this assumption.
In the first place, in the writ petition by which the appellant Corporation challenged the validity of the notification it did not deny the fact that it was the Government of C. P. & Berar that had effected the transfer, and, in fact, the allegations in the petition proceeded on the basis that it was the State Government that had done so but the contention raised was that on a proper construction of is.
81 it applied only to transfers made after the Jubbulpore Corporation Act, 1948 came into force an untenable contention which has not been persisted in.
The question as to who a transferor is obviously a question of fact or at best a mixed question of law and fact and when a party in a writ petition does not allege any such fact, it stands to reason that he ought not to be permitted to travel beyond the facts stated, 143 at the stage of the arguments, To confine a party to his pleadings, particularly to his allegations as regards facts is dictated not merely by the need for orderliness in these proceedings but for avoiding surprise to the other party and consequent injustice resulting therefrom.
Save in exceptional cases, parties should be held strictly to their pleadings and if owing to discovery of new matter or grounds, there is need to add to or to modify the allegations either in the petition or in the counter affidavit, the Court should insist on formal amendments being effected, for this would enable each party to state its case with precision and definiteness and the other side would have a proper opportunity to know this case and meet it with appropriate defences.
This salutary rule was not adhered to in this case, and the departure from the pleadings which the appellant was permitted to adopt during the course of its arguments before the High Court has led to injustice because thereby the Counsel for the State who was apparently not prepared, to meet an argument not raised in the petition, made submissions at the spur of the moment which were not justified by the true state of affairs.
In our opinion, on the allegations made in the petition by the appellant Corporation it ought not to have been permitted to put forward a case that the State Government was not the transferor of the property and the learned Judges of the High Court should have proceeded on the basis of the pleadings in the case.
Apart from this question of pleading, we consider that there is no merit in the contention even otherwise.
We have already set out the terms by which the transfer of the land was communicated to the Municipal Committee.
The preamble recites that is what being communicated is the order of the Government of the Central Provinces.
The words 144 of conveyance are in the second paragraph and they read: "Under section 38(1)(f) of the Central Provinces Municipalities Act, 1922 Government is pleased to transfer to the Municipal Committee. . . ".
The expression "Government" here obviously, in the context, means the Government of the Central Provinces.
Paragraph 2 which specifies what should happen if the condition on which the land has been granted should be broken, states: "The land shall be liable to be.
divested under section 38 (2) and resumed by Government ".
"Government" here again obviously is the Government of the Central Provinces a construction reinforced if one looked at the sub section referred to.
Further, in Condition 3 which speaks of what was to happen if the land was resumed by Government for any Government purpose the reference to "Government" again is to the "State Government".
On the terms of the document therefore it was the Government of the Central Provinces that made the grant the predecessor of the State Government.
We find therefore that there is no factual foundation for the submission which was apparently made before the High Court that the transfer in the present case was by the Central Government.
No doubt, the communication refers to the fact that previous to making the grant the Government of C. P. & Berar had obtained the approval of the Central Government, but that was merely a matter of administrative arrangement between the Central and Local Governments which is totally irrelevant for determining the identity of the Government which made the grant.
Besides, the corporation having accepted the grant from the State Government was obviously estopped from contending that 145 the land of which it continued in possession under that grant was not one by the State Government or that the State Government had not the authority to make the grant.
If such contention is both not open to the Corporation and not tenable on the merits.
, it would follow that the impugned notification was fully justified by the, provisions under section 81 of the Jabalpur Corporation Act.
We therefore hold that the impugned notification was valid, though for reasons very different from those on which its validity was sustained by the learned Judges of the High Court.
The appeal fails and is dismissed.
In view however of the concession made by the respondent before the High Court which misled the learned Judges we consider it proper to direct that each party should bear its costs throughout.
Appeal dismissed.

summary/full:
Acting under section 38 (1) (f) of the C. P. Municipalities Act 1922, the Provincial Government, with the sanction of the Government of India, transferred certain Nazul Lands to the Municipal Committee to be used for the purposes of a garden.
The 1922 Act was repealed by the City of Jabalpur Corporat ion Act, 1948, which replaced the Municipal Committee by the Jabalpur Corporation.
Under section 81 of the Corporation Act the State Government issued a notification notifying that a portion of this land needed for making a road stood divested from the Corporation.
The Corporation filed a writ petition before the High Court challenging the notification.
On a concession made by the counsel for the State that the transfer of the land had been made by the Central Government the High Court held that the notification could not be sustained under section 81 which was applicable only to transfers made by the State Government But the High Court sustained the notification under section 38 of the repealed 1922 Act, relying upon the saving in section 3 (1) of the Corporation Act.
Held, that the transfer of the land in fact had been made by the State (Provincial) Government and the notification was fully justified by the provisions of section 81 of the Corporation Act.
There was no basis on which the High Court could have based its assumption that the transfer was by the Central Government.
The allegations in the writ petition proceeded on the basis that the transfer was by the State Government.
On the pleadings the appellant ought not to have been permitted to put forward a case that the State Government was not the transferor of the property.
To confine a party to his pleadings particularly in respect of facts, is dictated not merely by the need for orderliness but for avoiding surprise to the other party.
Save in exceptional cases, parties should be held strictly to their pleadings, and if there is need to amend them, the Court should insist on formal amendments being affected.
136 in the present case, on the terms of the order transferring the land it was clear that the transfer was made by the Provincial Government.